By Ingrid Lunden
Nokia (NOK) may be struggling to reach a critical mass of users to adopt its Windows Phone-based smartphones instead of Android or iPhone devices, but today it got a little light relief in its bigger battle: it’s had a class action suit over its choice of the Windows Phone platform formally dismissed, with no compensation paid.
“After further investigation, the plaintiffs have agreed to dismiss the case against all defendants without any compensation being paid to any plaintiff or their counsel by any defendant,” Nokia notes in a statement. “The complaint has been withdrawn and dismissed with prejudice by the court.”
The case, Chmielinski v. Nokia Corporation, was first filed in the U.S. District Court for the Southern District of New York on May 3, 2012. At the time, Nokia had already said the case had no merit and that it would seek to fight the charges: the plaintiffs alleged that Nokia had overplayed how well Windows Phone and Lumia devices would do.
Nokia, they said, had claimed that Microsoft’s (MSFT) Windows Phone platform adoption would halt sales declines at the company. But a month before the suit was filed, Nokia had to issue a warning to investors that it would be reporting lower-than-expected device sales.
It’s a small victory but perhaps a significant one as the company continues to work hard at both selling more Lumia/Windows Phone devices, and also at convincing investors and the wider public not to lose all faith in the company. Nokia has also faced several ratings downgrades by the credit agencies, concerned also over declines in the company’s core business of handsets.
It’s turning out to be a longer struggle perhaps than some expected for Nokia to turn the big ship around. Once the world’s most dominant handset maker, Nokia had done disastrously in smartphones. Since dropping Symbian as its flagship OS, its share in smartphones, already struggling in the face of stiff competition from Android and iOS, has declined even further. In November, Kantar WorldPanel Comtech reported figures that showed that Windows Phones accounted for less than 5% of all device sales across major markets over the last 12 weeks.
In Q3, reported in October, Nokia said it had sold 2.9 million Lumia devices. More recently, the company has been rolling out more high-end and less expensive Lumia devices to target different segments of users, one example being the Lumia 620 unveiled last week.