The sales of Nokia's (NOK) new flagship, Lumia 900, started very positively. It was on top of Amazon's cell phone best seller list for about a week. Its sales rank, however, has been in decline over the past two weeks. It is currently ranked between #3 and #8 on the bestseller list. While I still believe Lumia 900 will lift Nokia's gross margin, I think it is not popular enough to be a major milestone - not by itself. The sales of Lumia 900 is at best described as "encouraging". It is, however, far from a deal breaker.
During the first quarter of 2012, Samsung has surpassed Nokia to become the number one cell phone manufacturer by shipment. The pressure is huge on Nokia to turn around quickly, because otherwise, it may never turn around. For the near term, the most important thing for Nokia's investors is to have a rough idea of the popularity of Lumia 900 - in particular, how many units Nokia can sell in the United States.
The guessing game will have to start with a guesstimate of Lumia 900's sales prior to Nokia's next quarterly report. Here I'm going to count on a very gross estimates. First I compare the search volume of Motorola's (acquired by Google (GOOG)) Droid Razr Maxx, Samsung's Galaxy S II, and Nokia's Lumia 900. The following chart shows their search volume over the past twelve months.
The red line is Motorola Droid Razr Maxx. The orange line is Samsung's Galaxy S II. The blue line is Lumia 900. At its peak, Lumia 900 was close to Razr Maxx. But right now, it is very close to Galaxy S II. This chart also tells us two things: 1) Raz Maxx's launch stimulated far more interest than Lumia 900, although the holiday season could be a contributing factor. 2) Very likely, Lumia 900 is not out selling Droid Razr Maxx. This is reflected in Amazon's sales rank as well.
In 2011, Motorola sold 18.7 million smartphones. We also know Samsung sold about 20 million Galaxy S II worldwide in ten months since its launch. So, ballpark Droid Razr Maxx sells 1-1.5 million units a month. Galaxy S II likely sells between 700 to 1 million units a month. Using the search figure, Lumia 900 likely sells inline with Galaxy S II, well below 1 million units a month in the United States. To me, that number leaves a lot to be desired, as this is Nokia's one and only appealing product in the United States. Although I like the prospect of Microsoft (MSFT) behind Nokia's turnaround and believe Windows platform will be a success, I'd have to shy away from Nokia before more positive signs show up.
Finally, just for fun, I put the iPhone in the chart. The green line in the following chart is iPhone's search volume in the United States. The other three smartphones, Droid Razr Maxx, Lumia 900, and Galaxy S II, are at the bottom of the chart.
Obviously, in order to catch up with Apple (AAPL), every Android or Windows based smartphone manufacturer has a long way to go.
The final conclusion: Lumia 900 is not able to save Nokia, not yet, not by itself. I deem it a decent success. But Nokia needs many more successful products to turn itself around.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.