When Nokia Corporation (NOK) introduced its high-end smart phone Lumia 900 in the US and select European countries, many people wondered when this phone would become available in other places like China, India and the Middle East. Nokia made a mistake by ignoring these markets and focusing only in Western Europe and America, which resulted in it selling only 6 million Lumia 900s (2 million in the first quarter and another 4 million in the second quarter) in the first half of the year. Now Nokia has finally decided to introduce its Lumia 900 model to the Indian market; however, many wonder if it is too late. After all, the Lumia 920 is only months away and Lumia 900 will not be upgradeable to Windows Phone 8.
The phone will be sold for 33,000 Indian rupees, which translate into $612. For comparison, the phone's current price is $400 in the AT&T store when purchased without a contract. India is one of the few countries where Apple Inc. (AAPL) doesn't have a lot of penetration and Nokia continues to enjoy a strong brand name. In India's smart phone market, Apple's market share is 4% whereas Nokia's market share is 36%. Of course, Nokia's high market share mostly stems from the company's low-end phones in the country. Nokia hopes to convert some of its low-end users in the country to its high-end phones in order to improve its margins in the country.
Still, the country doesn't give India the attention it deserves. By launching the Lumia 900 late in India, Nokia probably means to say that the Lumia 920 will arrive in the country late too. This is just another marketing failure by Nokia. When the company announced the Lumia 900, it was available in very few markets and the company might make the same mistake with the Lumia 920 too. I don't understand why Nokia keeps delaying the introduction of its new phones in many markets when it desperately needs to sell as many phones as possible.
Will Indians buy the Lumia 900, or will they wait for the Lumia 920? This will probably depend on the arrival time of the Lumia 920 in the country. For the time being, Flipkart and Infibeam two of the country's largest online stores will carry the phone. In addition, Ebay's Indian branch will also allow people to sell the phone on its website. The Lumia is expected to hit the stores in the western part of Europe and the US around November. Asian and Eastern European countries probably won't see the new Lumia until after New Year's. I have no idea what the management of Nokia is thinking right now, but we all know that marketing isn't one of Nokia's strengths.
Maybe Nokia just wants to get rid of its Lumia 900 inventory by dumping it in India where the company's brand name is strong and there are literally hundreds of millions of buyers there. Given that the company sold only 4 million Lumia 900s globally and one-tenth of the number in the USA, the management of Nokia might be pleased to sell one or two million Lumia 900s in India. I just hope that the company will not delay its launch of Lumia 920 too much in countries outside of West Europe and North America.
As the company's CEO mentioned a couple weeks ago, Nokia's low-end phone model Asha is selling very well in India. While Asha doesn't have much of a profit margin, it can make sure that many of the Nokia-fans in the country stay loyal to the company until they can afford a high-end Nokia. In my opinion, in the next decade, most of the Lumias will be sold to former Asha owners, rather than former iPhone owners. Upgrading the low-end Nokia users to the high-end Nokias can enable the company to sell nearly one billion phones in the next couple decades.
While Lumia 900 will not be upgradeable to Windows Phone 8, it will come with the already-upgraded versions of Nokia applications, such as Nokia Maps, Nokia Drive, Nokia City Lens and Nokia Music. In fact, as a Lumia 900 user, I can tell you that my phone's operating system has been upgraded to Windows Phone 7.5, and nearly all my Nokia applications were upgraded in the last couple weeks. The phone is still fully functional and it is still a great phone. While some consumers will be disappointed with the fact that Lumia 900 can't have Windows Phone 8, many consumers will not care, because the phone comes with many upgraded features compared to a year ago when the phone was new in the market.
Best case scenario: a few million people in India who are able to afford one don't mind owning a great Nokia phone running on Windows Phone 7.5. This will help Nokia reduce its inventories, while making some profit. Worst case scenario: people in India get annoyed with Nokia's behavior of dumping its old phone in the country. The company's image suffers in a country where it has enjoyed a great brand name for many years.
I continue to stay long in Nokia as a loyal investor and customer of the company even though I believe that the company lacks the ability to market its products.
Disclosure: I am long NOK.