27 Jul 2012

[News Update] Nokia Mulling Carrier Exclusivity & Revenue Share for Windows Phone 8 Lumia Devices

Nokia Windows Phone 8

A report from the Financial Times states that Nokia is in discussions to make upcoming Windows Phone 8 based Lumia models exclusive to certain European carriers. The report also states that Nokia is offering carriers a revenue share in return for retail support. 

By offering carriers a revenue share, Nokia seems to be tacitly admitting that consumer interest in Windows Phone based Lumia devices is low. This would definitely boost carrier push for Lumia devices and could boost short-term sales, but long-term growth would depend on generating consumer pull. Long-term consumer interest would still be dependent on ecosystem viability.

The more puzzling move is carrier exclusivity, since consumer demand was damp even when devices were available on all carriers. The report claims that Nokia hopes to create an iPhone-like buzz surrounding device releases. Unfortunately, Nokia followed a similar strategy with the Lumia 900 on AT&T in the US and the result was less than 600,000 total device sales (smartphones & feature phones) in the US. I think Nokia is looking at this more from a "return on marketing investment" perspective., i.e. limiting Lumia devices to few carriers could cut down on Nokia's total marketing expenses while garnering a comparable amount of sales.





2 comments:

  1. Limited carrier launch would also allow it have some bargaining power with the carriers chosen... same strategy that Steve Jobs used to launch iPhone... Atleast good to see that Nokia is doing a little bit of thinking

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  2. sameer_singh1727 July 2012 at 06:54

    I see it the other way around. The iPhone had bargaining power because of consumer demand. Nokia's offering carriers a revenue share to generate consumer interest, which has so far been non existent. So, the carriers have all the power here.

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