Nokia Corp. NOK1V.HE -12.95% saw its shares plummet Wednesday after it unveiled two new smartphones designed to run on Microsoft Corp....
Chief Executive Stephen Elop presented the flagship Lumia 920 and the mid-tier Lumia 820 at a press event in New York. Both devices use the Windows Phone 8 operating system, work on high-speed fourth-generation networks and feature Nokia's advanced mapping and location services.
But the company didn't say when the devices would hit the shelves. Nokia's Helsinki-listed shares, down by half this year, fell 13% after the devices were announced.
Michael Walkley, an analyst at Canaccord Genuity, attributed the drop to worries about the launch of the new devices, which will likely be going up against a new iPhone from Apple Inc. AAPL -0.70%as well as new devices powered by Google Inc.'s GOOG -0.05%Android operating system.
Nokia said it would disclose pricing and availability of the new Lumia phones in the fourth quarter.
"Investors want to be sure the devices will be selling well ahead of Christmas," said Hakan Wranne, an analyst at Swedish banking group Swedbank. "For Nokia, it's all about distribution now, and we got no answers on when these new devices will sell and which U.S. operators will market them," he said.
Mr. Elop said Nokia has worked hard to distinguish the devices. The Lumia 920 will have an eight-megapixel camera similar to the iPhone 4S, but it will have a Carl Zeiss lens. Nokia, which has long touted the high-end lenses in its devices, is once again banking on the popularity of its camera to extend the market for its smartphones.
The new phones have brighter, more colorful screen presentations. The company's Smart Shoot feature allows users to remove unwanted photo content, and its image-stabilization produces sharper, more colorful images and video in low light.
Nokia is hoping the smartphones will catch on with consumers and help turn around the company. Once the market leader in mobile phones, Nokia has lost ground to Apple's iPhone and devices powered by Android on the high end, and phones produced by emerging-market competitors on the low end.
A year and a half ago, Mr. Elop made the risky decision to jettison the company's own operating systems and focus on phones built around Microsoft's software. While well reviewed by critics, the phones that were released since have failed to get much traction with consumers. The new line is Nokia's second generation of Microsoft phones.
"While the new phones unveiled Wednesday are seen as more critical to Nokia's prospects, the announcement also is important to Microsoft and its push into the smartphone business," said Steve Ballmer, chief executive of Microsoft, who briefly joined Mr. Elop on stage Wednesday.
"Microsoft and Nokia forged their phone partnership 18 months ago and the new Windows Phone 8 devices bring that partnership to life."
Developers have written more than 100,000 applications for Windows Phones, up from 7,000 when the partnership began. That increase in numbers combined with the cross-platform features of Windows 8 makes it likely that "the next app developer to hit it really, really big will be a developer on Windows," Mr. Ballmer said.
Nokia's new Lumia 920 smartphone features wireless battery charging. This option is also available for the 820, but as an add-on. Both phones are powered by Snapdragon s4 chip from Qualcomm Inc., QCOM +0.20%a dual-core processor that allows the phone to communicate and execute applications more quickly. They also are equipped with Pure Motion HD displays that are intended to set the Lumia models a notch above other smartphones.
The operating system, meanwhile, has been completely overhauled by Microsoft and will be compatible with Microsoft's Windows 8 for PCs and tablets. The new software is set to debut Oct. 26.
Despite the high-powered union between Nokia and Microsoft, devices running Windows Phone software have a smaller mobile market share than the operating system held before the partnership began. This has prompted Nokia to embark on a sweeping restructuring that will cut 10,000 jobs, shutter factories and see several executives replaced.
Despite receiving favorable reviews, Nokia's first Windows-powered Lumia smartphones haven't sold in great numbers. Statistics released from industry research firm Gartner Inc. showed that the Windows Phone operating system ran on less than 3% of smartphones sold in the second quarter.
However, in the wake of Apple's big patent-suit win over Samsung Electronics Co. 005930.SE -2.38%last month, analysts expect Samsung and other phone makers to invest more heavily in Windows devices in order to hedge their bets against legal attacks from Apple. Those phone makers have been focused on devices powered by Google's Android software, Apple's target in a global wave of litigation.
Nokia's announcement comes a week after Samsung beat the company to the punch and unveiled its own new Windows phone. Microsoft has said manufacturers including smartphone maker HTC Corp. 2498.TW +0.39%of Taiwan and telecom giant Huawei Technologies Co. of China will also be making Windows Phone 8 devices.
Nokia also has to contend with Apple, which has invited the media to a product announcement Sept. 12 at which it is widely expected to announce a new iPhone.
Separately Wednesday, Motorola Mobility took the wraps off three new smartphones for its RAZR line at a New York City event. The company, now owned by Google, said the RAZR M model, which has a 4.3-inch touchscreen, will go on sale next week. No specific launch date or pricing were announced for the other two models, the RAZR HD and RAZR HD Maxx, with Motorola only saying that the devices would launch "before the holidays."
Gartner analyst Carolina Milanesi said Nokia's highly anticipated launch has come at a good time, given that many BlackBerry users and some users of Google's Android operating system are looking for an alternative. She added, however, that Nokia will need to work hard to articulate the benefits of the devices to consumers, and that this will require investment in close work with retailers and distributors.
The launch is also considered to be Mr. Elop's last chance to win over the company's long-suffering investors.
Shareholders, particularly on Nokia's home turf, are growing restless with the slow-moving turnaround and will be closely watching to see if the new phones catch on in the marketplace.
"Most of our 10,000 members own Nokia shares, and there is a lot of disappointment with the company and its management," said Timo Rothovius, chairman of Finland's Shareholders Association for small investors. "People are especially disappointed with Stephen Elop."
If the new phones don't sell, Mr. Rothovius said, his group will push for Mr. Elop's removal.
Since Mr. Elop made risky decision in February last year to scrap Nokia's own software, Symbian, and use Microsoft's Windows operating system for its future devices, the company has piled up billions of euros in losses, its credit rating has been slashed to junk status by all three major ratings companies, and Nokia has lost its crown as the world's largest maker of mobile phones to Samsung.
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