Microsoft and Nokia go low-end for higher marketshare

Microsoft isn't exactly the clear cut winner of the smartphone wars, but there are strong indications that the company's efforts are bearing fruit. Nokia recently announced that they have seen a substantial increase in Windows Phone sales during the last quarter and some research companies are claiming Microsoft's platform is growing even faster than Android.

As such it's pretty obvious that both the Redmond company and Nokia are trying to keep this momentum and gain more marketshare. As Reuters reports, the recently launched Lumia 521, known outside of the US as the Lumia 520, is a perfect example of Microsoft's and Nokia's strategy.

Both companies are going after the low-end segment of the market, a segment that is split between feature phones and cheap Androids. By bringing higher quality devices to lower price points the Windows Phone group is trying to out-maneuver Android and replace it as the de facto ruler of this market segment.

And so far this strategy seems to be working. India, China , South America and other developing markets are much quicker to adopt Windows Phone that other competing systems due, in large part, to an excellent money/quality ratio.

Even markets such as North America, that have proven extremely difficult for Microsoft and Nokia, seem to be responding well to this strategy. The Lumia 521, that launched last week at HSN is a 4" Nokia smartphone that sells for just under $150, and has already sold out. In the following days the 521 will also launch at Walmart giving Microsoft and Nokia even broader reach and driving this low-end adoption rate even higher.

Both Nokia and Microsoft have always relied on volume, so one might argue that only now are they actually starting to compete in the market; and as they have proven before this "focus on the low-end" strategy might be the winning one.

Via: Reuters | Image via Nokia

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16 Comments

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Funny...its been what two years? I still don't know a single person who has mentioned, or knows about or is excited about Windows phone. Not a single person.

This new is just marketing stunt. Lumia 610 is already low-end.

And about it, it is amazing the amount of people that claims Android is laggy while iphone and WP is lag free. Sheeeesh!.

I've a low end samsung galaxy pocket (832MHz cppu) and its lag city for anything other than txt or calls my nexus 7 runs rings around it

After stumbling many times along the road it seems there are signs of intelligent life at both Microsoft and Nokia. The reason both neglected the low and middle segments of the phone market, critical if you are coming from behind and fighting strong competitors, was that very deluded impression that Windows phone 7 was a ground shattering product that only needed a bit of marketing muscle to get itself noticed at which point it would start "selling by itself". Targeting the higher end of the market was reasonable since that is where the money -that Nokia so desperately needed- was and of course what better way of parade the strengths of the new contender that on the glittering light of fanciful and expensive hardware. It was a case of overconfidence and looking at reality through apple-shaped lenses. Sadly I'm not enterily confident Microsoft and Nokia can pull this off with the product they'd got. The simplicity of the interface both from a design and a functional point of view no doubt appeals but soon it starts to ware thin and "limited" and "simplistic" become the dominant impressions. Windows phone is good enough as it is to survive on its own purely based on the strength (MS) or desperation (Nokia) of the companies behind it but not to make it a success and by that I mean anything approaching 30% market share. It needs serious tweaking and on going rethinking (including the graphical design of the interface). Too many people that have willingly come to the platform and wanted to like it (myself included) have deserted it because they couldn't live with its many annoyances and constraints. Much have been said and talk about the lack of applications for the platform; I don't think that was such a critical factor but if that was the case it's telling of the brains at the top at Microsoft that they would rather spent billions in advertising than millions paying software houses to code popular or useful applications for the platform. It is also telling of their strategic blindness that having witnessing the decline of RIM Microsoft or Nokia haven't had the vision to create a business oriented hardware and software platform capable to gain the hearts and minds of the corporate world. As it stands Windows Phone is not bad but not good enough and to turn around its fortunes it requires to be rid of executives that are not stupid but certainly not smart enough.

Minayowitz said,
After stumbling many times along the road it seems there are signs of intelligent life at both Microsoft and Nokia. The reason both neglected the low and middle segments of the phone market, critical if you are coming from behind and fighting strong competitors, was that very deluded impression that Windows phone 7 was a ground shattering product that only needed a bit of marketing muscle to get itself noticed at which point it would start "selling by itself". Targeting the higher end of the market was reasonable since that is where the money -that Nokia so desperately needed- was and of course what better way of parade the strengths of the new contender that on the glittering light of fanciful and expensive hardware. It was a case of overconfidence and looking at reality through apple-shaped lenses. Sadly I'm not enterily confident Microsoft and Nokia can pull this off with the product they'd got. The simplicity of the interface both from a design and a functional point of view no doubt appeals but soon it starts to ware thin and "limited" and "simplistic" become the dominant impressions. Windows phone is good enough as it is to survive on its own purely based on the strength (MS) or desperation (Nokia) of the companies behind it but not to make it a success and by that I mean anything approaching 30% market share. It needs serious tweaking and on going rethinking (including the graphical design of the interface). Too many people that have willingly come to the platform and wanted to like it (myself included) have deserted it because they couldn't live with its many annoyances and constraints. Much have been said and talk about the lack of applications for the platform; I don't think that was such a critical factor but if that was the case it's telling of the brains at the top at Microsoft that they would rather spent billions in advertising than millions paying software houses to code popular or useful applications for the platform. It is also telling of their strategic blindness that having witnessing the decline of RIM Microsoft or Nokia haven't had the vision to create a business oriented hardware and software platform capable to gain the hearts and minds of the corporate world. As it stands Windows Phone is not bad but not good enough and to turn around its fortunes it requires to be rid of executives that are not stupid but certainly not smart enough.
Wall of text is a wall of text... couldn't read

I've been saying since the first talk of this that it would be huge for the platform. I'm glad to see that it appears to be working. It's a great platform that deserves more market share. It's only a matter of time.

The low range Androids are a complete nuisance. There are HTC, Sony and Huawei and even Samsung cell phones priced in the range of USD 130-170 which with a 600 Mhz processor and Android OS are impossible to use. Then there is a whole lot of android based Chinese phones in this range with dual and quad core MTK processors which are poorly built and unreliable. Its shocking how so many OEMs have not been able to adequately cater with this segment. Lumia 520 and 620 are a sigh of relief here and I see them doing really well going forward.

Believe it or not, UNIX based operating systems used to have the highest "desktop" market share and that appeared unstoppable only to be superseded by MS-DOS and Windows, same with xbox same with the office suite same with Windows Server same with Embedded, same with motion sensing devices... the list goes on. I think the prospect of Windows Phone cololonising the phone market isn't that far fetched. Work from the top down and particularly the bottom up and we have lift off.

This area of android is where the most fragmentation occurs due to old devices still on sale running very old versions of android on very cheap hardware, sure people don't get into the tech aspects of such things when buy cheap phones, but they will feel the effects when apps cant run along with seeing others phones with features that theirs will never get, not to mention never getting any updates of any kind at all!

If MS and Nokia can deliver WP8 devices at this price point, devices that will see updates due to the new infrastructure and codebase of WP8 (as in updates are for certain), then they should kill this segment off in a short time.

Neobond said,
This is why Android 2.3 still has a very large marketshare as well.

True, and it is also the reason why Android has a large marketshare over all - without the massive cheap Huawei and ZTE Android phones running old versions of Android it would be interesting to see what the what the market share of each OS actually is.

Mr Nom Nom's said,

True, and it is also the reason why Android has a large marketshare over all - without the massive cheap Huawei and ZTE Android phones running old versions of Android it would be interesting to see what the what the market share of each OS actually is.

It's not only Huawei and ZTE, Samsung makes a range of lower end Galaxy devices, aka Fame, Blaze and I don't know how many more. LG also, and HTC before that.

Android's growth has come on the large number of mid-low end devices it'd be silly not to target this as not everyone out there is a techie who wants the bleeding edge hardware on a smartphone. Hell, just the other day I saw the HTC One for sale here for 750 euros without a contract.

GP007 said,
Android's growth has come on the large number of mid-low end devices it'd be silly not to target this as not everyone out there is a techie who wants the bleeding edge hardware on a smartphone. Hell, just the other day I saw the HTC One for sale here for 750 euros without a contract.

In the US HTC sells it directly at $545 SIM free; price is not bad and it is something Nokia should do as well.