Nokia to Stop Selling Feature Phones, Symbian Smartphones in the U.S.

Nokia Edges One Step Closer to Extinction: Set to Drop Sales of "Dumb Phones", Symbian Smartphones in the U.S.

by Anton Shilov
08/09/2011 | 11:25 PM

Nokia Corp., presently the world's largest maker of mobile phones, on Tuesday made another controversial statement claiming that it would stop selling its feature phones and Symbian-based smartphones in the U.S. once it makes available its Windows Phone 7.5-based handsets in the country. If the move will be as dramatic as it seems, Nokia's market share will see a further major drop.

 

“When we launch Windows Phones we will essentially be out of the Symbian/S60 business, the S40 business, etc. It will be Windows Phone and the accessories around that. The reality is if we are not successful with Windows Phone, it doesn’t matter what we do (elsewhere),” said Chris Weber, the president of Nokia U.S., in an interview with AllThingsD.

While the decision to rapidly get rid of Symbian-based products in the U.S. quickly after the release of Windows Phone-based smartphones seems to be logical, the move to drop sales of S40 platform-based feature phones is completely unexplainable.

Even though sales of smartphones reached 106.5 million units in Q2 2011, shipments of feature phones (which some call dumb phones) by far exceeded that number and rose to 258.9 million, according to International Data Corp. Exiting the market of feature phones even in the U.S. is not only a questionable decision, but it may be considered as an intentional sabotage of Nokia's market performance.

When Nokia announced intention to adopt Windows Phone as a primary operating system for smartphones in February, 2011, it said it would sell 150 million of S60-powered smartphones in the years to come. Considering that the company only shipped 16.7 million of Symbian-based handsets in Q2 2011, it will be extremely hard for the company to fulfill its promise when Symbian is out from the U.S. market.

To make the matters worse for Nokia, it is pretty obvious that the future of feature phones is becoming smartphones. Current Windows Phone reference designs can be applied only to expensive models, whereas Symbian can be installed onto relatively inexpensive hardware. Essentially, dropping Symbian means that Nokia will not be able to address the market of cheap smartphones, which will naturally dethrone it from the position of the world's largest maker of handsets and will cause massive drop in the company's revenue.

But for Mr. Weber, who came to Nokia from Microsoft Corp., the top priority seems to be entering the market of smartphones in the U.S. with a Windows Phone 7.5 "Mango" handset and then ship it in other regions.

“We’ll develop for North America and make the phones globally available and applicable. In fact, evidence of that is that the first Windows Phones that will ship are being done by our group in San Diego. [Nokia Windows Phone promotional campaign] is significantly larger than anything we have done in the past and the most we will invest in any market worldwide,” said Mr. Weber.

According to Gartner market research firm, Symbian operating system was installed on 111.5 million, or 37.6%, of smartphones sold worldwide in 2010; Microsoft Windows Mobile/Phone was installed on 11.4 million of smartphones and had 4.2% market share in 2010. It is believed that the share of Windows Phone 7 declined further in 2011 and is now around 3%.