Nokia Confirms Low Initial Volumes of Flagship Model

Stephen Elop: There Is Frustration Because of Lumia 920 Limited Supply

by Anton Shilov
12/18/2012 | 09:56 AM

Chief executive officer of Nokia Corp. has confirmed in an interview that although the demand towards Lumia 920 flagship smartphone is high, the supply is low, which causes frustration. At the same time, he did not reveal when the company expects to resolve the supply issue, and whether it actually plans to. At present, for Nokia it is crucial to formally launch the novelty in more markets to create awareness.

 

“We are certainly pleased [with Nokia Lumia 920]. There is excitement in the sales organization, although there is frustration due to limited supply. Our focus is on broadening distribution. You will see us launch in more and more countries. We got onstage (back in September during the launch) and said rather boldly that it was the most innovative phone out there. We stand by that statement. This is something everyone in Nokia is feeling today. It is that sense of pride that we are doing our best work. It is very encouraging,” said Stephen Elop, the CEO of Nokia, in an interview with Cnet News web-site.

Some analysts said back in November that the demand for the handsets exceeds supply. Last week other analysts said that actual sales of Lumia 820 and 920 may be relatively low.

According James Faucette, an analyst with Pacific Crest, there is initial pent-up demand that is resulting in stores selling out of initial shipments in a few days. Nevertheless, this is largely to do with the low shipment volumes rather than surprisingly strong demand. The observers estimate that the batches the stores receive from Nokia are small; but considering the lack of massive backorders, the demand is also not that that high.

“We believe a somewhat similar dynamic is likely going on at AT&T for the 920. Based on the inventory on hand, we believe AT&T is selling only 10 to 15 thousand Lumia 920 devices per week at the moment. We believe stores are able to sell available stock in a few days; however, we found most stores getting only a handful at a time. We estimate that the company is tracking toward shipping roughly one million new Windows 8 products in the December quarter, while it looks likely to sell-through roughly half of those units, based on current run rates,” said Mr. Faucette.

Apparently, Nokia wants to launch its leading-edge smartphones at as many markets as possible to increase awareness of the platform and advertise the platform with operators. Therefore, shortages of Nokia Lumia 820 and 920 will likely to continue to persist.