Nokia stumbles in China comeback as phones miss New Year

Source: Bloomberg Source: Bloomberg

On billboards across Beijing, in subway stations and on banners outside its stores, China Mobile Ltd. is inviting subscribers to “Change Phones for the New Year!” with Nokia Oyj’s Lumia 920T.

That’s not as easy as it looks. Most China Mobile outlets won’t carry the 4,599-yuan ($738) device ahead of next week’s holiday, with the largest Chinese operator blaming delivery shortages. While 90,000 Lumia 920T models were ordered through Jan. 30, Nokia only shipped 30,000, said Li Yan, a China Mobile spokeswoman.

Nokia missing out on the Chinese New Year shopping season is another stumble for the Finnish company two years into a comeback attempt driven by the Microsoft Corp.-powered Lumia. After U.S. holiday sales trailed estimates, Nokia risks a repeat in the largest handset market, which it once dominated and is trying to win back from Android devices and Apple Inc.’s iPhone.

“China is the hottest market by far now and everybody is circling around trying to get in as much presence as they can,” said Neil Mawston, an analyst at Strategy Analytics in London. “Nokia must not fail in China because it would place their entire worldwide recovery effort at risk.”

Nokia led smartphone sales in China with a market share topping 50% as recently as two years ago, only to let it slip away after ditching its own Symbian operating system in favor of Microsoft’s Windows. Local rivals such as Lenovo Group Ltd. and China Wireless Technologies Ltd., as well as giants Samsung Electronics Co. and Apple Inc. have left Nokia with a meager 1% share, according to Strategy Analytics.

No Lumias

The Chinese Lunar New Year, which falls on Feb. 10 this year and is followed by a week-long holiday, is a gift-giving season in China comparable to the peak Christmas shopping rush in the U.S. Retail sales during last year’s New Year holiday week rose 16% to $75 billion.

“Nokia’s production is still very low and supply isn’t meeting demand at this point,” China Mobile’s Li said in a Feb. 1 interview. “Many of our stores don’t have any units.”

The shortage threatens to let rivals widen their lead as China Mobile’s New Year campaign also features Samsung’s Galaxy Note 2, Lenovo’s A798T, the Coolpad 8190 from China Wireless, the MT788 from Google Inc.’s Motorola Mobility, and HTC Corp.’s T528t.

Two China Mobile outlets visited by a Bloomberg News reporter at Beijing’s World Trade Center and on Guanghua Road on Feb. 1 both said they never received any of the Lumia 920T models, and didn’t expect any until after the holiday. The five rival devices were available at outlets visited by Bloomberg.

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