Nokia stumbles in China comeback as phones miss New Year

New Mode

“We’re shifting into a mode now, where we’re essentially starting with a fresh new portfolio of products,” Elop told a conference call. “The Lumia 920, which is on China Unicom’s network, and the Lumia 920T on the China Mobile network combined with other Lumia products that you are seeing or will soon see land in China, really give us that fresh approach.”

Samsung led in China with a 16% market share in the third quarter, according to researcher IDC. A host of domestic vendors have also surpassed Nokia with low-cost smartphones, including Lenovo, China Wireless, ZTE Corp. and Huawei Technologies Co., which rounded out the top five vendors in the nation. Apple ranked sixth, with a 6.6% share.

Demand for the Lumia exists in China, according to Li Azi, a 22-year-old university student in Kunming, in China’s southwest Yunnan providence. Li is one of China’s 1.34 billion residents who are upgrading old phones to take advantage of the country’s expanding third-generation mobile networks.

“I like the Lumia 920 because of its design, the operating system,” Li said. “It has personality. I want to get a Lumia 920 but I haven’t bought it yet.”

Two Decades

Nokia, which has been present in China for more than two decades, has an extensive distribution and sales force in the country. The challenge for Nokia is to revive the brand’s attractiveness, said Sandy Shen, an analyst with Gartner Inc. in Shanghai.

“The key is to improve the brand mindshare so people will consider Nokia whether it’s a holiday or not,” Shen said. “The Nokia brand has slipped a lot from the consumer mind in recent years due to the lack of star products.”

The deal with China Mobile, announced in December, was a good step forward for Nokia. China Mobile is looking for a flagship smartphone to help it combat the iPhone, which isn’t compatible with its homegrown 3G network standard.

To improve its chances, Nokia needs to make sure it doesn’t let down consumers like Lin Sanmu, who was looking to trade up from his Nokia 6120C at an electronics store in Beijing’s eastern Chaoyang district.

“I got five years of use out of my last Nokia phone and that’s pretty good,” Lin said. “Nokia is good quality. Now, I’m looking to upgrade from a feature phone to a smartphone so I can use the Web.”

Still, Lin left the shop empty-handed because it didn’t have the Lumia model he wanted.

Bloomberg News

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