Microsoft Corp.’s MSFT foray into the competitive smartphone-making business was dealt a setback in the final months of 2013 as Nokia Corp. said sales of its Lumia Windows phone line suffered a rare decline in the fourth quarter.
The trend is a troubling sign for Microsoft, which is in the process of closing the $7 billion purchase of Nokia’s handset business. When the pact was announced in September, executives at both companies pointed to a string of quarterly smartphone sales increases as a key reason behind the U.S. software giant’s bold bet.
Nokia launched a range of new devices ahead of the holiday season in an attempt to stoke momentum.
This news is so bad I hardly know where to start.
First, Nokia didn’t simply fail to keep up its growth in a growing market. It actually sold fewer phones, quarter-to-quarter, in a growing market. That by itself is an ominous sign.
The fact that Nokia did so with all-new product, including their flagship smart-camera-phone, makes the news just that much worse.
But the real kicker might be that a software company with zero experience designing, assembling, or marketing smartphones is about to take over its operations.
This has “BlackBerry” written all over it.
The good news for Nokia employees is that Microsoft has much deeper pockets than BlackBerry, and can keep this ship afloat for as long as it chooses to.
But to what end, if the product doesn’t move?