Will Lumia light up Nokia?

Nokia and Microsoft this week provided a sneak peek of their upcoming Lumia 710 and 800 phones for the Australian market and both have a lot riding on the release. To put it simply, it is make or break time for both companies in the mobile space.

Having said that, the phone itself is quite nice – Windows Phone 7.5 runs quite fast with some nice features such as integrated messaging and coupled with good hardware it's a nice experience. Those I know who use Windows Phones are quite happy with them (I'm an iPhone user myself). Whether it's enough to displace the iPhone and the dozens of Android based handsets on a market where both Nokia and Microsoft have missed opportunities remains to be seen.

The battle is going to be on a number of fronts – at the telco level, in the retail stores and, most importantly, with the perceptions of customers.

Probably the biggest barrier with consumers is the perceived lack of apps and both companies are taking steps to rectify that. Nokia has bundled in their Maps and Drive applications while Microsoft has included their Mixed Radio streaming features along with Microsoft Office and Xbox integration.

As well the built in services, both parties are playing up their application partners with services like Pizza Hut, Fox Sports and cab service Go Catch. Bear in mind that all of these services are also available on other platforms.

The real battleground

While applications matter, the real battle for Nokia and Microsoft is going to be in the retail stores and that challenge shouldn't be underestimated. Apple dominates the upper end of the smart phone market and Android is swamping the mid to low end. Where the Windows Phone devices will fit in remains to be seen?

In Australia, if they going to find salvation it will be at the tender hands of the telco companies. The iPhone is constant source of irritation for the telcos because the US giant not grabs most of the profit, it also “owns” the customer.

On the other hand, Android devices are irritating customers who are bewildered by the range of choices and frustrated by inconsistent updates that can leave them stranded with an outdated system.

So the Windows Phone does have an opportunity in the marketplace, although I suspect commissions and rebates will be crucial drivers in getting sales people at the retail coal face to recommend the Microsoft and Nokia alternatives.

Overall though, it's good to see a viable alternative on the market. For both Microsoft and Nokia the stakes are high with the Lumia range – it could be Nokia's last shot – so they have plenty of incentives to get the product right.

Microsoft has consistently missed the boat on mobile computing since Windows CE was launched in 1996 while Nokia were blind-sided by the launch of the iPhone in 2007 and have never really recovered. To make things worse for Nokia, the market for basic mobile phones where they still dominate is under threat from cheap Android based devices. So even the low margin, high volume market isn't safe.

For both, the Lumia range is critical and 2012 will be an interesting year.

Paul Wallbank is a business technology writer, broadcaster and blogger and author of eBusiness: Seven Steps to Online Success.