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Will Nokia?s Windows embrace win over US consumers, carriers?

The lukewarm reception for Nokia?s first smartphones on the Windows Phone operating system suggests the company has work cut out for it in terms of gaining a bigger role in the United States mobile space.

The new Lumia line of smartphones on the Windows Phone operating system introduced by Nokia last week are the first effort to come out of the Nokia and Microsoft strategic partnership announced earlier this year. The smartphones have been anticipated for months as a possible solution to Nokia?s sagging U.S. sales and the lack of consumer interest in Windows devices.

?In the U.S., Nokia and Windows Phone have struggled over gaining market share,? said Ross Rubin, executive director, industry analysis at The NPD Group, Port Washington, NY.

?Nokia has been in decline for smartphones for a number of years and Microsoft has not grabbed much market share since the launch of Windows Phone last year,? he said.

?There is a long road ahead for both to become strong players in the U.S. market.?

U.S. challenges
The Lumia handsets, as well as other new Nokia products will be available in the U.S. market next year.

The Finnish handset manufacturer clearly has set its sights on rebuilding its presence in the U.S. and also announced last week an agreement with the New York Metropolitan Transportation Authority to develop a NFC-based smartphone ticketing service to pilot on New York regional commuter trains starting before the end of 2011

Once a leading U.S. wireless handset player, Nokia's share of the market has declined in recent years as competition has heated up.

The launch of Nokia devices for Windows Phone have been highly anticipated, with Microsoft investing a significant amount of money into the partnership as it looks to build adoption of its mobile operating system. 

One potential hurdle Nokia faces in the U.S. is gaining the support of wireless operators who currently sell only a small number of entry-level Nokia handsets. 

The impact of the new phones in the U.S. may not be clear until wireless carriers start signing on to offer the phones.

?A lot of it will depend on which carriers sign on,? Mr. Rubin said.

Mobile services a plus
The Lumia handsets themselves did not offer analysts a lot to crow about.

The handset itself is a full-screen device with touch capabilities and the design borrows heavily from earlier phones. 

?The Lumia 800 essentially takes the design of the Nokia N9 on Meego and substitutes in Windows Phone,? Mr. Rubin said.

?It is not very differentiated in terms of specifications from a pure component perspective,? he said.

Meaningful services are key to the strength of smartphones and Nokia addresses this with a new location-based service called Drive, an exclusive new ESPN app and music streaming.

?The Lumia phones demonstrate how Nokia can differentiate from Android and other Windows Phone handsets through industrial design and also via the service on the devices, such as the location-based turn-by-turn direction service called Drive,? Mr. Rubin said.

?Drive opens up new revenue opportunities for Nokia as Google Navigation has done for Google,? he said.

Nokia Drive is a personal navigation service with free, turn-by-turn navigation and dedicated in-car-user-interface that is available on the both Lumia 800 and 710 phones.

ESPN Hub is a new mobile application that is launching in early 2012 and which will come preloaded exclusively on the phones.

Both of the new smartphones also feature Nokia Music with MixRadio, a free, global, mobile music-streaming application that delivers hundreds of channels of locally-relevant music.

Marketing opportunities
Now that the phones are available, it sets the stage for Nokia and Microsoft to put their promotional might behind both Windows Phone and the Lumia line.

?That can help build mindshare for both companies in the U.S.,? Mr. Rubin said.

In terms of opportunities for marketers, it is too soon to know if consumers will embrace the phones.

Additionally, Nokia and Microsoft are up against some stiff competition in the U.S., where popular mobile operating systems like iOS and Android receive the lion share of mobile marketing campaigns simply because they represent the bulk of mobile connected devices.

?What Nokia and Microsoft need to do now is to develop and nurture another mobile ecosystem build around the Windows Phone platform in order to make mobile marketing a possibility,? said Wayne Lam, senior analyst for IHS, El Segundo, CA. ?That's a challenge given that there are other competing platforms for marketer's dollars.?

The new phones include the high-end Nokia Lumia 800, which features one-touch social network access, integrated communication threads, an instant-share camera experience, HD video playback, 16GB of internal user memory and 25GB of free SkyDrive storage for storing images and music.

The more moderately priced Nokia Lumia 710 offers instant social & image sharing. 

Both phones are currently being rolled out across Europe and Asia. The Lumia 800 carries a retail price of $680 while the Lumia 710 is priced $440.

Nokia also launched last week the Asha line of mobile phones offering both QWERTY and touch screen experiences, access to the Internet, integrated social networking, messaging and applications from the Nokia Store. 

For Microsoft, the Lumia phones offer an opportunity to drive adoption for its Microsoft Windows mobile operating system, which has not seen much uptake since it was launched last year.

?With Nokia's adoption of the platform, Microsoft stands to see a boost in this platform,? Mr. Lam said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York