Seriously, Nokia, this is painful to watch

Shares plunge on lowered financial outlook; glitch plagues Lumia 900s

Have you ever been at a comedy show where the comic was bombing so horribly that every joke was met with dead silence, making it painfully awkward for the audience? That's what it's like watching Nokia these days. You just feel like averting your eyes and waiting for it to be over. Once the world's leading manufacturer of mobile phones, Nokia is trying to recover from the brink of irrelevance in the emerging smartphone market. Key to its comeback is the Lumia 900, the Windows Phone-based device that's supposed to challenge Apple's iPhone and handsets powered by Google's Android in the U.S. market. But just three days after the Lumia 900 began selling in the U.S. through AT&T for $99.99, Nokia revealed that the 900 may lose its high-speed data connection (just the sort of feature people want in a smartphone!). That was late Tuesday. On Wednesday, shares of Nokia (NYSE: NOK) plunged more than 15% to 4.27, their lowest point since 1997 after the Finnish company lowered its financial outlook for the first half of this year, citing "competitive industry dynamics," which is a euphemistic way of saying Nokia can't compete. Certainly not in the U.S., where the company has less than 1% of the market. And with the latest embarrassing glitch likely to sway many initial impressions of the Lumia 900 and Nokia overall in a decidedly negative way, it's hard to see Nokia winning new smartphone customers in head-to-head competition with Apple and Android manufacturers (even if it is resorting to a $100 credit for all Lumia 900 buyers through April 22, even if they weren't affected by the software glitch). When Nokia announced its smartphone partnership with Microsoft in February 2011, many people (including myself) were skeptical that two companies clearly falling behind in smartphone technology could somehow produce a winner, especially since they essentially were "going dark" for the better part of a year. By "winner," that meant a genuinely competitive smartphone that has something neither the iPhone nor Androids offers. A phone that rates an "11". Instead, at least according to a Windows Phone program manager last fall, the partnership was producing "8s". Eights won't cut it in the smartphone market, especially in the high end. And especially if your marketing campaign is predicated on the notion that the "smartphone beta test" is over. (This is reminiscent of Research in Motion's PlayBook tablet campaign last year in which RIM assured potential buyers that "amateur hour is over." Ironically, it had just begun.) What we're getting from Microsoft and Nokia is pretty much what we should have expected. No one should be surprised.

Chris Nerney writes ITworld's Tech Business Today blog. Follow Chris on Twitter at @ChrisNerney. For the latest IT news, analysis and how-tos, follow ITworld on Twitter, Facebook, and Google+.

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