nokia trips on day 3 of the Lumia 900 US launch – windows phone software bug triggers a 100% refund

US nokia decided to launch the Lumia 900 on Easter Sunday when most of AT&T and Microsoft stores are closed.  every brand manager worth his or her high paying job knows you choose a launch date for a new product only when you are sure your product will be available in the retail stores for consumers to buy it from.

choosing a date when the retail stores themselves are closed is the first time nokia tripped on their Lumia 900 product launch.  now, nokia not only trips but takes a fall – on day 3 of the launch, nokia announces a 100% rebate to those who bought or will buy Lumia 900 due to a data connectivity problem with the windows phone OS. the product is priced at $100 with contract with AT&T, giving a $100 rebate is like givng it away for free.

it’s a magnificent gesture to nokia customers (hello, apple are you listening?) but it does leave a bad taste in the mount for those who have not bought their Lumia 900 yet. this fear that even though it has been fixed (to be done in the future) getting a brand new Lumia 900 that will not work can be very real even if its for free or back to the regular $100 price.

potential buyers will definitely think twice before buying the Lumia 900 or for those decided on it will probably postpone the purchase for as long as they can. with aggressive and more popular competitors lurking, nokia might just lose the sale.

this windows phone OS problem is puzzling to us –  doesn’t  nokia test their products before they launch it in the market? we would think extensive lab and field testing would be in order for cellphones  before they are launched. discovering the OS defect on day 3 of the market launch just sounds too amateurish for such a huge company.

bad news does not end there.  nokia  sent out a press re;lease as advance notice to their 1qtr call scheduled next week:

Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition.

nokia has announced it will have first and second quarter 2012 results will be below expectation.  it looks like the business decline for nokia that has been going on for sometime has not been arrested.

but here is what puzzles us as well – the announcement states 1st quarter and 2nd quarter results will be bwlow expectations. our question is this – what is the share of  Lumia 900’s launch in their first and second quarter forecast?

there are several possibilities here :

• Lumia 900 was forecasted  very low versus the rest of the Nokia business that its impact to its business is very minimal. marketers typically show a bump in sales forecast when new products are launched.
• if nokia forecasted this very low, does that indicate nokia has little confidence on the success of Lumia 900?
• this early nokia is already anticipating very low sales on the Lumia 900?
• the rest of the business is nokia is expected to perform so poorly that even the bump in sales from the lumia 900 will not be able to push its total sales up?

we have seen thousands of new product launches before but this lumia 900 launch we think is one of the weirdest ever and to some degree has gotten a lot of  bad luck.

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from the above, a big  sell down in the stock market for Nokia.  investors sold down NOK by almost -16% to just $4.24 at close. NOK also reached its 52 week all time low last night at $4.20.