Growing sales of its Lumia smartphones and the increasing popularity of the Windows Phone platform appear to have driven Nokia to target the tablet market. The company is reportedly planning to launch a tablet based on Windows RT next month. This sounds like a disaster in the making.
In contrast to most of the other handset makers, Nokia has long kept out of the quickly growing tablet market. It did not have much of a choice given the poor state of affairs at its main handset business. In early 2011, Nokia started its turnaround by signing a cooperation agreement with Microsoft to adopt the Windows Phone platform on all its smartphones.
Two and a half years later, the cooperation has still not completely born fruit. There are a few emerging positive points, such as a continued sequential improvement in Lumia smartphone sales and Windows Phone settling in comfortably as the third mobile OS after Android and iOS.
Now, as Microsoft is still struggling to absorb the failure of its own Surface tablet, Nokia wants to tackle a new product category, one known in particular for very low profit margins. While the premium segment is stable with Apple the only really relevant player, the rest of the tablet market appears to be shifting to cheaper devices. Android is by far the biggest platform in this segment.
According to market reports, Nokia's tablet will come with high specifications: a quad-core Snapdragon 800 processor (2.1GHz), 10.1-inch full HD display, 32 GB internal memory and a keyboard cover. The price will be around USD 500-600, similar to other (failed) devices such as the BlackBerry PlayBook, HP TouchPad, HTC Flyer and Motorola Xoom. The question is whether anyone who has a bit to spend on a tablet would choose a Nokia tablet running Windows RT.
It will be difficult, if not impossible, to compete with such a product. A number of other manufacturers – HTC, Acer and Asus - have already given up on Windows RT, saying it's not suitable. Sales channels may also not be waiting for a Nokia tablet, given the difficulties they've already had shifting Nokia's smartphones.
If Nokia does go ahead with the launch of a tablet, it's very likely that the device will be discounted repeatedly, before within about a year disappearing from the market. Nokia may then see that it could have achieved more using Windows 8.
