Edible Apple

To say the iPhone disrupted the smartphone industry would be an understatement of the highest order. While consumers lined up in droves to get Apple’s revolutionary smartphone, companies like Microsoft and Nokia were quick to scoff at Apple’s allegedly feeble attempt to get into the phone business.

Not surprisingly, Microsoft and Nokia’s arrogance came back to bite them in the behind in a major way. Having been pushed to the brink of irrelevance by Apple and Google as well, it was only natural that Microsoft and Nokia would eventually join forces in an effort to stay afloat in a market that’s largely passing them by.

Together, the two are hoping that Windows Phone 7 coupled with Nokia’s sleek hardware design can compete with the iPhone and a slew of Android handsets. And while we’re not particularly enthralled with the concepts behind WP 7, early reviews of Nokia’s first WP 7 phones were largely positive.

But pleasing critics is a whole lot easier than making an impact in the marketplace.

That said, shares of Nokia fell today after word broke that initial shipments of WP 7 based Nokia handsets were lower than expected. Specifically, one analyst believes Nokia may have only shipped 1 million units, with only 500,000 being picked up by consumers.

Nokia announced the 420 euro ($568) Lumia 800 and 270 euro Lumia 710 last month for shipment this quarter and said it plans more models and higher volumes with U.S. and China rollouts early next year. Chief Executive Officer Stephen Elop shifted to Microsoft Windows Phone platform for the company’s main smartphone line after the company lost ground with its own 10- year-old Symbian software.

“The market has somewhat elevated expectations for Nokia and its Lumia launch, particularly given the strong backing from carriers that the company is garnering,” Faucette wrote. “If Nokia is unable to successfully regain high-end market share in the next several quarters, the stock could return to what we consider a fair value of roughly 4 euros.”

One thing’s for sure. It’s going to be an uphill battle for Microsoft and Nokia and to be fair, it doesn’t look too promising.

via Bloomberg