Lumia 900 to Help Secure Third Place for Nokia and Microsoft

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REPORT

May 3, 2012 Companies: AAPL, AMD, FRA:DTE, GOOG, INTC, KS:005930, MMI, MSFT, NOK, QCOM, S, T, TPE:2498,

TSE:RIM/RIMM, VZ

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Reverdy Johnson, rj@blueshiftideas.com, 415.364.3782

Summary of Findings Sales and product reviews are exceeding expectations for Nokia

Corp.’s (BIT:NOK1V/NOK) Lumia 900, providing a necessary win for both Nokia and Microsoft Corp. (MSFT). Twenty-three of 26 sources said it is the best Windows Phone to date.

Sixteen sources specifically praised Nokia’s hardware and feature choices for the Lumia 900 and said the smartphone is Nokia’s best entry yet into the high-end U.S. smartphone market.

The Windows Phone operating system is expected to take third place from Research In Motion Ltd.’s (TSE:RIM/RIMM) BlackBerry. Windows Phones are also more likely to steal share from Google Inc.’s (GOOG) Android devices than from the Apple Inc.’s (AAPL) iPhone/iOS, though it will take time to pose a significant threat.

Six sources said Microsoft has a better chance of a breakout hit in its Windows 8 OS, especially in Windows 8 tablets. Nokia has stated its intentions to be the first to offer Windows 8 tablets.

Sources were split on the Windows Phone Marketplace for apps. Developers are more enthusiastic about creating apps for the OS than in Blueshift’s Sept. 22, 2011, report. However, they also mentioned the lack of high-profile apps and Windows Phone Marketplace’s slow growth compared with iPhone and Android.

No secondary market yet exists for Lumia 900. Resellers are hesitant to take on the phone amid an oversupply of BlackBerry devices and lackluster demand for previous Windows handsets. Still, one industry specialist said Nokia wants to sell only through carriers for now, making other distribution channels less relevant.

Lumia 900 Best

Windows Phone

Windows Phone Will Overtake

BlackBerry

Windows App Marketplace

App Developers

Industry Specialists

Distributors/Resellers

N/A

AT&T Stores

Customers

Research Question:

Will the Lumia 900 be a breakout for the Nokia/Windows partnership and capture some of the smartphone market from the Apple and Android operating systems?

Silo Summaries 1) APP DEVELOPERS Four of five sources praised the Lumia 900, calling it the best Windows Phone on the market. The Windows app marketplace is attractive to developers. One source said he has a better ROI on his apps on Windows phones than in the Android marketplace, despite fewer downloads. Another source saw advertising revenue spike for his app before the release of the Lumia 900. A third source, however, reported having difficulty in making money off of Windows Phone apps because of the smaller user base. Two sources said the Windows 8 OS will be even better than Windows 7. 2) INDUSTRY SPECIALISTS All five sources said the Lumia 900 has had a successful rollout in the United States and should continue to post strong sales and penetrate the market. It is the best Windows phone and has exceeded some expectations in terms of demand and market reaction. Windows Phone will become the No. 3 platform in time. It also benefits from Android’s increasingly fragmented market because Windows offers a plug-and-play device. Verizon’s backing is important and could result in a major marketing campaign for Windows phones and tablets this fall. 3) DISTRIBUTORS/RESELLERS Four of five sources said distributors are waiting to see demand for the Lumia 900 at the retail level before jumping in to distribute Nokia’s newest device. They also are reluctant to take on another platform since they have not had success with RIM’s BlackBerry or previous Windows Phones. Still, all five sources agreed the Lumia 900 is an improvement over previous Windows phones, and will be a success for carriers but not yet for distributors. Three sources said BlackBerry’s weakness presents an opportunity for Windows Phone to jump into the No. 3 OS slot. 4) AT&T STORE VISITS Four of six sources said Lumia 900 demand is strong and the phones are selling out. The two remaining sources said sales have been average. It will establish itself in third place among OSs. Windows 8 tablets are highly anticipated. 5) CUSTOMERS These five sources praised the Lumia 900 for its ease of use, solid hardware, competitive pricing and strong OS. Lumia owners said the app market had plenty of options. Sources also said the Lumia will compete well against Android phones. One source is interested in getting a Windows 8 tablet once one is released.

Nokia/Windows Platform: Lumia 900

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Background In Blueshift’s Sept. 22, 2011, report, 11 of 14 app developers reported having little interest in creating apps for the Nokia/Windows platform. Still, several sources had positive comments about Windows 7 and said it could threaten RIM in the enterprise market. On April 8, AT&T Inc. (T) stores started offering Nokia’s Lumia 900, which comes with Windows 7.5 (“Mango”) software. The launch has been accompanied by a massive TV marketing campaign that is expected to last six to eight weeks. The Lumia 900 represents the best chance for Nokia and the Windows Phone platform to have a breakout hit in the United States and to capture some of the smartphone market from Google and Apple. Nokia is expected to release the Lumia 900 in the United Kingdom on May 14. CURRENT RESEARCH This report aims to determine whether the Lumia 900 launch will be a success and if it will signal a stronger future for the Nokia/Windows partnership. Blueshift employed its pattern mining approach to establish and interview sources in six independent silos:

1) App developers (5) 2) Industry specialists (5) 3) Distributors/resellers (5) 4) AT&T store personnel (6) 5) Customers (5) 6) Secondary sources (9)

We interviewed 26 primary sources, including eight repeat sources, and included nine of the most relevant secondary sources focused on Nokia’s intentions to create the first Windows 8 tablet, anticipation for the Windows 8 OS, doubts surrounding the upgrade process from Windows Phone 7 to Windows Phone 8, reviews for the Lumia 900, a surge in downloads for an app developer after the release of the Lumia 900, news of Verizon supporting Windows Phone to help it become a third major mobile platform, and Microsoft paying developers to help build its app market.

Silos 1) APP DEVELOPERS Four of five sources praised the Lumia 900, calling it the best Windows Phone on the market. One source said it could help Windows Phone challenge Android and iOS among mobile operating systems, while overtaking RIM which is dying off. Other sources were more reserved regarding Microsoft’s ability to take on the top two OSs. The Windows app marketplace is attractive to developers, in part because it is less crowded. One source said he has a better ROI on his apps on Windows phones than in the Android marketplace, despite fewer downloads. Another source saw advertising revenue spike for his app before the release of the Lumia 900, a possible sign that advertisers expect strong sales for the handset. A third source, however, reported having difficulty in making money off of Windows Phone apps because of the smaller user base. The fourth source still is not creating apps for the Windows Phone OS because Lumia 900 lacks uniqueness and innovation. The fifth source is hesitant about the Lumia 900 since it may not be able to be upgraded to Windows 8. Two sources said the Windows 8 OS will be even better than Windows 7 and will give Windows 8 tablets the ability to take second place from Android tablets. Developer for a mobile app design team that has created apps for iOS, Windows and Android

The Lumia 900 should be the most successful Windows Phone to date, outselling HTC Corp. (TPE:2498) devices and reaching sales on par with Samsung Electronics Co. Ltd.’s (KS:005930) Samsung Galaxy S II. It is a good step forward for the Windows Phone platform, but Nokia phones running Windows 8 later this year will provide real competition for Android devices and possibly even the iPhone. For developers, the Windows Phone OS is attractive because its app market is less crowded. To date, his firm has had better ROI, more income and an easier time with iPhone and Windows Phone development than with Android, though downloads are lowest on Windows Phones.

Nokia/Windows Platform: Lumia 900

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“Having used the Lumia 800 launched earlier in Europe and being aware of the differences, the 900 is a phone that is on par with the Samsung Galaxy S II and probably slightly weaker than the iPhone 4S. The Lumia 900’s 4G support, low-price entry point and the marketing put behind it by Nokia are promising a great launch.”

“We’re expecting this device to be by far the most successful Windows Phone device, to outsell HTC phones [running Windows] and sell fewer but a comparable number to the Samsung Galaxy S II in the U.S.”

“The Lumia 900 will be the first step to bring Windows Phone to the mainstream and get a visible market share. The next Nokia Windows 8 phones this fall or winter will be the ones that will bring a direct competition with Android and perhaps Apple devices. The lack of brand recognition is the issue these phones are still likely to face.”

“One thing a lot of analysts and iOS and Android developers tend to ignore is the fact that Windows Phone fits into the coming Microsoft Windows 8 tablets, desktop and Xbox ecosystem in a very similar way as the iPhone currently does in the iPad and Mac ecosystem. We expect Windows Phone to accelerate in gaining market share starting in the fourth quarter of this year and the first quarter of 2013 with the release of Windows 8.”

“We’re expecting Windows 8 to rocket into a solid second place in the tablet market, overtaking Android in months. We’re expecting Android to still be battling with vendors, fragmentation, patents and fuzzy user experience this Christmas. A successful Windows 8 would definitely boost Windows Phone brand recognition.”

“With Mango out and with Nokia using Windows Phones only for smartphones, the platform has gotten a huge boost in terms of completeness and brand recognition. With Nokia, it’s not a ‘Windows Phone’ but a ‘new Nokia’ on the street. We’re much more optimistic about long-term success than previously. With the Nokia partnership, the OS is getting much needed spotlight.”

“The Windows Phone operating system still has small glitches, which makes it feel a bit less mature than iOS. However, its user interface is distinct enough to offer a truly new kind of experience. Windows Phone—just like iOS—offers the same experience on all devices, which is not true of Android. Usability-wise, Windows Phone, iOS and high-end Android devices running the ‘Ice Cream Sandwich’ version of Android are comparable experiences.”

“We’d expect Windows Phones to be successful with general consumers, especially with Xbox gamers. The phone and marketing seem to target general consumers, aiming to convince Android, iOS, BlackBerry and non-smartphone users to use this phone. There seems to be little to no business-specific features in this phone. This might happen in the next version, but currently this does not seem like a strategic point.”

“We have a pretty unique approach by launching on Windows Phone first and porting apps to iPhone and Android afterwards. This is because of resources available and technology preference and because it’s much easier to become popular on Windows Phone since the Marketplace is less crowded.”

“Developing for iPhone and Windows Phone requires about the same effort. For Android, we’ve had to invest two to three times the effort. Almost all of the extra time is spent on testing and fixing fragmentation issues and vendor specific modifications, and this still results in a number of user issues.”

“The iPhone has the highest number [of downloads of our app], with Android half or less and Windows Phone by far the lowest, about one-tenth or less of the Android version.”

“Income per user is tricky to compare because on Windows Phone the app is paid, but it supports the trial concept where there’s a free demo, which you can then purchase at a click anytime. Windows Phone has by far the best results here, with about 25% of downloads converting into

We’re expecting this device to be by far the most successful Windows Phone device, to outsell HTC phones [running Windows] and sell fewer but a comparable number to the Samsung Galaxy S II in the U.S. ... The next Nokia Windows 8 phones this fall or winter will be the ones that will bring a direct competition with Android and perhaps Apple devices.

Mobile App Developer

Developing for iPhone and Windows Phone requires about the same effort. For Android, we’ve had to invest two to three times the effort. ... We’ve released a paid-only app on Windows Phone and Android, and Windows Phone delivers more total income and downloads than the Android version despite the much larger Android reach.

Mobile App Developer

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 4

purchases. The iPhone is performing much, much less and Android about one-tenth of the fraction of iPhone.” “The iPhone and Windows Phone make similar income, with Windows Phone probably performing well because

the app is high up in the charts. Android is making very little money.” “The iPhone definitely has had the best ROI. Windows Phone has also delivered good value, while Android

delivered very poorly—the conversion rate is extremely low on that platform. We’ve released a paid-only app on Windows Phone and Android, and Windows Phone delivers more total income and downloads than the Android version despite the much larger Android reach.”

“We’ve had a positive experience with the Windows Phone platform and the purchase conversion rates. Our income so far has exceeded what we would have expected based on the small user base. We are continuing to invest in the platform, at this point mostly by further developing our apps and not ruling out further new app releases.”

“Starting from last fall … we’ve seen significant growth in the downloads of one of our highly ranked free apps and moderate but noticeable growth of our paid apps downloads. Overall, revenue has moderately increased since then and continues growing.”

European software developer with three apps in the Windows Marketplace, including a top finance app

This source said Windows Phone is a terrific OS that could pose a significant challenge to Apple’s iOS and Google’s Android. He has high hopes for Nokia’s Lumia 900 but is concerned the price may be too high for consumers looking to buy it without a contract. Ad revenue for his apps spiked just prior to the Lumia 900 launch, a possible sign that advertisers expect a surge in Windows Phone users.

“I sure do think [Windows Phone] can be the No. 3 phone after Android and Apple. They could even take a big bite of both markets.”

“I was optimistic when I first got to know Windows Phone, and I’m still very optimistic, even more with the Microsoft/Nokia partnership. I think with Windows 8 coming out, they will surely get a big piece of the mobile/tablet market.”

“The Lumia 900 is a great-looking device, and the 4G is a real plus for the people in the U.S. The Nokia apps are a plus as well. Nokia delivering Nokia Drive and Nokia Maps preinstalled [on Lumia phones] is a great advantage.”

“The only disadvantage I’m seeing is the price tag [for the Lumia] without a contract. Here … it’s around €400 to €500 [$520 to $650] for the Lumia 800. When you’re a new player and you have to compete against the iPhone, this price is a bit too high. The Lumia 900 isn’t out in our area yet, but I think the pricing will be around the same price as the Lumia 800.”

“I’m sure Nokia and Microsoft will put their best effort into promoting the Lumia 900. I think the stores play a big role in selling the phones as well. When the salespeople aren’t promoting the phone, it simply will not get sold.”

“Between the preorder [March 30] and the launch of the Lumia 900 [April 9], I have seen a rise in the eCPM [effective clicks per thousand impressions] for the ads running in the free version of my app. A rise in eCPM—which tracks how much money you get for every 1,000 impressions—could indicate there are more advertisers and they are bidding more for the ad placements. This could indicate that advertisers are expecting a rise in Windows Phone users.”

“The Windows Phone OS is great. I just love the simplicity. Everything looks clean and dead simple. Everything I need is just right there on the main screen. The live tiles are a unique concept. It’s simple, but it really brings your phone alive.”

“Microsoft has clearly thought about certain functions that needed to be fast. Looking at the ‘Smoked By Windows Phone’ series, you get some great examples of those functions.”

“I personally haven’t had an iPhone or Android device yet, but I have many people around me with one. Most of my friends are Android users, and I have played around with their different ROMs and versions. It just isn’t my thing, the endless tweaking of an Android device. I want something that works out of the box without the

I sure do think [Windows Phone] can be the No. 3 phone after Android and Apple. They could even take a big bite of both markets. ... With Windows 8 coming out, they will surely get a big piece of the mobile/tablet market. ... I think Android is digging its own grave with all their different versions. It will not only leave users frustrated but also developers.

European Software Developer for Windows Marketplace

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 5

tweaking. I think Android is digging its own grave with all their different versions. It will not only leave users frustrated but also developers.”

“Comparing the specs between an Android and Windows Phone device, you see a huge difference as well. You won’t get decent performance with a budget Android phone. You need better hardware to get a smooth-working Android.”

“I hope Windows Phone can continue the same smoothness with their budget phones that are coming out. If they can deliver a great-working budget phone, they will surely get a bigger share of the market.”

“I think they will get a bit of all [segments]. Gamers will get great Xbox Live games, though we will need in-app purchases to get the FarmVille [Zynga Inc./ZNGA] kinds of games. General consumers will get a device that works great with social networks. Business/enterprise consumers will love the Office integration. They need [Microsoft’s] Skype though.”

“If the rumors are true that Skype will be baked into the OS in the next version, then Windows Phone will convince a lot of these consumers. I think everybody will find something useful in a Windows Phone.”

“As a [Microsoft Visual] C# developer in my professional life, I will surely keep developing for Windows Phone. It’s a new platform, and I think it has a lot of potential.”

“I don’t have any actual experience with the iPhone [App Store] and the Android Market. I missed the boat there, so I’m pretty darn happy that I can take the opportunity to grow with this new Marketplace. I’m sure a lot of new developers think the same way. The [Microsoft] .NET community has some great developers that are working on great apps.”

“Some people have had some problems with the strict rules in the Windows Phone Marketplace, but I personally haven’t. Just follow the guidelines and everything should work out in your favor. These rules are needed so you don’t get that many low-quality apps. I have seen the wait period differ between two and seven days. I don’t see this as a problem. If it benefits the quality of apps in the marketplace, then this is a good thing.”

“Some people claim that the fate of Windows Phone is connected to the amount of apps [in the Marketplace]. When I have this discussion with an iPhone or Android user, I make them tell me the apps they use. About 70%-80% of the apps they use are also available in the Windows Phone Marketplace. And you can probably find an alternative for that other 30% somewhere. Of course, there are still some holes to fill, but I’m sure this is just a matter of time.”

“I just hope other players like HTC and Samsung will still deliver Windows Phone devices. With Nokia being the biggest player and getting the most attention, I’m hoping [other manufacturers] won’t leave Windows Phone behind.”

“I believe once Windows 8 is released, many people will adapt to the Metro principles and hopefully love it. People will get used to the new layout, and they will be more easily convinced to buy a Windows Phone because they know the interface and have worked with it before.”

“BlackBerry is slowly dying, and I think they realize that as well. There are already rumors spreading that BlackBerry might implement Windows Phone. Both BlackBerry and HTC might see Windows Phone as their ticket back in the market.”

Software engineer with a top-selling finance app in the Windows Phone Marketplace; repeat source

The Lumia 900 is a great phone, but its short-term success could be hindered by sales reps more interested in pushing the iPhone or Android devices. App development for the Windows Phone OS is growing, but he has made little money in the Windows Market. Nokia needs to decide if it wants Lumia to be its high-end or low-end phone as the Lumia 700 bargain phone confuses the customer and the market. Nokia could extend sales of the Lumia 900 by releasing a version running Android, which would be bad news for the Windows Phone OS. Windows Phone may have more success internationally than in the United States. iPhone’s status among professionals may kill any chance Windows Phone may have of competing in the corporate space.

“The Nokia Lumia 900 is a spectacular phone. I was seriously considering buying one.”

When I have this discussion with an iPhone or Android user, I make them tell me the apps they use. About 70%-80% of the apps they use are also available in the Windows Phone Marketplace. And you can probably find an alternative for that other 30% somewhere.

European Software Developer for Windows Marketplace

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 6

“The biggest problem may be educating those that sell the handsets. When I go into an AT&T store and ask for a smartphone, the sales rep immediately points me to the iPhone. When I say that I’m not interested in the iPhone, they immediately point me to an Android handset. Windows Phone devices don’t seem to register at all as a viable option.”

“The success of the Lumia 900 in the short-term depends wholly on the sales rep pushing the product. [Longer term] AMOLED screens will become mainstream soon, so whatever impact the Lumia has will be short-lived. Apple is working on high-resolution liquid-metal screens now, leapfrogging the competition.”

“Whether the Lumia 900 can be the No. 3 smartphone depends on Nokia. What keeps Nokia from releasing the Lumia with an Android OS? You can buy the Samsung Galaxy running Android, which is the exact handset as the Samsung Focus running Windows Phone 7.”

“Windows Phones can definitely have a shot at being the No. 3 operating system as long as Microsoft has exclusive rights to the Lumia 900. If Nokia decides to release Android on that device, then it doesn’t look good for the OS.”

“There are a lot more of the popular apps on Windows Phone 7. As a product and OS, it is definitely becoming more solid.”

“The development story is incredible and it’s just getting better [for Windows Phones]. But I wish I would have deployed my application to iOS first. I’m pretty sure I would have made more than $200 in revenue.”

“Downloads [of my Windows Phone app] are increasing, but my revenue has been a meager $218. That’s with the app being out there since December of 2010, and I’m one of the top 10 most downloaded apps in the Windows Phone Marketplace under the financial category.”

“Windows Phones will have the most success in the foreign markets, actually. I’ve seen a few apps that are 100% built in Chinese. A lot of my own downloads are from the United Kingdom.”

“Releasing the Lumia 700 in the U.S. was a bad move. I understand they are trying to target the bargain phone market, but it doesn’t communicate clear motives. Is Nokia coming in as the high-end, polished Windows Phone with the Lumia 900, or are they coming in as providing the bargain phone? This may confuse consumers.”

“It’s the same problem with Windows 8. What is the clear motive? Are they trying to deliver an OS that is optimized for tablets, or are they trying to deliver the next generation of desktop OSs? They can’t go all-in as a tablet OS because of a fear of breaking backwards compatibility, so it’s brought forward instead as dead weight.”

“The service provider plays a role in this too. The appeal for iPhone is that AT&T, Sprint [Nextel Corp./S] and Verizon [Communications Inc./VZ] have zero say into what applications are loaded on the phone. It’s really frustrating when a service provider loads their trashy applications onto my device during activation.”

“A lot of top-level business executives want the prestige of carrying an iPhone. It’s perceived as a high-end device and represents status in society. Not sure if Windows Phone 7 and Nokia can beat that.”

“AMD [Advanced Micro Devices Inc.] is desperate. They are losing market share because of Intel [Corp.’s/INTC] Core i3, i5 and i7. iPads run on Hitachi-based [Hitachi Ltd./TYO:6501] processors and Macs run on Intel-based processors. What choice does AMD have [besides Windows tablets]?”

President of a development firm with an email and productivity app for Android

phones and tablets; repeat source The Lumia 900 is a great device but not different enough from the competition to separate itself from the pack. Microsoft’s approach that requires the Windows Phone OS to look and feel the same across all devices could limit its success by stifling innovation among manufacturers. His firm is not willing to invest in developing its productivity app for Windows Phones because the OS does not seem likely to gain traction among enterprise users.

“The Lumia 900 and its OS are truly great, but to succeed in the market it has to be revolutionary. In a market where differentiation has started becoming harder, it takes nothing short of a revolutionary feature to come to the front.”

There are a lot more of the popular apps on Windows Phone 7. As a product and OS, it is definitely becoming more solid.

Software Engineer for Windows Marketplace

The Lumia 900 and its OS are truly great, but to succeed in the market it has to be revolutionary. In a market where differentiation has started becoming harder, it takes nothing short of a revolutionary feature to come to the front.

President, App Development Firm Android Phones & Tablets

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 7

“The nonfragmentation of the Windows Phone OS will probably become its own undoing. All Windows Phones look the same when you turn on the screen. Android has fragmentation to its benefit, with variations to suit every demographic. Don’t like the stock Android OS? Try HTC’s Sense. Don’t like Sense? Try Samsung’s TouchWiz. Don’t like TouchWiz? Try [Motorola Mobility Holdings Inc.’s/MMI] Blur. Don’t like any of them? Try CyanogenMod.”

“I don’t think Nokia will be able to bring Windows Phones into the mainstream by themselves. If a tight Microsoft/Nokia partnership discourages other vendors from innovating too far, it can be counterproductive to the platform. Apple can afford to not require differentiation because they manufacture the devices themselves, but any platform that requires a diverse set of OEMs cannot afford to restrict innovation by laying down standards.”

“Our perception [of Windows Phones] has not changed in the last six months. Although a flagship device was released, we have not seen many people on the street sporting one.”

“I think Windows Phone will see more adoption in the consumer space and the young school/college crowd. But without big-ticket games coming to the market, even that is still a little doubtful.”

“We do not have plans to port our applications to the Windows platform or even to develop new apps [for Windows]. The Windows Phone platform already has a good implementation of what we do well in Android, and we were not convinced that the Windows Phone platform, at least in the short term, would dominate our key demographic of enterprise users.”

“Being a high-investment activity to port our complex enterprise application to Windows Phone, we do not want to port the application yet while there are still questions on the upgrade path of Windows Phone and especially the developer tools, APIs and architecture. We do not want to invest heavily on the platform while there is a risk of having to face platform changes which may require rework. Microsoft has not been very forthcoming in keeping developers informed about the future of the platform.”

“Windows Phone is an OS that we love and hate. On one hand, the graphics and user experience on the applications are extremely good. On the other, Microsoft seems to have this tile fetish.”

“One of the key features we have come to expect from a mobile platform is the ability for responsible developers to develop background applications. It seems like Microsoft could really not get their arms around battery consumption and, hence, the platform just provides the ability for apps to run code when opened.”

“Being a closed platform where apps will change hands from the developer to end user only through their market makes it hard for developers to put all their trust into Microsoft. While Apple makes you do it, you are looking at a multimillion potential user base. Android lets users side-load, leading to a whole different underground application market with its own ups and downs.”

Owner of a software development firm with a productivity app for Android phones and tablets

The Lumia 900 is generating some excitement and has prompted this source to consider designing his company’s app for Windows Phone. Concerns remain, namely whether the Lumia will be upgraded to Windows 8 and whether Windows 8 will be a hit with consumers.

“I haven’t used Windows Phone a whole lot, but with the new Lumia 900 out for sale it sounds like there are some exciting things going on. I’m actually considering writing a version of [our Android app] for Windows Phone. To gauge interest, I’ve been going to AT&T stores and asking about sales. So far it seems a bit mixed here.”

“My main concern with Windows Phone is the upgradability. The rumors that current phones, including the Lumia 900, might not get the Windows 8 update are a little unsettling. Also, there’s the fact that I haven’t liked what I’ve seen with Windows 8 so far, and I’ve been using Windows since the weekend that Windows 95 came out. The consumer

We do not have plans to port our applications to the Windows platform or even to develop new apps [for Windows]. ... We were not convinced that the Windows Phone platform, at least in the short term, would dominate our key demographic of enterprise users.

President, App Development Firm Android Phones & Tablets

My main concern with Windows Phone is the upgradability. The rumors that current phones, including the Lumia 900, might not get the Windows 8 update are a little unsettling.

Owner, Software Development Firm Android Phones & Tablets

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 8

preview didn’t sit well with me, but it might work a lot better on a phone.” “I’m probably going to stick with Android. I just got myself an HTC One S, and it’s every bit as smooth as my

neighbor’s iPhone 4S and the Lumia 900 that I played with, if not more so. It’s not necessarily the customization that I’m into, but rather the feeling that I own my device. I don’t necessarily use Google’s services and Android seems to be the only platform that will allow me to use any service that I want.”

2) INDUSTRY SPECIALISTS All five sources said the Lumia 900 has had a successful rollout in the United States and should continue to post strong sales and penetrate the market. It is the best Windows phone and has exceeded some expectations in terms of demand and market reaction. Windows Phone will become the No. 3 platform in time and has a great opportunity to take BlackBerry’s dwindling share of business and productivity phones. It also benefits from Android’s increasingly fragmented market because Windows offers a plug-and-play device. Two sources said the lack of Windows apps is a hindrance, but one source said the smaller Windows’ app market will have little effect Windows phones, including the Lumia 900. Another is not concerned about the Lumia’s absence among phone resellers, saying that it goes straight to carriers. Verizon’s backing is important and could result in a major marketing campaign for Windows phones and tablets this fall, similar to what it did for Android with the release of the Motorola Droid. Editor of a smartphone news and review website; repeat source

The Lumia 900 is the best Windows Phone on the market, but Microsoft’s mobile OS is unlikely to make a big dent in the smartphone market until Windows 8 is released and consumers become accustomed to the tile-based system. Verizon’s decision to back the Windows Phone platform could give it a big boost, as will the growing complaints about Android devices’ inconsistent quality. HTC, Samsung or both possibly could abandon the Windows Phone OS, leaving just Nokia to make such devices.

“The Lumia 900 is the best Windows Phone out there, and its closest competitor is the Lumia 800.” “It’s a fine device, but it’s not an awesome one. I think the Lumia 900’s role is basically going to be to keep

Nokia and Microsoft in the game long enough for them to get Windows 8 out.” “I am more optimistic about the Windows Phone platform than I was [when we spoke in September], but that

doesn’t mean I’m filled with optimism. The Lumia 900 is actually selling. Nokia has only sold 2 million devices running Windows, so they’re not doing gangbusters, but the Lumia 900 has still sold vastly better than any previous Nokia device has done in the U.S. by a wide margin. It’s actually finding some customers.”

“The major complaint that people who sell the device are getting is that the tile-based system that Windows Phone uses has a learning curve.”

“The best thing that is going to happen for Windows Phones will be the release of Windows 8. That is also going to have that tile-based system. Once people learn to use that, they’re going to pick up a Windows Phone and say, ‘Hey, this works just like my desktop does.’”

“HTC’s and RIM’s struggles can only help Nokia. Verizon announced last week that they’ve picked Windows Phone as their third operating system, and they’re going to make a big advertising play on it for the Christmas season. Almost everybody thinks BlackBerry is a zombie at this point; they just don’t know they’re dead. And Verizon apparently thinks so too because they’re not going to make a big push around BlackBerry; they’re going to make it around Windows Phone.”

“Verizon made Android what it is today. Before the first Motorola Droid came out on Verizon, Android wasn’t doing all that well. It took months and months for people to buy the first million Android phones. It did not take off like a rocket. But then Verizon got behind it and made some great ads, and people went down to the store and bought some Droids.”

“There are some limitations in the Windows Phone operating system, like no support for the removal of memory, and currently it only has support for WVG [wide video graphics] displays—nothing more, nothing

The Lumia 900 is the best Windows Phone out there. ... I think the Lumia 900’s role is basically going to be to keep Nokia and Microsoft in the game long enough for them to get Windows 8 out. ... The Lumia 900 has still sold vastly better than any previous Nokia device has done in the U.S. by a wide margin. It’s actually finding some customers.

Editor, Smartphone News & Review Website

Nokia/Windows Platform: Lumia 900

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less. Windows Phone 8, ‘Apollo,’ is supposed to have support for more screen resolutions.”

“Android or iOS would have to make a serious mistake for Windows Phone to seriously challenge them. It’s not going to happen on its own. Apple’s cache never goes away. It’s unlikely to flub. But there is a groundswell of complaints around Android these days, the whole fragmentation issue.”

“Companies are selling too many crappy models [running Android] that don’t last two years. … People who have encountered that may seriously consider buying a Nokia [Windows Phone] though they’re more likely to buy an iPhone.”

“There are a couple dozen Android devices released every year, and maybe 25% of them will ever get an operating system upgrade. People will be using a device they bought last year into 2013, and by then you’ll have a two- or three-year-old operating system on it.”

“Every single Android device runs a different version of the operating system, which is a nightmare for developers and is really hurting the availability of apps. There’s lots of Android software out there, but some of the big names are staying out for the simple reason that doing quality assurance is a nightmare.”

“The lack of Windows Phone apps is still a problem—maybe not a horrific one, but it’s a problem. Microsoft and Nokia are doing everything they can to convince developers to write more software, but it’s going to continue to be a problem.”

“They’re doing what they can to foster development. For a while, Microsoft put out the word that if you’re a developer with more than X number of downloads and you want to port your app to Windows Phone, we’ll give you a device. But that’s not going to pull in the big-name developers.”

“HTC’s got real problems, and they’re talking about just focusing on a few models. That could mean they’re not going to waste their time on Windows Phone anymore.”

“At this point, there’s not enough general interest in the Windows Phone platform for there to be three companies successfully making products for it. I just don’t see any way there’s enough interest for six or seven Windows Phone devices to be profitable.”

Editor of a technology blog focused on mobile Internet

The Lumia 900, with its stunning optics and attractive price with a two-year contract, is a good start for the Microsoft/Nokia partnership. Taking market share will require time and better hardware on future devices, but Windows Phone should become the third-largest OS after Apple’s iOS and Google’s Android, provided Microsoft can lure enough developers to beef up its app catalog.

“The Lumia 900 snuck up on me. I enjoyed it far more than I anticipated I would. With its simple shape and bold colors, it seems it could turn some off right away. If you try it out, however, you will like it. Despite a single-core [Qualcomm Inc./QCOM] Snapdragon processor, it’s pretty fluid in everything it does. I did not notice any UI [user interface] delays or hang-ups in pretty much anything I threw at it. Credit the OS here.”

“It has one of the nicest cameras you will ever use on a mobile phone. I experienced stunning results in both pictures and video. The screen is also very crisp despite its 480 x 800 resolution, thanks to Nokia’s ClearBlack contrast filtering thrown in. When it comes to optics, Microsoft and Nokia hit a grand slam with the Lumia 900. It’s worth the price for the optics alone, and at only $99 with a contract, I feel it could gain a good following.”

“The Lumia 900 was thought to be too dated by release after a huge marketing campaign. It had the feel of a phone that could end this huge roll of the dice for Microsoft and Nokia before it even hit shelves. Basically, nobody thought it would be a good phone by the time it got here, but it turned out to actually be a decent phone. While the specs

Every single Android device runs a different version of the operating system, which is a nightmare for developers and is really hurting the availability of apps. There’s lots of Android software out there, but some of the big names are staying out for the simple reason that doing quality assurance is a nightmare.

Editor, Smartphone News & Review Website

The Lumia 900 snuck up on me. I enjoyed it far more than I anticipated I would. ... When it comes to optics, Microsoft and Nokia hit a grand slam with the Lumia 900. It’s worth the price for the optics alone, and at only $99 with a contract, I feel it could gain a good following.

Editor, Technology Blog Focused on Mobile Internet

Nokia/Windows Platform: Lumia 900

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leave something to be desired, it’s priced amazingly well and packs advantages over the big boys’ flagship phones in terms of optics.”

“I’m more optimistic about Windows Phones than previously. The operating system on the Lumia 900, while certain to come off as underwhelming to some of the more hardcore spec addicts, is beautiful in its simplicity. Microsoft has managed to pack more punch into a package intentionally designed with less pizzazz.”

“Microsoft will absolutely benefit from the struggles of RIM. … I can see HTC grabbing the wheel of the bandwagon and manufacturing many more Windows Phones with Mango loaded in the near future. … If so, we could see some serious momentum head Mango’s way.”

“I believe that Windows Phone will become the third-largest OS behind the other two behemoths. RIM is on the way out … leaving a massive consumer base looking for something else in the near future. Sure, they could opt for one of the two obvious choices in iOS or Android, but maybe they’re upset over what these operating systems did to their favorite OS. Retribution and scorn could pay dividends for Microsoft and Nokia.”

“While I see Windows challenging the other two big fish, it’s a long way off. The marathon approach is Microsoft and Nokia’s only hope. With only 70,000 apps in the library as of now, and many of the most necessary or beloved apps on other platforms still absent from the Windows Phone library, they have their work cut out for them. After polishing a decent OS and making it very usable, however, they certainly have hope in luring more developers into their web.”

Principal mobility analyst for a technology consulting firm; repeat source

The real power of Lumia 900 is to get Nokia into the computing mainstream despite its heritage as a mobile-only vendor. Market share gains will be enormous and Nokia’s early position could leave it with half of the Windows phone market. Android is ripe for consolidation. Lack of buy-in from traditional phone wholesale channels is not a problem for Nokia but a feature of the company’s straight-to-carrier strategy.

“This is a breakout product for Nokia and another shot on the mobile goal for Microsoft. This is what brings Nokia back to the United States after years in largely self-imposed exile. I expect them to have 10% of the U.S. market—at the high end this time—again by 2015. Add that to their strong 12% or so of the global market, and they start looking good.”

“Even the Lumia 800 was great … easy to use, intuitive, streamlined. Just different enough from the iPhone/Android interface that it’s not going to get them in trouble with the patent lawyers but similar enough that people recognize that, yes, this is still a smartphone.”

“Dell [Inc./DELL] just killed its phone program and I’m not holding my breath for them to come back any time soon. That leaves Windows to Nokia and maybe Samsung and HTC to divide. The question then is how big the Windows mobile universe becomes. I expect them to have 20% of the U.S. market running some form of Windows operating systems in the next three years.”

“Figure Nokia will keep half the Windows user base under the first mover principle. Lumia has massive marketing behind it, and people are at least going to associate it with the Microsoft phone much as people associated Motorola and the Droid with the ‘Google’ phone. The Droid is still hanging on as one of the four top Android phones in the United States, years after its launch. That says it all.”

“Market share for Windows will come out of BlackBerry, which is a lost cause, but everyone who was going to jump ship to iPhone has done so by now. Those who remain are the die-hards who will probably go with Microsoft. That’s a robust, what, 6% of the market for Windows and Nokia to grab? After that, the easy gains come from the fragmented Android world. Divide and conquer. Motorola is declining, LG never really got started. Samsung and HTC have set themselves up as the new Android leaders, so they’ll be tougher to crack.”

“I don’t think you’ll see much migration from iPhone to Lumia. That audience is fanatic in its loyalty, as you know. But iPhone may not grow much in the United States unless it finds a price point that tackles the weak segments of the Android world—again, LG and Motorola, the mass-market side.”

This is a breakout product for Nokia and another shot on the mobile goal for Microsoft. This is what brings Nokia back to the United States after years in largely self-imposed exile. I expect them to have 10% of the U.S. market—at the high end this time—again by 2015. Add that to their strong 12% or so of the global market, and they start looking good.

Principal Mobility Analyst Technology Consulting Firm

Nokia/Windows Platform: Lumia 900

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“In three years you have maybe Apple at maybe half the U.S. market, Samsung and HTC sharing 30% in the Android world, Nokia at 10% and the legacy providers fighting over the remaining 10% that non-Nokia Windows devices and fringe operating systems can hold. That’s not the magnificent land rush chaos we’ve seen lately, but it will provide sanity and some stability as the camps solidify. I think Nokia will look at that as a win. Microsoft will definitely look at it as a win. It’s a loss for Google.”

“I’ve heard that phone resellers are skittish around Lumia. Let them! Nokia is going straight to the carriers and bypassing all traditional retail channels. It’s taken a cue from Apple and selling customized versions to fit a given carrier’s network, with customized discounting built in to reward carriers that sell the phone better than their competitors. AT&T has proven it’s wonderful at that, so they got to be the standard bearer. But simply not getting Windows phones into reseller inventories means nothing in itself.”

Editor of a mobile device news/review site; repeat source

Microsoft is stage-managing the Lumia 900 launch to eliminate missteps and control expectations. As a result, the phone is selling out because shipments were calibrated just short of anticipated demand. Nokia is an obvious beneficiary of this since it will be perceived as launching a hit product. The goal is not to create an iPhone killer but simply to create space for a new operating system in the mobile universe.

“Ask any of the day-to-day reporters and yes, Lumia 900 is a breakout phone. After all, it’s selling out millions of units in a matter of days. Whether that’s actually a long-term breakout performance that swings long-term market share is beside the point. Nokia and especially Microsoft have created the impression that this is a breakout phone, and that’s probably the more important point.”

“Microsoft was obsessed with finally making this phone work. How long have they been hitting the wall in terms of mobile operating systems? … This was a do-or-die moment for them psychologically, so they threw everything they had at it. It was going to be considered a success, one way or another.”

“For Nokia this was truly a do-or-die moment, but they hitched themselves up to a very powerful partner and got to come to the party. They survive another year, another product cycle. You know, Nokia is now barely 5% the size of Microsoft. Microsoft could absorb them without missing a beat. So even though they have less than 5% of the resources, they’re getting 50% of the credit for Lumia 900. This is the hit they needed.”

“For Microsoft the goal was to make a space for a Windows phone that people take seriously. … This is a tactical win, not the big parade.”

“What surprised me was how this was run. Of course the phone sold out. Of course it was a hit. All the oversupply and disasters of previous iterations of the Windows phone are forgotten. Or more to the point, Microsoft learned from them. Don’t trust brute market forces when you can arrange a success story and let the brute media forces do the work for you.”

“Samsung is going to want a piece of this. They’re already in Android, so they win. Actually, Samsung probably is Android now for a growing segment of the population. The Galaxy line of phones is the brand that stuck. Now they’re Samsung phones or Galaxy phones powered by Google. They’re not ‘Android phones.’ That’s a crucial distinction in the way these brands evolve.”

“But if people want a different flavor of Galaxy, Samsung wants to be able to make it happen. They win because they’re bigger than either the ‘Google flavor’ or the ‘Windows flavor.’ That’s a position that’s hard to beat as you mount a serious challenge to Apple.”

“Microsoft also covets a broad OEM platform because while they’ve learned a lot, they’re still thinking as a pure software vendor, not as Apple. They’re thinking that Google and Android are the serious competitor. Right now, they’re right, but ultimately Samsung is looking at Apple as the last player standing and who knows who Apple looks at? What this means is Microsoft is painfully eager to let everyone build Windows phones. They want that rush of Android proliferation, people fighting over a piece of the ecosystem, but with them pulling the strings.”

“HTC made a great phone, but … they were not taken seriously as a feature phone maker two, three years ago. They made rock-bottom handsets, lower down the totem pole than the ones Nokia takes such grief over today.

Ask any of the day-to-day reporters and yes, Lumia 900 is a breakout phone. After all, it’s selling out millions of units in a matter of days. Whether that’s actually a long-term breakout performance that swings long-term market share is beside the point. Nokia and especially Microsoft have created the impression that this is a breakout phone, and that’s probably the more important point. ... This is a tactical win, not the big parade.

Editor, Mobile Device News/Review

Nokia/Windows Platform: Lumia 900

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That’s why Google raised them from obscurity to make the ‘baseline’ Android phones. They’re not going to be able to diversify beyond that without help. Same as Motorola. You’re not going to see a Motorola Windows phone any time soon. Samsung and Nokia in Windows; Samsung, Motorola and everyone else in Android.”

“[Deutsche Telekom AG’s/FRA:DTE] T-Mobile obviously needs cash. They’d be happy to take incentives from Microsoft to put the Lumia on their network and sales shelf. Sprint and Verizon, same thing. This is one of those situations where money talks. However, I think the next wave—now that Windows is being taken seriously—will not feature quite the insane levels of handset subsidy to get people to pick up the phone.”

Consumer electronics journalist; repeat source

The Lumia 900 is a success and already making inroads on BlackBerry as the business-oriented smartphone of choice. The source said the timing of the Lumia 900 launch shortly before Samsung’s latest Galaxy consumer phone likely was coincidental. The feature set seems designed to point consumers to Microsoft’s cloud solution, SkyDrive. Proprietary Nokia functionality likely will be absorbed into the default OS.

“I thought the latest round of Lumias would do better than the trade press—which hates Microsoft and disparages Nokia as a junk vendor—expected, but the reality has been even better than I thought. Selling out so quickly is a great sign. The trade press can’t discount these phones as another failure. That’s a big step.”

“There’s talk now that Lumia’s delayed launch in Europe is going to put it head to head against Galaxy S3 in the next few weeks. I think that’s hype and sour grapes. Galaxy is a great line of phones, but it’s aimed at personal subscriptions. It’s a personal phone. The Lumia is living up to the Windows Mobile promise of being a new kind of work phone. This means Galaxy is not a direct threat. Lumia is a direct threat to BlackBerry though. BlackBerry has just lost its reason to live.”

“This is the first smartphone you need for the office in a long time. It’s the first reason for anyone to own two phones—one Android or iPhone for me, one Windows phone for the office—since the golden age of BlackBerry.”

“Is it a success in terms of profit margins and scaling up to a global share of the market that needs to be taken seriously? Probably not. You know how much money Microsoft and Nokia are shoveling at both the carriers and the consumers to buy these phones? They’re selling at a huge loss. Microsoft gets the validation of signing these people onto Zune, SkyDrive and other services to make money from them that way. Nokia gets to live to fight another day.”

“The cloud angle means Microsoft has much greater control over the operating environment than any true ‘app store’ system. Talking about the number of apps in the store is just a way for Microsoft to lull a public that’s come to believe you need a lot of apps to be good. In reality, they’ll just keep updating the operating system with the functionality that they think people want and need. You’re free to buy extra and pin new software to your screen, but it’s not the main thrust this time around. This is a simple plug-and-play world for people who don’t like to customize everything.”

“If Nokia … does well with its proprietary apps like the mapping, then those apps stand a good chance of becoming standard in the post-Mango world of [Windows] 8 and beyond. Otherwise, Microsoft will probably go on sidelining those apps in favor of in-house functionality from Bing and elsewhere. This is Nokia’s chance to prove that it can still lend something to the software side. The reward there will be tighter integration, maybe even a merger between the two companies down the road.”

3) DISTRIBUTORS/RESELLERS Four of five sources said distributors are waiting to see demand for the Lumia 900 at the retail level before jumping in to distribute Nokia’s newest device. They also are reluctant to take on another platform since they have not had success with RIM’s BlackBerry or previous Windows Phones. One source likened Windows Phone’s situation to Android’s in which a catalyst like the Motorola Droid was needed to bring the OS to consumers’ awareness. Whether the Lumia 900 is that catalyst is unclear. Still, all five sources agreed the Lumia 900 is an improvement over previous Windows phones, and will be a success for carriers but not yet for distributors. Three sources said BlackBerry’s weakness presents an opportunity for Windows Phone to jump into the No. 3 OS slot.

The Lumia is living up to the Windows Mobile promise of being a new kind of work phone. ... Lumia is a direct threat to BlackBerry.

Consumer Electronics Journalist

Nokia/Windows Platform: Lumia 900

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Sales representative for a smartphone distributor; repeat source

Lumia 900 may be a great phone but Windows smartphones have yet to amass the type of consumer interest that would make them attractive to small distributors. Many distributors already are glutted with unsold BlackBerry handsets and are unwilling to support a fourth OS. Android currently is picking up the share lost by RIM, though Windows has a chance to overtake RIM in the future.

“They’re beautiful phones, and the operating system is fun. We don’t sell them. Maybe they’ll be a breakout hit, but we just can’t take that chance. Next time.”

“We’re seeing a lot of these phones sell, sure, but what’s a million phones in two weeks? Expectations have been managed here pretty shamelessly. Apple can move a million iPhones in a day. Samsung can ship 15 million of the new Galaxy phones in a month. There’s just no base here to build on, and until we see that base, it’s not for us.”

“BlackBerry is the problem. We’re dumping BlackBerry handsets because nobody wants them, and nobody wants them because, in part, we’re dumping them. Enterprise customers are afraid that support just won’t be there. They think this might be the last generation of BlackBerry, and they’d rather take the pain now while the markets are relatively calm than have to change mobile platforms in a bad period.”

“Nokia, we still love. We love the old handsets. They’re actually still selling for us for people who just want a handset. But until we sell those BlackBerry units, we don’t have the bandwidth or the capital to take on anything new.”

“We’re selling Samsung to the old BlackBerry accounts. It’s that simple. We’re not iPhone vendors, so that’s not an issue for us. We’re now effectively an Android ‘shelf.’ Maybe next year, when and if Lumia 900 is moving a consistent three to five million units a months, we’ll be an Android/Windows shelf.”

Founder of a mobile device wholesale marketplace

Distributors are reluctant to take a chance on the Lumia 900 after being burned by previous Windows phones. Retail demand for the device needs to push up the supply chain to give wholesalers confidence. The situation is reminiscent of the first generation of Android phones, which had to be pushed through retail channels before grabbing consumers’ attention. RIM is losing its niche status, leaving an opening for Windows Phone to fill.

“The new Lumia is a neat phone. It’s responsive, and I like the interface. It’s a more differentiated experience than any of the Android phones, a real choice against the iPhone. As yet, I haven’t seen anyone buying or selling it.”

“There just isn’t any inventory or demand for it. If it was a really hot phone, we’d have no sellers and everyone hot to get just a few units into their channel, no matter what it takes, for the prestige customers. Instead, we have no eager buyers and no sellers.”

“Wholesale buyers don’t want a Windows phone until they’ve seen proof there’s street-level organic demand for it. They’ve seen too well that previous generations of Windows phones just sat there and aged into obsolescence. Those phones were dead money, little more than bricks in terms of market value. In terms of technology they were pretty good, but nobody ever found out.”

“We need to see people with Windows phones in their hands who bought them of their own free will. … When that happens, people will start to trade the phone, and we’ll see how well it competes in the open market.”

“It reminds me of a few years ago when the first Motorola phones running Android came out. Before that, there was just that spooky Google Phone that sounded half-baked and ridiculous. Our members weren’t buying that one sight unseen either. There was no market for a non-iPhone smartphone.”

They’re beautiful phones, and the operating system is fun. We don’t sell them. Maybe they’ll be a breakout hit, but we just can’t take that chance. Next time.

Sales Representative Smartphone Distributor

Wholesale buyers don’t want a Windows phone until they’ve seen proof there’s street-level organic demand for it. They’ve seen too well that previous generations of Windows phones just sat there and aged into obsolescence.

Founder, Mobile Device Wholesale Marketplace

Nokia/Windows Platform: Lumia 900

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“Now that there’s a smartphone market, we see it largely belonging to Android phones: Samsung Galaxy and Motorola and so on. The BlackBerry models now compete in that space where formerly they enjoyed a unique aura almost like what the iPhone still has today. I think Nokia is trying to compete as that kind of unique niche play, not a ‘smart’ phone but a ‘Windows’ phone, a phone that interacts more closely with your desktop PC. I don’t know if that’s smart.”

“Everyone’s dumping BlackBerry now. Everyone still wants iPhones. You see that with the retail trade-in programs that go out of their way to capture iPhones and iPads to build up inventory. Nobody’s going into the towns and saying, ‘Sell us your BlackBerry for cash.’”

Sales chief for a major international smartphone distributor; repeat source

The Lumia 900’s launch was managed to generate headline success in the carrier channel, but distributors are not yet picking up the phone to unlock it and sell it overseas. Emerging markets are difficult for PC-based mobile devices to crack. In terms of tablets, even the iPad is difficult to place in large numbers.

“We love Nokia. We advertise ourselves as the biggest U.S. distributor of Nokia phones and those of other manufacturers. But we aren’t carrying the Lumia 900 yet for two reasons. One is, we haven’t been asked. Two, we don’t see a strong consumer demand for those whose carriers don’t sell the phone already.”

“I don’t know of other distributors who are actively hunting Lumia devices to unlock and sell into secondary markets. We don’t have our Latin American contracts calling us desperate for bulk Lumia phones. Maybe that opportunity will come in a year or so, but for now there just isn’t the wellspring of urgency that we saw when the iPhones came out.”

“In Latin America, carriers tend to work closely with European carriers, who aren’t terribly excited about the Lumia. That means that we might get a chance to build a niche business there selling to the Windows faithful, but there really isn’t a Windows cult down there the same way as there is in the United States.”

“What we call the smartphone has been in use in emerging markets for years now. They’re used to using their mobile to check the Web, shop, run their communications, play music. The iPhone was late in the game on those terms. Technically, Nokia had a thriving smartphone business for years in Asia. They just called it GSM and it ran on Symbian. Now suddenly they think they need an iPhone killer.”

“Unfortunately, people don’t associate Microsoft with good phones anywhere. The brand’s penetration on desktops means nothing in mobile, maybe less than nothing because previous generations of Windows phones have done so poorly, at least in the public’s perception. And these people don’t have personal computers, so leveraging off the desktop is meaningless.”

“We’re selling a lot of Samsung and a lot of HTC. A lot of iPhones, of course. Global markets can’t get enough iPhones because it’s a status symbol. Samsung and HTC Android phones are workhorses for serious executives, but everyone wants an iPhone.”

“Tablets are tricky. I don’t think they’re a long-lived form factor, to be honest. We don’t even sell the iPad, and a Windows tablet would be a nonstarter. For the serious consumer, an Android tablet is the productivity environment they’re used to. We don’t even sell that many Android tablets. … We sell more game consoles.”

“Nokia’s not going to run with AMD chips. They can’t afford to change things up on the fly, at least until they have a generation or two of phones that actually get traction in the global marketplace. Dance with the Qualcomm that brought you, so to speak.”

Principal of a UK-based electronics importer

The latest generation of Windows phones are much better than the Lumia 710 or Lumia 800, but the consumer proposition remains unclear. Advance demand for the Lumia 900 in the United Kingdom is speculative and seems driven by curiosity more than a sincere desire to adopt the Windows platform. The U.K. launch has raised red flags in terms of execution.

We aren’t carrying the Lumia 900 yet for two reasons. One is, we haven’t been asked. Two, we don’t see a strong consumer demand for those whose carriers don’t sell the phone already.

Sales Chief, Major International Smartphone Distributor

Nokia/Windows Platform: Lumia 900

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“I don’t think this is a breakout product for anyone. It’s more of the evolution, less of a revolution in the mobile market. Nokia gets to sell another year’s worth of phones; Microsoft gets to try again to prove its relevance in the mobile world. It’s a large niche product.”

“There’s a lot of talk about Lumia 900 here lately, but it’s largely regarding how the phones sold out in the United States and so are being delayed here while inventory is reallocated. It’s pure speculation here how well the phones will do when they actually come here.”

“I’m told the new version of the operating system fixes a lot of the problems in the earlier Windows 7. Progress is good, but it has a lot of us asking why the development on the operating system is happening out here in public. People who were loyal or willing to take a chance on a new platform are basically being asked to subsidize a work in progress.”

“The back-and-forth regarding when the phones are actually coming to the UK is a case in point. Are we meant to believe Nokia and Microsoft so badly misjudged demand for these phones in the United States that they ran out of phones and are having to push back their launch here by two weeks or longer?”

“Either these two giants deliberately ‘underpedaled’ the launch to manufacture ‘great news’ or they honestly bungled the global supply operation. Neither is bad in itself but it sends a signal that something is going on behind the scenes. Perhaps they’re throwing themselves a bit of a Roman triumph to please management and the shareholders. Nokia really needs this to be a success.”

“We thought for months that the Lumia 900 was coming out in June. Then we were told it would be mid-April. Now we’re told May. Nokia says there’s no delay; it was always May. If so, why didn’t they correct anyone who was taking preorders on the April timetable? I would have expected more discipline on the front end. Now it’s a bit of a mess and so the ‘success’ in the United States is only confusing the launch here.”

“The earlier Lumias may have done all right in their retail channels but are fairly rare in the wholesale/resale world. That means that either people love these phones so much that none are showing up in the secondary market or that there was never much demand for these phones among wholesalers in the first place. My suspicion is that the carrier subsidies are so high on the 710 and the 800 that nobody can charge anything like MSRP on resale. Everyone is selling these phones at a loss, and resellers are too smart to play that game.”

“Here the carriers have balked at subsidizing the Lumia so it’s going to be incredibly expensive, which will further enhance the phone’s reputation as a niche product. Paying £480 for a phone is a real way to prove your love for Microsoft or your hatred for Apple and Google. I don’t know if anyone hates Apple and Google that much. That price is in the iPhone 4’s range.”

Chief marketing officer, global handset distributor

Nokia remains a major vendor worldwide, and its higher-end and higher-margin phones are welcome additions to the global product mix. The Lumia 900 is the best handset the company has ever produced. Distributors will push the phone aggressively in order to qualify for Microsoft incentives and to boost their own profits. BlackBerry’s weakness will be an opportunity for Nokia.

“Lumia 900 will be a breakout product for Microsoft and Nokia. It is already doing much better than what we’ve seen from those companies in the recent past. Not a blockbuster but not a colossal failure. More like incremental progress.”

“I doubt Lumia 900 will make much of a dent in Nokia’s top line, no matter how well it does. And Microsoft, as we know, is a behemoth. Phones are a sideline for them.”

“But for the two companies working as an exclusive partnership, this is a breakout product. Lumia 800 was noteworthy largely for doing a bit better than the most negative press indicated it would. Lumia 900 runs the ball a little further and shows that they’re actually building

I don’t think this is a breakout product for anyone. It’s more of the evolution, less of a revolution in the mobile market. Nokia gets to sell another year’s worth of phones; Microsoft gets to try again to prove its relevance in the mobile world. It’s a large niche product.

Principal, Electronics Importer UK

Lumia 900 will be a breakout product for Microsoft and Nokia. It is already doing much better than what we’ve seen from those companies in the recent past. Not a blockbuster but not a colossal failure. More like incremental progress.

Chief Marketing Officer Global Handset Distributor

Nokia/Windows Platform: Lumia 900

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momentum. And it shows that they’re dedicated to building momentum. Microsoft isn’t giving up on the handset. Nokia isn’t giving up on Windows.”

“It’s an amazing handset. I’m very impressed with the technology. We’re actively selling it to accounts that used to be married to BlackBerry. At this point, if they’re still on BlackBerry, there’s a vested reason why they haven’t already switched to the iPhone or to an Android system. Having Microsoft at the table gives them a choice they didn’t have previously, and now that they’re forced to make that choice, they’re making it.”

“I expect Nokia to absorb most of the share that RIM currently has in our sales mix, which is about 20% of the pie. That’s substantial. And these are much more profitable phones for everyone concerned than the commodity handsets we currently sell from Nokia.”

“Lumia 900 is largely a North American franchise for us and is meeting our margins nicely. We are getting some incentives from the vendors to sell the phone. They help. Obviously, we can take that money and pass it on to the carriers and retailers to get them to sell the phone as well.”

“Windows tablets are definitely coming. From the Nokia side, they won’t incorporate AMD processors. It’s a Qualcomm system. I don’t know how they’ll be integrated into the mobile ecosystem. You don’t plug a tablet into a phone. You plug them both into a PC, where Microsoft has the edge through its other OEM partnerships.”

4) AT&T STORES Four of six AT&T store personnel said Lumia 900 demand is strong and the phones are selling out. The two remaining sources said sales have been average but that no customer has been disappointed in the phone’s performance. It will compete with Android phones and iPhones and will establish itself in third place. One source said the most important apps are available in the Windows Phone Marketplace, while another said certain apps are notably missing. Windows 8 tablets are highly anticipated. Sales associate, New Jersey

Demand for the Lumia 900 is high because the device is new and heavily advertised but also is a good product that will attract a variety of customers. It will compete with Android sales, but Apple customers are fiercely loyal.

“The Lumia is doing well. People are coming in looking for it, and we are having a hard time keeping up with demand. I’m not sure what we have in stock after the weekend. Sales were brisk.”

“The Lumia will give competition to the Android; I’m sure it will take away some of their customers. I don’t think it will take as many away from Apple; their customers are brainwashed and are less inclined to make a switch.”

“I think it will really take off when the new operating system is released in the fall.”

“I can’t say that any one group is purchasing it. I think it will do well across the board.”

“There aren’t as many apps, but the key things that people want are there and I’m sure more will be available in time. People who are looking at the phone aren’t concerned about that.”

“BlackBerries are over.” Reporter Observations: The Lumia 900 was displayed on the wall toward the center of the store. The store lacked promotional signs for the new Nokia smartphone.

I expect Nokia to absorb most of the share that RIM currently has in our sales mix, which is about 20% of the pie. That’s substantial. And these are much more profitable phones for everyone concerned than the commodity handsets we currently sell from Nokia.

Chief Marketing Officer Global Handset Distributor

The Lumia is doing well. People are coming in looking for it, and we are having a hard time keeping up with demand. ... The Lumia will give competition to the Android.

Sales Associate, AT&T New Jersey

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 17

Assistant retail sales manager, New Jersey The Lumia 900 is a great product and is well positioned to compete with Apple and Android phones. The store is having a hard time keeping up with demand, and the Lumia 900 is expected to exceed sales expectations for its first month on the market.

“I think it will beat expectations in the first month. We’ve been impressed by how it’s done so far.”

“The Lumia is in high demand. We released the phone in white over the weekend. A Nokia rep was here giving demonstrations, and it was a huge success. People are very excited about the phone; in fact, we’re having a hard time keeping up with demand.”

“I have the Lumia; all but a couple of the reps in the store have them for personal use. Nokia was very aggressive about getting them in our hands. It’s a great phone. The software works without a hitch, and it has a good interface. I’ve been very happy with it.”

“I wouldn’t say it’s a make-or-break, but it is an important play for Nokia and Windows in this market. I think it will be a player and will do well.”

Reporter Observations: Lumia 900 stock was positioned on the wall at the front of the store. A sign announcing the phone’s arrival was in the front window. A couple in the store intended to purchase a Lumia.

Sales associate, Chicago

Initial sales are stronger than expected, but the Windows format will not reach the success of Android or iOS. The store sells two Lumia 900s daily; the introductory offer of $100 in free accessories is helping sales, which he expects to be solid throughout the year. Samsung Galaxy is the most popular Android phone. The source has only heard rumors of a Windows-based tablet.

“The Lumia is doing much better than we expected. It is doing great.” “The Lumia 900 will continue to grow in popularity over this year as more people buy it, talk about it and when

more apps become available for it.” “The iPhone is still beating the Lumia in sales, but I have had a few customers who come in for the iPhone and

end up with the Lumia 900.” “The order of sales and popularity is iPhone, then Android, then

Windows. I don’t expect that to change anytime soon.” “The Windows format is catching on, but it will never catch up to

Android. And Android will not catch up to the iPhones. It is all about the applications. iPhone offers the best and most apps.”

“Marketing was smart to put the Lumia 900s right next to the iPhones. Often customers come in to look at the iPhones; then they look over and see the bright and shiny Lumia 900s and check them out.”

“We sell about two Lumia 900s daily.” “Customers really like our introductory offer. You get $100 in free accessories with your purchase; plus, the

phone is only $99 with a two-year contract. It is helping drive Lumia 900 sales.” “With how well the Lumia 900 is selling, the introductory offer of $100 in free accessories is not going to last

long. Customers are basically breaking even when they get the phone now. You pay for what you get in free stuff.”

“Like the iPhone, the Lumia 900 will take some business from Android phones. It will probably take more from Android sales over iPhone because most Apple people are very loyal.”

“Customers really like the way the Lumia 900 feels. It is light. The screen is very large and has a great picture quality. And unlike the iPhone, it comes installed with a navigation system and has voice activation. People also really like that the screen does not reflect in the sunlight. It is very easy to use—just as easy as the iPhone.”

“Nokia is known to make solid, reliable phones. The Lumia 900 is no exception. Customers really like it. I have not heard of any complaints about it.”

“Our best-selling Android phone is the Samsung Galaxy.”

I think it will beat expectations in the first month. We’ve been impressed by how it’s done so far. ... We’re having a hard time keeping up with demand.

Assistant Sales Manager, AT&T New Jersey

The Lumia is doing much better than we expected. It is doing great.

Sales Associate, AT&T Chicago

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 18

Reporter Observations: Two window signs advertised the Lumia 900 both in English and Spanish. The displays on the right wall carried iPhones and then Lumia 900s in white, black and cyan. A banner sign was placed above the Lumia 900s, and a small shelf tag advertised the $100 free accessory promotion with purchase. Three associates were assisting three to five customers at the main customer service desk, and three other associates were on the sales floor. No one browsed the Lumia 900 or iPhone section during the visit.

Sales associate, Chicago

The Lumia 900 sold out the first three days and totaled 70 to 100 unit sales. Ease of use, durability and design are driving sales. Nokia will take business from both Android and iPhones. The source sold 15 iPhones last week, 10 Lumia 900s and five Samsung Galaxy phones, the strongest selling Android device. Two Apple customers selected a Lumia 900. The limited number of apps for the Lumia 900 soon will change. The iPhone remains at the top. A few customers have inquired about the Windows 8 tablet.

“Windows is definitely going to take business from iPhones and Android. Microsoft revamped their entire system, started from scratch and has done a great job with it. It is an outstanding phone. It is extremely easy to use, as easy as the iPhone if not easier.”

“Lumia 900 sales are absolutely more than we anticipated. It has been a great.”

“We sold out of the Lumia 900s soon after getting them in. We sold 70 to 100 of them in three days.”

“Now we just have one white, one blue and a few black ones in stock.” “For the initial rollout, we are basically doing everything we can to make

sure customers are happy with the Lumia 900 phone. We are giving them whatever they want up to $100 in accessories and it is very reasonably priced with our typical two-year contract. You really can’t beat it for the incredible technology you are getting.”

“The Lumia 900 has great reception due to the material is it made out of. It is very durable too. It has Gorilla Glass [Corning Inc./GLW] on the screen, so it is very hard to break or crack. Customers really like the way it feels and looks, and it is very light for the size it is. They did a great job with the design of it.”

“I have sold 10 Lumia 900s in the last week. Three were to new AT&T customers, and seven were to current AT&T customers.”

“Two customers that came in for iPhones decided to purchase the Lumia 900s. They liked it better once they checked out all the great features.”

“The iPhone is still the top selling phone. It sells itself. People come in and that is what they want, period. I have heard a few issues with needing to do the updates. But once it is updated, customers say they operate great and they love it.”

“I sold 15 iPhones last week. That is typical.” “The Samsung Galaxy is the best-selling Android phone. I sell about five weekly. I used to sell more, but it has

been out for a while now.” “Android phones are not as easy to use as the iPhone or the Lumia 900. But for most people, it is all about the

apps.” “The only thing holding back the Windows-based phones is the limited number of apps available. But they are

introducing new apps for Windows every day. That will help accelerate sales for Lumia 900s.” “The demand for the Lumia 900 will continue and grow over the summer as more people find out about it. It will

be a strong seller.” “There is interest in a Windows tablet. I have not been asked that often, but with all the people that use

Windows, it makes sense. It will probably take off as well as the Windows-based phones have thus far.” Reporter Observations: The store had a large window sign and a center floor display sign for the Lumia 900. Two customers and at least six associates were in the store during our visit. This newer store was very clean and well lit.

We sold out of the Lumia 900s soon after getting them in. We sold 70 to 100 of them in three days. ... There is interest in a Windows tablet. I have not been asked that often, but with all the people that use Windows, it makes sense. It will probably take off as well as the Windows-based phones have thus far.

Sales Associate, AT&T Chicago

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 19

Sales associate, Los Angeles area The Lumia 900 has posted average sales. A poor rollout of the Windows 7 OS one year ago and fierce competition from well-entrenched market leaders stand in the Lumia 900’s way of taking significant share. Also, the Windows Phone market has fewer apps.

“It’s hard to say if the Lumia 900 is going to be successful because it really just came out. It has an awful lot to compete with. Apple and Android sure have a good handle on the marketplace.”

“It’s doing OK so far.” “It’s a good phone. Couple that with the fact that the Windows 7

operating system has gotten much better over the last year and app development has picked up. I can see this phone being a success if it is marketed properly.”

“Nokia and Microsoft have some large hurdles to overcome with both the size of Apple and Google’s market and the short memory of consumers. Nokia has been absent from the U.S. market for a few years now. Microsoft’s missteps with the Windows Phone 7 launch have landed its name in tech news with negative headlines quite often in the last year and a half.”

“I’ve been following the Nokia Lumina 900 phone for a little while now, and I wouldn’t mind having one. I really like the phone’s overall look and feel. I’ll probably end up with one sooner or later.”

“About a year ago I bought a Samsung Windows Phone 7. Overall I’d say that I do like it but there have been a few frustrating times. As a new platform that was poorly marketed from the start, many app developers ignored Windows 7 and focused on the iPhone and Android platforms. As a result, it suffers from a lack of available apps.”

“I just purchased a 2012 Chevy Cruze equipped with [General Motors Co.’s/GM] OnStar. The OnStar system offers an app for iPhone and Android that allows you to access information and some of the controls for the car. This app is not available for Windows 7, and there are no plans to make it available according to OnStar.”

Reporter Observations: Each phone had about the same amount of promotional space within the store. The Lumia 900 was on the back wall. The display was made up of 15 Lumia 900s hanging in three rows, with five in each row. Each phone was lit with different pictures, using the screen as an obvious selling point.

Sales associate, Los Angeles area Customers are interested more in looking at the Lumia 900 than in buying it. The phone has the potential to be the best Windows phone on the market, but may never challenge the iPhone or Android handsets. The source said the Lumia 900 may not even break into BlackBerry’s niche in the corporate world.

“So far customer interest has been good, but sales haven’t been as good as the interest in it.” “The Lumia 900 could be the best Windows phone available.” “Business and personal use seem to be what the Nokia customer wants.” “It’s hard to say how big a niche they’ll get because of this phone. I don’t know if Windows phones have the

same practicality as, say, the BlackBerry.” “I like Windows phones, but they’ve been so overshadowed in the past by iPhones.” “I bought a Samsung, and I love it.”

Reporter Observations: Three sales associates were helping customers, but none of them suggested the Lumia 900 as an option.

5) CUSTOMERS These five sources praised the Lumia 900 for its ease of use, solid hardware, competitive pricing and strong OS; two sources already own the Lumia 900, and three said they would consider it as a replacement for their current phone. Both Lumia owners said the app market had plenty of options; one source had switched from an iPhone and was able to locate the same

It’s a good phone. Couple that with the fact that the Windows 7 operating system has gotten much better over the last year and app development has picked up. I can see this phone being a success if it is marketed properly.

Sales Associate, AT&T Los Angeles, CA

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 20

or similar apps for his Lumia. Sources also said the Lumia will compete well against Android phones. One source is interested in getting a Windows 8 tablet once one is released. Lumia 900 owner in his mid-20s, Los Angeles area

The customer was very enthusiastic about the Lumia 900 as it met all his expectations and performs so well that he recommends it to friends and would buy it again. Switching from the iPhone was easy, and he was able to find all the apps he wanted. His complaints regarding the Lumia 900 were limited.

“When I originally purchased the Lumia 900, I was looking for something different. I was one of the first in line for the iPhone when it came out in 2007.”

“It’s one of the nicest phones I’ve ever seen. The screen is amazing, and the camera is so cool.”

“The operating system is about as smooth as it could be.” “I was able to find replacements for all of the apps I previously had on

my iPhone.” “If I were to say it had any cons, maybe it’s a little too heavy.” “I’d definitely buy it again. Some friends warned me that the battery

seems to run down quickly, but that hasn’t happened to me.” “I’d recommend the phone, but from what I see with my friends, people seem to know what they want.” “I had a few friends who had purchased Android phones, and at first the openness of the platform was very

attractive to me. However, the overall look and feel of the operating system was just too much like the iPhone.” “It’s totally worth switching to AT&T.”

Lumia 900 owner in his mid-20s, New Jersey

The Lumia 900 is a good phone that is priced competitively and well positioned against its competitors. This customer is pleased with its speed compared to his iPhone. He said the Lumia takes a bit of getting used to but ultimately is easy to use. He has been pleased with the number of available apps.

“I’m happy with the Lumia. The price is great and will encourage people to give it a try. I think the Lumia will do well.”

“I have had the Lumia for a couple of weeks. I am transitioning from an iPhone.”

“The Lumia is much faster than the iPhone. People think that it is harder to use, but it’s not. It just takes a bit of getting used to.”

“There are not as many apps for the Lumia, but the important ones are all there so I haven’t had an issue. More apps will come available as it gains popularity.”

“I do a lot of social networking with my phone. I’m on Facebook all the time.”

iPhone owner in his early 50s, Los Angeles area

This source is loathe to consider any handset other an iPhone, but said a Windows phone would be on the list should he pursue a change. He has heard good reviews of the Lumia 900.

“I use my iPhone 4S for business, personal and gaming.” “I never considered any other phone. I simply defaulted to the amazing technology of the iPhone.” “What I like best is its ease of use, its interface.” “If Apple ever gives me a reason to think about going to a new brand, then I’ll think about a Windows phone.” “I’ve heard the Lumia 900 hardware stands up pretty well.” “How important are apps to me? On a scale of one to 10, I’d say about a five. I rarely buy them for productivity;

it’s really more on impulse.” “I think the app markets are probably all the same. I’ve never wanted an app that I couldn’t get just because I

had an iPhone.” “If I go to buy a tablet, I’d definitely buy the iPad.”

It’s one of the nicest phones I’ve ever seen. The screen is amazing, and the camera is so cool.

Lumia 900 Owner Los Angeles, CA

I have had the Lumia for a couple of weeks. I am transitioning from an iPhone. ... The Lumia is much faster than the iPhone.

Lumia 900 Owner Los Angeles, CA

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 21

iPhone owner in his early 40s, New Jersey The Lumia 900 is well made and a big step forward for Windows-based phones. Its competitive price and functionality are impressive. However, it is not supported at this source’s office or by his personal Mac, so he purchased an iPhone. He expects the Lumia 900 to become more accepted in business environments and to compete effectively with other smartphones.

“I recently purchased an iPhone 4S to replace a BlackBerry. I use the iPhone as both my business and personal phone.”

“I looked at the Lumia and the Samsung Galaxy S II Skyrocket. I was most comfortable with the Apple operating system since I have a Mac at home. Also, the IT department at my office would only guarantee support for a BlackBerry device or an iPhone. I was reluctant to go with the Samsung or Nokia phones because I didn’t know if the integration would go well.”

“I think the Lumia is a great phone and that it will be a player in the smartphone market. It looks and feels well made. I’m sure as it gains market share, more office IT departments will be willing to support a Windows-based phone. I would expect it would provide for better integration with Microsoft Outlook. That would be a great plus as iPhone has had a few glitches. The price of the Lumia is also hard to resist.”

“The Windows interface has dramatically improved in the Lumia as compared to earlier Windows phones.”

“Apple and Android tout how they have millions of apps available. I’m not sure what to expect from a Windows phone.”

“I do not own a tablet. The closest thing I have is a Kindle. I might consider buying a tablet, but I haven’t really researched them. I think what I have right now is sufficient.”

45-year-old Samsung Galaxy owner in Chicago

The Lumia 900 is a mediocre phone that offers limited memory, an average camera and inferior display. Windows has an opportunity to emerge as a smartphone market player, but it needs to come out with a top-of-the-line phone that is superior to the Lumia 900. This source chose the Samsung Galaxy Nexus. He does not buy Apple products, but would consider either a Windows phone and tablet.

“If Windows plays their cards right, they could catch up, but they need to deliver an incredible phone. … It does not seem that they have gone all out. They have the resources.”

“Many customers have loyalty to the Windows operating system. That, coupled with an effective rollout, should make Nokia/Windows a strong competitor within a few years.”

“I might be swayed towards a Windows phone by continued good reviews from online sites like CNET over the upcoming few years. I am, after all, loyal to Windows on my personal computers.”

“Nokia- and Windows-supported phones will probably get a share of the market, but will they compete with the iPhone? They are definitely going to have to spend a lot of money to compete with Apple.”

“Less memory, inferior display and the newness of the system are some challenges Windows phones face. It is going to be hard to win over some people because when people think of phones today, they think Android or Apple.”

“I use the Samsung Galaxy Nexus. I got it a few months ago for personal use primarily.” “The Lumia 900 does not have the capabilities of my present phone. It would be a step back in terms of

memory, storage and display.” “The Lumia 900 looks super user-friendly. That aspect does not appeal to me as much because I am not into

‘simple.’ I like to think of myself as an advanced user.” “I would consider the Lumia 900 though I have fairly strong loyalty to Android platforms as what I perceive as the

most cutting-edge." “I have been happy with the Android 4.0 operating system. It is in line with how iPhones work.” “My phone also has a faster processor and more memory. The Lumia is limited to 16 GB and is not expandable.

That matters to me because I download a lot of music and watch movies trough my phone. My max is 28 GB.”

I think the Lumia is a great phone and that it will be a player in the smartphone market. It looks and feels well made. ... The Windows interface has dramatically improved in the Lumia as compared to earlier Windows phones.

iPhone Owner New Jersey

Nokia/Windows Platform: Lumia 900

321 Pacific Ave., San Francisco, CA 94111 | www.blueshiftideas.com 22

“The resolution of the Lumia screen does not compare to the screen that I have which is 1080p. The camera is not very good, and many reviews state that it does not take photos well. It does not deal well with difficult lighting situations. My camera has automatic adjustments, and I get really good pictures.”

“My phone has insufficient battery life. I have to charge my phone during the day because I use Bluetooth all the time and the Internet. I work the phone really hard, and my battery life is six hours.”

“While I do not generally load a lot of apps onto my phone, I enjoy using particular apps as needed. For that, the Android Community has satisfied my needs.”

“I do not own a tablet. At present, owning a smartphone and a laptop seems sufficient to my needs. When I eventually do buy a tablet, I will consider Windows but will most likely go with the most advanced and the one with the most positive critical review.”

“I am not an Apple person so I will never get an iPad or an iPhone. Any future phone or tablet purchase will either be the Android or Windows format.”

Secondary Sources These nine secondary sources focused on Nokia’s intentions to create the first Windows 8 tablet, the market’s anticipation of the Windows 8 OS, as well as questions surrounding the upgrade process from Windows 7 to Windows 8. Sources also highlighted two positive reviews for the Lumia 900, an endorsement of the new phone by Apple cofounder Steve Wozniak, an a surge in downloads for an app developer following Lumia 900’s launch. Also discussed were the news of Verizon’s support Windows Phone, which may help the OS to become the third major platform, and Microsoft’s payments to developers to help build its app market. March 12 PCMag.com article

Nokia intends to be one of the first to ship a Windows 8 tablet, which it expects to occur in the fourth quarter.

“Nokia and Microsoft are readying a 10-inch, Windows 8-based tablet that will feature a dual-core processor from Qualcomm, according to DigiTimes. The Taiwan-based tech journal cited component supplier sources as saying that the rumored tablet will be released in the fourth quarter of this year ‘at the earliest.’”

“The rumored Windows 8 tablet will be built by Compal Electronics with a first manufacturing run of more than 200,000 units, DigiTimes reported Monday. Microsoft has not announced a release date for Windows 8, but the new operating system, which adds support for ARM-based processors and is being optimized for touch screen mobile devices with features like its Metro-style interface, is expected to arrive in late 2012.”

“‘A lot of IT directors are anxious to get early models to test in their shops because these Windows 8 tablets can run in both Metro mode and traditional mode—an important feature for businesses that want to run current Windows apps,’ PCMag columnist Tim Bajarin opined Monday.”

April 5 PCMag.com article

Windows Phone 8 devices are highly anticipated and expected to put the Windows mobile OS on the map as a true competitor in the field.

“The Nokia Lumia 900 is the best Windows Phone so far, but it isn’t Microsoft’s make-or-break smartphone move. That won’t happen until this fall, with Windows Phone 8 ‘Apollo,’ and the wireless carriers know it.”

“The Lumia 900 is a good phone, and Microsoft isn’t writing off the first half of this year. But this fall, a whole constellation of things will come into alignment to make the 2012 holiday period the true test for Microsoft’s smartphone platform. Think about it:

o Windows 8 will probably arrive this October, bringing ‘Metro’ style apps to millions of people. Even more excitingly, W8 might run Windows Phone apps out of the box, so it’ll become much more appealing for developers to write Windows Phone apps which could run on both phones and PCs.

Nokia and Microsoft are readying a 10-inch, Windows 8-based tablet that will feature a dual-core processor from Qualcomm, according to DigiTimes.

PCMag.com Article

Nokia/Windows Platform: Lumia 900

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o Manufacturers will start selling Windows 8 PCs, Windows 8 tablets, and Windows Phone 8 devices in tandem.

o Microsoft will put a huge marketing push behind Metro on Windows 8 which will bleed over quite liberally to Windows Phone 8.

o Windows Phone 8 will almost certainly support Qualcomm’s S4 chipsets, with integrated LTE. This makes it much easier to build a 4G WP8 phone than with the Nokia Lumia 900, where Nokia had to pair a separate processor and modem.

o CDMA carriers will jump back on board the platform with Windows Phone 8. I’ve heard insiders at Sprint say that WP8 will be their on-ramp back to Windows Phone.

o Carriers and manufacturers will still be looking for a way to stave off an Apple/Google duopoly. For the first year of Windows Phone’s life, at least carriers had BlackBerry. Insert your own prediction about RIM’s position here.”

“I know it sounds insane to say this about two years’ worth of work, but everything with Windows Phone so far has been prologue. Microsoft’s consumer business is positioning itself for the post-PC era, and the real play there is offering a consistent experience across phones, tablets, Xboxes and its home market, PCs.”

“To succeed, Microsoft needs to pull all of those devices into alignment. That’s going to happen with Windows 8 and Windows Phone 8 (as long as the two OSes are released at roughly the same time.) It isn’t happening yet.”

“So why the big push behind the Lumia 900? Microsoft needs to show some momentum, but isn’t about Microsoft, really. It’s about Nokia.”

“Microsoft is very rich and very patient. Riding on a comfortable cushion of Office, server, and business software profits, it can afford to draw out a long-term strategy. And this patience has paid off for Microsoft before. The Xbox group started with several unprofitable years, but has since become a money-maker for the company.”

“Nokia, on the other hand, needs to stop a terrifying downward slide. If the company doesn’t come up with best-selling smartphones, it’ll be even more dependent on its sales of low-cost, low-profit feature phones like the new Asha line. Re-inflating the top end of its product line is an urgent task for Nokia. Otherwise, it may face being dismembered into a feature-phone firm and a wholly-owned smartphone division of Microsoft. The U.S. has been a largely unserved market for Nokia for years, so there’s a lot of potential for growth here. Almost every smartphone the company sells here is a new smartphone customer for Nokia.”

“So keep an eye on those Lumia 900 sales and Nokia Lumia 900 reviews, but don’t think this is the last word for Microsoft in phones. Let’s check back around Thanksgiving and discuss this again.””

March 12 InformationWeek article

Windows 7 phone owners may not be able to upgrade to Windows 8. Microsoft pointed out that Apple and Android also do not provide such upgrades for their phones.

“Microsoft’s forthcoming Windows Phone 8 platform will run at least 95% of apps available for Windows Phone 7, but owners of WP7 devices may not be upgraded to WP8 when it becomes available, a Microsoft executive said.”

“Speaking to financial analysts, Microsoft VP Terry Myerson declined to directly answer a question about whether current Windows Phone 7 owners would be offered an upgrade to Apollo (Microsoft’s code name for WP8) but implied that such a move would create significant logistical issues between the company and its hardware and carrier partners.”

“‘Even if we were to say all phones can be updated, then you get into the—you know, our business model implies layers of supply chain to get it out to them, and there are certain incentives to get it out to them that have to be talked through, so there’s nothing to announce there,’ said Myerson.”

The Nokia Lumia 900 is the best Windows Phone so far, but it isn’t Microsoft’s make-or-break smartphone move. That won’t happen until this fall, with Windows Phone 8 ‘Apollo,’ and the wireless carriers know it.

PCMag.com Article

Microsoft’s forthcoming Windows Phone 8 platform will run at least 95% of apps available for Windows Phone 7, but owners of WP7 devices may not be upgraded to WP8 when it becomes available, a Microsoft executive said.

InformationWeek article

Nokia/Windows Platform: Lumia 900

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“Myerson took issue with a questioner’s implication that the company would have to provide an upgrade path from Windows Phone 7 to Windows Phone 8 in order to match Apple, which allows iPhone users to upgrade from one version of iOS to the next. Myerson said such upgrades generally work so poorly that users are forced to buy the latest-generation iPhone.”

“‘In the case of Apple, they’ve shipped OS updates to hardware that make it unusable,’ said Myerson. ‘It’s a great hardware sales tool, as far as I can tell.’ Myerson also said that ‘no Android phones get upgraded, none, ever.’”

“Myerson did say that Windows Phone 8, which is expected by many observers to be available later this year, would run virtually all apps that were developed for Windows Phone 7. ‘Our goal is for all apps to run. That’s our goal. Someone [who’s] a very creative person is going to find a way to create an app that doesn’t do it, and I’m going to make that app work. That’s our goal.’”

April 4 CNET review of the Nokia Lumia 900

This Lumia 900 review praised the phone’s design, the screen and the camera, but criticized the optics and video, especially considering the market’s high expectations. At its price, the Lumia 900 is great value and the best of the Windows phones.

“The good: The Nokia Lumia 900’s eye-popping unibody design sets a new direction for smartphone style. Its LTE speeds, vivid 4.3-inch screen, and 8-megapixel camera are high points.”

“The bad: Problems with call quality and minor design flaws like some gaps in the construction and weirdly placed buttons get in the way. The designer camera optics are good, but they don’t live up to the hype. The phone shoots 720p video rather than 1080p video.”

“The bottom line: The Nokia Lumia 900’s unique design and high-end features make Windows Phone look fantastic, and the $99 price is extremely fair. Despite some flaws, this is my favorite Windows Phone yet.”

“Nokia sorely needs a ‘hero’ smartphone with the looks, the speeds, the specs, and a price that will hush the doubters. With the Lumia 900, Nokia proves that it has the chops to compete. We thought so at CES, where we awarded it best new smartphone, and I think so now.”

“But is the Lumia 900 a breakthrough device? The features are high for Windows Phone’s threshold (the OS doesn’t yet support multicore processors), but the phone lacks a halo-making feature like the Nokia PureView with its gasp-inducing 41-megapixel camera. While a revolutionary new feature could clinch Nokia’s victory, what it has now in the Lumia 900 is the best Windows phone I’ve tested yet, and it’s perfect for the mainstream market. Of course, my assessment could always change in a week when the HTC Titan II launches, with its whopping 16-megapixel camera, though to me, the Lumia 900 is ahead in style points. It’s also half the price: $99.99 versus $199.99.”

“Beyond the looks, I’d recommend the Lumia 900 without hesitation to anyone considering a Windows Phone—although I’m psychologically incapable of leaving out important caveats. I love the Lumia 900’s bold look and the way that the phone’s style and screen make the Windows Phone interface pop. With Windows Phone nearly identical on all handsets, Nokia really only has the hardware to control, and in terms of specs, it did a great job (mostly).”

“LTE ... check. Strong camera quality, check. Fast processor, sturdy construction, check and check. There are still some changes I’d make if Nokia had asked for my opinion, including the placement of some buttons, quality control when it comes to calls and on a couple external components, and 1080p HD video rather than 720p. However, none of these flaws would keep me from using the 900.”

“It won’t outsell the Samsung Galaxy S II or iPhone 4S (which together gobble up 95 percent of all smartphone profits), and the design isn’t strictly new, but the Lumia 900 is nevertheless a successful handset for the Microsoft-Nokia partnership.”

“Of course, not everyone likes Windows Phone and not everyone will like the design, but in my view, Nokia has provided a great handset on a platform that’s frankly still immature, but with the camera and call quality, it has left room for the upcoming Titan II and its jaw-dropping camera to do a better job. We’ll have to wait until we review that phone to compare.”

The Nokia Lumia 900’s unique design and high-end features make Windows Phone look fantastic, and the $99 price is extremely fair. Despite some flaws, this is my favorite Windows Phone yet. ... It’s perfect for the mainstream market.

CNET Review of the Nokia Lumia 900

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“In the meantime, it’s Microsoft’s turn to help out Nokia by issuing software features that will make Windows Phone a smoother, smarter, and stronger OS that can compete more completely against the much more mature Android and iOS.”

April 15 TechCrunch review

The Lumia 900 offers quality hardware and software at a great price that would be an advisable upgrade for consumers with phones at least a year old.

“The Nokia Lumia 900 is an excellent handset, comes packed with a fresh new operating system in the form of Windows Phone 7.5 Mango, and thanks to a nifty AT&T bill credit from Nokia, you can essentially get this $100 LTE-equipped phone for free until the 21st. Repeat: for free.”

“Pros: o Beautiful unibody polycarbonate casing (matte) o Well-built and premium feeling in the hand o Windows Phone is a refreshing joy to use.”

“Cons: o Poor color reproduction on the camera o The display is a bit pixelated o If thin and light is your thing, this may feel clunky.”

“The hardware on the Lumia 900 is top-notch.” “The baked-in features of Windows Phone are excellent. “I love the UI of the camera app, to be sure, but the actual images produced by the Lumia 900 camera aren’t all

that great.” “Upgraders coming off of a one- to two-year-old phone shouldn’t have too much of a problem unless you’re really

keen on display issues.” “The Lumia 900, and specifically Windows Phone, is snappier than any Android phone I’ve ever played with.” “Battery life on the Lumia 900 is actually quite impressive.” “I wouldn’t, and couldn’t, tell a smartphone enthusiast who’s been using a Galaxy Nexus or iPhone 4S to

upgrade to this, simply because it wouldn’t be an upgrade.” “But this doesn’t make the Lumia 900 a bad phone at all. It’s a great phone. Nokia kicks ass at call reception,

and while the specs are a bit outdated, hardware is beautiful and sturdy. As I said before, anyone coming off of a phone over a year old would be lucky to own a Lumia 900.”

April 17 FourBros Studio’s Taptitude article

An app development company with the leading Windows Phone app said downloads from the Lumia 900 have made significant growth in the short time the phone has been on the market.

“FourBros Studio began developing Taptitude early in 2011 … a free Windows Phone 7 game with a collection of over 60 competitive minigames. We initially launched Taptitude in March 2011 with just a handful of relatively simple minigames, and have since updated it every week adding new games and platform features.”

“Over the last year, we’ve seen exponential growth in our impression rate. For the first few months we made very little money, and only served a few thousand impressions per day. As we stuck with the project we added many weekly updates with features including online leaderboards, stars to unlock minigames, coins to purchase game upgrades, and stats to track your progress.”

“We’re at nearly 100 million ad impressions, and much of that was in the last few months.”

“Nokia is leading with the Lumia 800 followed by the 710, with the 900 making significant gains in the short period of time since its release. Despite this, HTC is actually the #1 manufacturer at this time due to the breadth of devices they offer.”

Anyone coming off of a phone over a year old would be lucky to own a Lumia 900.

TechCrunch Review

We’re at nearly 100 million ad impressions, and much of that was in the last few months. ... Nokia is leading with the Lumia 800 followed by the 710, with the 900 making significant gains in the short period of time since its release.

FourBros Studio’s Taptitude Article

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April 30 BGR.com article The Lumia 900 got a tech celebrity endorsement when Apple cofounder Steve Wozniak purchased and praised Nokia’s new phone.

“Apple co-founder Steve Wozniak recently purchased a Nokia Lumia 900 and thus far has had nothing but a pleasant experience with the device. The folks over at aNewDomain.net caught up with ‘the Woz’ and spoke to him about his opinion on the Windows Phone platform. ‘Just for looks and beauty I definitely favor the Windows Phone over Android,’ he said.”

“Wozniak called the operating system ‘intuitive and beautiful,’ and said it makes him feel as if he is ‘with a friend not a tool.’ He also noted that apps on the Lumia look ‘more beautiful than on Android or iPhone.’ Despite his praise, Woz maintains that the iPhone is still his favorite smartphone. The co-founder isn’t shy about his opinions and has previously stated that in many ways Android had [leapt] ahead of Apple and the iPhone.”

April 20 Mashable article

Verizon is looking to support the Lumia 900 and bring the Windows Phone platform more mainstream. Verizon’s backing of Android and Motorola’s Droid gave the platform the identity it needed, and Verizon could do the same for Windows Phone, especially once Windows 8 is released later this year.

“Verizon is publicly getting behind Microsoft in the smartphone war. During the company’s earnings conference call Thursday Verizon CFO Fran Shammo suggested that the carrier wants to help Windows Phone become more of a contender in the smartphone market.”

“‘It is important that there is a third ecosystem that is brought into the mix here, and we are fully supportive of that with Microsoft,’ Shammo said.”

“Carriers are currently dependent on Google’s Android and Apple’s iOS to drive most of their product sales. Carriers are traditionally responsible for paying the full retail price for any smartphones they sell. The iPhone has a retail price starting at $600, which means the carrier is taking a huge hit when it sells you that phone for a mere $199—something it then makes up for in hefty data charges.”

“Adding a third player into the mix would fuel competition amongst the handset makers which could ultimately lead to better devices as well as lower costs for both consumers and carriers.”

“Shammo noted that Verizon played a key role in growth of Android into the ‘incredible platform’ it is today, and is ‘looking to do the same thing with a third ecosystem.’ While T-Mobile was the first carrier to offer an Android device, it was Verizon who pushed the ecosystem into popularity. The ‘Droid’ name—which was always a Verizon exclusive—has become a household name.”

“If it really threw its weight behind the platform, Verizon could potentially have a similar effect on Windows Phone. The platform has gotten off to a slow start. However, with the release of Windows Phone 8 –codenamed Apollo—later this year, the platform may be able to better keep up with Android and Apple’s high-resolution screens and faster data speeds.”

“While Android handsets have been running on LTE for some time. The first LTE Windows Phones –the Nokia Lumia 900 and HTC Titan II—were released earlier this month. Apple is also expected to release an LTE iPhone late this year.”

April 5 New York Times article

Window Phone apps have been slow to develop, but signs of increased demand are beginning to show. Microsoft also is putting considerable resources behind app development, including free phones, promotions and advertising to developers.

“Nowadays, cellphones are all about apps. And Microsoft is so determined to have lots of brand-name apps for its Windows Phone app store that it is willing to pay for them.”

“Many developers are reluctant to funnel time and money into an app for what is still a small and unproved market. So Microsoft has come up with incentives, like plying developers with free phones and the promise of prime spots in its app store and in Windows Phone advertising.”

“It is even going so far as to finance the development of Windows Phone versions of well-known apps—something that app makers estimate would otherwise cost them anywhere from $60,000 to $600,000, depending on the complexity of the app. The tactic underscores the strong positions of Google and Apple, neither of which have to pay developers to make apps. “

“When Microsoft offered to underwrite a Windows Phone version of Foursquare, the mobile social network, Holger Luedorf, Foursquare’s head of business development, did not hesitate to say yes.”

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“‘We have very limited resources, and we have to put them toward the platforms with the biggest bang for our buck,’ he said. ‘But we are a social network and it is incredibly important for us to be available on every platform.’”

“Foursquare has in-house engineers working on iPhone, Android and BlackBerry versions of its service. But had Microsoft not offered to pay an outside company to do the work, Mr. Luedorf said Foursquare would ‘probably not’ have developed an app for Windows Phone.”

“Ben Huh, chief executive of the Cheezburger Network, a collection of humor and entertainment sites, said Microsoft’s market share was too small to warrant in-house development of a Windows Phone app. But when Microsoft approached his company about making an application featuring funny photos of cats, he agreed. ‘They made it very easy for us,” he said. “They took care of everything.’”

“Casey McGee, senior marketing manager for Windows Phone at Microsoft, confirmed that the company offered an array of incentives for developers, but he declined to name the apps Microsoft had financed.”

“Microsoft now has more than 70,000 apps in its app store, including big names like Netflix, YouTube, the Weather Channel, Amazon Kindle and the game Fruit Ninja. Apple, by comparison, has more than 600,000 apps, and Android has nearly 400,000. Analysts say that Microsoft does not need a million apps to appeal to phone buyers—just the ones that are so popular and mainstream that they feel like features of the phone itself.”

“Despite Microsoft’s best efforts, a number of popular applications are noticeably missing from its store, including Pandora, the streaming music service; Instagram, the photo-sharing application; and games by Zynga. AT&T, the sole carrier of the Lumia 900 in the United States, has said that it will train its sales force to talk up the apps that are available and give demos of alternatives to curious shoppers.”

“The Windows Phone store has a version of the app phenomenon Angry Birds, but not the sequel from its maker Rovio, Angry Birds Space, which has also been a big hit. Rovio’s marketing chief, Peter Vesterbacka, said last month that it would not be worth the effort to bring the game to Windows Phone. But later that same day, Mikael Hed, its chief executive, said the company was ‘working toward’ building a Windows Phone version. Rovio has not said when that might happen, and both companies declined to discuss what caused the about-face.”

“Often Microsoft’s problem is not outright refusal by a developer, but more that its platform is simply not a priority. Sonos, which makes apps for Apple and Android devices that allow customers to control its networked home audio equipment, does not yet know when it will release a comparable Windows Phone app.”

“Microsoft has also approached news organizations, including The New York Times, about having a presence in its app store. Eileen Murphy, a spokeswoman for The New York Times Company, said that its Windows Phone app was built by outside developers, and that ‘Microsoft provides assistance to help ensure that the app is best in class.’ Ms. Murphy declined to say whether Microsoft had paid for the app’s development.”

“Even Facebook did not build its own Windows Phone app, the creation of which was underwritten by Microsoft. Derick Mains, a spokesman for Facebook, said that for platforms other than Apple’s and Google’s, Facebook encourages companies to make their own apps, certifying them before they are released.”

“Sarah Rotman Epps, an analyst at Forrester Research, said Microsoft’s relative weakness was a function of not having a big enough audience of users. ‘Developers go where the money is, and the money is where people are,’ she said.”

“Ms. Epps noted that Microsoft and Nokia currently appeared to be going after customers who are not already using iPhones and Android devices, and so may not be as familiar with the mobile apps they cannot get on Windows Phones. To someone moving from a BlackBerry or an old-fashioned feature phone, the selection of Windows Phone apps is likely to be satisfying, she said.”

Ben Huh, chief executive of the Cheezburger Network, a collection of humor and entertainment sites, said Microsoft’s market share was too small to warrant in-house development of a Windows Phone app. But when Microsoft approached his company about making an application featuring funny photos of cats, he agreed.

New York Times Article

We’re starting to get requests from firms that want a Windows Phone app’, he said. ‘It’s still only 5 to 10 percent of our total requests, but very different than a year ago, when only Microsoft was calling us to do work.

New York Times Article

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“Ben Lamm, who runs Chaotic Moon, an app development studio that developed Windows Phone apps for TripIt and Pizza Hut, among others, said larger companies were warming up to Windows Phone.”

“‘We’re starting to get requests from firms that want a Windows Phone app’, he said. ‘It’s still only 5 to 10 percent of our total requests, but very different than a year ago, when only Microsoft was calling us to do work.’”

Next Steps Blueshift’s next report on the Nokia/Microsoft partnership will include app developers’ opinions of Windows 8 and their creation of apps for the platforms as well as an updated status on growth in Windows Phone’s app market. We also will track sales trends of the Lumia 900, anticipation of Nokia’s Windows 8 phones and tablets, and Nokia’s position within the U.S. smartphone market. We will determine the upgrade process from Windows 7 to Windows 8 and customers’ decisions on whether to wait for the Windows 8 release. We will follow Verizon’s expected adoption of Windows Phone and Nokia devices. Finally, we will assess Windows Phone’s efforts to take the No. 3 OS spot from RIM, especially considering BlackBerry’s new focus.

Additional research by Seth Agulnick, Scott Martin, Tina Strasser, Maggie Purcell and Debbie Moss The Author(s) of this research report certify that all of the views expressed in the report accurately reflect their personal views about any and all of the subject securities and that no part of the Author(s) compensation was, is or will be, directly or indirectly, related to the specific recommendations or views in this report. The Author does not own securities in any of the aforementioned companies.

OTA Financial Group LP has a membership interest in Blueshift Research LLC. OTA LLC, an SEC registered broker dealer subsidiary of OTA Financial Group LP, has both market making and proprietary trading operations on several exchanges and alternative trading systems. The affiliated companies of the OTA Financial Group LP, including OTA LLC, its principals, employees or clients may have an interest in the securities discussed herein, in securities of other issuers in other industries, may provide bids and offers of the subject companies and may act as principal in connection with such transactions. Craig Gordon, the founder of Blueshift, has an investment in OTA Financial Group LP.

© 2012 Blueshift Research LLC. All rights reserved. This transmission was produced for the exclusive use of Blueshift Research LLC, and may not be reproduced or relied upon, in whole or in part, without Blueshift’s written consent. The information herein is not intended to be a complete analysis of every material fact in respect to any company or industry discussed. Blueshift Research is a trademark owned by Blueshift Research LLC.