Nokia still pledging Windows phone as Apple marches on

HELSINKI (Reuters) - On the day that Apple launches the fifth generation of its ubiquitous iPhone, the once mighty Nokia is still weeks away from mounting a fightback.

Nokia Chief Executive Stephen Elop takes part in the 2011 Nokia Annual General Meeting in Helsinki, May 3, 2011. REUTERS/Jussi Nukari/Lehtikuva

Stephen Elop, chief executive of the Finnish mobile phone maker, on Tuesday promised to unveil its first Windows-based smartphones this quarter but it remains to be seen whether the they will start shipping in time for Christmas.

The launch is expected to coincide with the annual Nokia World trade show in London at the end of October and deliveries would need to start in early November to get the phones to consumers during the peak of the holiday-sales season.

In the past, Nokia has often unveiled phones half a year before deliveries started, but the company has said it plans to change that.

Addressing a technology fair, Elop argued there is room for the new Windows smartphone in an already fiercely competitive market dominated by the iPhone and models based on Google’s Android operating system, which has won around half the market globally in the last few years.

“Our belief is that there is a clear opportunity for an alternative ecosystem,” Elop said.

Meanwhile Apple, which only entered the cellphone industry in 2007, is expected to unveil the new version of its iconic iPhone later on Tuesday.

“You could argue that one of the most fundamental disruptions that the industry faced happened around 2007 ... when the iPhone was introduced,” Elop said. “The iPhone did something disruptive. It introduced a new level of experience.”

“They created a new bar... that all of a sudden everything else was measured against,” he said.

The iPhone 5 -- expected to be faster, thinner and larger-screened -- will arrive on the shelves just in time for the holidays. It should sustain Apple’s smartphone momentum and help ward off a challenge from close runner-up Samsung, which uses Android.

Market sentiment toward Nokia has improved recently. According to Thomson Reuters data, with 14 analysts currently rating Nokia shares a buy and 17 saying sell. This compares with 9 on buy and 21 on sell at the start of September.

But the Windows phone has got it all to do.

“Mr Elop is talking. I want action - show me the products and show me when you will ship them,” said John Strand, founder of Danish mobile industry consultancy Strand Consult.

The world’s largest phone maker by volume, left in the dust by Apple and Google, announced a high-risk new strategy at the start of the year to ditch its home-grown Symbian software for a deal with Microsoft.

The switch -- which Elop likened to jumping from a burning oil platform -- meant a tough eight-month changeover period during which investors fretted about the delay between the announcement and the first of its Windows smartphone models reaching the market.

Already struggling with falling sales and profits, Nokia has seen its shares halve since the announcement on worries it would lose so much market share before the new phones come out that it might never make up lost ground.

Both Apple and Samsung outstripped Nokia in the smartphone market last quarter, ending its 15-year reign at the top of that market. Nokia’s quarterly phone sales to end-June dropped 20 percent at a time when the market grew 10 percent.

The firm is expected to report a 0.02 euros loss per share for the September quarter, according to estimates gathered by Thomson Reuters.

Elop, who took over a year ago, last week unveiled a plan to cut 3,500 jobs in his second major restructuring in six months. The redundancies come on top of cost cut plans set out in April, which included laying off 4,000 staff.

Additional reporting by Ritsuko Ando; Editing by Chris Wickham and Sophie Walker