Top 10 reasons Nokia could sink or swim in the smartphone market

Lumia 800 launch is a pivotal moment in the Finnish firm's rebirth

It's been a tough few years for Nokia. The company was the undisputed mobile leader as late as 2007, churning out devices that were good enough for most and priced to appeal to broad market segments.

But since then Nokia's position has fallen away in the face of an onslaught of smartphones that have eroded its market share and popularity as flops like the N8 failed to meet expectations.

A change in leadership and operating system marked Nokia's first real attempts at change, and the launch of the firm's first Windows Phone 7 device this week, the Lumia 800, marks a key point in this transition, and indeed a key moment for Microsoft too.

Whether Nokia will succeed in reclaiming its mobile crown remains to be seen, and there are reasons for optimism and pessimism as one of the mobile phone industry's most notable companies fights for its future.

The case for: Why Nokia might succeed

1. Strong channel
If anything is going to save Nokia - and Windows Phone 7 for that matter - it's the channel. The company has routes into markets all over the world, enabling it to ship huge volumes of devices to stores that can sell them to eager consumers.

This will not only help Nokia market its products at more people than any other vendor, but will spread the use and awareness of Windows Phone 7 which, in turn, could generate more desire for the Lumia 800 and other Nokia phones in the pipeline.

More people than ever are clamouring for smartphones and the benefits they bring, and being able to get new devices to corner shops in towns and cities in emerging markets is going to be a huge advantage.

Top 10 reasons Nokia could sink or swim in the smartphone market

Lumia 800 launch is a pivotal moment in the Finnish firm's rebirth

2. Emerging markets
Nokia has always been a major player in emerging markets. The Nokia World event in October opened, not with the Lumia, but with four low-end devices for regions such as India, Brazil and other growing economies, showing that Nokia sees such markets as central to its future.

More people than ever in these nations are likely to upgrade to smartphones for the first time in the coming years, and Nokia, as a player in a core segment of the mobile world, could be well placed to win millions of new customers.

Android will prove stiff competition here, but Nokia clearly has a strong strategy for ensuring that "the next billion" people wanting mobile internet access and the benefits of a smartphone choose its devices.

3. Reputation
Nokia has hardly set the world alight in the past few years, but its reputation has remained fairly strong thanks to producing some of the most successful mobile phones of all time.

Everyone remembers the 3310, the phone that really paved the way for the mobile phone explosion in the late 1990s and early 2000s.

The brand may have lost some of its cachet in recent years after sticking with Symbian for too long, but Nokia clearly still has what it takes from a design and build position, and the Lumia 800 is one of the nicest phones V3 has seen for a while.

Nokia will no doubt be hoping that a still loyal fan base, and those who have an affinity with the brand that made them fall in love with mobile phones for the first time, will return to its welcoming arms.

4. The use of Windows Phone 7
For all the debate around Microsoft's failure in the mobile market, few can doubt that Windows Phone 7 is a slick, well-polished offering that has impressed pretty much everyone.

The operating system offers something truly different from Android or iOS, and the Mango update contained features that make the platform an equal to the market leaders in terms of core functionality and capabilities.

Add to this Microsoft's growing application store which, while low on numbers, is high on quality apps for everything from gaming to business applications, and Nokia's decision to be the key Windows Phone 7 seller, rather than just another Android clone, could turn out to be an inspired move.

Top 10 reasons Nokia could sink or swim in the smartphone market

Lumia 800 launch is a pivotal moment in the Finnish firm's rebirth

5. Android's legal trouble and Apple losing its way without Steve Jobs
Another key benefit of Nokia's eschewing Android is avoiding the mountain of litigation Google is facing, including legal action by Apple, Oracle and Microsoft.

Google even went as far as paying $12.5bn for Motorola Mobility to fend off these attacks, although so far this does not appear to have convinced its major partners HTC and Samsung, both of which have signed deals with Microsoft for the use of its technology.

Furthermore, there are continuing concerns over the risk of fragmentation to Android that makes it almost impossible to manage or develop for, although Google has reached version 4.0 in the platform's short life and its popularity is as high as ever.

Apple's position as darling of the smartphone world will no doubt continue for a while yet - the rumour mill for the iPhone 5 is already in gear - but without its iconic founder and leader Steve Jobs to guide Apple forward, it too could lose its way. Nothing lasts forever, as Nokia knows all too well.

Android and iOS are facing their own challenges, and Nokia could push ahead and reclaim a sizeable portion of the market if Google and Apple get distracted and lose their way.

The case against: Why Nokia will struggle

1. Too slow to market
When Nokia unveiled the N8 in 2010 the mobile world rolled its eyes and wondered what on Earth they were doing up in Finland. The device was perfectly acceptable, but it was nothing more than a glorified feature phone in a market dominated by smartphones.

The N8 summed up everything that was wrong with Nokia. The company failed to realise that the market had changed utterly owing to the rise of Apple and Android, and stuck doggedly to an operating system and style of phone that was clearly past its sell by date.

Nokia's new chief executive, Stephen Elop, best summed up Nokia's woes in a leaked memo which likened the firm's position to "standing on a burning oil platform".

Elop began turning things around by cutting jobs and backing Windows Phone 7, but the long time it's taken to get off this "burning platform" and get the first smartphones into the shops has given Apple and Android an almost unassailable lead and made Nokia a forgotten player.

The Lumia is a nice device and no doubt there are more to come, but it could well prove too little, too late.

Top 10 reasons Nokia could sink or swim in the smartphone market

Lumia 800 launch is a pivotal moment in the Finnish firm's rebirth

2. Apple and Android's dominance and innovation
Apple and Android have their troubles, as noted, but they also have a huge market lead on Nokia. Android is now the platform of choice for almost every other handset manufacturer on the planet.

Google pushes out updates for the platform on a regular basis, and offers features such as NFC content sharing and face recognition technology, and many end users demand the latest and greatest software.

Apple's iPhone range, meanwhile, generates press coverage year round, any tiny piece of information being circulated around the web with a fervour other firms can only dream of. And with services like Siri, Apple shows no signs of slowing down.

Nokia not only has a mountain to climb to catch up with the current momentum around Apple and Android, but is doing so against two of the most innovative companies in the market.

3. Getting into bed with Microsoft
Windows Phone 7 has much going for it, as noted above, but Nokia may still come to regret ceding control of its software to an outsider.

Nokia has lost the ability to innovate and update the software, and has handed this over to Microsoft. This includes the rollout of any future software updates for Nokia phones, an area in which Microsoft has hardly covered itself in glory in the past.

Microsoft may also not have the enthusiasm to continue developing the platform if it doesn't see the returns and market share it hopes for, and could lose interest in maintaining the platform, leaving Nokia down a dead-end.

Top 10 reasons Nokia could sink or swim in the smartphone market

Lumia 800 launch is a pivotal moment in the Finnish firm's rebirth

4. Difficulty convincing people to start using a new platform
A second major issue with adopting Windows Phone 7 is that people used to Android or iPhone software will be loathe to start all over again with a new operating system.

It requires learning how everything works, and many will feel that they have a lot invested in their chosen operating system having paid out for applications. The prospect of doing so again from scratch is not appealing.

Furthermore, developers are hardly champing at the bit to create applications for Windows Phone 7, meaning that the number of apps available on Android and iPhone devices far exceeds those on Microsoft's platform.

5. Device competition
Nokia made a great fanfare over the launch of the Lumia 800 this week, its most important phone in years, but the handset was somewhat overshadowed by the arrival of the Samsung Galaxy Nexus running Android 4.0 Ice Cream Sandwich.

Meanwhile, vendors such as HTC and Motorola continue to produce strong devices, RIM is attempting to reinvent itself, Huawei is looking to become a sizeable player and even Amazon is rumoured to enter the market in 2012.

Put simply, whatever Nokia does, its efforts will always be diluted by the sheer volume of competitors in the market looking to attract buyers and putting new devices on the market. This isn't just limited to established markets, either. Firms like Huawei and ZTE are also looking to meet the new demands of emerging markets.

Even if Nokia sees a change in its fortunes, the company may struggle to regain its former position as market leader and could have to settle for mid-tier status instead.