Here Comes the First Lumia Carrying the Microsoft Name

SEATTLE (The Seattle Times/MCT) -

Microsoft officially entered the post-Nokia smartphone era with the release late Monday of a budget-priced Lumia device.

The Microsoft Lumia 535 will sell for approximately 110 euros, or about $137, a figure Microsoft said would vary by market. Microsoft’s previous Lumia smartphone devices — which carried the “Nokia Lumia” name — were released in September and cost between $259 and $430.

Last month, Microsoft said it would start phasing out the Nokia brand for its smartphones, the latest step in integrating Nokia’s phone-manufacturing business. Microsoft’s $7.5 billion deal to buy the Finnish company’s handset group closed in April.

As part of the deal, Microsoft licensed the rights to use the Nokia name for 10 years on basic cellphones that lack the processing power and internet connectivity of more advanced smartphones. Microsoft obtained more limited rights to use of the Nokia name on smartphones.

With Monday’s announcement — along with a coordinated rebranding of Microsoft’s Nokia-branded social-media and internet sites with the “Lumia” name — Microsoft is pushing ahead with a brand it owns in its entirety.

“The Nokia brand is very strong,” particularly internationally, Will Stofega, research firm IDC’s program director for mobile technology, said in an interview before the announcement. “The game is going to be for (Microsoft) to make sure people understand what they have: This is an extension of Nokia. And hopefully carry on the same things that people found compelling in those devices.”

Microsoft’s news release on the launch didn’t specify the countries in which the Lumia 535 would be sold. A spokesman said the phone would be rolled out this month in some markets, but declined to elaborate.

In 2013, Nokia was the world’s No. 2 phone manufacturer, behind Samsung, when including basic mobile phones. In smartphones alone, however, Nokia stood at No. 8.

The Microsoft Lumia 535 will run on the Windows Phone 8.1 operating system, and feature a 5-inch display and 5-megapixel front-facing camera. A separate model will feature dual SIM card capability.

The phone comes in green, orange, white, gray, cyan and black, and will be preinstalled with Microsoft software, including Skype, the Office suite and Outlook.

Windows Phone, the operating system that runs Lumia devices, powered just 2.5 percent of the smartphones shipped worldwide from April through the end of June, according to the most recent IDC data.

Google’s Android dominated the market, with a share of 85 percent, and Apple’s iOS ran second with 12 percent.

“They do have some distance to make up,” Stofega said of Microsoft. “They are going to clearly look at (rising demand) in some of the emerging markets and see what they can do to bundle both their services and their devices” to draw customers there, he said.

Major international companies have been eager to tap the fast-growing Chinese market in particular, but have struggled to compete with local manufacturers who offer cheaper hardware.

Domestic manufacturers accounted for four of the five biggest sellers of smartphones in China during the third quarter, according to research firm Canalys.

South Korean giant Samsung was No. 2.