LG exec admits WP7 sales weak

But Nokia may put Microsoft OS on its phones

For the first time, a handset manufacturer offering Microsoft’s Windows Phone 7 has publicly acknowledged that sales of devices running the new OS have fallen short of expectations. James Choi, marketing strategy and planning team director of LG Electronics, was quoted today on the Web site Pocket-lint as saying that while the OS is “absolutely perfect,” Microsoft’s marketing campaign has made “the visibility less than we expected.”

Specifically, Choi said WP7 is initially available only on “high tier” phones that are relatively pricey -- the typical price point is $199.99 in the U.S. with a two-year service contract -- and that once WP7 becomes available on mid-tier to lower-tier models, unit sales should pick up. He also said that the OS has been made so easy to use that some tech geeks may actually find the WP7 experience "boring."

Microsoft has carefully managed expectations about Phone 7, issuing platitudes about being “pleased with the response” in the market to the phones but withholding specific sales figures. Carriers have been equally vague, such as AT&T, which said it is “encouraged by the demand.” There’s a saying in politics that a gaffe is what happens when a politician accidentally tells the truth, which is what it seems Choi has done. Microsoft has declined my request for a comment.

The Pocket-lint post ricocheted around the tech Web today. On the Technologizer site, writer Ed Oswald put the blame on Microsoft’s relative stodginess: “The company’s still fighting a stigma of not being ‘cool’ — unlike Android and Apple at the moment.”

But the news today about Phone 7 isn’t all bad. Forbes.com also reported today that Nokia may begin selling phones running WP7. Forbes columnist Eric Savitz quotes Canaccord Genuity analyst T. Michael Walkley as laying out four strategic options for Nokia, which is a top cell phone seller globally, though not so much in the U.S.  First, Nokia could stick to its current plan to offer the Symbian OS on low- and mid-market devices and MeeGo for high-end smartphones. Second, it could phase out Symbian and go just with MeeGo. Third, it could replace MeeGo with Google Android for high-end smartphones and gradually phase out Symbian. Plan four is where Microsoft comes in, as Walkley suggests that Nokia replace Symbian with WP7. Among his reasons why this is the best option, “these two companies need each other to succeed in the mobile market longer term.”

While today’s news from LG is likely troubling to the people at Microsoft, possible interest from Nokia has got to be encouraging, although, to be clear, this specualtion is not coming from Nokia. Even if Microsoft’s first push has been inadequate, it could still make a second or third push, and it still has plans to expand distribution through more carriers yet this year.

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