Preston Gralla

Nokia said to release a Windows RT tablet --- can't this company get things right?

December 19, 2012 2:52 PM EST

Nokia may be set to release a Windows RT tablet in February, but how that will help the struggling phone maker isn't at all clear. Windows Surface tablet sales seem to be so-so at best, and just yesterday, IHS iSuppli said that Nokia will fall from the top spot to become the number two phone manufacturer after 14 straight years of being number 1. What is Nokia thinking?

The rumors about Nokia releasing a Windows RT tablet have been circulating for quite some time. They've just been revived by a report by DigiTimes that Nokia has resumed work on a Windows RT tablet, and it is likely to be announced at the 2013 Mobile World Congress in Barcelona, Spain, on February 25-28.

Keep in mind that DigiTimes does not have a stellar record when it comes to predicting the future. Some might say that its rate of successful calls is about the same as a Magic 8 Ball.

Still, it does get things right often enough for the report to be taken seriously, especially because it confirms what other people have been hearing as well.

DigiTimes reports that the tablet will be a 10-incher, and that Nokia had initially planned to release a Windows RT tablet earlier, but delayed development to first let Microsoft release its Surface tablet.

The questions are (if the report is true), why Nokia decided to develop an RT tablet in the first place, and why it decided to continue development after seeing Surface sales that haven't been outstanding.

Betting on Windows Phone may be one of the reasons that Nokia has been knocked off of its top perch as the world's biggest cell phone seller to number 2 by Samsung. Ever since Microsoft and Nokia announced their partnership, and Nokia decided to bet its future on Windows Phone, Nokia's market share has been plunging.

IHS iSuppli reports that Samsung will have a 29% share of worldwide phone shipments by year's end, with Nokia number two with 24%. Last year, Nokia was on top with 30%, and Samsung had 24%.

Wayne Lam, senior analyst for wireless communications at IHS attributes Nokia's problems to its deal with Microsoft. He noted:

"Finnish-based Nokia is mired in transitioning its smartphone line to the Windows operating system, resulting in declining shipments for the company. Sales of the company's older Symbian-based phones have plunged, while its new Microsoft Windows 7-based handsets haven’t been able to make up for the loss so far."

So why, if Nokia's troubles can be attributed to Windows Phone, would Nokia ber doubling down on another piece of Microsoft technology whose sales haven't set the market on fire?

Microsoft hasn't released sales figures for the Surface, but indications are that it's not a big seller. The most recent statistics from the data analytics firm Chitika found that users of the Surface accounted for less than one percent of all North American tablet traffic. Steve Ballmer, always one to hype any success, no matter how minor, has admitted that Surface sales have been modest.

Making things more puzzling is that selling tablets is outside Nokia's main expertise. It's a phone maker and marketer, not a tablet maker and marketer. That will make it even harder for a Nokia Windows RT tablet to succeed.

All in all, I'm baffled. It may well be that the DigiTimes report is flat-out wrong. But if the report is true, this one is a head-scratcher.