Better Never Than Late: Nokia Jumps Into the Tablet Fray

As Apple debuted its new iPad Air and Mini refresh yesterday, Nokia quietly introduced its first Windows tablet. Though some of the Lumia 2520 features are nice, there are several reasons the device is destined for failure.

Lumia 2520. Source: Nokia.

Pricing itself out of the game
On the outside, the Lumia 2520's styling is on par with its smartphone cousins, a smart move by Nokia in building a cohesive brand. The tablet sports a large 10.1-inch display, Qualcomm's impressive Snapdragon 800 processor, LTE connectivity, and comes with Nokia's HERE offline mapping app.

But where the 2520 takes a wrong turn is its $499 price tag. Nokia's polycarbonate shell doesn't have the same build-quality as Microsoft's VaporMg magnesium-alloy Surface 2, which sells for $50 cheaper. But the real problem is that the Lumia 2520 is priced exactly the same as Apple's new iPad Air.

Microsoft has priced its Surface 2 at $450, knowing that it can't compete with Apple's name recognition in tablets and robust app ecosystem. But the Nokia 2520 starts at the same price as the new iPad Air, and then goes up from there. The new tablet is designed to function like a PC, with its Power Keyboard. The accessory is a full-sized keyboard with trackpad, two USB ports, and an additional five hours of battery life. While those features are impressive, it comes with an additional $150 price tag.

This means that a Nokia Lumia 2520 at its peak of functionality, battery life, and usability will cost consumers $650. That's a hefty price tag from a company that has never sold a Windows tablet before and is in the process of selling its devices and services to Microsoft.

Apple has sold 170 million iPads since it debuted the device, and sold an estimated 15 million the quarter ending in September. The company has 475,000 apps designed specifically for the iPad, and Apple won J.D. Power and Associates' highest ranking for tablet owner satisfaction earlier this year. Add all of that up and it's easy to see how the Lumia 2520 stacks up against the iPad.

But wait, there's more.

The 2520 runs the all-but-abandoned Windows RT operating system. Before Nokia's tablet debuted, Microsoft was the last hardware maker using RT. Dell, Lenovo, Samsung, and Asus have all dropped the OS because of a lack of consumer interest. It's highly doubtful that in Nokia's current position it can turn around Windows RT.

Whatever Nokia's intentions for the Lumia 2520 were, the tablet will probably have a short and insignificant life. Needless to say, Apple investors don't need to be worried about the new device.

With Nokia in the middle of selling its devices and services to Microsoft, Nokia investors shouldn't focus too much on the tablet, either, but rather on what will remain of the company after the sale. Microsoft investors probably have the most interest in how the new tablet does, as it's likely to become part of the company's business in some way. But don't expect the Lumia 2520 to be an eventual saving grace for Microsoft's tablet business. The company is busy building the Surface brand, so Microsoft would likely only glean small cues or technology from the tablet. Unfortunately, Nokia's timing couldn't be worse.

A better tech bet
Though Nokia may not be in the best position to benefit from tablets, Apple certainly is. But Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

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Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple, Microsoft, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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