Will Nokia Eat Apple's Lunch? Not So Fast

NEW YORK ( TheStreet) -- I own a Nokia ( NOK) Lumia. It really is a great phone. First red flag: I have to use a word like "really" to convince you.

I can honestly say that, holding all variables constant, a Lumia smartphone provides every bit as good of a user experience as an Apple ( AAPL) iPhone, with a few exceptions. Second red flag: "exceptions" are qualifiers, and qualifiers are not good in a conversation that covers A eating B's lunch. I shouldn't have to hold anything "constant" either.

But Lumia Outsold iPhone!

In The Wall Street Journal, Rolfe Winkler did an excellent job of putting into context something that a few Windows fanatics blew out of proportion.

In its first three quarters of existence, Nokia shipped more Lumia smartphones than Apple did iPhones during that device's first three quarters on the market. That's 10.9 million for Nokia vs. "just" 5.4 million iPhones for Apple back in 2007. Heck, in its smartphone infancy, Samsung only shipped 1.5 million gadgets running Google's ( GOOG) Android operating system.

In his report, Winkler pointed out several factors that make these numbers much less exciting than they appear at first glance.

Initially, Apple only offered iPhone through one carrier, AT&T ( T). Plus, it was constrained by limited geography. Plus, this is a 2007 vs. 2012 comparison. That requires no explanation. Now that most of the world actually knows what a smartphone is, Apple sells about 100 million iPhones every nine months. Red flag: That's a lot more than Nokia sells.

But Winkler did not include what might be the most important point. This data looks at the number of smartphones shipped, not sold. Research in Motion ( RIMM) shipped a whole bunch of product for which it later had to take massive writedowns.

But more importantly, moving away from the way "shipped" vs. "sold" can impact the bottom line, even if Nokia saw twice as much traction with the Lumia as Apple did with iPhone early on, will it stick? That's all that matters. Does this 10.9 million number signal a phenomenon bubbling beneath the surface? That feels like an incredibly stupid question to ask.

However, it's worth asking.

I'm not sure about Nokia management. They seem a bit more humbled and less goofy, but I would not put it past Microsoft ( MSFT) CEO Steve Ballmer to use these numbers to put his foot in his mouth yet again.

Mindshare Leads to Market Share

I forget from whom I last heard that expression. It might have been J. C. Penney ( JCP) CEO Ron Johnson. In any event, it's so true. You can have the greatest product in the world. But if your presentation fails to capture the imagination of the masses, you're screwed. That's Nokia's struggle: to make this headline-grabbing number take on meaning.

I'm not sure it's humanly possible. It's within the realm of possibility that Windows Phone could end up No. 3 in the smartphone OS wars. It could even take enough market share from Android to make iOS No. 1, ironically, and produce a battle for Nos. 2 and 3 between Android and Windows.

If Microsoft achieves this incredible feat, it will not be because of Nokia. It will be because Microsoft put together an effective marketing campaign that convinced enough consumers, particularly new smartphone adopters, that there's something to the whole Xbox, Windows 8, Surface tablet, Windows Phone integration thing. Nokia has very little, if anything, to do with this.

What does Nokia have to show the public? What can it say to convince people that 10.9 million or so folks, presumably, bought a Lumia smartphone and you should as well? It has nothing to show except what it can leach from Microsoft.

I'm confident Microsoft can make it happen. I'm just not confident that this success would a) do anything but make iOS the No. 1 mobile operating system and b) ensure Nokia's survival.

Nokia has no ecosystem. And it's hardly cool. It's lucky to have access to what really is a nice OS, but that's Microsoft's thing, not Nokia's. It will only go so far for the latter.

On the cool end of the spectrum, it's stunning. Nokia might have sold 10.9 million Lumia smartphones. Heck, let's just say it only sold 7.5 million of the 10.9 million it shipped. It did this much business, and, in my travels in the pretty diverse market of Southern California, I have only seen one person fiddling with a Lumia. Me.

There's no buzz on the street for this phone. Until Nokia can create one, any turnaround it orchestrates will be less than exciting. Microsoft does not have this problem. It has Windows 8 to leverage. That's a massive built-in advantage that should get Apple and Google's attention. Nokia provides no such threat. Not even close. Even with promising, but almost-certain-to-hit-a-dead-end data.

At the time of publication, the author was long MSFT and NOK.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.