The Nokia Lumia 900 phone at the Mobile World Congress in Barcelona: The cash-strapped Nokia will slash its Lumia smartphone prices to try to drive sales.

Manuel Blondeau/Corbis

his week Nokia posted a $1.2 billion loss for the most recent quarter, citing a "mixed" response to its Lumia fleet of smartphones, which use the Windows Phone operating system developed by Microsoft. Nokia says it will lower the prices of some of its Lumia phones in order to better compete, but CEO Stephen Elop insists that "Lumia is up and running in the USA." Industry watchers, however, are more skeptical about Lumia's prospects, and its ability to take on the iPhone and Android-powered phones. Can Nokia save itself?

Nokia is in way too much trouble: Nokia's sales are bad, but it's cash situation is even worse, says Henry Blodget at Business Insider. "The company is burning cash at a mind-boggling rate, and it's about to run into a cash crunch." At the current rate of nearly $1 billion per quarter, Nokia will be bankrupt in less than two years. It's gotten so bad that Nokia chief Elop is talking "about the need to conserve" cash. The company needs to be "super-aggressive to have any chance of saving itself." Nokia is in a bind, and it "may well drown."
"And now Nokia has a new problem — it might go bankrupt"

Actually, Nokia is in a good position to recover: "As bad as Nokia's financials look right now," you can't deem Windows Phone "a failure just yet," says John Biggs at TechCrunch. Nokia is "essentially waiting" for the Lumia to catch on, and its cheap pricing strategy will allow it "to gain market share." In fact, "Windows Phone is better than Android," and those who write Nokia off do so at their peril.
"Nokia may be down, but they're not out"

And Nokia can still grab new smartphone buyers: "Android and Apple have a lock on the smartphone market at present," says Charles Arthur at Britain's The Guardian. But about half of cell phone users still haven't switched to smartphones, meaning Nokia has a chance to lure new customers "with the right incentives." The next half of smartphones users "won't necessarily make the same choices" or "spend as much money on a phone," which could play into Nokia's hands.
"Nokia's dismal numbers: Is Windows Phone a bust?"