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Nokia Sued for 'Fraud' Over Windows Phone Sales

 & Chloe Albanesius Executive Editor, News

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Nokia has been hit with a class-action lawsuit that takes the phone maker to task for claims it made about its Windows Phone lineup.

According to the suit, filed in California district court by Robert Chmielinski, Nokia is guilty of fraud for telling investors that Windows Phone would "halt its deteriorating position in the smartphone market."

"It did not," according to the suit. "This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected."

A glitch with the Lumia 900 software, meanwhile, prompted Nokia to offer $100 rebates, "making the phone essentially free," the suit said.

In the suit, Chmielinski pointed to media reports that quote Nokia chief Stephen Elop championing Nokia's Windows Phone options.

In a statement, Nokia said it was aware of the class-action suit. "Nokia is reviewing the allegations contained in the complaint and believes that they are without merit. Nokia will defend itself against the complaint," the company said.

Nokia last month revealed that it sold 2 million Windows Phone-based Lumia devices in the first quarter, a period that was otherwise "disappointing," the company said.

The Windows-based Nokia Lumia line was introduced late last year. The low-cost Lumia 710 was announced for the U.S. in December and made its debut on Jan. 11. Nokia's first high-end Windows Phone device in the states, the Lumia 900, hit stores in April.

Windows Phone has thus far struggled to compete against iOS and Android, despite mostly positive reviews. According to April data from ABI Research, only about 2 percent of the 36 billion apps users are expected to download this year will be for Windows Phone devices. That, however, is twice the share from last year. "Microsoft is gaining momentum, but its starting point is frustratingly low," ABI research associate Lim Shiyang said.

The suit comes several days after Nokia sued HTC, Research in Motion, and ViewSonic for patent infringement.

For more, see PCMag's review of the Lumia 900 and the slideshow below.


About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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