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January 08, 2010

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Comments

Jason Grigsby

Good stuff as always Tomi. One thing you didn't talk about with the iPhone is the end of AT&T exclusivity. There are strong indications that this is the year exclusivity ends.

I think Apple is banking on growth in the U.S. due to the fact that people will be able to get a subsidized Verizon iPhone. Assuming that happens, there is likely to even be a percentage of current iPhone users who are not only excited by the new iPhone release, but also excited to get off of what they perceive as an inferior network.

FWIW, I not an Apple fanboy trying to defend the iPhone here. Just think there is an element to the market that you didn't touch on that may have some impact.

Rodrigo M

Why don't you just disclose that you Tomi Ahonen is a formar Nokia executive and Nokia is a major customer of your research and consulting activities?

Richard spence

Tomi

The big problem I have with this analysis is the definition of Smartphone. For me Apple have created the first "real" smartphone. One with an upgradeable o/s, a proper browser that can access the current internet and a way of changing its behavior - installing apps. Nokia/RIM to date do not produce smart phones, they produce *just* phones. You are not comparing like with like.

The iphone is an iconic device because (much like sony walkman did for personal stereos) it defines what a smartphone is. Nokia despite the years of opportunity have just missed the boat. Their market share is huge but it is for phones not smartphones - they have a lot of catching up to do. Symbian is a laughable operating system with poverty stricken, arcane development tools, don't get me started on RIM.

Dismiss the USA at your peril. The iphone has finally put a decent smartphone, with a decent development environment into the hands of American software developers and it is American garage software developers who have led the computer revolution from the 1970s to today. They will create the smart phone and applications services that the world will use.

I speak as a European mobile software developer who has created software services for both Nokia, RIM, Apple and Google Android.

Richard Spence
Bluetrail

Romain Criton

Great article Tomi, I'm especially glad to hear about Samsung's bada, which I feel has been largely downplayed by tech media. I too think that Samsung has what it takes to make it a big success, including on mid-range phones, a la Nokia with Symbian. Samsung is very clear about their intentions when they say on their website:
Samsung has developed bada to make these exclusive smartphone experiences available to everyone.

Romain Criton

@Richard Spence: well judging from your own smartphone criteria, I don't see where was the novelty in the iPhone:
- Upgradable OS: Symbian phones had it years before. Heck, even Windows Mobile phones were upgradable
- Proper browser that can access the "PC" Web: didn't Nokia have a WebKit-based browser in the N95, which was released before the iPhone ?
- Installable apps: Symbian & Windows Mobile had it from day one. iPhone DID NOT HAVE installable apps until 1 year after its original launch !

Many people believe that Apple has invented a whole lot of tech stuff, but that's not true: Apple integrates other's inventions, make them actually usable and turn them into unique, great products and bring them to the mass market.

It's not about ideas, it's about execution

Tomi Ahonen

Hi Jason, Rodrigo and Richard

Thank you all for your comments. I will reply to each individually.

Jason - thank you. Yes, its a good point and something Apple quite needs - to be on 'all' networks in all markets. There are a couple of problems with the Verizon scenario, particularly the one about CDMA. Apple so far has saved a ton of money in not attempting a CDMA variant, and putting all radio research into only the GSM platform. That gives them (with WCDMA/UMTS ie 3G and HSDPA ie 3.5G) the whole world. CDMA would only cover North America and a few selected other countries mostly in Asia and Latin America, amnd often second or third tier networks in those.

In almost all countries of CDMA the migration is away from CDMA to GSM. The fully operational and functional and 'modern' CDMA networks with easily 10-15 years of life left, have been switched off in favor of GSM in countries such as Australia, India, Mexico, Chile, South Korea etc. So for Apple now to put effort into a CDMA variant just to get onto Verizon's network would be tremendous effort for very modest potential gain. Note that going to T-Mobile gets half the gain for no extra R&D as T-Mobile is on GSM.

But regarless of whether its T-Mobile or Verison (and Sprint, CDMA would obviously open Sprint as well..) that would be to Apple's considerable advantage. They saw for exanmple in France that once the networks all started to carry the iPhone, its sales took off. Good point. I think I do mention it in the article but not explicitly..

Rodrigo - ok, if you insist. I added the paragraph pointing out also that I am a former Apple/Macintosh trainer (and Apple fan) and that my current reference customers include not just Nokia out of this list, but also Motorola, RIM, SonyEricsson and LG. I have other customers from this list who have not yet revealed in public that they work with me, so I have not disclosed those names of course. But you can imagine its almost anyone from the top, as also my reference customer list includes the world's largest mobile operator, China Mobile; the world's largest mobile operator group, Vodafone; the world's largest mobile networks supplier Ericsson; the world's largest mobile application developer Buongiorno; the world's largest mobile internet company NTT DoCoMo; the world's largest computer maker HP and the world's largest IT services company IBM. Are you happy now?

Richard - I hear you and I understand what you mean. And there are two points here in your comment. One is, whether Apple had been a transformational (smart)phone - and I agree it has been. We measure the telecoms industry in two eras, the time before iPhones and after iPhones (as I predicted in my blog of the same name). You know this haha.. But yes, so the Apple iPhone did totally transform this industry.

But does that negate earlier smartphones. I think that is completely unreasonable to say so. You know from working with Symbian before the iPhone, that the world's first smartphone was the Nokia Communicator. You also know that the original iPhone 2G did not even fit the modern definition of a smartphone (the newer iPhones do). Just because we have 'better' smartphones now, does not negate the earlier ones. Its like saying only PCs after the Mac should be considered PCs. Come on, the original Apple II is a personal computer as is the original IBM PC (as in the Charlie Chaplin PC) that used DOS etc. Yes, the iPhone made smartphones radically easier to use, and easier for developers to develop apps for, but that is IMPROVEMENT not creation of something.

I understand what you're saying, but I don't buy the argument. Certainly currently there are phones that are easier and less easy to use, and easier and less easy to develop to, but the commomnly accepted definition is that if it has an industry standard OS and users can install apps - whether most users do or not - then its a smartphone. That is the definition used by Gartner, by IDC, by Canalsys, by Nokia, by RIM, by Apple, by HTC, by Microsoft, by Google, by Palm, by Samsung and by Toshiba. I will go by that majority view, sorry, and not eliminate some systems because they are a bit too difficult haha...

Thank you all for writing

Tomi Ahonen :-)

Jason Grigsby

To reinforce your point about RIM in 2010, I have to assume that they will release a new browser based on their Torch Mobile acquisition sometime this year. If they do so, expect them to skyrocket up in the metrics that the media (particularly US media) seems to be paying attention to (e.g., AdMob's and Net Application reports on mobile browsing market share).

Richard spence

@Tomi @Romain

In my post I said that Apple have defined what a smartphone is. Sure you can install apps on N95s - but hardly anyone does. Sure there is a webkit browser but it there are pretty useless for surfing the real web. Sure you can technically upgrade the o/s - do you know any end users who have?

I have been in the trenches trying to create services for these types of devices for some years and believe me it is horrible. If these so called smartphones had been any good we would have a vibrant services industry for them now - we don't. Most people who own Nokia smartphones have no idea they can install apps on them, there is no discovery and frankly hardly any apps as Symbian/J2Me dev is so bad. On the web side the web usage stats for these devices is pitiful given the installed base of phones.

In your reply you give examples of Apples IIs, to Pc to mac. I don't think this is a comparison that I would make. Comparing Symbian to iphone is like comparing an Amstrad Word Processing Device to an IBM PC. The Amstrad came with fixed software was ok for doing the odd letter but the IBM PC is a really general purpose computer that created a massive software industry.

I do feel you analysis misses the real importance of the iphone, it is a genuine watershed moment for mobile - finally we have a device we can create services for ... at last!! Nokia make and sell plenty of "phones" but they a lot of catching up to do in Smartphones. I think they know it too.

Somewhere in a garage in the US someone is inventing really cool apps/services for the iphone/android - because unlike Symbian/RIM devices they can.

For the record I do not own an iPhone. ;-)

Philipp Weiser

You might not want to start the Windows Mobile death watch just yet. As you point out in your Smartphone Realism Pt. 2 post, IT departments hate change. So they'll be buying new WinMo phones for a long time to come...

Microsoft could probably seize all development on WinMo (not that they have done much develepment anyway) and still continue to sell nice amounts of units.

As with the Internet Explorer, it will be enough for them to try and not fall too far behind with each new version.

As someone who's stuck with a HTC WinMo at work, it's really sad that we all have to suffer from Microsoft's inertness.

miko

@richard spence,

what do you own? your questions in your first paragraph are blatantly ingorant, to say the least. my 1 yr old Nokia N85 has about 100 apps installed and growing every day. The OS have been upgraded many times thru OTA, maybe not your definition of upgrade, but for a non-techie like me, it is. i dont understand about the webkit browser, but i do use Opera mini/mobile and skyfire browsers.

cycnus

Hi,

This is one of the BEST review of the cell phone industry I ever read that I believe is NOT biased. First, let me say that I really hate to see when analyst said that iphone will rule the world. It's not that I'm against iphone, but because i know the fact that iphone selling well just in the USA. kudos for you to pointing this out, as other reviewer failed to do so.

Second, I'm from Indonesia, and you mention about blackberry fever in Indonesia. I have a good news and bad news for blackberry. First, the good news. Yes, bb has doing some great advertising the phone. The president obama use is, then our president susilo bambang yudoyono decide to use it. And then, suddenly, the nokia communicator lost of it's prestige to bb in indonesia. The cell phone operator also pushed this bb so hard, because the ARPU (average revenue per user) has been down from US$30(year 2000) to US$3-US$5 (year 2006) due to price war between operator. With bb, user will use the bb service that were US$15-US$17/month, thus operator were very happy with bb.

Now, the bad news. Cell phone operator were trying to hide the hidden cost of bb in small print. There were lots of bad story here and there in Indonesian news paper, internet forum, etc, that when traveling aboard, someone would be charge with expensive roaming fee when connected to the blackberry server. I know for sure that there were a tiny market of less than 3% of user that have 'done' with bb and back to nokia. second, the bb representative in indonesia were very arrogant. there were an interview in the past by the biggest indonesian news paper to bb numero uno in indonesia about the cheap Chinese product with keyboard/thumbpad. and he said "the cheap chinese phone is only a steeping stone for that user for using bb, because it would be a shame to use such a cheap product, and it would be logical once that person have a money buying the real product that could up his status." This comment were like a storm in Indonesian people. And make a good percentage of people vowed not to buy bb at all. I, myself, a bachelor degree with good amount of salary won't buy any bb because I hate such arrogance. Nokia on the other hand, released their cheapest phone to date with nokia life tools and showing their care about the poor too. so, bb will going down because of it's arrogance. more bad news.... nokia messaging / ovi chat will surely be a better choice for indonesian because of the better priced. US$ 4/month for nokia messaging + ovi chat, compared to US$16/month for bb. With a group of anti bb (because of the arrogance + cheaper nokia messaging + bad publicty of hidden roaming cost) 2010 will be the year that bb fever will be cured in indonesia.

Now about bada.
I don't know if samsung will be success with bada in the long term. The korean company need to show the long roadmap of bada to be really success. For non-smartphone, no one care about support. the most important thing is phone+sms. that's it.... but no one will buy a smartphone that would not have a good support (firmware update). and samsung need to show that they were able to give such a good support for their product.

about nokia.
contrary to other believe such as symbian is old need to be replaced, I believe symbian were one the best operating system. it might not be suitable as the top os anymore, but for middle end, it would do just great, and nokia doing right with the maemo/s60/s40 positioning. BUT... nokia doing their hardware VERY WRONG.

First, the N97 fiasco. It's all about the RAM. the RAM / C-drive is too small. Nokia has been doing a if it's not broken, why fix it. Nokia need to make their phone with more RAM, especially, if their user willing to shell out US$500-800.

Let me say this... the N97mini, has double the RAM, while it looks like an improvement, I believe, nokia should quadruple it instead because N97/N97mini is THEIR TOP OF THE LINE. They should not do a '128 MB is enough' or '256 MB' is enough. They should be AT LEAST doing a enough TIMES TWO for a product that were US$400+.

Now, about the all their current line of the E series. I believe E52/E55 should AT LEAST have internal memory of 1GB, so it should be C-drive + 1GB internal memory to store email/sms/photo/video + tranflash. Their E72/E75 should at least have 2GB of internal memory. and so does their N series... reason...

I really hate nokia for this. I own Nokia E series and MUST store the email/sms on the memory card. If I store on the C-drive, it would be full in no time, and make my phone DEAD!!! and because I store it in memory card, I lose the ability to hot swap. DARN!!!!!!!! This is NOT a good bussiness phone, and I really hate it.!!!!! (note, I use Axis in Indonesia, they give their user 1000 free MMS each month, 1000x50kb photo = 50MB, so... go figure, why my C drive are draining so fast, other than email with attachment too).

Nokia problem is not the software choice or bad hardware, but their trying to use the if it's not broken, why fix it ideology. I even wonder if anyone that have a decision on designing nokia phone ever use email on their nokia.

Best Regards,

James M

@richard spence,

Symbian has thousands of applications and has had for years, before the first iphone app was written. Just because there's been no central place to get marketing info from (apple's great coup is generating headlines) doesn't mean they aren't there. http://www.engadget.com/2010/01/08/live-from-nokia-ceo-olli-pekka-kallasvuos-ces-2010-keynote/ Nokia are claiming 300,000 app developers in China alone for Symbian.

@Tomi T Ahonen

"couple of years ago, the Symbian operating system was owned across several giant handset makers (Nokia part owned with SonyEricsson, Samsung, Motorola etc) and had over 60% market share. Now being only Nokia's owned operating system"

You make a mistake when talking about Symbian being owned by Nokia, it is not. Symbian was bought by Nokia and now the Symbian Foundation has been setup to be custodians of the platform as it moves to open source. The Symbian Foundation has many members, Nokia, SE Fujitsu to name but a few.

Brendan

Hi Tomi,

A really insightful view of the next year in the smartphone industry, which I would expect from you! Very good point about Samsung - though to turn this into an advantage they need to make sure Bada is a good platform for development. I have heard this is not the case, but give them time.

Only one thing is bothering me though, in the Sony Ericsson analysis you say - "Recently with the Symbian OS shifting to Nokia ownership, SE has little reason to particularly push Symbian in its smartphones and is shifting to Android."

You must know yourself that Symbian is not Nokia owned. In fact, now Sony Ericsson have a BIGGER stake in Symbian since it is a not-for-profit foundation instead of a private company in which they have a (smaller) shareholding. If you didn't know that then I'm quite disappointed that someone who comes up with such insightful views can get that wrong.

Mr Swiss

usually...i would not get so upset..but...
i stand corrected wasnt the nokia 9000 the first smartphone? and lets add that the nokia 7650 was the first symbian smartphone...which in turn was an OS built directly for smartphones...(thus the fact that it looks aged now)...
the iphone was the 1st smartphone OS to be upgraded? let me go back a few years with the Nokia N90(oh the 1st Nseries device which carried superior multimedia capabilities) was able to be upgraded via Nokias (Device) software update updater...followed behind by the N70(correct me here but still is the worlds best selling smartphone?) N80, N93 and N95(and im being sporadic with the devices only listing the ones which were the flagships).....
full web experience? iphone? does "optimized for" ring any alarms? where other devices actually showed the actual web pages with no optimizations?...alot of people forget this point...that loads of webpages have been optimized for the iphone....its like .mobi just became .appiphone
you can develop for iphone easier- true fact that you can..but how easy is it to actually get past apples red tape? no problem here with other OSes...as a matter of fact there was an article recently stating how app store developers are now moving away from the app store due to the restictions of apple...while other OSes are making it much easier to develop apps....
and to your n95 comment about peple dont/didnt know you could install apps...if that were of any truth...the developer Samir of the famed "Rotateme" application would not now own his own developing company and also working in conjunction with nokia...if people didnt know....
it is an insult for mr richard spence to even state that he was a developer....given such ignorant facts spewed from him. if human waste could fly your mouth would be an international airport!!!!

Freem

I think Nokia is on the decline because they have totally overslept the changing dynamics of the smartphone industry.

X6 or E72 all the way up to N97.. just a weak lineup!

Nokia is weak in all the segments right now to compete, the only reason they sell so many phones is because of their brand recognition, thats it. Once the consumers find out that what they're buying is not on par with the competition they will run in masses and never look back!

X6 is so expensive for what it offers, namely a huge headache, it should come with all the CwM music collection pre-installed on the device DRM-free to justify the price.

E72's email client is so laughable that even the free flash gmail app is better to use.

How about, the E-series is supposed to be all business right? Well if you try using the build in calender or contact app, its just pure anti-business! If you want to remember your client's birthdays which are stored in your contacts guess what your calender wont know it and there is no way to tell the calender go and import all birthdays. If you search for a contact and you only remember his company name, well guess what your all business phone wont know you're looking for a business because it only searches the names of your contacts!

The N97 has a 3 row QWERTY keyboard.. enough said!! The inventors of the original QWERTY go ahead and destroy it!

Ovi maps is so laughable and slow that it should pay you to use it, not the other way around considering that Google Maps is free to install und much better to use. The Navigation part is not bad, it should be free though.

Their chat app is so laughable i had to immediately uninstall it.

Their touch screens are so ridiculous, if you want to use the N97/mini and all their touch screen phones for that matter, you better sharpen your nail on your index finger and make it pointy in the middle otherwise the phone wont properly recognize when you try to touch it.

I used to like Nokia because they were leading the market, nowadays, they're stuck in the past. They can't fire their senior engineers who are clueless with today's technology demands because they once were actually leaders and helped Nokia get to where they are now, and now the same people who helped it get there will take them down.

Nokia fire your top designers and engineers because for the past 3years they have shown no results, they're old and stuck in the old ways. Get some fresh blood in there and let them make some bold moves.

Jason Lackey

Tomi, if you have used an N97, X6 or any of the latest touch screen Nokia Symbian devices it would be clear that Espoo 2010 is Detroit 1980 and that the seeds sown with these awful devices will be reaped in plummeting market share. To command anything, you need to own the high ground. Today's high end device can easily be tomorrow's midrange and the day after's low end, but today's low end will never be anything but tomorrow's giveaway.

Alexandre Bouillot

First Nokia Smartphone was 9000. First Symbian Smartphone was the 9210. First S60 Smartphine was 7210. iPhone cleary bring a different model from the era before it. Apple isn't after complying Carrier requirement and don't care being frontal with their business model.

iPhone was one of the first 3G phone without video telephony embedded. It was not unusual on Nokia's E line up, but not on mass market range.

For years Nokia was struglling between pushing apps to the phone - remember Preminet - and not ruin carrier's portals and what was their appstore at that time.

Apple succeed transforming carriers into pipe for data and bring unlimited Internet on subscription plan.

Google is now benefiting of this and is able to produce Android on the same ground.

Regarding Internet experience, when I'm browsing on the net, I'm pretty sure I have the 'generic Internet' pages (the one 750K/1.5Mb) and not a cut down version without flash.

This might explain why Nokia's smartphone devices are under represented in adMob stat. I'm pretty sure I rarely cross them during browsing.

I'm planning to try to make an app to check what site are visited, then make stats on what add network are the most proheminent...

JB

Interesting take as usual. Your analysis is very carrier/feature set based. If you were to compare the players on different criteria you might see a different picture. What about customer satisfaction as a driver of sales? Mobile is a product that people share face to face, word of mouth is probably a huge driver of sales, particularly with people upgrading from feature phones. If you can capture a big percentage of the upgrade customer, your going to grow. Or you could look at who has the strongest connection with existing customers, or who has a robust feeder system... By these criteria RIM and Apple are way out in front and the have been eating up the lions share of the market growth for the last 3 years (0 to 17 is amazing!). I'm not sure you've made a strong case for Nokia or Samsung to grab a big chunk of the new audience and without the new users they can't maintain share, let alone grow.

Hyoun Park

Tomi,

Fantastic post, but a couple of points I disagree with:

1) The assumption that RIM can count on its 75% enterprise market share. If they thought that, they would not have hurried into the consumer space as quickly as they did. With the increasing consumerization of enterprise IT services, we're going to see more iPhone/Android to go along with Symbian/WinMo/RIM. Specifically, iPhone has critical mass in specific geographies to make inroads and the device management companies are quickly stepping up to cover these new OSes. As companies analyze the cost of training, hardware acquisition, software acquisition, and cost of support, both math and strategy will start leading to the increasing adoption of multiple OSes. For the 80% of businesses who only support 1 OS, I'd be interested in seeing how many of them have individual-liable devices in their companies. Based on our numbers, I'd put good money that more than half are unofficially supporting additional mobile OSes. This unofficial support ends up affecting the enterprise mobile ecosystem whether it is acknowledged by IT or not.

2) One of the challenges that Nokia, RIM, and the Japanese providers struggle with is their focus on hardware functions at the cost of UI. Although this worked well in the early adopter phase of smartphones where only techies or tech-advanced cultures picked up on the smartphone, we've moved into an early majority phase where intuitive usability becomes far more important. Simply put, if I need a manual, the device isn't worth it at the majority phase of adoption. As long as Nokia doesn't realize this, they are doomed to become increasingly irrelevant to the future of smartphones. I think they're well positioned to continue to be the market leader in cell phones in general and have taken fantastic steps in owning emerging markets. But this will be at the cost of thought-leadership and creating the next generation of smartphones. Eventually, this will catch up to them (and all other hardware-focused vendors)

One of the reasons that HTC has been so successful is that they realized this from the beginning and rather than simply provide hardware functionality for WinMo, they created intelligent skins and form factors on top of winMo that have been far more usable than anything Microsoft has figured out for themselves. If HTC had taken a Nokia approach to development, they would have missed their opportunity to become the great company that they are today.

Davide Rota

I'm sorry but after reading some of your articles I really had to comment! Really liked the different point of view of your posts, the numbers/business/market share view, but I was also so disheartened ...

So let me sum it up:

Big customers buy retro phones because their IT departments are too afraid to support new OS and new technologies and carriers don't want to sell them new phones anyway.
People will only buy the cheaper subsided phones available in their country, be it N97, iPhone or whatever.
People will also value a lot more some useless feature like flash or Mpixel or color ahead of important ones, like OS choice or CPU speed etc..
People will happily spend tons of money for useless premium services, ringtones et similia, but will not care of good, quality applications.
Everyone can make smartphones since apps, community and developer support are apparently not needed. You just need to come up with a new OS, put it on your lineup of dumb-phones, et voilĂ . The cheaper the better, quality is not required.

You are probably right because that's exactly the way the mobile industry has worked for decades and that's why mobile phones basically sucked and Apple managed to release a product years ahead of the competition.

I'm so glad Apple decided to take the risk and propose a revolutionary product, putting quality OS and polish over meaningless tech specs, leveraging great apps over ringtones and so on...
I'm still convinced, but maybe it's only a stupid hope, that in a while the differences between the innovators pack (IphoneOS, Android) and the others will be too big and glaring for anyone to just ignore them. And I hope that more and more competitors will stop just thinking in terms of numbers and start to put some love/passion and innovation in their products.

Also I'd like to quote another user comment "To command anything, you need to own the high ground. Today's high end device can easily be tomorrow's midrange and the day after's low end, but today's low end will never be anything but tomorrow's giveaway."

cycnus

@david

seeing your comment, made me must comment your comment. :)

First,
Yes, most user doesn't care about CPU speed and OS. Because that is irrelevant to them. I believe anyone who comment on this forum should be categorize as geek (count me in). But ordinary user (my mom, dad, wife, cousin, etc) doesn't really care if their phone CPU is Arm Cortex A8, or Snapdragon, or 600MHz Arm 11. They also don't care about Windows, Symbian, etc. They wouldn't even want to know the max speed of their car because they won't drive that fast. They just wanna use the phone. The looks and silly specs such as MP and color and brand/quality is what really mean a lot for them. and that's the way the market works.

Now,
when you said IT department doesn't want to support new tech and also phone carrier..... I believe you were american who lives in American. If you ever go to asia, you would know that the IT department and phone carrier is really EAGER when seeing new devices. My company have a bussiness with HK, Singapore, China, Taiwan, and most IT department in this country very eager to support new technologies such as new computer OS and new cell phone OS.

apple polished OS is only a skin deep, and their lack over meaningless tech specs is an anomaly/bubble and will cost them fortune, whereas nokia/SE/samsung did great with their digital camera and will set a mark on the history.

I also believe that iPhone will lost a great battle in the long run. phone is not just a beauty OS. the competitor will catch up with it. When it happened apple will really have a hard time maintaining their elites because at that time (that time is NOW) the real capability of the OS is what really matter.

Now, you saying that iphone and android were the innovator pack. It's a sad things, but only american really say this. In other part of the world, the 93%, Symbian is THE INNOVATOR. symbian innovate the easy of use and the one that bring most the first smartphone experience for mankind. Nokia seems loosing the battle if you read a lot of american journalist review on cell phone. But, nokia now laying the BEST foundation for their phone by acquiring QT trooltech. They made the it easy for linux program made with QT to be ported to Symbian/Maemo. This is priceless in term of computer software will be able to run on phone.

OK, that is a geek stuff, no real user will care about it. But nokia is not stand still to their competitor. They know, they've been lazy in the past 3 year, and they catch up in the gimmick (beautifull os). and competitor should also notice that nokia own the MOST stable OS with the RICHEST feature on this planet gaia.

1 more things.... my sister have an iphone, and she really hate while she's using skype and have an incoming call, the skype apps will be closed. This is the OS that you just categorized as innovators, while SymbianOS that can trully multitask doesn't have this problem. This is the underlaying strong OS that nokia have. The multitouch and good looking gimmick is easier to make rather than good/strong OS.


Alex Birkhead

Superb market primer for 2010, though I think a few areas could be reconsidered, at least for the medium-term:

Nokia appears now to be actively re-segmenting the top-end of the market around mobile computers. This could be a very smart move to sideline Apple in a fight with Maemo (which looks off to a promising start). This relegates smartphones and Symbian to featurephone-successors in the mid-market -- not a bad spot to be, if only Series 60 wasn't such a buggy beast (this weakness also endangers the enterprise credentials). I appreciate NOK is revamping the Symbian interface, presumably partly to address this, but this is going to be hard work as software problems have recently seemed endemic and non-enterprise developers appear now to avoid Symbian like the plague (Symbian hardware is nice, though, and that wasn't always the case in the past when it seemed systematically under-specified -- which shows NOK can fix weaknesses). If the market is segmented like this, Android straddles the segments, and I'm not sure if this is good or bad for it. BlackBerry looks like a featurephone (or 'netphone'), in this context, as do nearly all shipments from other players (excepting HTC and Palm).

Apps may be very important, at least at the top-end of the market, i.e. in the mobile computing segment (also, in the cross-over smartbook and other emerging segments). Also for end-user experience (but not much in revenue-terms for vendors or operators) -- Apps are key to the iPhone's success, despite the very low investment/income for Apple. Operators and Apple's rivals would be wise to chuck some sizeable sums at developers to neutralise the App Store as a competitive advantage (tens, if not hundreds, of millions of dollars). Longer-term, however, is there a battle between apps and web services, i.e. Google v Apple approach, or will they just co-exist? In the mass market, I would place Nokia more in the web camp, although its history and recently expanding ties with Microsoft give it pragmatic balance. Smartphones and featurephones could be perfectly happy with web services, as power/efficiency/connectivity continues to improve, especially if web browsers become more standardised and capable (big mobile operators want this...) -- this also nicely opens up cloud/web and device-independent computing.

Android -- someone has to make this prettier and more usable for ordinary folk...and I suspect they will soon. HTC or Sony-Ericsson, perhaps? If Google merges its Android and Chrome OS forks, as has been suggested, it could create the basis for a defacto mass-market consumer electronics OS, heralding an age of pile-it-high, sell-it-cheap (sub-$50/$100), WalMart-style computing across pretty much all imaginable formats. This could be very dangerous for other mass market mobile platforms. Sidetrack: I think Nokia should actively support Android in Maemo devices, if only for developers and hardcore users to retrofit, to demonstrate open-source Maemo hardware's power/potential, provide a Plan C, and give some internal competition (might freak out Google and others a bit, too!).

badu -- early information suggests this is severely limited, possibly crippled so that it can be overlaid across as many devices as possible, making it more of a traditional featurephone than smartphone platform. In part, I think Samsung has belatedly woken up to Nokia's strength in emerging markets where S40 plays to its strength as a terrific featurephone platform (but Samsung could now be caught out again, as NOK ditches the beloved S40 for an enhanced Symbian to reinvent the featurephone segment). Nokia also looks impressive in the emerging markets VAS space -- Microsoft and Google watch out, imo. Samsung is probably also sick of supporting, and paying for, other smartphone OS that don't really work out for it (PalmOS, Symbian, Windows Mobile. Linux, etc.).

RIM -- yes, they are doing better than expected, and partly for the reasons you outline, but probably mainly because the even more impressive/disruptive iPhone took them off the radar at rivals and mobile network operators; suddenly RIM didn't seem quite so greedy/dangerous after all; just as RIM succeeded Nokia as the operator's bogeyman before it. While short-term, I agree with you that RIM is doing remarkably well; mid-term, where is their mobile computing platform (in stealth, for all I know)? Additionally, their strength in enterprise is more to do with rivals weakness -- my bet is that Android will take them on fairly soon (backed by IT companies some of which you you flag), to support Google's Apps enterprise drive (BlackBerry is reliant on Microsoft's Exchange in the enterprise space). Maemo could also strengthen Nokia in the enterprise space. A shift to cloud/web computing might also change the game (possibly to RIM, Maemo and others' advantage).

Microsoft -- badly wrong-footed, indeed, but I think they are seriously attempting a comeback. Consider Vista > Windows 7, in terms of what they can do when they put their minds to it (Azure and Xbox are other recent examples). A bit of an outside bet, but how about a fundamental shake-up around Windows 8, converging their mobile, desktop, server, cloud, and other OSs (I've lost track of how many they have...). Late to the party, sure, but much more in tune with what Android, iPhone OS, Maemo are doing (all UNIX heritage, not coincidentally, with BSD/Linux and proprietary ingredients thrown in ...). Also, don't forget that LG is supposed to have a big batch of WinMo devices in the pipeline -- this doesn't fully make sense to me unless a stop-gap for WinMo 7 or even WinMo 8, and LG presumably has more incentive to play along than just a big co-marketing and R&D sweetener. Strange to say, but the market may need MS to offset the rise of Google...

Totally agree about the danger of US-myopia, but don't get too Europe-centric! Emerging markets are developing at remarkable pace. China is astonishing, while India, South-East Asia, and LatAm are also fascinating, and Africa very interesting. Your list of players pretty much overlooks China-specific and lesser-known Taiwanese players; they may be relatively small/invisible but they are also very busy and ambitious. Much of this action is VAS- and featurephone-oriented (plus Android in China), but this could actually be a grey area if smartphones are becoming the new featurephones, and with Nokia already a strong player on both these levels (its hidden jewel, imo, totally overlooked by iPhone/Android/US/Euro obsessives).

And, of course, there's also the fairly real possibilities that Palm and/or RIM get snapped up (MS rearguard?), plus Sony Ericsson and Motorola need to get fixed or subsumed.

@Hyoun Park

Totally agree that usability needs to be at the forefront, but I think Nokia is well aware of this, and could well be making 2010 its 'year of usability' for Symbian developers.

cycnus

@Alex Birkhead

I don't agree that Nokia should support Android. If Nokia support Android or Palm WebOS (as most US analyst suggest), it would DESTROY the symbian foundation. The enemy will spread more FUD to bring down nokia. It's a bad move/decision. What nokia did right now for the Symbian/Maemo is already the best. It's a pity that nokia symbian phone hardware is such a laughing matter. SE symbian and samsung symbian already use Arm cortex A8, but nokia N series top of the line only use 434MHz Arm 11 CPU, and E series top of the line only have 320x240 resolution. Not to mention the low C-drive problem on ALL nokia devices. This is like having a ferari with 140R13 tyre.

Furthermore, Nokia Maemo is **BETTER** than Google android. Many US analyst point out that android is the next big things because android seems cool. Somewhere in the web I read there were 2 ways to develop car. from inside out, or from outside in. Android were build from outside in, whereas Maemo is carefully build from Debian platform and have a better compatibility with Linux source than Android.

From my point of view, nokia build maemo foundation very strong, like building a 200 meter building but with a room to grow to 2000 meter. Whereas Android, they just randomly picking linux source code and change it here and there to be android. I bet my money on nokia/maemo, but this would be a very interesting things to be watch which one that would really work.

Tomi Ahonen

Wow, lots of comments over the weekend. As usual I will reply to each of you indivudally. I will split this reply posting into about 3 parts. So from my previous reply, here the first comments after that:

Hi Romain (before my reply), Jason, Richard, Philipp, mico and cygnus

Romain - I apparently missed you when we must have posted about at the same time. Sorry about that but happy you commented. We agree obviously and thank you Romain for answering Richard Spence directly. I agree with all of your points. I would add that yes, the N95 from Nokia prior to the original iPhone allowed unlimited access to the real internet yes, but the first mobile phone to do so was literally a decade earlier, also by Nokia the 9000 Communicator. Full unrestricted internet, except at snail-speeds of the early cellular 2G networks at that time. And Nokia brought WiFi connectivity to cellular mobile phones on a mass market phone with the N9500 Communicator around 2004, many many years prior to the iPhone. And you can't say that 9600 Communicator was not used as an internet browsing phone - on the real internet, not WAP - as it had the wide screen internet-optimized screen and certainly with WiFi was very capable as a high speed internet device.

Jason - great point about RIM, yes I would expect that aspect of browing stats also to keep growing with RIM. Note also, that their latest quarter they said that 80% of their new subscribers now come from residential users, not business users, so that also means more of the 'frivolous' surfing to pages that have advertising, so expect a continuous increasing use of Blackberries at those pages that the ad server networks support.

Richard (second posting) - Thank you for coming back. About first the role of the iPhone. Richard, I have written a very widely reported blog - 3 years ago - that the iPhone will so dramatically re-invent the whole mobile industry, that we will talk of two eras, the era before the iPhone and the era after the iPhone. So first, we agree on that point. Second, I have ALREADY said so, in a very long and detailed posting explaining why, and this posting of 2010 smartphones is long enough to double its length on what the iPhone has meant to the industry. But most importantly, that change has HAPPENED, it happened in 2007, it is not 'newsworthy' now in 2010. In 2010 Apple is not driving the industry. That change came out of 2007 and the App Store in 2008 but now we have nothing spectacular from them in nearly two years. The iPhone keeps getting better yes, but its now incremental changes not radical innovation.

Then of that focus you have on the apps and why they are so good with the iPhone and you claim nobody installs apps on other devices. Obviously there are a million downloads every day at the Nokia Ovi store, so obviously millions of people would disagree with you. But I want to also point out a specific point of detail. Most of the paid content on the iPhone are games (and second most downloaded content are now ebooks). So very concretely the iPhone is a 'toy' it is used for 'gaming' and by far the most of the money made by the iPhone to any developers is for 'videogaming'. I do not mean to dismiss the iPhone, but point out that its not some aeronautics calculations for the rocket engineers that the iPhone 'smartphone' is used for. It is used primarily as a gaming platform. Its nearest rival in terms of apps and an eco-system is the Sony PlayStation Portable (PSP). There would be many 'real' developers of software who might disagree with the iPhone being a 'serious' platform if most of its paid apps are in fact games. That then its more of a small Xbox or Wii than a replacement of a Lenovo or HP or Dell computer. But lets go with teh gaming.

Gaming content is fair game, eh? So what was the first smartphone - a purely consumer smartphone not used by any enterprises? Not the iPhone, it was the Nokia N-Gage. While it only sold a couple of million units and was deemed a market failure, it did introduce a whole eco-system of game developers, and the games had to be installed by users, so anyone who bought an N-Gage would then go and buy many games. And there was an independent Nokia N-Gage store where you could buy the games and download them (or side-load them). Certainly the same model as the iPhone App Store but years before it. If we want to give credit for creating a new eco-system for developer to launch games to phones, then that goes to Nokia not Apple.

Lastly on the 'real internet' access. You also seem to suggest Richard that if a phone is used to access the 'real internet' it is - or should be - considered a smartphone. That is not at all true. All modern Japanese phones can access the real internet, and over 80% of them do so. Most fo those are not smartphones. And access to the real internet preceedes the iPhone by ten years literally, as first enabled by the Nokia 9000 Communicator. There are over 2 Billion phones in use that have some kind of browser that can access the real internet (and almost twice that number if we count WAP browsers). But only 450 million smartphones. So if you want to look at the phones being used to access the internet - where the modern smartphone in the USA was often the first phone used this way - that is old tech for most of the world and nothing uniquely belonging to the domain of smartphones. Lets not bring 'internet enabled' phones into this picture to muddle it more. No major definition of smartphones includes this aspect. Sorry.

But most of all, Richard, I told you that 'my' definition of smarthponess is the one used by all the major analysts, and all of the major makers of smartphones (including Apple). Why would you not accept this commonly accepted definition. Richard, if you cannot answer me, why would I bother to answer your new complaints. Please address my point first. Thanks.

Philipp - good point and thank you. So you've read the blog before haha... No seriously, yes, that 'IT departments hate change' is indeed an element that will prolong Windows Mobile's lifespan. I think its a major reason why WinMo still sells in its modest levels today. But I do have to think WinMo is near its death. Not all operating systems can survive. Symbian, RIM and Apple are big enough to guarantee major markets for their developers into many years in the future. Android, Maemo and Bada all have good new aspects, suggesting they are the growth and future option. So the other older players which are also small - Palm, WinMo are easiest to face death. I do think they can't survive, not in this ever more competitve space.

mico - thanks. Good point also about OTA upgrades to OS.

cygnus - thank you for the detailed coment and very insightful details about the Indonesia market. I was not aware that there has recently been bad press with the Blackberry and in particular its roaming. Also yes, the arrogance of a company that has recently been growing strongly, is a dangerous habit and can turn many customers away. Meanwhile about Nokia, I hear you, and yes many have been saying the same about the internal memory fo the top end phones. Its a bit of a game for the developers, in optimizing the price points of declining cost of memory, and the present market requirements. You may be surprised to know, that in terms of usage, Indonesia is certainly among the world leaders, so you will be experiencing the limits of top end phones far more quickly than many other even European countries. So you are witnessing the limitations very early and I hope the Nokia designers are keeping close attention to the market there in INdonesia to help design better phones in the future.

I will return to give more comments to the rest of you soon. Thank you all for writing and please keep up the intelligent discussions here, I myself am learning a lot from the comments here.

Tomi Ahonen :-)

haydn

Tomi - full of great data. here's one quibble with the interpretation. There is a lot of pent up pressure for rapid change in the business market with major enterprise apps vendors persuading IT departments to let staff use their own phones. Part of the reasoning behind that is, as one of the vendors told me, the iPhone is causing an Y2K effect in business. That remark was made about the UK market. The fascination there I believe is that IT departments will not determine phone types and will take on a different role - to secure networks against a variety of risks in a variety of handsets. It could make the business market far more volatile.

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