This is very incompetent reporting by Forbes. They get essentially all facts wrong on which they base their analysis. Very silly Forbes, reporting this sloppy will hurt the reputation of your magazine.
Lets examine the evidence shall we.
Parmy Olson wrote an article entitled "Nokia's Motorola Moment" today on 17 July 2009. In the article Forbes suggests that the "global champion is lagging behind an innovation shift spearheaded by Apple and even Toshiba". As evidence the magazine says that there is a "big shift happening in the mobile sector, with consumers more interested in easy Web browsing and applications than the look and feel of their phone."
Then Forbes quotes a clearly clueless analyst Lee Simson of Jeffries and Co, saying "All these guys who have nothing to do with mobile are coming into this space with better handsets than Nokia"
Of the trend to mobile phone and PC convergence, Forbes quotes the same Simpson who claims that Nokia doesn't offer details.Then Forbes suggests Nokia is in a position similar to Motorola a few years ago, and Nokia now is "failing to catch on to other innovations that are taking place in the handset space"
Forbes says Nokia was late to clam-shell phones, late to touch-screens and late to the applications store. Then they again quote clueless Simpson saying "there is nothing innovative about Nokia"
Forbes concludes observing that there is a trend in the West to smartphones, and mentions the iPhone and RIM's Blackberry as devices that Forbes thinks are successfully capturing this smartphone opportunity.
WHAT DO YOU THINK, TOMI?
What a load of crap. Rarely have I read a major publication get essentially all of its points so totally wrong. What is wrong with Forbes editors and Parmy Olson to not do the simplest, most basic research into the facts. Lets go through them one by one.
Lagging in innovation (vs who? Apple?). Forbes claims clearly that Nokia is lagging in innovation compared to Apple's iPhone. Now, the current iPhone 3GS is yes, a very impressive smartphone. Lets look at a few of the innovations we witnessed in this newest model, one month ago? Compared with the iPhone 3G from a year ago, the "innovative" 3GS upgraded its camera to 3 megapixels. Nokia is clearly not as innovative, as Nokia's first 3 megapixel cameraphone (and yes, smartphone) was released in 2006. The 3GS now added video recording ability to the camera feature of its phone. When did Nokia's (smartphone) cameraphones all incorporate this "innovative" ability? in 2004. Apple now offers video recording at 30 frames per second at so-called DVD quality. First Nokia smartphone to have 30 fps DVD quality video recording came out in 2006. The 3GS added MMS picture messaging support in 2009. Nokia's cameraphones have all been MMS compliant at least since 2003 (proabably 2002, I don't remember exactly). Apple added Autofocus in 2009. Nokia had autofocus early in 2007
Note that these all are improvements to Apple's "innovative" phone, after two changes, where each of these features existed on Nokia smartphones before the original 2G iPhone had even been launched. Who is innovative, if it took Apple two tries to get these features included. Who is following whom?
What of the previous edition of the iPhone? How innovative was the iPhone 3G in June of 2008? It offered three signifcicant changes to the handset (I'll talk about Apps store later), ie it added 3G, GPS and it added TV-out. Again, how does this innovative phone maker compare with the "follower"? Nokia's first smartphones with 3G high-speed connectivity were released in 2003. GPS? The other hot innovative feature of iPhone 3G? Nokia had it in the N95 more than a year before the iPhone 3G, in fact before the original iPhone 2G. And TV-out? Nokia offered TV out from 2006.
I can appreciate the admiration for Apple, and that its phones are sexy and extremely user-friendly and yes, its touch screen technology was quite innovative (back in 2007) but what have you done for me lately, Apple? Essentially every improvemnt to the iPhone has been a copy of Nokia innovations from years earlier. Not months, years. Six years in the case of MMS... Who is the innovative phone maker?
BUT WAIT, IT GETS WORSE
Really incompetent reporting, shame on you Forbes. Lets go on, it gets worse.
Big shift to web browsing. Yes, there is a big shift to web browsing. But Parmy Olson, Apple did not invent this shift. Apple did not cause this shift. Apple did not originate this shift. Apple did not expose this shift. At best, in those markets where the iPhone is popular (mostly in lagging mobile telecoms markets like the USA), it has helped move this shift along. In Japan for example, where previous iPhone models have been total duds in the market (only now, the 3GS is finally accepted in Japan as an acceptable phone for that market), the existing internet usage has already shifted to mobile phones, and its not just the majority of users who now access the "real" full internet on their phones, but also the bulk of internet surfing time is on mobile phones. And this had happened by 2006, long before an iPhone. So no, this is not an Apple innovation. But yes, Apple did bring a smartphone to the market, that could access the real unrestricted full internet. And yes, Apple offered this on its iPhone already back in 2007. That is our "innovative" company.
Now, when did Nokia learn to offer the full unrestricted (non-WAP) internet on a cellular phone? How long did it take for Nokia to learn to do this amazing innovation? Not in 2007, not in 2008, not in 2009. In 1997 - exactly 10 years BEFORE the iPhone, Nokia released its first (pre)smartphone, that had full internet access, and yes, a similar width VGA screen 640 pixels across the screen, as Apple has today. Now yes, back in 1997 the Nokia 9000 Communicator did have a monochrome (black-and-white) screen, but hey, if you want to acknowledge a "big shift to web browsing" and then accuse Nokia of being less innovative than Apple - Nokia did not only do this before Apple, Nokia was the world's first phone to offer this, and yes, that was a decade before Apple. Who is the innovator? When the original iPhone launched, Nokia had about a dozen smartphone models that all featured the full internet. Not with the touch screens, but if the point was that somehow Nokia is not innovative because it missed the "big shfit" to web browsing, this is patently wrong. Nokia INVENTED this shfit. I personally wrote the first white paper when I was employed at Nokia, in 1999, on how to do the internet on cellular phones. Don't tell me Nokia has not seen this shfit coming - and done massive amount of education over the past decade before the iPhone, to teach the industry how to do it.
You know what, Parmy Olson. I have this nagging feeling that I've actually read abou this somewhere, quite a while back. Hmmm. Oh yes, a Richard C Morris wrote about the "tech-jammed" Nokia Communicator and how it gave access to email in 2001, for a publication called Forbes.
By the way, that 640 pixels wide Apple iPhone screen is VGA resolution. Now the latest Nokia E90 Communciator (from early 2008) has SVGA resolution ie 800 pixels wide. Makes internet surfing far more comfortable than having columns weirdly re-formated on the screen like on any iPhone that formats to basic VGA. But maybe thats "not innovative", eh? Apple didn't bother to add to its screen resolution in three models. Nokia's E90 is also wider - 4 inches vs iPhone's 3.5 inches, but again, whose counting.
IT GETS WORSE
Big shfit to applications. Yes, there is a shfit to applications. There is a lot of disagreement in the industry whether this is truly a "big shift" as today the "data services" side of the mobile industry (excluding SMS text messaging) is 10 times bigger than total applications sales; and 250 times bigger than total revenues of the Apple Apps Store, and many industry leaders, just yesterday Google's CEO for example, have said data services will be bigger than data applications. But lets accept this shift. Yes, there is a shift to data applications, and yes, there are many experts who claim this is a "big shift", so lets not squabble about that issue. You can fairly report that such a shift is indeed going on, even if perhaps there is an even bigger shift as well. So apps? So apparently Apple is the big innovator with this "shift".
Apple's Apps Store is one year old. Nokia also has an apps store, it is called Ovi. Ovi launched its applications store in May of 2009. So how severly behind the times is Nokia? Its apps store was launched ten months after Apple's. So while Apple is six years behind Nokia, Apple is still innovative, but when Nokia is that quick-moving that it releases a rival service in ten months, Nokia is "failing to catch on" to innovations.
Yes, really? Apple took 12 months to build a portfolio of about 55,000 applications in its store. In two months, Nokia is already at 20,000 applications. Oh, just to see how impressive that is, Google's Android has 5,000 apps, RIM's Blackberry 2,000 Apps and Windows Mobile 600 Apps. But in 2 months, Nokia is already at 20,000. Is this really a slow-mover who is failing to move and take market opportunities? Really, Parmy Olson? Did you not bother to do the most basic Google search of your topic before writing this drivel?
But lets really look at the facts, who was the innovator in this? Nokia released its Ovi branded mobile services store in August of 2007, almost a year before Apple's Apps Store. Ovi was right from the start announced to be Nokia's all-inclusive store to deliver and to sell mobile services, applications and content. Note this is significantly more than Apple's Apps store in its scope - more innovative - and announced a year before the Apple "innovation". That Nokia did not rush apps to its store reflected its market presense and understanding of its customers - Ovi launched first in Europe and Asia - and it delivered such content and services as maps, screen savers, photos, music etc. And if you bothered to read that quarterly report from Nokia, you'd have seen that Nokia's "services business" (apps, services and content) earns to Nokia royalties in 2009 worth about half a billion dollars. Meanwhile just a week ago, the Wall Street Journal estimated that Apple earns about 80 million dollars this year as its royalty for apps sold at the Apps store. Who is following whom? Who is capturing the real opportunity and who is only pretending?
Even this is not the genesis of customizing your mobile phone with downloaded services, content and applications. The first phone maker to offer such as service did so back in 2000, first with downloadable ringing tones. And that company to offer a software/services store to download content 9 years ago was.. Nokia... This is years before Apple had launched the iTunes music store for the iPod, when the iPhone was not even a twinkle in the eye of Steve Jobs. Who's the real innovator?
And how far-sighted has this been? Nokia started in 2000, expanded the whole decade, then branded its store (as Ovi) as a supermarket for all content, services and apps, and added apps specifically to its store this May. Where are the other of the big 5 (remember, Apple only sells 1% of the world's phones, LG sells ten times that). Samsung released its Apps store in February of this year (and has about 10,000 apps). LG just released theirs now in June. SonyEricsson promises to open theirs in August. And Motorola is so far lost, they have not even announced an Apps Store. So who is really the innovator and how far ahead has Nokia been in this area? They had a dedicated "Mobile Internet Applications" division to the company as far back as 2000.
Now where was it that I read about Ovi a while back? Oh yeah, Parmy Olson, it was Forbes who was quoted about specifics of Ovi in November 2007. And Nokia's first step to allow customization of phones by downloads, in 2001, was actually singled out as being so innovative and exclusive to be for "Nokia customers alone" as reported by Forbes.
BUT IT DOES GET WORSE
(I really hate sloppy reporting, but this is one of the all-time worst and error-filled article I've ever read) Lets continue. Cue clueless analyst Lee Simpson (of Jeffries and Co). The statements by Lee Simpson are so ludicrous that one wonders what is his motivation. Has he bought Nokia stock options and now needs to push the stock price lower? Or is he just incompetent. Lee starts by saying "All these guys who have nothing to do with mobile are coming into this space with better handsets than Nokia."
Who is he talking about? Makers who were not phone makers? So he is talking about Dell? We don't have Dell's phones yet. Or Apple? Or who? HTC is a phone maker. ZTE is a phone maker, Huawei is a phone maker, Sendo is a phone maker. Google does not make phones. Toshiba is certainly not a newcomer to phones (but maybe they seem new to laggard markets like the USA). Panasonic? NEC? the Japanese makers have made Apple-magnitude amouts of handsets annually this whole decade, they are not newcomers (but they've focused on the far more demanding Japanese market recently). Microsoft doesn't make phones and their mobile phone OS has been around for years before the iPhone. Who are your "all these guys" Lee Simpson? If he means the new phone by watchmakers TAG Heuer, then again, that phone is not even launched yet. Who? The only oneof the "all these guys" with "nothing to do with mobile" making "handsets" with a phone on the market, is Apple. And they entered the phone market two years ago. Lee, you are seriously behind with your news about the industry. Perhaps time to get a Twitter acount? But yes, the only maker who was not a handset maker, who joined this industry, and has a phone already on the market, over the past several years, is Apple. The phone we have to consider then, when Apple truly did have "nothing to do with mobile" was the original iPhone, now known as iPhone 2G, back in June of 2007.
Yes, so Lee Simpson, you say these on-phone makers have brought phones that are "better than Nokia". Now was it really? Since the original iPhone launched, Apple has had to fix deficiencies ie add missing elements, of 3G, GPS and TV-out in 2008, and then even that was not enough to make it a full-featured normal smartphone, Apple had to add autofocus, MMS and video recording in 2009. So since Apple has voluntarily added these changes to the iPhone, it goes without saying, that Apple itself felt the original iPhone was not a complete phone.
But a Nokia smartphone released before the iPhone had all of those features in March of 2007, That phone, the N95, also included features that even the latest iPhone does not have, such as a 5 megapixel camera, a flash, a removable memory card expansion slot, an interchangable battery, stereo Bluetooth, Instant messaging, video calling, VOIP (Voice Over IP), 2D barcode reader and FM radio.
Well, maybe thats not fair, I mean, would this phone be covered in a magazine like Forbes? Or wait, Parmy Olson, The N95 phone was considered so relevant, that it actually was covered in Forbes well before the iPhone, in 2006. In addition to listing its main specs, and specifically four of those that the iPhone 2G would not later have - 5 megapixel, DVD video record, GPS and 3G - your collegue Bruce Upbin raved about it in these words, "the blogosphere is already drooling, and justifyably so."
The only recent "newcomer" who released a significant smartphone was computer-maker Apple. Yes, that phone had impressive innovations, in particular the size of its screen, touch-screen interface and accelerometers, all which have been since copied also (not touch-screen clearly yet as well) by Nokia. Three real innovations. But Nokia's equivalent model at the time had 6 major features that Apple has since copied, and 10 further features that the iPhone did not offer. When Lee Simpson says the non-phone-makers have come into the phone space and made "better" phones than Nokia, it is 100% totally not true. Apple itself had to fix the problems of its first iPhone. And obviously now, we can't even consider Apple as "guys who have nothing to do with mobile" when Apple has been selling phones for 2 years. No, this is totally bogus. Lee Simpson you are incompetent!
BUT IT GETS WORSE STILL
PC and phone convergence. So yes, this sounds so nice. There is a convergence trend happening. PCs are migrating via laptops and notebooks to netbooks. And the basic voice-only cellphones to basic data (SMS) phones to feature phones to smartphones. The current top-end smartphones are very close in abilities to the smallest of the netbooks. There is a renewed interest in "palmtop" computers like early PDAs from the last decade. And Apple's Steve Jobs is on record saying that the iPhone was Apple's entry into the netbooks market. A computer maker says that their smartphone is equivalent to a netbook computer. Yes, that sounds quite innovative. And where has Nokia been in this area? Two years before there was an iPhone, Nokia started to call its premium smartphone line of N-Series, not "mobile phones" but "multimedia computers." Sorry, Parmy Olson. If you did very basic journalistic research, and bothered to examine the facts, you'd see that Nokia was literally one of the first to suggest a smartphone is actually a small computer. Not only thinking that, Nokia was so obvious and vocal to communicate this, at the time radical view - that Nokia plastered that statement in all of their packaging and promtion for the N-Series. (isn't a radical view that is later adopted by your competitor, a sign of true innovation?)
Oh, Parmy Olson, have a guess who wrote about this in 2006? Yeah, your colleague Bruce Upbin at yes, Forbes. He actually used that Nokia marketing phase in the article "multimedia computer"
Failing to catch on to other innovations. Really? Why no examples? Lets turn to the evidence. I already mentioned the trend to services and applications. Most mobile telecoms experts (in advanced markets) feel that the services opportunity is far bigger than the applications opportunity. But Nokia has been innovating in both.
One of the big trends in the mobile industry is open systems. Using standards and with open APIs. With rivals collaborating. Apple's OS/X operating system, and the Apps store, is a tightly controlled monopoly by Apple. That is not the current trend, it is an archaic model from the time of mainframe computers of the 1970s. Apple is decidely against the current trend, totally anti-innovative in its operating system.
How is Nokia? It invited its most powerful rivals at the time, with Motorola (who was bigger than Nokia) and Ericsson as well as PDA-maker Psion. And to promote collaboration, even though Nokia was biggest shareholder, they expanded ownership to include Samsung, Panasonic and Sony. The Symbian operating system has since been turned into non-profit foundation, with fully Open Source Software. This is at the heart of all of Nokia's smartphones. And Nokia was a founding member of Symbian in 1998. Nokia was catching the trend eleven years ago, that still today Apple resists. Who is innovator?
Hey, you know what, Parmy Olson, this very exact point, that Nokia is open source and Apple is a closed controlled environment, was reported by your colleague Bruce Upbin, in Forbes in 2006.
Another big trend is to embed full digital TV tuners into smartphones. Real crystal-clear broadcast digital TV, not streamed and jittery 3G TV. South Korea was the world's first country to launch these kinds of advanced superphones in 2005 and today 45% of Korean phone owners have them. 32% of Japanese phones are like this. Is Nokia involved? Nokia was creating a "European" digital TV standard called DVB-H at the start of this decade, and provided custom prototype phones for tests that were run for example in Helsinki and Oxford. And Nokia released DVB-H phones for sale in 2008. Where is your Apple, RIM/Blackberry or Palm with in-built digital TV tuners? Who is innovating?
And as to anyone really knowing this? Yes, Parmy Olson, your colleague there at Forbes, Elizabeth Woyke did report on Nokia's interests in mobile TV in 2008.
Then there is the trend to mobile advertising. While the global ad industry is experiencing unprecedented decline of TV ads, newspaper ads, radio, cinema, and even internet advertising, mobile advertising is experiencing phenomenal growth, most analysts suggest it will double this year. The Ad industry talks of this being the year of mobile advertising. Did Nokia notice? Nokia launched its Nokia Ad Service early in 2007 and expanded it to the Nokia Advertising Alliance last year - in line with open principles and collaboration again. Nokia not only has innovated in this area, it has again driven the innovation years before it broke into the mainstream. And while Google obviously does advertising for mobile, who else of the major players?
And there is the trend to full QWERTY keyboards. The article mentions RIM's Blackberries and Palm's Pre which illustrate this trend (as does the N97 also mentioned). The trend to QWERTY keyboards is far bigger than the trend to touch-screen phones. Touch-screens are not that new or innovative, as they originate from early in the previous decade, and even Apple had its touch-screen PDA, the Newton. (And incidentially, Nokia's first touch-screen phone was released 3 years before the iPhone, the 7700). But QWERTY keyboards are now the hot trend and have propelled for example RIM's Blackberries to outsell Apple iPhones by about 2 to 1. And yes, who invented this trend? Not RIM. Five years before the first Blackberry phone, there was the Nokia 9000 Communicator, the first mobile phone with a full QWERTY keyboard. Since then Nokia has expanded its range of QWERTY keyboard phone models and has always had more such models than any other maker. Who is the innovator?
What of 2D barcodes (aka QR codes)? Another invention from Asia, launched by NTT DoCoMo in Japan in 2005. Americans are now just starting to study this technology. In advanced markets it is revolutionizing how internet surfing is done on a phone, being far better than using a keypad or a touch-screen. Four out of five Japanese mobile internet users already use 2D barcodes. Europeans have been moving rapidly to 2D barcodes in countries such as Germany, Spain and the UK. Where is the 2D barcode reader on the iPhone 3GS or Palm Pre or Blackberry? Its not there. Apple will get you a 2D barcode reader software through its Apps Store. But Nokia started to ship phones with 2D barcode readers pre-installed and fully integrated, in 2006. Who is the innovator?
And there is the trend to "digital communities" or "social networking" or "user-generated content" best typified now by Twitter, Facebook and YouTube. Such a massive change in society, that Business Week wrote in its cover story in 2005, that this is the biggest change in mankinds's history, since the industrial revolution. Such a big change that the Economist wrote in 2005 in its cover issue that businesses which do not understand it, will not survive. Google's CEO Eric Shmidt said this March that this change is "the defining aspect of humanity over the next 10 or 20 years". So this shift is bigger than smartphones, bigger than mobile telecoms, bigger than the IT, telecoms and media industries. The biggest trend going.
And its interesting to see, that yes, RIM has just announced a Blackberry community and social network, for its users. This is clearly capitalizing on this trend and is truly yes, an innovation by RIM. There is no such social network by any other handset maker... except Nokia. Nokia started its path to capitalize on the social networking trend with the original Lifeblog .. in 2004. Now they offer for example Club Nokia to all Nokia phone owners.
And yes, this trend, and Nokia's interests in it has indeed been chronicled by Forbes, Parmy Olson, first in discussing Lifeblog in 2005, and then discussing the music recommendation community in Forbes in 2006.
It is irresponsible to print such rubbish with no evidence, claiming that Nokia is "failing to catch on the innovations happening in the handset market" when Nokia has invented several of the current strongest trends and been driving the industry to understand most of the others, and in almost every case, Nokia has been there long before its main rivals today, which truth be told, are not Apple or Palm or RIM, all tiny phone makers globally. The big five are Nokia, Samsung LG, SonyEricsson and Motorola. If Parmy Olson wants to write about a handset maker who is "failing to catch innovations" - then Nokia is definitely the least valid example to use, out of the top 5 biggest phone makers.
AND THE TREND TO SMARTPHONES
Finally, the biggest injustice. If the headline of this ridiculous article is "Nokia's Motorola Moment" and Forbes suggests Nokia's current lead is threatened by misunderstanding a change in the market, that is so big, it could destroy the company; and the article throughout uses the specific phone category of smartphones as this giant change which might cause the demise of Nokia, then lets examine that evidence.
First, I have to mention the alternate view, that very expensive superphones are not the engine of sustainable market dominance - 40% global market shares - but rather, that the only way you can control the mass market, is with low-cost mass market devices. The biggest car maker is not Ferrari, it is Toyota. GM made more Chevrolets than Cadillacs; Ford made more Ford branded cars than Lincolns. Even if Nokia was somehow unable to hold onto its share of top-end premium phones (smartphones), it is perfectly feasible to remain the biggest handset maker by volume if Nokia holds onto its market share in the lower end of the handset market. The biggest markets are China and India and teh vast majority of the phones that they buy are low-cost models. But lets leave this alternate strategic option to the side. Lets talk about smartphones.
Depending on the exact definition used, it can be argued that Nokia invented the smartphone market. The early smartphones were business-oriented phones (typified by the original Blackberry). Nokia was the first handset maker to separate a whole division to specialize on only business-oriented smartphones (E-Series), as distinct from the dvision selling mass-market consumer phones. Today we know the far larger smartphone opportunity is the consumer smartphone (typified by the iPhone). Nokia was the first handset maker to offer two separate lines of smartphones, one series of business phones and another consumer phones, setting the consumer smartphones unit as its own division (N-Series). This was years before anyone had seen an iPhone. Very literally Nokia was the first phone maker to even start to sell smartphones as consumer phones (as distinct from business phones). Note that recently RIM followed this same trend and released consumer-oriented smartphones and doubled its sales. Again a rival follows Nokia's lead.
Today Nokia is bringing the smartphone to mainstream consumers and sells more mid-range mid-price smartphones than top-end N-Series smartphones. Nokia has literally three separate divisions selling smartphones to different customer segments. Apple has two phone models in total. Nokia has powerfully driven the ever wider acceptance of smartphones.
Maybe this is too much of a finer point of nerdy techie geeky strategy details, that really go so obscure, that the Forbes reader would not really care, right, Parmy Olson? No, wait, Forbes did cover this very matter, Apple's iPhone vs Nokia mass market smartphones in volume, last year printing the Nokia strategy statement that these lwer price new Nokia smartphones are "for a much broader mass market."
In absolute numbers, Nokia today sells more smartphones than the four rival brands mentioned in the article, Apple, RIM, Toshiba and Palm combined. For the latest quarter, Nokia's global handset market share grew to 38%. That is for all phones. But for smartphones, Nokia's market share was 41%. Nokia, the world's biggest handset maker, is performing better in smartphones than overall in all types of phones. Which part of this performance signals a giant that is "lagging behind" and headed to a "Motorola Moment"?
The Forbes article suggests that the West "is trending" towards smartphones. Yes, the US and Canada are indeed now snapping up smartphones and about a quarter of all phones sold in these two countries are smartphones. But the phone market for Europe is twice the size of the USA, and is so far further ahead of America, that next year half of all phones sold in Europe will be smartphones (says the EU commissioner). And who is by far the best-selling smartphone in Europe, not Palm, not Toshiba, not RIM, not Apple. Its Nokia. The company has correctly anticipated the shifts in the market, and achieved the success in the most important market by size. Why is this leading Nokia to a Motorola Moment?
Now, the global economy is in the toilet. Hundreds of giant global branded companies have gone bankrupt. The recent economic news has been reports after reports of IT companies making losses. The handset market is shrinking. SonyEricsson just reported losses and all signs suggest Motorola will also post losses. Nokia has not only grown market share from the previous quarter, but did this while making profits. Yes, the profits are down but find me any global manufacturer whose profits did not decline from this time last year, before the global recession struck. That Nokia did make profits where rivals make losses, says that Nokia is executing particularly well, in exceptionally difficult economic times. And where did you Parmy Olson see a Motorola Moment in this?
This was one of the worst articles I've ever read about any mobile telecoms related topic, by any major periodical. Shame on you Forbes. Shame. Parmy Olson you have been negligent in your duties as a journalist to check sources for your story. And even worse, you have been patently unprofessinoally lazy to not even bother to read past Forbes stories about Nokia. Your colleagues have accurately covered essentially every item you managed to get wrong. (Management ahoy, perhaps this "journalist" is not really fit for the job?) and Lee Simpson, you are either incompetent or biased or both. Shame!
TWO CLARIFICATIONS
I am now (19 July) adding two clarifications, after reading all the comments left so far (thank you all who left comments!). I think it is very important to just keep these two issues clear
Innovation has nothing to do with usability. Many who have commented here, or on various forums, read between the lines in the Forbes article, and perhaps also inject their own personal experiences with recent Nokia smartphones (vs iPhone in particular) and think, but there is a point, the iPhone is far better to use than Nokia. That may be true, but it has nothing to do with innovation. If the Forbes article had been entitled "Nokia smartphones not as easy to use, this may be Nokia's Motorola Moment" - I'd have NO problem with that premise. I'd examine the evidence, but probably would agree. Certainly, I totally agree - totally agree - that Apple's iPhone is by far the best phone out there in terms of usability. (I said so earlier in this blog article!) But usability is not innovation and innovation is not usability.
It is like if I said, "it is raining", and you replied, "the sea is calm". They have nothing to do with each other. Each can be independently true or false, It can be raining and the seas be calm. It can be raining and the seas be stormy. It can be a day of sunshine and seas calm. It can be day of sunshine and seas wild. They both happen to deal with water but are not in any way linked.
Innovation is the introduction of some new technology or ability or gadget or feature etc into some industry. It is almost always "clumsy" at first intoduction. The first plane, Wright's Flier was very tricky to operate. So was the first car by Daimler Benz, so was the first computer in Bletchley Park. So was the first home video recorder by Philips. The first phones were so bad to use, that the user could not call anyone. You could only ask the switchboard operator to connect your call, even if you wanted to call your neighbor. It took 20 years until Almon Stowger looked at the phone, and decided it can be better, and invented the rotary dial, and for the first time, normal phone users could make phone calls. That does not invalidate the original invention of the telephone. Usability comes usually later. We can have total innovation with horrible usability. We can also have improved usability with no innovation. Most bug-fixes and minor software upgrades we all experience on our PCs are not innovations, but do make the usability better (or should do, ha-ha).
It is possilble to innovate in usability, but usability is only one element of a complex gadget as a mobile phone. It is very possible that usability is "the defining attribute" today in 2009, in the modern smartphone market and if Nokia was so horrible at it, that might be a Motorola Moment - But that would be a totally different Forbes article. But innovation is ONLY about doing something new, and doing it first. Whether it is usable or not, matters not at all on the FACT of innovation. It is very common that the original innovator does not create the most successful product and it is very common that companies that specialize in usability will refine such products (like for example Sony and Apple). I think you get my point. Forbes did no argue that "Nokia is facing its Motorola Moment because its Symbian OS is uncomfortable to use (vs the iPhone)". Forbes arrgued Nokia is facing its Motorola Moment because currently there is a lot of disruptive innovation going on (true) and many of its rivals are innovating like Apple, RIM, Palm and Toshiba (also true) but that Nokia is not innovating is TOTALLY untrue. I listed in this blog Excluding all the items of features I mentioned about either the N95 or N97, in the blog I listed 9 truly giant innovations for the industry, where Nokia has been at the beginning, and far ahead of Apple, Palm, RIM and Toshiba. I could add many more, but those should be enough, as most of those innovations have been already mentioned in past editions of Forbes.
So please do not start another argument that this OS is better than that OS, it is TOTALLY not the point of the Forbes article and the errors in it. I'll grant you all arguments about the OS. It is irrelevant to the Forbes article. Has Nokia been innovative or not (however miserably poorly that may have been executed) is the only point. If Nokia has been innovative recently, and Forbes says lack of innovation causes Motorola Moment, then this argument by Forbes falls. Lets not argue after this ridiculously long blog, about whose OS (or usability) is better. Forbes claimed Nokia in trouble because Nokia does not innovate. Lets discuss whether Nokia is innovating (hwever poorly or well that is executed)
Innovation vs Strategy. Also there are some who like the conclusion of the Forbes article without considering the merits of the argument. There is a lot of feeling out there that Nokia is about to lose its market (totally irrespective of whether Nokia has innovated, some have even said Nokia innovates too much and needs control and discipline and focus, to select a few innovations and perfect those rather than to do everything). On any other issues, is it smart to sell ultra-cheap phones - to capture India, Afirca etc - or the shift in organizational abilities and staff competences from a haredware company to a software company, etc, that has nothing to do with innovation. I am happy to discuss Nokia strategies (or Apple, RIM, Palm, Toshiba; or any other handset maker; or any other player in the mobile space like Vodafone, Google, Microsoft, etc) but for you reading my blog for the first time - I have a treat for you. I am already into a series of strategy articles about the market wars of smartphones. We HAVE this discussion elsewhere. I will discuss all those factors, the role of OS, the role of software, the role of the user interface; as well as other complex matters such as handset subsidies, carrier relationsships, multiple handset ownership, replacement cycles (and price!), etc, in that series of articles about the smartphone market. Please lets move the discussion about Nokia strategies there, unless the Nokia strategy is about innovation.
Because innovation does not require a smartphone! Look at Nokia again. It sells many ultra-cheap handsets (non smartphones) in Africa, India, Latin America etc - which have the FM radio as a feature. It was Nokia who first deployed an FM radio into a phone, a true Nokia innovation for mobile phones. Now, in Africa most of the population is so poor that they don't own TVs or PCs. They cannot afford to buy a daily newspaper. More than half of the population do not have even a household radio (FM radio). Now, when Nokia offers FM radio as a feature on a phone - and about 30% of Africans already have a phone - it is a VERY compelling feature. Innovation yes. Do you (my reader) buy your hot new smartphone because it has FM radio - no. You probably didn't even notice if it had it. But in Africa (India, Paistan, Indonesia, China, Brazil, Russia....) that FM radio feature is currently among the most desired features. (and that conveniently brings my count of Nokia innovations to ten. Not just increasing the megapixel count on a camera, but true giant industry invvoations)
This blog and this counter-argument is only to Forbes articles silly statement that Nokia is not innovating (anymore) in this industry. If I have proven that Nokia is innovating, no matter how irrelevant that innovation is to you, or how poorly you think it is executed, then Forbes is wrong. It may still be true, that Nokia is on a wrong strategy on something else, but on innovation, they have been doing that very well in the past, including very recent past.
AM NOT APPLE-BASHING
And just to be clear, especially to any Apple fans and followers. I am not intending to "dump" on Apple. I am going through the facts of this silly Forbes article, which made those ourageous statements. It ws Forbes who did mention Apple/iPhone on seven separate occasions in the article (all other supposedly innovative smartphones, Palm Pre, Toshiba, RIM/Blackberry, get a combined 5 mentions). It was not me who drew a comparison of "Apple vs Nokia" in innovation, it was Forbes. I am not in any way against Apple (nor RIM, Palm or Toshiba), only correcting the blatant errors where they relate to innovation. It is not an opinion of mine, it is a fact, that the original iPhone was a 2G device. It was Apple, not me, who felt 3G was an improvement to the iPhone and so much so, that for the first re-design of the iPhone, they named the newer device "iPhone 3G". Thus 3G is recognized by Apple as an innovation. Now the reality is that Nokia's N95 was a 3G device more than a year earlier; and Nokia's first 3G smartphone was released in 2003. It is not "Apple-bashing" to report these facts, and I did not select the comparison, the "standard" of innovation to measure Nokia, to be Apple. Please don't blame me, blame that silly Forbes journalist.
But to be clear. Apple is a fantastic company, I have loved them for decades, I was a Macintosh trainer for an Authorized Apple Dealer in New York City early in my professional career. I loved the Lisa, the Mac, the Newton, the iPod. I thought so highly of iTunes that I made it the second case study of my fourth book, Communities Dominate Brands (the signature book for this blog). I eagerly awaited the "Apple iPod phone" for more than two years before the iPhone was announced. I was most supportive of the original iPhone announcement and posted immediate reviews and commentary, including the world's first prediction of how the iPhone would do in the market. Not overhype like some, not dismissing its chances like others, but I forecasted one day after the original iPhone was announced in January 2007, that yes, Apple would hit its 10M initial sales target, with a detailed analysis of why. That blog was very widely referenced. Then a month before the iPhone was launched, in May 2007 I wrote a comprehensive analysis of what its impact would be. Not only to phones, but to the IT industry, the internet business, media, and advertising. That blog was widely praised. My predictions proved very accurate.
I was very honest about the first iPhone, and explained clearly what was wrong with it, why it would not become a world hit (as it did not, the first iPhone was only a market success in America). Clearly Apple management completely agreed with all but one of my recommendations, because they have made those changes to the two revised editions, iPhone 3G and 3GS. I was not Apple-bashing, I was trying to help. And whether anybody in Cupertino happened to read my blogs or not, essentially all of my recommendations have been implemented, except for the slider QWERTY keyboard (which may still come, mark my words). Please understand, that I felt in 2007 that the original iPhone was a good phone, but an incomplete smartphone. Yet I boldly predicted that inspite of initial shortcomis, Apple would hit its sales targets. I will not let my personal views interfere with honest, factual reporting.
Since then the iPhone 3G, new pricing, better global availability and the Apps Store have all helped to bring Apple greater success. Now the iPhone 3GS is a brilliant device. Apple has achieved a lot of cross-sell and up-sell opportunities and the iPhone has helped the sales of both the Macs and the iPods. I don't hate Apple and I don't hate the iPhone. I greatly admire the company. Now recently I have been urging Apple to expand its product line (many Apple fans agree, hoping for an iPhone Nano as its often called). But for this article a journalist said Apple is more innovative than Nokia in phones. And it is honestly true, that while the iPhone is now teaching many new users to access the internet on a phone - and yes, the web surfing is BY FAR most user-friendly on an iPhone - yet Nokia did invent the real internet-surfing mobile phone ten years prior to the iPhone. Now, when that journalist explicity mentions "web surfing" as an area of innovation by which Nokia is behind - and a fellow Forbes journalist has acknowledged this ability in a Nokia phone 8 years earlier - then I have to mention this error.
I am not Apple-bashing. If the journalist had mentioned Samsung seven times or Palm or Motorola or RIM, I would have compared Nokia to that brand. It is not personal about Apple. I love Apple. But I needed to correct errors about Nokia. And trust me, if someone made as silly statements about Apple, I'd be as fiercely there to defend Apple. I defend the truth (and attack incompetence and unprofessionalism). I'm sorry if any Apple fans were offended. (Blame Forbes ha-ha..)
Bravo Rodrigo. A very good point.
@Marketing Intern an Yannick: I'm sorry, but the Forbes was right on target. Nokia DOES have the Motorola moment. I was a user of Motorola phones, primarily because of design. But, I had to admit their software was inferior comparing to Nokia's so I switched. Now Nokia is rapidly losing market share (especially in spmartphone segment) and there's a reason for that. Just like in Motorola's case.
Also, Yannick - I did say that Nokia is leader in cheap and simple phones segment. That was exactly my point. But that doesn't make them innovative. We are talking here about smatphones primarily because that what is innovation all about these days.
Me Apple fanboy?!? Well, in a way - yes. But I am actually quality fanboy. I used Mac OS 9 and was sort of happy. But I was one of the first who realized that they would have to abandon it and write new system all over again. And that's what happened. Unfortunately, I have to use Windows now and I'm very unhappy. We all know Microsoft copies Mac OS all the time, not the other way around.
Rodrigo was right in his post: the way you implement your solutions is what makes innovation great; and it's success among the users. There must be a good reason why Mac OS X was accepted that well among the customers. Don't tell me it's because of the looks of iPhone?!? The philosophy of Mac (Jobs) has always been: think ahead of time; using UI should be natural (since invention of desktop UI).
Implementation, implementation, implementation!
That's what makes Apple No. 1 in innovation.
No, Apple nor Jobs didn't invent GUI, or mouse or touchscreen. But, their products are better than anyone elses. They THINK! Think about what is the best way to use a certain product.
Nokia fell asleep.
We'll see what happens. I'd hate to see Microsoft/PC scenario again.
On CCD chips: yes, iPhone's (3GS) chips is good enough for making pics and video. I prefer taking good pics with my digital camera. The only thing I liked about N73 was a pretty good camera. (Video was worthless, sorry.)
Making UI so user freindly, easy to understand, LOGICAL and natural is always teh greatest INVENTION of all. Nokia is nowhere to be seen when we talk about that.
But: if Nokia surprise me and make BETTER OS and phone - I'll switch again. I don't care about logo on my gadget.
Posted by: Boro | July 18, 2009 at 08:13 PM
I do agree on one point with Mr. Ahonen: Apple should make more phone models if they want to play a sigificant role in cell phone business. And yes, I also think they will have to make a model with slide out keyboard, for those who can't live without it. Although, this is against their philosophy: do you really want to type Mr. Ahonen's article on any phone?
Posted by: Boro | July 18, 2009 at 08:19 PM
Well i'm glad Mr. Ahonen took the time to write his article. It really needed to be written.
Ever since the iPhone came out there has been a self-feeding circle of opinions on the US based mobile blogs, tech sites and user forums. Except now it seems it really was a spiral instead of a circle. With every round of the spiral, reasoning and common sense were lost. So that it all lead to a conclusion that Nokia cannot ever innovate and is nothing more than a corpse waiting for funeral.
Everyone knows that terms like 'customer' and 'market share' in american media always refer to the US market. If they mean the whole world they will say so, usually in parentheses after the main sentence. So when Forbes says Nokia has no innovation, I assume they really only meant the US. Rest of the world is a different story.
Posted by: Mika | July 18, 2009 at 11:36 PM
Ok, I had to come back. So, plain and simple. Stop confusing the Symbian OS with S60 (a UI layer on top of the core OS).
You can say that S60 is old and dated and all that (yet I have still to see ONE actual, factual reason for why it would be, except that you think it "looks old"), but stop there.
Symbian OS is, as we speak, the most advanced (smart)phone OS. Period. It has the most support for features, programming languages, APIs, and I could go on. The only issue it has is a little code bloat, but that is inherent in such a circumstance. And it's not, in any way, something that influences UI or UX.
Argue all you want on prettiness or usability. But never forget that both these are prone to excessive subjectivity. So say "I hate S60" all you want, say "Symbian is doomed" when you actually understand what Symbian is.
Thank you.
And my apologies, Tomi, but this had to be said.
Posted by: Vlad | July 19, 2009 at 04:18 AM
I'm back.
Thank you for many good comments. I will reply to everyone individually by name, in two parts. First to those who posted before my flight, then the second set up to this comment.
Let me make one overall comment. The Forbes article was not about whose smartphone is easier to use. There is not question - and I made that point in the original blog - that Apple iPhone is easiest to use.
The Forbes article was claiming that Nokia is not innovative. Innovation is who does it first, not who does it most easy to use. Ease-of-use can be innovation - and it was with the original iPhone (and I say so in the blog) but that would be ONE innovation by Apple. The article was not whether Apple is innovative - it is, the article claimed Nokia was not innovative, and then suggested many others, in particular Apple, were more innovative.
The first deployment of any new invention or technology is usually clumsy. But that is the innovation. For those who commented here about anything that Nokia's way of doing its innovation is not user-friendly, is not talking to the point of the Forbes article, nor to my blog. It is like me saying its raining, and your reply is that the sea is blue. Both may be true (or not), they have nothing to do with each other.
So, Boro, Chad, Rodrigo - I TOTALLY AGREE WITH YOU. Apple's OS/X, Apple's iPhone (any year) is BETTER TO USE. You guys WIN your point. That is not relevant to this blog, and is not relevant to the errors in the Forbes article.
If Forbes had written an article claiming Nokia is more easy to use than Apple iPhone, I would have written as heated a response saying that is not true. But the article was not about whose phones are easier to use, it claimed that Nokia was not innovative and thus about to lose its market lead.
I will now address each of the replies individually.
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | July 19, 2009 at 08:09 AM
Hi Yannick, Rafe, Boro, Mike, Chad, Harri, Rodrigo and Marketing Man
I will respond to each invididually here by name
Yannick - thanks for both comments. Thank you for calling the blog story beautiful. I do agree some points also apply to SonyEricsson, but SE has its own set of problems. For a while (up to about the launch of the iPhone) they seemed to be on a hot streak but recently they have hit a very bad patch - now four consequtive quarters of making losses and losing market share very dramatically. I don't quite know what to make of SE, why this is, they make great phones, have lots of loyal fans, the youth seem to prefer SE to Nokia (at least in my informal surveys of youth that hang around my relatives etc) and powerful brands such as Walkman and Cybershot.
Thank you also for returning here to reply to Boro and other Apple fanboys, ha-ha, very good points. By the way, I take it you knew, that I was the unwitting source for the term "Jesus Phone" (for the iPhone) which I never said, but which was mistakenly attributed to me in a blog of a blog of a blog, about my big iPhone preview blog, Entering the iPhone Era from May 2007 a month before the iPhone.. So its funny to see now a spontaneous mention of the "Jesus Phone" (and to be very very clear - I never said so, and never will..)
Rafe - Very good points. Yes, there is US isolation and myopic views. We all suffer from that in some ways, say Nokia HQ for example, in a country where phones are not subsidised (or were not, ha-ha) and where there is essentially no pre-paid market. Its difficult then to fully understand how differently a subsidised market behaves, where the carrier has essentially all control of which phone brand and specifically which phone model succeeds..
I agree Nokia is suffering in its transitions to a more software and services oriented company. Its also the biggest of the telecoms technology providers (handset makers, OS makers, network providers, SIM card makers etc) so it has the most to do in re-educating its staff and coordinating efforts across the globe. But they are, as you say, in the same boat as Motorola, SonyEricsson, Samsung, LG etc - all have to experience this shift, and while Apple, Microsoft, Google etc come at it from the IT/software side (or closer to it), the engineers always say, that the mobile telecoms part is by far the most difficult competence to acquire.. So Nokia is not necessarily behind in the growth pains, and we may well see rivals suffer (perhaps even more) in upcoming quarters and years, going through the same transitions.
Boro - really, worst article, and worse than the original Forbes article? Where was there one error of fact in my article? But is it not honestly a sign of a bad press story, if the journalist makes statements that are diametrically opposed to what the same periodical has said in the past?
I mentioned that my blog had nothing to do with usability. You WIN the argument, Boro, yes you WIN, Apple iPhone is by far more user-friendly that any other phones, including Nokia and any other Symbian devices. That was not the point. The Forbes article was not about whose phones were easier to use, it was trying to claim that Nokia is not innovative in the mobile space.
You say the future of the smartphone "is the OS, stupid". Maybe that is so. We can debate that at another time. Clearly Nokia has made huge steps in trying to innovate in the OS (yes, eleven YEARS ago, so obviously Symbian will show its age). This was not about who is better, but who innovates. Then Nokia has also developed Symbian to what is now an Open Source Software platform like Android, and run on a foundation for no profits. Yes, this is innovation and something Apple's OS does not offer. Now, you may well be right, that Apple's superior OS will win - but wasn't there a superior OS on the Macintosh, for 25 years? Where is the Mac's market share? Its never grown higher than the low teens. The Mac is a niche product. The BEST at its OS, but a niche. If Nokia "succeeded" by your terms, and developed such a powerful OS like the Mac then or iPhone OSX today, and then its market share was 10%, that would be a true "Motorola Moment". Apple can AFFORD to be a luxury premium brand with superior investment in its OS. There is not enough of a mass market to appreciate it, else we'd all own Sony Betamax VCRs, the airlines would fly the Concorde and we'd all use Mac PCs..
Mike - yeah, preaching to the choir ha-ha, to some extent, especially when I posted the blog. It was widely referenced already, from anything from All About Symbian to the Apple forums and obviously Forum Oxford and Twitter. It did get much more attention than I thought, and hopefully helped open some eyes.
You talked about your wife and 6 year old, and I totally agree, I hear anecdotal evidence of this trend all the time. The iPhone users are often very willing to shift from PC based internet use to iPhone based. And its easy to use. About the US, yes its totally controlled by the carriers, like say Japan; and thus Nokia needs to sell on two levels - one to convince carriers to take their next phone model(s) into their lineup (and try to get them to "trade up" to more expensive Nokia phones) and at the same time promote to the mass markets to get the customers to ask for Nokia phones. It is a slow process and Nokia has had many issues with the US market.
Chad - about the 6,000 words. I do short blogs, long blogs, write books (I am the most prolific author in mobile with 9 books already) and for those who don't want much to read, I have my Twitter feed. Perhaps you should consider next time taking the Twitter option?
You say I rant against one publication and journalist while there is a legitimate debate going on about smartphones. Yes, you probably don't know it (and thats totally ok) but I actually am one of those people who not only support and advocate open and rigorous debate - I am one of the co-moderators of Forum Oxford (they most influential of the mobile telecoms related expert forums) where just a couple of weeks ago I specifically launched this type of debate discussion. Legitimate discussion and debate is healthy. But reporting falsehoods is not beneficial to any debate, it only confuses the issue. The Forbes story is full of errors. I point them out, many here and at the Forbes website itself have pointed out many of those same errors. Nobody has pointed to a single item in my blog, where I claimed Forbes to be wrong, and they actually were right. The falsehoods do not add to the value of good debate about smartphones.
You also ask me to excersize some journalistic control to edit my story. This is a hobby for me, this blog. There is no advertising here, I make no money out of it. Professionally I sell my consulting competence and my books, and many have argued that it is against my best interests to offer so much free advice and facts on this blog (Alan Moore and I have posted more than half a million words here, thats 5 hardcover books of 400 pages of solid text).
I do this as a hobby. I spent 5 hours of my Friday-Saturday night to compose (and edit and re-edit) that original blog posting. Its only a blog. It is totally not worth my professoinal time to waste 5 hours on something like this. Now you, reading this for free, dare suggest I spend more hours to edit it for your pleasure, so you'd get an easier read? No, Chad, clearly others who are your peers and colleagues have written to thank me for a great article. I think I've done enough. If you want to read me in professionally edited form, buy one of my nine books. This blog I do only out of my passion and personal motto "in a connected age, sharing information is power". If you can't appreciate the value of this blog, please do not come back. Like I said, for people who cannot handle a complex argument, there is always Tomi on Twitter
Harri - thanks for "great article". Yes, you make a great point, it is not a question of is the innovation implemented well, it is who does the innovation to begin with. And Apple is brilliant at taking what someone else had "engineered" to the max, and then far exceeding that utility. The PC into the Mac, the first PDAs into the Newton, the Walkman into the iPod and now the smartphone into iPhone. Apple is brilliant at this, re-engineering to make things better (and they also are innovators too)
Rodrigo - You say Nokia and Symbian are lacking usability. That is fine, we totally agree. You say a larger megapixel camera is not innovation. Fine. But what of all the other items I mentioned - like the world's first internet access phone - it is what the iPhone is most known for, how wonderful it is with web surfing. That was NOT invented by Apple. It WAS invented by Nokia. Nokia is undeniably the innovator in this, even Forbes acknowledged it way back in 2001, 6 years before the first iPhone. What of the QWERTY keyboard which is the biggest key to Blackberry's success (mentioned in Forbes article). BB sells twice the number of smartphones than Apple sells. QWERTY is certainly an innovation, who did it first, Nokia. My article was not about camera resolutions. I mention the 3 megapixel camera because APPLE mentions it FIRST when they did their formal press release about iPhone 3GS. Not my words, Apple's words.
Marketing Intern - thanks, very nice posting and thanks for arguing on my behalf as I was travelling.. I love your word, renovator. That is perfectly what Apple is. It is the renovator. It takes badly performing technologies that should be far better and makes them great - PC-Mac, PDA-Newton, Walkman-iPod and now iPhone. Renovator, that is exactly the word I was looking for. Thanks
Thank you all for writing
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | July 19, 2009 at 09:22 AM
We disagree only in few details, actually.
First: making a system an open source is NOT an invention, at least not Nokia's.
Yes, the percentage that Mac OS has on the market allows you to say it is a niche product, but - it's not, because it is used by all kinds of people. If it was used only by, let's say graphic designers, then it would be a niche product. So, it is just platform used by xx percentage of users.
And yes, maybe the Mac will dissapear (we should all be sorry if it happens). Betamax was superior, not to mention other inventions. We all know what happenned.
Sorry, I still think Nokia has "Motorola moment". 66% drop in profits? THAT is what article was about! When you write this kind of article, you write it about present moment, not about history. She wanted to say Nokia is not inventive NOW or for the past few years.
Although, I think Nokia didn't invent anything.
When I was in 8th grade, I told my mother that one day we will have some kind of hand device that we will read books on. We would put modules in it. That was 30 years ago!! (and I lived in former Yugoslavia)
16 years ago I said we will connect those devices to a telephone line in the morning to download e-version of newspapers. When Apple dropped production of Newton I said it was a HUGE mistake, that it was the future. Am I an inventor or just visionary?
We all knew what was coming. Internet on mobile phones etc... QWERTY keyboard on phones? oh, please... it is not INVENTED by Nokia... Do you know the definition of invention?
Nokia is NOT innovative. You say they were the first to SAY "mobile phones are little computers" (big deal). Well, for every version of their software you have to buy a new phone! You cannot upgrade!! That is anti-innovative!! I was mad when I realized it. Not even Microsoft does it.
User interface, ease of use and a GOOD implementation - THAT is an invention these days. For now - Apple is No 1.
But, history teaches us - the best doesn't mean the most succesful. I am afraid Nokia will become a new Microsoft.
I will repeat: if Nokia doesn't come with a whole new system, they're finished (or finnished :) . They have a fantastic market position (in other parts of the world, not in the US) and they can use it. But I want them to be punished for twisting our arms to buy a new device every year and for making such a crappy system.
And you are extremely biased. You say it took only two months for Ovi store to reach 20,000 apps. Now, that is complete nonsense!
Yes, when Apple showed them how to do it, it was MUCH easier, don't you think?
And - it's not true, either. There were third party apps for Nokia's Symbian phones years before iPhone. And then Apple comes and there are 55,000 apps in a year. Who's lagging behind? Or, to use your own words - "Who is the leader"? Interesting use of statistics, though... Don't you think, Tomi? It took YEARS AND YEARS for them to have only 20,000 apps. That would be more fair to say, I think... Who cares when they opened the Store?
A computer company comes, with no previous experience in mobile phones production - and they steal the show from huge market leader with a single model?!? Who's fault was it?
I am a journalist but I don't write about technology, I just love it.
One thing is right. If you want to respond to the article, use same space.
It would take too much time and space to answer all the issues in your original post (this is already too long).
But I still think: Nokia didn't INVENT anything.
(Newton was a real visionary product and they blew it.)
The future? I read all forum posts on this subject here in Croatia and, by reading Nokia users posts, all I can say they don't have a clue what iPhone really is. They think it's just stylish and a must-have products for snobs. They never had it in their hands. They think Symbian Nokia phones are century ahead of anyone else. Besides, people tend to see the brand they are using as a favorite soccer teams (you should see the terminology). That is, unfortunately, a good news for Nokia because they have time to come out with new system and use this fact to their advance. Just like in Microsoft's case.
When I got my my iPhone last November, I was VERY dissapointed. It took some time to get used to it but I couldn't understand why there was no landscape keyboard, MMS, etc. Now I have MMS and don't use it. I rarely use landscape keyboard. One thing makes me really mad, still: I can't choose my ringtone melody, not the way I could on Nokia or any other phone. There are some other things, but that is not the subject here. Let's just say I am very happy with it right now.
Bottom line: if they drop the ball again it will partly be their fault.
But, when you have more than half of the market share and you start to rapidly lose it - it's only your fault.
Posted by: Boro | July 19, 2009 at 12:15 PM
I'm gonna come back on the rest, but about SonyEricsson, I think I know what the problem is: they were the ones "caught in the middle". Whenever there's a bit market shift, it's always the guy in the middle (with 1 smartphone, and 1 budget phone, but tons of feature-packed mid-range phones) that suffers the most. So I think they were caught off guard with that. I'm eager to see how their smartphone offerings come out, I know they've had some success with the X1, and let's see Satio and more importantly, Rachael. Personally, I can say this though: my W810 is 3 years old and still takes better pics than an iPhone, not a single reliability or OS issue, not even the battery).
Now I'll be back to reply to some other (preposterous) comments... ;)
Posted by: Yannick | July 19, 2009 at 01:16 PM
A lot of good points here, but I thought I must say something too. I think Nokia has been excellent to play with the mass market. And often it is so that you cannot be too innovative to make profitable business. And of course it is important asset for Nokia to have a huge customer base and really effective logistics and production.
Having said that I must admit that I share many concerns re Nokia's next steps. Services are very different business from hardware business, and it also needs a new kind of culture (could I say internet culture). And Nokia has a lot to do to achieve that. Nokia has been quite technology or even radio technology driven company. But for many users it doesn't matter anymore (e.g. we know iPhone is not the state of art in all area, but it is what it's users like). And at least for me Nokia hasn't been able to offer very attractive design. So, I don't know if this is Motorola moment, but I definitely see that Nokia has a lot of work (and changes) to do to be successful in this new situation. And of course they make a lot of things like new operating environment, OVI etc, but they haven't yet been able to prove that it works. But they have been also good to follow other guys to bring new things at right time.
So, Tomi, I agree on many your points, but also would like to raise more question marks.
Posted by: Jouko Ahvenainen | July 19, 2009 at 02:20 PM
Hi Tomi,
I think its no use wasting time with mac fanboys, they'd stay the same. Check out any Mac/PC related forum, its the same story, Apple vs Nokia is the same story all over again. They'd never understand why, even after being so easy to use, apple's marketshare never goes beyond a certain single digit percentage figure.
Posted by: Hardeep Singh | July 19, 2009 at 05:09 PM
Hi Mobile Observer, Boro, Mika and Vlad
Thank you for your comments. Here my replies to each of you individually
Mobile Observer - Calling me a "raging frustrated Nokiatard" does not add to your credibility as able to add reasonable contributions to this discussion. But I'll address your primary point anyway.
You say that the hardware era is over and now its software and usability. I would beg to differ that the "era" for hardware is "over" - Africa, Latin America, India, China etc will add easily a billion more non-smartphone mobile phones over the next two years, but I do agree with you that there is a grand shift going on in the handset business, away from hardware and into software.
I hope you knew, that Nokia has been very vocal about this shift for far longer than Apple has been a phone maker. So if this shift to software is your argument of an innovation threatening old handset makers, then Nokia has truly been on that matter for many years already. Its a giant company - twice the size of Apple for example and far more global ie different cultures and nationalities to harmonize - it will take time to get there. But if your point is that Nokia has not noticed the Motorola Moment of software, you are wrong. Its been widely reported in the press for many years that Nokia is aware of this and trying to change to face that reality. If the IMPLEMENTATION of that change in the company is struggling, that is not the point of the Forbes article and if you intend to argue irrelevant issues, I won't rise to the bait today. But to change, Nokia is trying to do that (and arguably several of its major rivals are less so).
Boro - you are completely mistaken. Nokia raised market share in smartphones, it did not lose market share. Please check your facts.
Then you say making cheap phones is not innovative. Was offering an iPod Nano not innovative? Was offering a Macbook not innovative? Yes, a significant form-factor change can be innovation, but it is not automatically innovation. But as to innovation in cheap phones, you have not seen them, because you don't live in Africa, India, China, Brazil etc, but Nokia has innovated a lot in the cheap phones segment. Take FM radio and the "flashlight" ('torch') feature. FM radios are not common in the developing world, most families do not have a radio in their homes. When Nokia (who first did this) added FM radio, they became very popular not among us wealthy people who have probably a dozen FM radios in our home electronics and gadgets; but for the young employed person in the developing world, who literally cannot afford to buy a newspaper and for whom an FM radio would involve savings for half a year (and is nowhere near ever getting a bank account or credit card) for that person, FM radio into the phone is a god-send. Innovation by Nokia in cheap phones.
And the light. Note that most villages in the developing world do not have night time lighting. It is dangerous to go home after dark, because you might be robbed, raped, killed. Having a little portable flashlight/torch on your phone is a great benefit. You and I would not pay a penny more for the feature because our homes have lighting and electricity 24 hours a day. I was just in Pakistan in a village last month, where the electricity is off twice per day for 2 hours (but the villagers know in advance, and it comes on a schedule, and only 2 hours, so their frozen foods etc don't spoil). And this was a wealthy family in a well-to-do village near the city. If we consider places like Zimbabwe where I was 2 years ago, the poverty is almost unbearable. The living conditions are totally different. Yet these people all aspire for one thing, a phone. it will totally change their lives. And if Nokia adds a particularly useful tidbit of convenience to that cheap phone, it adds to Nokia's market share significantly..
Finally implementation is not innovation. You need to get a dictionary.
Boro (your second comment) - well, at least we agree Apple should expand its product portfolio. There, I was not so evil after all, was I (and I did say that in 2007 for the first time...)
As to "typing Mr Ahonen's article on a phone" you are again talking of being a privileged person, with enormous arrogance of the wealthy. Only 1.4 billion people have internet access, less than 1.2 billion of those people even own a PC. But there are 4 billion people who have a phone, so 2.8 B people have a phone but no PC. For them the decision to type or not on their phones is not an option, its the only possibility.
In Japan, the e-books/mobile books industry is worth half a billion dollars. Not that the books are sold to phones and read on phones, the most amazing part is that the majority of them ARE written on phones. A kid today can text faster on a T9 phone, than the "cluttered" PC keyboard. Sorry, Boro, you don't know the reality out there about phones and their users. Its not only a Blackberry or iPhone. BB and iPhone together account for 3% of new phones sold, and under 2% o the installed base of all mobile phones in the world.
Mika - thank you so much! About that spiral, yes its alarming to me too, that there are many very reputable experts in the US, who are drawn into that very perverse reasoning that is going on. I do see that at times there are good highly visible annoucements by US players - like Google's CEO just a couple of days ago when he said the future is not Apps Stores, its services on phones. But the US industry is kind of insular, its very much "them and us" kind of thinking. What happens in Japan "cannot happen here because we are not like the Japanese" or else its like you said, the US way is somehow "inherently better" and therefore the world needs to learn it and adopt it and buy it (well, like the Hummer, ha-ha, a car so beloved by drivers in cities the world over..)
Vlad - very good point about S60 v Symbian. Very good, totally agree, thanks for pointing it out.
Thank you all for commenting
Posted by: Tomi Ahonen | July 19, 2009 at 05:25 PM
I am just very glad that there is a respected and well-heard professional in the mobile industry who cares about the truth and real statistics before commenting on the issue. Thanks, Mr. Tomi for the immaticulate article and the incredibly polite replies to the trollish comments.
I'm gonna go a bit off topic so you may want to read and reply later.
I only have one emotional request - if you still have some contacts with someone in Nokia who is in a influential post (by which I mean affecting the future of new devices), could you please suggest him that users out there actually want new features now - like xenon, for their money. That's one solid innovation that needs to be used more by Nokia. And consumers are WILLING to pay for it! I'm from India and I can say for sure people won't mind paying for a smartphone that has the requisite features. Value for money is what is needed. I'm angry that Nokia belittles our intelligence by demanding more than 700 USD (by current conversion rates) for a phone like N96. It is not the cost. If the phone had the features, consumers don't mind paying. But no Xenon, cheap plastic, poor battery, bad build quality, absolutely NOTHING new over existing models, etc. and THEN this amount of money? No, never. Not just the premium segment, even the lower segment suffers from sloppy carelessness and an apathetic attitude. Take the newly released black and white 1203. It is a rehash of the 1200 (whic was a rehash of the 1100) but it is WORSE. I own one as a secondary phone and it seems unbelievable, but the phone actually CRASHES. Yes, an entry level Nokia crashes. I've used every phone from the 1100 to the 1200 and that has never happened in the past. Sloppy releases in the premium segment is understandable but not in such phones that sell by the dozens per minute. Please tell them, give us value for money, or it won't be long before some other manufacturer smells the potential of the lower and middle segment of the market and makes a killer profile of phones (Samsung is already doing that, with appreciable success) that finally overtakes Nokia as the market leader, in terms of sales.
Posted by: kln | July 19, 2009 at 06:54 PM
"Then you say making cheap phones is not innovative. Was offering an iPod Nano not innovative? Was offering a Macbook not innovative?"
Well, actually - no, I don't it was innovative. There alredy were MP3 players on the market. And the iPod was the most expensive. So - why do you think they are the market leader in this segment?
I think we disagree on the definition of "innovative", "innovation" and "invention". Nikola Tesla is for me the greatest inventor of all times. It's also true that most of his inventions weren't implemented.
And I didn't say ONLY implementation is innovative (take a better look at what I wrote) - that is what YOU said. You said that making cell phone with FM radio was innovative. I think it was exceptionally great feature - which I miss very much in my iPhone.
"Arrogance of the wealthy"?!? You got to be kiddin'... I don't think that anyone would want to type article that long on a smartphone. Not even you. It was not meant for that. Third world countries? They mostly have cheap phones. I don't think there's anyone with a smartphone and no PC.
And, like I said - I just can't be an Apple fanboy. I had 7 Nokia's and was happy when I switched to iPhone. And I'm looking forward to use even better phone even if it is going to be Nokia. But not today.
Nokia is gaining smartphone market share?!? During past month all data I found on the Internet (articles on CNN, Guardiantech and many others) showed Nokia is rapidly losing ground in this segment. Nokia placed a report yesterday they had 66% fall in profit. Since the biggest profit margins are in this segment.. well - do your math. Don't tell me they are losing (only) cheap phones market share? There was even one report that predicted Apple will come in front of Nokia in 2013. (I don't think that will happen)
Well, I would like to hear your opinion (so it's not that I don't respect you) about Nokia's policy not to make phones and software that you can upgrade to a new version. (You didn't comment on that)
Don't you think it is suicidal? And what do you think about future of their present software? Don't you think they should write a completely new one?
They blew it, Tomi... I tend to be loyal user (that is why I sticked to Motorola for so long, but I made a switch to Nokia). After one month of using N70 I knew that system was doomed. I still bought N73 but that was it. No more.
Their Symbian (or S60, whatever you say) has no future, I'm sure of that.
Posted by: Boro | July 19, 2009 at 09:22 PM
And I think Apple will blew it again if they don't licence their phone OS to other companies. The real question here is what will become a STANDARD.
Most likely - it will be Mobile Windows if Apple makes the same mistake again.
They have 1.5 billion downloads and practically one phone. Imagine the revenues from licencing the OS and from downloads of apps THEN!
They can't have it all, it just won't happen. We've already seen it.
Posted by: Boro | July 19, 2009 at 10:23 PM
Boro : Nokia's policy of not upgrading their smartphones with newer versions of S60 has to do with the fact that up until Symbian Foundation came into the play, Nokia had to pay a license for every S60 device out there to Symbian, they didn't have full control of Symbian, so imagine having to pay a license fee for say upgrading N80 to FP2 ? That would cost money and resources, it's not like they only have 2 or 3 S60 devices out there (they now say that future Symbian releases are compatible with today's S60 5th phones, since they don't need to pay a fee for every license). Also, S60 is a UI, Symbian is the underlying Operating System (exactly what KDE is to Linux for example).
Nokia is losing profits not market share, they are in fact gaining market share this passed quarter (Nokia put in a solid performance in what was another tough quarter. We increased our share of the global mobile device market sequentially to an estimated 38% and grew our smartphone market share to an estimated 41%. Source : http://www.allaboutsymbian.com/news/item/10105_Nokia_Q2_2009_results_in.php).
They are completely re-writing the UI based on QT, we should see it in about a year or so, the reason for not changing S60 is very simple, it is a very big risk changing an interface that people are familiar with (if you are an S60 user, you feel familiar with each new phone cause very few things change with each version, hardly ever do companies with a big market share completely re-write the UI's for that same reason) they are ready to take the risk now and I really hope it goes well.
As for innovation, yeah, Nokia has been innovating and inventing a lot of things in the past decades, 7650 for example was the first smartphone in the planet, also Nokia had a little something to do with the creation of GSM too, or how about the DX200 ? or the NMT standard ? the first GSM call ever made on a Nokia network using a prototype Nokia phone ? the 9210 ?
As for touch screens, some of you may remember Series 90, for those that don't, it was a Symbian UI designed for touch screens in 2003, Nokia saw no point in having both UIQ and Series 90 in the market (the market wasn't big on touch screens then) and since UIQ was doing very well at the time, they decided to combine Series 60 (S60 now) and Series 90 into what we now call S60 5th, as they did with Series 80 as well, stupid move if you ask me because now Series 90 would have been way ahead of S60 5th.
Posted by: SymbiX | July 20, 2009 at 03:03 AM
Reading your Article used 1% of my iPhone 3GS battery, some good points, sadly Nokia have removed the barcode reader and sip voip function from both the 5800 and N97.
Posted by: Ratkat | July 20, 2009 at 09:26 AM
@Symbi X: Thanx for the info, that was interesting... The thing is - no one who knows this fact will buy a new Nokia in "the next year or so".. But, you must agree: that should have been done years ago, not wait for Apple to force them to do it.
I somewhat disagree that it is risky to make big UI changes (especially if yours is not good enough and you're a market leader. You should know what happens then). I switched to iPhone! How about that for a change? It was completely different! And so many others did it!
If that was "risky" for Nokia - now they have nothing to lose - they are FORCED to change it.
They should have known what was coming, if not before, then after iPhone launch.
That was 2 years ago. I knew it the first time I started to use S60.
Also, you have to know that Apple and Microsoft won't be sleeping for year or two. But, as I said before - there's a big Nokia's customer base and they probably won't lose that much to make it impossible to come ahead again.
Posted by: Boro | July 20, 2009 at 01:13 PM
Market share statistics. According to Bloomberg (http://www.bloomberg.com/apps/news?pid=20601085&sid=aMEAIizeet0I) Nokia's marketshare in the SMARTphone segment fell to 41 % in the 2nd quarter vs. 45 % a year ago. The fact is Nokia's losing although Nokia's shipments of smartphone rose 10 % (anyway good) but shipped 15 % less of total phones (that's bad). Apple doubled its market share to 11 %.
Now on to the "innovative" factor.It's true that Nokia first installed many features and technologies long before the birth of the iPhone but does it make Nokia innovative? Maybe inventive, but to be innovative the novelties should have a high take-up among the users or customers and have some kind of a substantial effect on the market. Has it happened with Nokia? Not at all. As far as I remember, every move by Nokia into sevices or software has had a limited success at best. Enter iPhone and a year after everybody reports of iPhone's browsing success. According to StatCounter (http://gs.statcounter.com/press/opera-retakes-leadership-from-iphone-in-mobile-browser-market/) in May 2009 iPhone alone took 22 % (or 37 % if iPod touch included) vs. Opera's 24.6 % (on all devices) and Nokia's 18 %. And this is global statistics! And this is just after two years of iPhone introduction! That's a huge success unbeatable by Nokia. And remember how everybody had written off mobile browsing before iPhone?
Next, apps. Yes, there were apps aggregators before Apple like getjar or ovi. But did they have success? Nope, for sure. Ovi had a reputation for storing different media files but not apps. Getjar recently reported 500 mln downloads. Since 2004. Clearly they're riding the Apple App store wave. Of course, in terms of monetary effect the apple app store contributes little (http://www.telecomasia.net/article.php?id_article=14256) but still it's significant as a trend changing innovation. Some say it's a short term trend with apps migrating to web apps in the future. It might be true but remember Apple started apps as web apps only in the beginning, so they might've been just too early in the game.
And what's driving all these successes for Apple? Innovations in usability, UI and business models. I'm sure they have the highest margin on smartphones, provide the high level of ARPU for carriers and keep their users satisfied and happy.
By the way, I don't own any piece of Apple hardware. I have a SE feature phone which is fine for me now but want to upgrade to a smartphone. I know I can't afford the iPhone because we don't have them subsidised and most likely it will be Nokia widely available and affordable so it will stay the leader in the market for the foreseeable future.
Posted by: Marat | July 20, 2009 at 01:15 PM
Tomi, as much as I liked your response on the hardware innovatio side, I think your are using too narrow a definition of innoviation - why would a breakthrough in usability not be an innovation, even if someone has had e.g. an icon based interface first? Even if it strictly speaking would not fall within the definition, I gather that's what Forbes was largely referring to.
Just to split some hairs ;-), a few definitions coming up with google (!) search:
invention: a creation (a new device or process) resulting from study and experimentation
invention: the creation of something in the mind
initiation: the act of starting something for the first time; introducing something new; "she looked forward to her initiation as an adult"; "the foundation of a new scientific society"
wordnetweb.princeton.edu/perl/webwn
The term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products ...
en.wikipedia.org/wiki/Innovation
The act of innovating; the introduction of something new, in customs, rites, etc; A change effected by innovating; a change in customs; something new, and contrary to established customs, manners, or rites; A newly formed shoot, or the annually produced addition to the stems of many mosses
en.wiktionary.org/wiki/innovation
Posted by: Viipottaja | July 20, 2009 at 02:15 PM
@ Boro : Yes, I do somewhat agree that they should have changed S60 years ago, but, at the risk of sounding like a broken record, I'm gonna say this once more, when you have a UI that millions of users are familiar with, you think long and hard before you make any changes, let alone a UI that has so many settings and customization options and runs on many different devices, most of which are not touch screens. Do we really think that a giant like Nokia couldn't have changed it if they wanted to ? Do they lack the money or the resources to do so ?
Again, Apple is not forcing them to do anything, as I've pointed out before, S60 5th was the result of Series 90 being merged with S60 (Nokia said so when Series 90 was discontinued back in 2004, iPhone was not in the picture back then), if you ask me, Series 90 should have been alive today, S60 should have been left on non touch screen phones and Series 90 should have been to UI for their touch screen phones, which was the original thinking behind Series 90.
It is also a matter of opinion, I have used the iPhone a lot, didn't like it at all, too limited for my taste, I have an E90 and a 5800, both of which I use every day for many more things I would use the iPhone for and I could provide a very long list of things the iPhone can't do here. The thing is, that people only complain about one thing when it comes to S60 and that's the UI and not the features, while most people using the iPhone go mute when you talk about simple things, like, well, i don't know, a file system or the ability to transfer things over bluetooth maybe ? what does that tell you ?
@ Marat : It's a very complicated procedure when analyzing quarter results, I could blame it on the fact that Nokia had no new devices on that specific quarter, the financial crisis, the fact that the iPhone is heavily subsidized and promoted as well, you name it, but the fact is, Nokia did raise their market share this quarter and 5800 is a big part of this. Considering that most of the resources on Symbian at this point are working on going open source and re-writing the UI from scratch, new devices are very few and bringing nothing really new, I think it's a miracle Nokia has managed to raise share on this quarter.
Now, on to the innovation part. You keep mentioning of browsing, how about the fact that the very first smartphone ever released was the 7650, was it's technology new ? Not really, but did it manage to create a trend ? Yes it did. How about video recording and optical zoom (N90)? Widescreen (7710, which by the way, was using a quite familiar concept, no menus, instead, the desktop had all the application icons and you could have multiple desktop screens, sounds familiar ?) ? QWERTY (9210) ? Multitasking (iPhone still hasn't got it) ? And that's just to name a few, if that's not innovation then I guess our definitions differ.
No one had written of mobile browsing before the iPhone, the problem was with the networks, 3G was relatively new, as was HSPA, as someone using the mobile internet in the good ol GPRS times, let me tell you, it wasn't anything like today, there were very few of us who did use it and social networks like Facebook weren't even an idea back then, there weren't many things you could with it. Apple has had a huge hit with the mobile internet because it's one of the most promoted features of the iPhone, similar to the hit Nokia has had with the N95 due to it's (at the time) superior camera.
Even the idea of an in device application store was nothing new, Nokia had Catalogs and Download! years before, they just didn't care for it, what they did instead was adding a host of applications into their smartphones so users didn't need to buy them seperately (QuickOffice, Adobe Reader, Zip manager just to name a few).
Posted by: SymbiX | July 20, 2009 at 03:16 PM