Communities Dominate Brands

Lets Understand the Mobile Phone Market, installed base and smartphones vs dumbphones

I have been doing a long-running series of annual reviews of the overall mobile telecoms market here on this blog. In it I have touched upon the handsets side of the industry (but most of the industry is in the services side of voice calls, SMS text messages, mobile internet services, etc). As this year heated up with the 'Smartphones Bloodbath' - many of my readers have asked for more details and analysis about the handsets market itself. I do track those stats too and my consultancy is used from time to time to analyze the handsets market (and smartphones and their operating systems). So I decided to put my best insights into the TomiAhonen Phone Book that I just announced earlier today, a 171 page statistical review of the handsets market, with over 90 charts and tables.

As is the style here on this blog, we then want to give you, our loyal readers, as much of that for free as is reasonable in a longish posting about that topic. So here we go. This is the 'definitive' blog posting about the handsets industry. And if this is of interest to you, please note, there will be a new free gift for you in it too, so read carefully haha.

MARKET SIZE 2010

The mobile phone handset market returned from the economic downturn, and grew strongly in 2010. A particularly hot area of the handset market in 2010 was smartphones. But first, we need to understand how exceptional this market is.

The PC industry sells a little over 300 million PCs this year. That includes all desktops, laptops, notebooks, netbooks and the tablet PCs like the iPad and Kindle. A little over 300 million sold per year. Similarly television sets sell in that scale, about 300 million per year. And DVD players sell in the 250 million range annually. These are the global giants in electronics, the others of our favorite gadgets, like videogaming consoles or digital cameras or MP3 players like the iPod, sell in far smaller numbers per year. Except for one gadget. The mobile phone. The world sees sales of 1.37 Billion mobile phones sold in just this past year! You see why I am so excited about this industry? Just smartphones alone will sell very close to 300 million units this year, and yes, next year more smartphones will be sold than all types of personal computers, combined.

While we are on those smartphones, this is a big milestone year for the smartphone. For the first time, in 2010, the total value of the smartphones sold, exceeded the value of dumbphones sold. And the market is tipping very lop-sidedly to the smartphones, due to both the incredible growth in smartphones this year - while the overall handset industry grew by 10% in units sold, the smartphone market sector grew by 71%. So today 60% of all handset sales revenues come from smartphones. yes, you have to sell more than 4 dumbphones to earn about the same as one smartphone.

But you do not need to have a smartphone to have a powerful gadget in your pocket. Only 22% of all phones sold this year were smartphones. The other 78% were what now is a bit dismissively grouped as 'dumbphones', which includes anything from very high-end featurephones (many non-smartphone featurephones in Japan and South Korea have more features and abilities than the best smartphones known in the rest of the world) to mid-priced phones to the ultra-cheap basic 'Africa phones'. Even the most simple basic phones do SMS text messaging, meaning every phone sold worldwide is capable of mobile messaging, and can be used for anything from advertising and coupons to news and games to TV-interactivity to mobile banking.

FEATURES OF INSTALLED BASE

While many developers obsess about the iPhone and its App Store, and think that the Android OS may be the next big thing to achieve mobile data success, the reality of the dumbphone installed base can be astonishing. Most phones in use worldwide today have a full HTML browser - even in the Emerging World, seven out of ten phones in use has an HTML browser. And if the developer can offer the intended service on a basic browsing experience, the more basic WAP browser is on more than nine phones out of ten worldwide.

Similarly MMS, not just a 'picture messaging' ability but a true 'multimedia messaging' platform, MMS allows pictures, videos, sounds and longer text content to be delivered to mobile phones. If you put your internet service on the PC based internet, you can reach 1.7 Billion people. But if you put that multimedia content on MMS, the world's installed base of MMS capable phones in use is 3.4 Billion handsets! Yes, twice as big as the total internet and yes, twice as many MMS capable handsets are in use globally, than television sets! No wonder MMS is growing so strongly, and being embraced by major media brands.

I want to mention a few other features. Memory cards. Two thirds of all phones in use worldwide now have a memory card slot. That is a lot of capability to swap data without worrying about cellular network charges. And yes, while WiFi is spreading (18% of all phones in use have WiFi), the far bigger wireless connectivity is of course Bluetooth - 64% of all phones in use have that ability. If you want to listen to music on a phone, or watch a video, you don't need a smartphone. Six out of ten phones globally has a media player. And of those apps? Try Java/Brew - more than half of the installed base of mobile phones support either Java or Brew (try 2.5 Billion handsets as an installed base today). Wow, these are huge numbers.

INPUTS BY TYPE

The battle of QWERTY and Touch-screen phone inputs is at the tipping point this year, with the Touch-screen phones now selling more than QWERTY phones, but the installed base still has more QWERTY inputs. 14% of the total installed base of mobile phones has some kind of special input, like QWERTY, Touch screen or hybrid input.

And on the camera resolutions, VGA cameras still are the biggest category, but 1 megapixel cameras are rapidly catching up, and almost one out of five phones in use has a camera resolution of 3 megapixels or better. How many is that? Try 800 million cameraphones, thats nearly 12% of the planet's population, who have such a good phone in their pocket, that it has a 3 megapixel camera on it, or better..

MARKET SHARES

First a few quick preliminary look at how the full year of 2010 will pan out for the Top 6 biggest handset makers in all phones, in smartphones, and in smartphone operating systems. Note, that this is a short-term projection by my company, based on the first 3 quarters of 2010, and making a projection for Q4 sales, We will know the final numbers during January and February (and will report here on this blog). So this is what it looks like:

Total handsets Top 6 for 2010
1 Nokia 32%
2 Samsung 21%
3 LG 9%
4-5-6 very close race between Apple, RIM and ZTE about 4% each

Smartphones Top 6 for 2010
1 Nokia 35%
2-3 very close race between RIM and Apple, about 15% each
4 Samsung 9%
5 HTC 6%
6 Motorola 5%

Smartphone OS's Top 6 for 2010
1 Nokia Symbian 39%
2 Google Android 21%
3-4 very close race between RIM/Blackberry and Apple iOS, about 15% each
5 Microsoft Windows Mobile and Phone 7 4%
6 Samsung Bada 2%

So then lets look at who are the big boys of this industry. The market shares are regularly reported - as units sold, so we know Nokia is the biggest dumbphone manufacturer and the biggest smartphone manufacturer. But selling tons of cheap phones does not make you a big company. The average price of the phones sold will determine who are the really big players, and by revenues, the big five of the handsets market are (as I reported earlier on this blog) - Nokia, Samsung, Apple, RIM and Motorola in that order.

Then it becomes interesting to see who is focusing on what region (I divide the world into 8 regions in my analysis, like I do in the Almanac, so its North America, West Europe, East Europe, Asia-Pacific Advanced, Asia Developing, Middle East, Africa and Latin America). The biggest region by far in unit volumes and revenues is Asia Developing (as it includes China, India and Indonesia 3 of the 4 most populous countries in the world). The West Europe and North America are running neck-to-neck.

Nokia's top 3 market regions (by unit sales) are Asia Developing, West Europe and Middle East
Samsung's top 3 market regions are Asia Developing, North America and West Europe
Apple's top 3 market regions are North America, West Europe and APAC-Advanced
RIM's top 3 market regions are North America, West Europe and Latin America
Motorola's top 3 market regions are North America, Latin America and East Europe

OS WARS

And then those OS wars for smartphones. While Android got most of the news in 2010, and it had very strong gains in North America, the world giant has been, is, and continues to be Symbian, powering Nokia smartphones and about half of smartphones in Japan (being the OS of preference for NTT DoCoMo, Japan's biggest mobile operator/carrier). A regional analysis of smartphone OS's is more revealing.

In North America the installed base of smartphone OS's reflects the recent rapid growth of smartphones, so while Microsoft's Windows Mobile and Hewlett-Packard's Palm used to have major shares in North America, the battle is now between three OS's of almost identical market share - RIM/Blackberry, Apple iPhone iOS and Google Android.

In Western Europe, Nokia's Symbian has a dominant role, and interestingly, the second biggest OS, Apple's iOS, has not taken significant market share from Symbian, but has decimated that of Windows Mobile. RIM runs a distant third with Android rising.

In the Advanced Asia-Pacific market, Symbian's strong market dominance is very stable, the battle on the fringes has seen iOS and Android eating into Windows Mobile and Linux Mobile.

In the Asia Developing market, Symbian rules, with RIM a distant second and Android rising.

In Latin America the battle is between Symbian and RIM, both gobbling up what share Windows Mobile and Palm used to have.

In Eastern Europe not surprisingly Symbian dominates but RIM is growing strong as a distant number two.

Africa is almost exclusively Symbian with some Blackberry. The Middle East has more Blackberry but is also strong dominance by Symbian.

While the pundits love spinning the fable that the iPhone is stealing Nokia's market, the truth is, that when examining the eight regions, Symbian has been very stable and most gains that Apple has been able to make, have been at the expense of Windows Mobile and Palm, not Symbian. Where Symbian has taken major losses, has been more at the expense of Blackberry and now Android. What confuses the pundits, is that North America is both the worst market for Nokia and for Symbian, so the analysts there do not see the real performance of the world's biggest handset maker, smartphone maker and smartphone OS.

I do want to make a mention about Bada (something I have said on this blog before, but it bears repeating). If you are impressed by how strongly Apple has grown from never having made a mobile phone to now challenging for 4th biggest mobile phone maker globally, or how strongly Google's Android has stormed the market, today selling on one out of every five smartphones sold worldwide - consider Bada. In its first 6 months of sales this year, Samsung's Bada has sold more smartphones than Apple iPhone managed in its first 6 months, or how many smartphones were sold in the first 6 months of Google's Android. Do not discount Bada. It achieved 2% smartphone market share in only 6 months. That is a world record. Expect Samsung's Bada to be one of the big stories of 2011.

PRICE PYRAMID

What else can I tell you? The average sales price of dumbphones sold in 2010 was 61 dollars, and for smartphones was 332 dollars. That is of course the 'unsubsidised' or 'SIM-free' price (so don't think the iPhone 4 offered by AT&T for the nominal price of 199 dollars, is really a 199 dollar phone - Apple tells us they are paid 600 dollars for it - so AT&t hides the remaining 401 dollar price into your 2 year contract..)

I calculated the price pyramid for the global phone market and found the following price breaks:

Premium smartphones costing over $450 = 5%
Standard smartphones costing between $250 - $449 = 9%
Low-cost smartphones and premium featurephones costing $100 - $249 = 17%
Low-cost featurephones costing between $50 - $99 = 24%
Ultra low-cost basic phones costing under $50 = 45%

There you go, that is a view into the market of mobile phone handsets, the most prevalent technology on the planet, yes more people today have a mobile phone than have a wristwatch or even a basic FM radio. Now about that freebie surprise gift I promised? Yes, if you would like a two-page pdf document with all the major stats and facts about the handset industry, I have that for you! If you send me an email to tomi (at) tomiahonen (dot) com, I will send you the brand-new two-page 'Cheat Sheet' about the handset Industry by return email. Please write into the email header 'Cheat Sheet' for rapid delivery of the pdf file.

And for those who already know they need more data, if you liked this blog story, but would want to see more than 90 tables, charts and diagrams about the mobile handset industry, including all of the above, but obviously many many more, I now have my 11th book, the TomiAhonen Phone Book 2010, which runs 171 pages and is formated for the small screen so you can save it to your smartphone and have all the handset industry stats and facts in your pocket with you every day. The eBook costs only 9.99 Euros. There are free sample pages from the TomiAhonen Phone Book both at the ordering page, and in the new Insider's Guide to Mobile. So take a look and for under ten Euros, this is the best bargain in stats and facts about the global handset and smartphones industry. See more at TomiAhonen Phone Book 2010. 

Announcing my 11th book, this is the TomiAhonen Phone Book, statistics of the handset industry

Its a happy time here at the CDB blog when we have another new book to announuce, and yes for those counting, its my 11th book (second this year). I am proud to announce the:

TomiAhonen Phone Book 2010

 

 

This is in response to many readers and released as the companion volume to the highly popular TomiAhonen Almanac. In the Almanac there is only one chapter and 12 of the tables, charts and diagrams about the handset part of the mobile industry. Now the new TomiAhonen Phone Book 2010 gives you 171 pages all about the handsets part of the industry, with over 90 charts, diagrams and tables. Like the Almanac, the format is eBook and like the Almanac, it is formated for the small screen so you can carry all the phone industry stats in your pocket on your smartphone or in your Kindle or iPad or laptop etc. And just like the Almanac, the Phone Book costs only 9.99 Euros.

The TomiAhonen Phone Book 2010 discusses overall handset industry numbers like number of handsets sold, the market shares, the prices of handsets, regional differences etc. Then it looks at market shares of all phones, of smartphones and of dumbphones, as well as the market shares of the operating systems for smartphones. The Phone Book includes a whole chapter on the installed base of phones so if you need to know what features are common on phones worldwide, from color screens to GPS, from WiFi to Bluetooth and from memory card slot to media player, the numbers are there. There are 3G migration rates and cameraphone resolution migration rates etc. 

The Phone Book includes plenty of regional numbers including market shares of handsets, smartphones, operating systems etc by region, etc. There are useful comparisons of average sales prices regionally for all phones, smartphones and dumbphones, as well as an overall handset price pyramid. There is a chapter on smartphone app stats, and a chapter on the Digital Divide with a focus on handsets. There even are business overviews of the five biggest global rivals (by revenues) in handsets (Nokia, Samsung, Apple, RIM and Motorola) and illustrative charts of their recent sales performance and their regional footprints.

Like in the Almanac, there is a big numbers section in the back of the Phone Book which includes the 60 biggest countries and short summaries of their mobile and handset markets (how many handsets sold annually, who are the biggest handset and smartphone brands in that market) and such useful tables as the biggest country-markets by number of handsets sold, and by value of the handset markets.

There will be some sample pages soon at the ordering page, but some readers may have noticed, that in the new The Insider's Guide to Mobile that I released earlier, there were 7 charts and tables taken from the Phone Book 2010. For those who are familiar with the Almanac, the format is identical, same style of text and same style of diagrams, tables, charts and graphs that make it easy to quickly find the info you want,.

The TomiAhonen Phone Book is now available, for immediate download, and costs only 9.99 Euros. The eBook will only be available from my website. Here is the link to the ordering and information page:

http://www.tomiahonen.com/ebook/phonebook.html

I will also return to blog about some interesting findings from the Phone Book so please come back. 

Some Christmas Cheer.. Mobile Learning Success Stories

I am always looking for the success stories in mobile, as a personal passion. So I will celebrate even the most silly and frivolous and 'juvenile' mobile ideas, from the crazy frog ringtones to the fart apps. But the stories I like the most, are success stories from areas of mobile that help the world. And few areas can help more, than those around M-Learning.

There are many great stories and I try to include at least one m-Learning story in my presentations nowadays as I talk around the world. M-Learning is a concept more broad than 'M-Education'. M-Education is delivering traditional education services (schools, universities) to those who formally enroll in education services. Learning goes far further, covering enterprise/corporate training in the business world, and for just random people, their personal development, for those who want to gain further knowledge.

So some stories for Christmas. I blogged here last month about the UK museums who got together with schools to make group museum-visits by school kids far more engaging and enjoyable by using mobile (and grew the time spent by the kids in the museums by 4.5x longer!). The story is one of the case studies in my 10th book, The Insider's Guide to Mobile (eBook edition available for free download). Here we have evidence of one critical element to successful mobile learning - making it entertaining, or to use that familiar term from early in the past decade, make it 'edutainment' (Education and entertainment). Now at the World Summit Awards, sponsored by the United Nations and given out in Abu Dhabi two weeks ago, we saw a similar service win a WSA award, which was SmartMuseum from Bulgaria, helping make the museum visit more engaging and interesting.

We have so many other good stories. Here on this blog we wrote about the BBC language courses that were introduced in Bangladesh. In the first month they had 400,000 people using the short language drills that cost less than a cup of coffee. The BBC Janala service has been winning many awards, including one at the World Summit Awards where the BBC told us that the service has been used in Bangladesh by over 2.3 million people. The point being, if you hvae a basic service job, like being a housekeeper or gardener, and you can learn a little bit of English, enough to understand a few work-related phrases, you can get a better job paying 2x to 3x more. Imagine your own life, if you had the ability to suddenly double your annual income - doing the same job - how much of a boost would that be to your ability to look after your family.

Along those lines, are the stories from Pakistan, where young boys and girls get to go to school, but older women were of the age, when society didn't support young girls going to school. So there are many middle-aged women in Pakistan who are not literate. They feel very much excluded from society, and they are often ashamed of this inability. Now there are basic reading courses offered that often are used by the literate friends, who help the illiterate woman slowly learn to read, and greatly increase her sense of worth and reduce the shame that is often associated with illiteracy. The point is, that these women will of course not have smartphones and aren't ever considering buying a PC. But they have basic mobile phones and it can deliver basic m-learning lessons to them.

In many countries like in China where the families have only one child, the interest is in using mobile learning to enhance the child's skills and abilities in everything from math and languages to the sciences etc to help the child gain a better overall skill set, and do well in exams, to get to a better university. Again at the World Summit Awards, one of the winners was the first Arabic language math course, delivered via mobile, called Hesabi (My Math) from the UAE, which was intended to help very basic level math education for young children, with games and quizzes. Another award-winner from the WSA awards was the Grace App which helps autistic children learn, something that really warmed the hearts of all in the audience. Meanwhile in South Africa, the school books publisher Maskew Miller Longman got together with Nokia, to deliver 'MoMath' mathematics skills drills via mobile to 10th grade high school kids, offering over 10,000 actual math drills, that work on most featurephones, usable by the phones used by over 82% of all students in South Africa - and the results? 4,000 school kids in 30 schools took part, their average math performance improved 14% in the national math tests!

In the long run, any nation's best resource is its population. As we head into the information age, there is an increasing need to educate the population. Businesses and enterprises need to retrain work forces for ever more information-intensive job skills. And the populations of all countries will need to learn new digital information age skills to be able to participate in the ever more digital world. Imagine trying to find a job today if you are illiterate, for example (or functionally illiterate). Yet mobile is helping, giving us services and applications that can help, from formal education and training to more informal learning and gaining of knowledge. Notice that most of the examples I list in this story today come from countries of the Emerging World markets, which even more makes me so happy, that we are using mobile as a way to bridge that digital divide, and bring gains to societies, using mobile. These are the stories that make me proud to be a mobilista.

Rare Synch of Regional Quarterly Data Gives View to Regional Split Top 3 Smartphones

This is a rare treat. We get occasional updates of regional market shares for smartphones but it seems almost impossible to find two such regions reported in the same quarter, and we thus can't get solid split of smartphone shipments on a regional basis. But the stars were kindly aligned for Q3 - as both Canalys reported US market shares, and Strategy Analytics reported Western European market shares for smartphones for the same quarter. Together these two regions account for half of the world's smarthphones, so we can now offer rare insights into the Top 3 smartphone makers - Nokia, RIM and Apple, on how their markets are split, by units sold (not by revenue).

Note that the two analyst houses did not report uniform total numbers - their total count of smartphones for Q3 differed by 5% (which is typical variation), so please recognize, these numbers are not directly comparable. But they are 'close enough' to give us the insights, at least to the level of a free blog story, eh?

The world according to these two analysts is split like this: Rest of the World has 50% fo all smartphones sold in Q3 of 2010 (40 Million), 26% in North America (21M) and 24% in Western Europe (19M). The total quarter was 80M

Now, Nokia - the market for their smartphones is clearly 'rest of world' because their average smartphone price is less than a third of that of Apple and about half that of RIM. Nokia's smartphones were sold 76% in Rest of World, 23% in Western Europe and only 1% of Nokia smartphones sold in North America. (Number for Rest of World is corrected on 17 Dec, thanks maxxfi for noticing the typo)

RIM's best market is North America, no surprise, where it sells 41% of its Blackberries. RIM sells 35% of its Blackberries in the Rest of the World, and 24% in Western Europe.

Apple meanwhile sells 39% of the iPhones in North America, its second best market is Western Europe where it sells 33% of all iPhones and 28% in the Rest of the World.

Fascinating. I wish we had this kind of splits reported more often. Nothing dramatically surprising to me out of the above data, very consistent with my consultancy internal analysis, and I'll be having some good regional smartphone and dumbphone data in the new upcoming TomiAhonen Phone Book that I hope to have out very soon.

Ouch. Time for Humble Pie. The one smartphone I 'promised' didn't gain market share: RIM Q4 and full year results

So, its time for the humble pie. I am sorry. When I did my preview to this 'Year of the Bloodbath', I went over every major brand in January of this year, with my best insights of who does well and who does poorly for the next 12 months. The one smartphone maker that I singled out as the one that was sure to gain market share was RIM and its Blackberry. I was very sure of that forecast. They have just reported their latest quarter (ending November) so we have (close enough) info for the full year, and its clear, I was wrong in my forecast. Sorry guys. But first the results.

RIM reported good growth of 14% from the previous quarter, and 40% growth from this point a year ago. They would be astonishing growth numbers for almost any company in one quarter and year in any other industry. Except that smartphones will grow roughly 25% in just this past quarter, and about 74% for the full year. Obviously, if you grow less rapidly as the industry average, you lose market share.

Note the 'leapfrogging' now with Apple. Apple reported Q3 numbers of 14.1 Million and bragged about passing RIM. As their quarters do not completely overlap - Apple current quarter ends December, RIM's ended November - now we have RIM's 'next' quarter, and they just edge past Apple at 14.2 Million. Its almsot certain that Apple does better than that for their Christmas season (last year Apple grew 17% from Q3 to Q4 in unit sales) so expect in the next Apple quarterly results, that they report they have 'again' passed RIM haha. We may see this neck-to-neck battle for many quarters now haha..

For those who are interested, RIM is very profitable doing this. Their customers are increasingly from abroad and the majority of their sales are now with consumer customers, not enterprise/corporate customers (mostly youth with messaging addiction).

For the record, I had projected RIM to end the year with market share of roughly 22% - 25%. They will end with roughly 16% for the full year. OUCH. Thats VERY big error in forecasting (my error from the mid-point of my forecast, is 30%). Well, at least the good news for me, is that it seems like this was my worst error, most of the other big names are coming much more close to my 2010 forecast haha..,

What can I say. I honestly believed the reasons why I thought RIM would do better, they ddin't. They still grew - 40% growth in a year while being one of the most profitable companies in the business, is good performance in most other times, but not this year in mobile. Not in the 'year of the Bloodbath'.

Which gives us a 'Magic Number' for those watching Apple. The magic number is 17.2 Million iPhones for Q4. If Apple reaches that level, they pass RIM for the full year 2010 and become the 2nd biggest smartphone maker in the world, for full year sales. If Apple doesn't hit that number, they remain 3rd biggest. Oh, and those who want to consider the Scobleizer's claims that Nokia is 'doomed' - Nokia is already guaranteed to outsell both Apple and RIM combined for this year. So yeah, I wouldn't be getting the shovels for grave-digging just yet haha.

Guys, 'my bad'. I am sorry. I really did believe that forecast, but as any forecast by any of us in the professional crystal-gazing industry, we always get many of them wrong, that is the nature of forecasting. The point is to try to be accurate more often than wrong, and to try to be less inaccurate than rivals. Lets see how the rest of the smartphone numbers pan out for the full year of the bloodbath, to see if perhaps any of my other forecasted market shares end up more accurate.

For those who don't want to go read the full forecast blog, here is what I said on January 8: Nokia first 35%-40%, RIM second 22%-25%, Apple third 15%-18%, fourth Samsung at 8%-12%, fifth HTC 5%-7%. Lets see how they pan out, we'll know HTC during December and the others during January. And for those wondering about Apple's 'peak' forecast, that we probably won't know until early February because we need the full year smartphone sales number, not just Apple's number, but its close. Obviously those who wish there was no peak, need to hope for a great iPhone quarter and a modest growth total smartphone quarter haha..

My 10th book: Insider's Guide to Mobile - cover image, table of contents, summary

Thank you all for the very kind early support of my newest, my 10th book. Here is a somewhat more 'formal' announcement of the book, The Insider's Guide to Mobile, by Tomi T Ahonen, which runs 340 pages and is available for free download in an unrestricted pdf file, for direct download at Lulu. There will soon be also a paid hardcover edition, as well as a paid m-book small screen version. But the main pdf file version will be free always.

So here we go. Here is the book cover:

 

(Cover Image of book The Insider's Guide to Mobile by Tomi T Ahonen, 2010) 

And here is a short outline version of the table of contents, including the 11 case studies, 8 myths and 7 essays that the book includes:

BOOK CHAPTER OUTLINE:

Foreword
To the Reader
Acknowledgements

Chapter 1 - INTRODUCTION

Chapter 2 - SIZE OF MOBILE
 - Essay 1: Telephone Houses

Chapter 3 - CONSUMERS OF MOBILE
 - Myth 1 - Input Myth
 - Case Study 1 - Fanta Mosquito Noises (UK)

Chapter 4 - 7TH MASS MEDIA
 - Myth 2 - Screen Size Myth
 - Case Study 2 - Tohato Snacks (Japan)

Chapter 5 - 8 UNIQUE ABILITIES OF MOBILE
 - Myth 3 - Location-Based Services
 - Case Study 3 - Blackberry Pocket Cop (USA)

Chapter 6 - HANDSETS
 - Essay 2 - The Nokia Decade

Chapter 7 - SMARTPHONES
 - Essay 3 - A Supercomputer in your Pocket

Chapter 8 - MOBILE MESSAGING
 - Myth 4 - MMS is a Failure
 - Case Study 4 - Finnair Mobile Check-In (Finland)

Chapter 9 - MEDIA CONTENT ON MOBILE
 - Case Study 5 - Puma Racing Advergame (China)

Chapter 10 - MOBILE SOCIAL NETWORKING
 - Case Study 6 - My Art Space (UK)

Chapter 11 - MOBILE MONEY
 - Case Study 7 - Iron Man M-Tickets (USA)

Chapter 12 - BEYOND REALITY
 - Case Study 8 - Axe Wake-up Girls (Japan)

Chapter 13 - MOBILE ADVERTISING
 - Myth 5 - Nobody Wants Advertising on Phones
 - Case Study 9 - Girlswalker (Japan)

Chapter 14 - DIGITAL FOOTPRINT
 - Case Study 10 - Tesco Shopping Guide (UK)

Chapter 15 - CONVERGENCE AND THE CANNIBAL
 - Myth 6 - Smartphone Apps Are Good Economics
 - Essay 4 - Before iPhone After iPhone

Chapter 16 - INTERNET AND MOBILE
 - Myth 7 - WAP is Crap
 - Essay 5 - Mobile First

Chapter 17 - ECONOMICS OF MOBILE
 - Essay 6 - The 5 Trillion Dollar Convergence

Chapter 18 - DIGITAL DIVIDE
 - Case Study 11 - Mobile Radio (India)

Chapter 19 - MOBILE INDUSTRY
 - Myth 8 - Saturation Myth

Chapter 20 - A SHORT HISTORY OF MOBILE
 - Essay 7 - Ten Things That Changed

Chapter 21 - CONCLUSION

Humorous Interlude
How Does Someone Get From There to Here?
Abbreviations
Bibliography
Good Websites and Blogs
Index
About the Author
Other Books by Tomi T Ahonen

The above book is about 340 pages in length currently in the 'Pre-Release' or 'Beta' version, where some of the supplementary parts are still under development (index, table of contents, bibliography etc). The final book will be about 360 pages in length.

The book includes practially all currently hot services and apps in mobile, such as Flirtomatc, M-Pesa, Layar, Girlswalker, Angry Birds, AQA, Mixi, Blyk, ChaCha, Itsmy, MobageTown, Qik. The book discusses all the hottest companies innovating in mobile from Google to QQ, from NTT DoCoMo to Apple and from Nokia to RIM, from Vodafone to MTV. It celebrates successes from the simple but successful Babajob in India to Carlos Slim the new wealthiest person on the planet, from Mexico. The book includes many celebrated mobile advertising and marketing highlights too, from BMW Winter Tyres to NorthWest Airlines Mobile Puzzles, to Tohato Adver-Wargames, to Puma Racing Adver-App, to Tesco Shopper to Axe Wake-up Girls to Guinness Sevens Guide. The book includes over 100 innovative, creative and successful mobile services and applications.

Tomi T Ahonen exposes 8 famous and widely-held myths of mobile in his newest book, The Insider's Guide to Mobile, including that myths that Apps will make you rich, that WAP is crap, that the screen size hinders mobile success, that inputs on phones are limited, that location-based services can make major revenues, etc. Each myth is meticulously described, where it came from and why it seems believable, and the real truths and facts that expose it as a myth.

In his 10th book, the hihgly respected industry analyst and consultant Tomi T Ahonen also runs several deeper business calculations and explains for example why the smartphone 'app store' economics are not sustainable in the short term, and why 'engagement marketing' advertising on mobile can sustain 25% - 45% response rates, and how new mobile services can make money while abandoning subscriptions and not relying on advertising.

The free eBook edition includes 'advertisements' which are all relevant to the book or to Tomi Ahonen consulting practise. The majority of the added content, is full chapter-length excerpts from six of Tomi T Ahonen's previous est-selling books including in hardcover: Mobile as 7th of the Mass Media, Communities Dominate Brands (the signature book to this blog), Digital Korea, and in eBook format: TomiAhonen Almanac 2010, Pearls Vol 1: Mobile Advertising and Pearls Vol 1: Mobile Social Networking.

The 'Pre-Release' edition now in December, is not complete, but the main text is in near-final form, and can be already read 'from cover to cover' and includes most intended charts and illustrations as well. It can now be downloaded and read and shared. The final, formal 'First Edition' of The Insider's Guide to Mobile by Tomi T Ahonen will be announced on this blog with a January target date, and that final edition will also be fully free in pdf format and free to share. The final formal First Edition will include the Foreword by someone who is very highly respected by our industry and whose company has been remarkably in the spotlight recently. But I cannot say more about it, except that I am honored to have that person's contributoin to my book.

So there. Please feel free to go and get your own free copy of my 10th book, The Insider's Guide to Mobile. And please feel free to rate the book on Lulu if you like it, and to spread it freely to all of your colleagues and friends, if you find it useful. Here is the link to the book for free download:

http://www.lulu.com/content/e-book/insiders-guide-to-mobile-free-edition/9882582

Meanwhile I will return to work on the 11th, 12th and 13th books haha..

Tomi Ahonen   :-)

My Gift to You, my Loyal Readers, Fans and Followers: Announcing my 10th Book - this one is Free

I have reached many delightful milestones this Autumn. I am now into my 10th year of being an independent consultant. My professional career in IT and telecoms hits 20 years. In a public speaking career that has spanned 25 years, I have been seen speaking in public in 50 countries on all six inhabited continents, where I have done over 250 public presentations to a cumulative audience of over 100,000 people (and thousands of presentations more to private audiences). My press credentials have passed 300 press mentions (excluding countless book reviews). This blog is over 5 years old, and we hit the magical one millionth visitor here, earlier this summer. The reference I am most proud of, however, is how my peers trust me: I have now passed the point where over 100 books by other authors mention me. I am humbled.

AND MY 10TH BOOK

So, in light of all that, isn't it appropriate that its time for my 10th book. Really? Has time really gone so fast? Yes, the first book came out in 2002. I wonder if any of my even most loyal fans have all nine of them, haha. But yes, its time to release my 10th book today. It runs 340 pages. And because you have been so loyal to me, buying my books, visiting this blog, following me on Twitter, and meeting up with me around the world, I am happy to announce, this book is completely free!

Yes, my 10th book is entitled 'The Insider's Guide to Mobile' so it is just what you would expect from me. My very best stories, examples, theories, case studies, calculations, analysis and opinion, about where mobile is today, in late 2011. Best of all, the full book, including all its illustrations, are available in an eBook edition, which you can download now, today, and forever, for totally free. The eBook is at Lulu publishers (address and link are below).

ON FREEMIUM BASIS

A few words about that. First, this is a 'freemium' project for me. That means, typical of freemium concepts, that there are also paid versions. I will shortly release the hardcover printed (paid) version for those who prefer the 'traditional' printed book. And I will release an edited-for-small-screens pdf smartphone version (also paid). No worry, the free full eBook edition will always be also available.

Then about the free edition. It is the full 340 page book, in eBook format, but I to make it free, I have added ..ahem.. advertisements (no! Tomi! What have you done?). No, don't panic. The ads are 'fair' haha, they are mostly chapter-length excerpts from several of my recent books! So for those who might want to 'sample' some of my books, now you can. And for those who may have seen a free excerpt of one of my previous books, these chapter excerpts are all new! So unless you've read all of my books, the free 'advertising' content is at least relevant, fresh content you can read. And the excerpts are also easily marked in the eBook so you can easily skip them if you want. But isn't that a fair bargain? You get to read the full newest book for free, in exchange for 86 pages of content from my earlier books? Sound almost too good to be true?

There are also some advertisements about my consulting work (only a couple of pages intersperced in the eBook). And then - get this - at the end of every chapter, I give you my recommendation of what one or two or three books you should consider reading next, on that topic. Yes, often that includes a book of mine, but usually also a good book by one of my friends, and on several chapters, I don't recommend any of my books to read next, only those by other authors. But isn't that also a 'good value' for why this eBook is free?

BOOK IS STILL IN 'BETA'

Oh, one more thing. The book is not quite finished yet. I wanted to get it out now, before Christmas, but it still has a lot of the 'maintenance' work to do, the pagination of the Table of Contents, the Index, the bibliography, the abbreviations etc. I will finish editing the final edition over the Christmas and New Year's break, and will upload the final version in early January. That will also be free. But the main story, the actual text will not change significantly between now and then. A few of the tables have some data which needs to be updated, there are lots of typos in the manuscript, and a bit too much repetition, but I will fix those. The stories won't change. So if you want to start to read about all the inside scoop info about mobile, you can start now, and in January just return to Lulu to download the final version, still totally free.

THE LICENSE HAS ONLY 2 RESTRICTIONS

About the license. You may freely save multiple copies of it. There is no copy protection on the file.  It is a standard pdf meaning you can read it on any PC or ebook reader like Kindle or your iPad etc. You may freely download the eBook as many times as you want. You may freely forward it to anyone via email (isn't that nice?). But two things you may not do. You may not edit the pdf document, and you may not save the pdf file online.

You may quote at length from the eBook in any context. You may make a printout of the eBook if you want. You may use the illustrations in the eBook if you want. It has tons of 2010 statistics from my TomiAhonen Almanac (and brand new stats from my soon-to-be-released TomiAhonen Phone Book - including several stats never before seen in public). You may use all of those. Just don't edit the pdf file, and don't save the pdf file online, not even at a file-sharing site. All downloads online have to come from Lulu.

SEND IT TO ALL YOUR FRIENDS

Regular readers of my books and blog know, that my personal motto (imprinted on my business cards and quoted in every one of my books) is 'In a connected age, sharing information is power.' I want you to have this information. And if you find it useful, you will probably have some friends who 'should' read Tomi's tediously long blog postings, but who probably won't. Now you can give them my book! And just point them to the chapter or case study or essay you think they should read. What could be easier? And if your friend or colleague finds value in that eBook, they will thank you - and assign power to you, for sharing. Remember, in this, the connected age, sharing information is power. And you have totally the right to send that eBook to anyone you want.

The whole file of the free edition of the eBook, Tomi T Ahonen 'The Insider's Guide to Mobile' is about 9 megabytes in size, and runs about 500 pages with the excerpts and ads.

TELL ME WHAT YOU THINK

I would love to hear from you as you read it. Please bear in mind, that it is still in 'beta' version for now, so don't tell me about editing and formating and style issues, until the final edition has launched. But on the content, I would love to hear what readers of the blog here (and my Twitter followers and other fans and friends) think of it. For once, everyone gets to read one of my books. Cool.

Honestly, the only reason I get to live this 'James Bond lifestyle' travelling around the world, pretending to be the big-shot mobilist guru, is because my publishers continue to release more of my books. I could not hope to sustain a life as a consultant, if the books died up. And the reason they want to publish more of my books, is because you - my loyal readers, fans and followers - keep buying the books! I owe my whole career to you, so the least I can do, is let you all read my latest book for free. Thank you!

(PS for those who will have a miserable time reading a late draft manuscript, which honestly still has  many typos, format errors, style errors etc, it might make sense to wait until January when the final version will be published. I will tell you when that happens)

UPDATE DECEMBER 16:

I have now posted a more 'normal' announcement of the new book, with the book cover image, the table of contents, and a description of what all the book covers (100 real world examples, 11 case studies, 8 myths, 7 essays). See the book summarized here: (Tomi Ahonen 10th Book The Insider's Guide to Mobile, table of contents, cover image, summary of book)

If you don't need more info and just want the pdf file right now, the link to the free eBook edition of The Insider's Guide to Mobile, by Tomi T Ahonen is on Lulu at this link:

http://www.lulu.com/content/e-book/insiders-guide-to-mobile-free-edition/9882582

Enjoy!

Great Analysis by Michael Mace, yet is Completely Not Relevant to RIM ie Blackberry

(oops, looks like this week is the debate week for me, yesterday we did a friendly give-and-take with Robert Scoble, today I am picking a fight with Michael Mace, who is next, tomorrow haha..)

Yes, regularly read the Mobile Opportunity blog where Michael Mace keeps his home. And a few days ago he had a great article with tremendous insights he has gained, over the years, in how platforms die. He applied that analysis to RIM (maker of the Blackberry) and came to the conclusion that RIM was in deep trouble. His methodology is sound, his evidence is compelling. And his article is truly worth reading, just to gain new insights into what to look for when platforms we see around us, do begin to die (including many operating systems for smartphones, I am certain they will follow the patterns Michael illustrates in his detailed blog article).

The problem is, that Michael is doing analysis on an incomplete view to RIM and the smartphone market, from an obsolete market view - yes, you guessed it, from a laggard-market US focus. He applies his thinking on the basis, that the US market today is reflective of how RIM is doing globally, and how RIM will do in the near future worldwide. That could be plausible, were the evidence of the non-US performance of RIM not so drastically different - and against all the evidence Michael provides too!

GOTTA UNDERSTAND WHERE WE CAME FROM

Here is the relevant history. RIM launched its inconic email smartphone, the Blackberry in 2001. It strugged to make any sales, as it focused on the enterprise market where the sales cycles are very long. They slowly convinced customers in North America that the 'crackberry' was the most efficient management emailing tool, and built a loyal user base. Still in 2006, the prevailing Blackberry models were using black-and-white screens and didn't have in-built cameras. They were typical North American smartphones of modest cost (compared to far more advanced consumer-oriented smartphones in Europe) and typically the Blackberry of the time was not on 3G, did not have WiFi, did not have a color screen, did not have bluetooth, a media player, etc. Meanwhile a top Nokia phone in 2006, like the N93, had a 3 megapixel cameraphone, and the second forward-facing camera for video calls, recorded near-DVD quality video, had TV-out, 3G, WiFi, bluetooth, etc. And where the Blackberry's real cost was about 300 US dollars (if sold without contract) the Nokia N93 cost 1,200 dollars without contract.. This was obviously before the iPhone.

The US market for smartphones was for all practical purposes in 2006, a market for enterprise/business phones, and most US based analysts were certain that Americans would not be willing to buy 500 dollar or more expensive smartphones (like Europeans were buying) for consumer use. And the US carriers further insisted that any European smartphones brought to the US shores, had their WiFi and bluetooth etc connectivity blocked by the manufacturer, else the carriers would not sell the devices. Which is why most Nokia premium consumer smartphones of the time were never introduced to the US market.

The Blackberry strategy at the time was sound. They were building a loyal customer base - among enterprise/corporate buyers - with their super-secure servers and their remote control of any lost Blackberries, which could be de-activated at a distance, by the IT departments fearing any intrusions to the IT systems by outsiders. But enterprise/corporate business phone buyers - those who buy thousands of phones at one go, any given year, for the Fortune 500 sized companies - did not want to give toys to their executives, by subsidising expensive digital cameras, MP3 players, etc on their employee phones (at the time). So RIM was not in a hurry to install consumer items to their business phones. It wasn't until around 2006, that RIM started with their first cameras, color screens and media players. The full line wasn't 'modern' and media-oriented until 2008.

While RIM was eager to expand abroad, they found it very difficult to sell Blacberries as business phones in any other international markets except Latin America.

But a funny thing happened on the way to the Blackberry bush. Indonesia. Suddenly the gossip was, that in Indonesia, Blackberry's best market outside of the Americas, the Blackberry was a sudden hit sensation. And then, when RIM execs went over to study why, they found that the youth of Indonesia was adopting the Berry. So much so, that there were already 'Chinaberries' in Indonesia, knock-off cheap Blackberry clones, from China. It was not that the business enterprise/corporate users in Indonesia had fallen for the Blackberry. It was that consumers, specifically texting-mad youth, had taken to the Blackberry. Note, that this could not have been possible, if the Blackberry had still been the typical enterprise-oriented monochrome screen non-cameraphone non-media player business-only emailing smartphone. The Blackberries selling in Indonesia were all the new consumer-oriented QWERTY phones that Blackberry had introduced.

Globally there was a dramatic shift going on, that started well before the iPhone came along, of smartphones shifting from enterprise/corporate use, to the far bigger consumer market. Blackberry had introduced the right phone at the right time. But its secret sauce was not the QWERTY keypad which any cheap handset maker could copy - Blackberry's magic is the Blackberry messenger. The users of the Blackberries could send free messages between Blackberry users (on any networks, in any country even).

I have been reporting on this site the same trend in a bizarre array of random countries of the world. Blackberry is the most popular phone, not smartphone, any phone, in Venezuela. Its the most popular smartphone - in Nokia's backyard of Africa - the most popular smartphone of South Africa. Its the most popular smartphone in Thailand, in Botswana, in the Philippines. Its a runaway hit in India (also with many Blackberry clone QWERTY phones). In Europe it has passed the iPhone in the youth segment as the most desired phone, and today British youth have a name for their Blackberry "BB" texting habit - they call it 'feeding the BeeBee' (or others say, 'feeding the Baby').

BACK HOME IN NORTH AMERICA

While this was going on, the US market discovered smartphones for consumers, thanks to the iPhone in 2007. Then all major smartphone makers either rapidly shifted from enterprise phones to consumers phones (like Motorola) or died (like Palm). The analysts did not get this, and the analysts were for example encouraging Motorola to launch enterprise-oriented smartphone the Android system, or encouraging Microsoft to emphasize Phone 7 to be enterprise-oriented (both would have been disasterous mistakes of obsolete thinking). Meanwhile, in their home press, RIM was regularly ridiculed for 'having missed the boat' in not launching touch screen Blackberries fast enough, because the US analysts mistakenly felt that QWERTY keypads were the old and vanishing form factor, and touch screens the inevitable future form factor (when still today more QWERTY phones sell than touch screens). Then, when RIM finally did launch a touch device, their Blackberry Torch was next ridiculed for being a supremely bad smartphone. Inspite of that, the Blackberry has been the best-selling smartphone every quarter for most of the decade in the USA, up to now, the Q3 of 2010, when Apple's iPhone finally passed Blackberry sales in the USA. Even for that quarter, Blackberry still grew sales in the USA (but this being Apple's best quarter, they leapfrogged RIM in Q3)

What almost all analysts fail to mention when discussing Blackberry or RIM, is that it has shifted its primary customer base beyond enterprise/corporate users, and today sell the majority of Blackberry devices to consumers - and that simultaneously RIM has shifted its market focus away from the USA, and today sells 6 out of every 10 Blackberries outside of the USA.

And look at RIM's innovations! Apart from their visible migration to touch screens, did you notice that RIM is connecting to all sorts of social networks on their smartphones. That they pre-install rock music on selected phones. That they have created a social network for their users even. This is all lost under the horizon, by those who obsess about touch screens. Silly. There are more than one acceptable form factor for phones and I have told you before, if you can text blindly with your phone in your pocket, it can save your life. I challenge most iPhone users to do that! But I reported on the middle-aged lady in Mexico who did that with her Blackberry last year in that airline hijacking incident.

That brings us to today. American analysts are obsessed with a diminishing minor segment of smartphones, because only in North America anymore, are enterprise-corporate-business oriented smartphones a significant slice of the pie. Globally the consumer segment is more than twice as big. Outside of the USA its nearly 3 times as big. But in North America, still nearly half of all smartphones are sold as employee phones.

So I can fully understand that Michael Mace did his analysis, and like I said, his analysis is sound, and his data is sound. Except that he ignored the majority of RIM's current market and all of its growth market. Its like doing a survey of pregnant ladies, and finding that they are not a good market for whisky sales (even if some have been drinking whisky before they got pregnant) - when the majority of whisky sales is men - who cannot ever even get pregnant. So yes, Michael, I loved your analysis, but its pointless to the analysis of RIM today. The conclusions Michael draws, are not sound.

My analysis of the new smartphones sold for the full year 2009 in the US domestic market, had the market split like this: in the enteprise/corpoate/business phone market, RIM had 64%. Of the consumer/residential market, RIM had 38%. While that has changed a lot now in 2010, due to the rapid growth of Android smartphones, that basic split is important to understand. In North America, and North America alone, RIM is equivalent to 'business phone' and similarly 'business phone' is equivalent to 'Blackberry' as Changewave reported that RIM had 74% of all business smartphones in the USA, in 2009.

BLACKBERRY NOT AS POPULAR AS iPHONE OR ANDROID

This is a completely 'duh' type of a finding by Nielsen rankings. Most Blackberries in use in the USA, were not selected or bought by their users. They were given as corporate/enterprise/business 'employee' phones. Therefore, some like them and some do not. Almost no industry gives iPhones or Androids as free company phones (yes yes, some ad agencies do, but almost no other Fortune 500 companies have an iPhone as a standard employee phone given to employees, if they allow iPhones, it has to be the employee's own phone). So essentially all iPhones in use in the USA, were personally selected by the phone owner. There is actually a scarsity of iPhones in America, as its not available on 3 of the 4 big networks, so you have to go through some degree of hassle to get one (only available on AT&T). Of course the user satisfaction is going to be far better for an iPhone that you wanted and bought and perhaps had to go to a rival network to get, than the 'tool' you get from work, that your boss pushes work at you over the weekends and on business trips.

I completely agree that the Nielsen finding is valid. For the average sample of US consumers who happen to have a smartphone, the Blackberry will score very poorly, because many who have a Blackberry did not select that phone for themselves. And the reverse is true of the iPhone. No problem here.

The interesting part is, what of those who did select the Blackberry. Where do we have studies of that? Would Michael think differently of the chances, if he remembered the Canadian university study, by which of university students in Canada, 90% have a Blackberry - and yes only 1 out of 10 university students has any other brand or type of phone, smart or dumb. This is in line with UK youth addiction to Blackberry or Indonesia or South Africa or Venezuela. The Motorola study earlier this year, which said that a third of total consumers will not consider a smartphone that doesn't have a QWERTY keypad! A third! For all the love he has of the platform of the iPhone or Android taking over the world supposedly, and Blackberry being in trouble - well, the iPhone cannot touch that third of the population who want a QWERTY. Its a safe market where RIM gets to split with only selected pure-QWERTY or hybrid-QWERTY+Touch ie slider/folder QWERTY smartphones. It kind of changes the equation, doesn't it Michael?

YOUTH AND MESSAGING

Here is the point. Studies the world over now prove that all youth, when they hit about age 15-16-17, will take to SMS text messaging with a vengeance. They average over 100 SMS per day (yes, American youth included). Then comes the QWERTY- the Blackberry is the easiest phone to type messages fast and blindly, single-handedly. Then comes Blackberry's secret sauce, the instant messenger. The cool kids get Blackberries. Suddenly they start to optimize their messaging traffic away from SMS to Blackberry messenger between the other cool kids. If you want to hang around with the cool gang, you have to get a Blackberry, else you will be digitally excluded! Digi-dissed. You've gotta have your BFF on the BB.

Now, is this sustainable? Youth are fickle. Others will try to steal this market too. There are tons of low-cost QWERTY phones (and for some bizarre reason, Microsoft, who had the perfect tool for this market segment, the Kin phones, abandoned it even before trying). And there are many free messenger services for phones. But today, Michael, if you look at the growth of RIM, they are indeed losing some sales of enterprise/corporate/business users in North America - but the stats prove, that RIM is more than making up for that loss, with new, consumer customers abroad! Vastly bigger market, and often utterly devoid of competitors. In the near term, I would say RIM is very safe. If you are the 'must have' phone (and service) for the youth of 2010, you may well have their loyalty well into the middle of the decade - a time when a random iPhone 8 or Nokia N12 or Samsung Galaxy Z or whatever may not be the hottest phone of the day. If the youth are addicted not to the device - but the circle of friends, all using their exclusive messenger service, that is a stronger level of loyalty than a Nielsen survey.

Do not be surprised that RIM will report solid smartphone sales growth later this week, and again in the first quarter of 2011, and in the second quarter of 2011, and so forth. I am monitoring this smartphones bloodbath, and the giant player who has the safest path to growth is - and continues to be - Blackberry, because of their focus on the youth segment who are getting their first smartphones (in mostly the Emerging World markets where all the big growth is in telecoms).

Sorry, Michael. Good analysis on how platforms die, but not relevant to RIM today.

UPDATE 1 - RIM is going to do quarterly results this week, I will of course analyze those. For those who want instant Tomi commentary, my Twitter feed is of course @tomiahonen

UPDATE 2 - I have just on Wednesday released my 10th book. The 340 page book is entitled 'The Insider's Guide to Mobile' and the best part is, that you can read it now. Its the first time one of my books is made totally free, as an eBook download. For more see link Tomi 10th book.

Nokia Smartphone Strategy and Execution IS Right, even if the Scobleizer can't find developers who say they like Nokia

I enjoy good smart debate. Robert Scoble, the Scobleizer, is a very highly respected tech and mobile blogger, often referred here on this blog and no doubt most of our readers recognize his name. I was a bit surprised that the Scobleizer took a negative view to my blog a few hours ago, where I explained why Nokia won't abandon its current strategy. As that strategy is complex, involving Symbian, MeeGo, Ovi and QT, not everybody understands it, and I felt it necessary to write that blog, to try to explain why it would be futile for Nokia to abandon its current strategy, and go with Android or Phone 7.

When Robert Scoble replied, in his blog posting 'Why Nokia is still doomed, no matter how many words Tomi Ahonen writes' he didn't actually offfer an alternate strategy to what Nokia is now doing, other than claiming that Nokia was 'doomed'. In my blog I argued that Nokia's strategy in smartphones was better than that of other legacy handset makers and to this point Robert never makes any mention.

NOKIA DOOMED?

Robert says that the "prevailing view in high-tech communities I talk with around the world is that Nokia is doomed." That may be so, but it was also said that Nokia was doomed when the iPhone launched - actually Nokia's N95 outsold the iPhone. The prevailing view was that Nokia had lost it when Motorola's Razr launched - actually Nokia is standing and Motorola lost it. And we could go back year after year and model after model. That 'prevailing view' in high-tech communities that Robert Scoble is likely to be meeting - mostly US based (this part added:) or visiting in the USA, mostly PC based - would not understand mobile telecoms, certainly not that which is outside of the USA, where 92% of all mobile phone subscriptions exist today. In that market, Nokia has pretty near to 50% installed base of all phones (as Nokia is also the preferred phone among the ultra-poor as a second hand used phone). So I'll grant you Robert that you hear that Nokia is doomed. I have heard that for a decade. I prefer to discuss the facts, not the parlor game of whose flagship luxury toy gadget is the sexiest this month. 95% of the people who buy a phone cannot afford your Google Nexus S by Samsung or the iPhone 4, that you mention that you own, Robert. Nokia is not only connecting rich people, Nokia is in the business of connecting people: all people.

But Robert does argue that Nokia's own communication of its strategy is confused - I agree. Nokia is not good at communicating its strategy, I have said that many times in the past. Contrast that with say Apple who are very clever at communicating their strategy. Yes, I agree with you Robert, that Nokia has been weak at communicating its strategy - but its strategy nonetheless, is far better in smartphones than those of Motorola, SonyEricsson, Samsung, LG or any other legacy dumbphone makers.

SIX POINTS

Then the Scobleizer gives us his impression of a 6 point strategy for Nokia. He outlines it as:

1 - Attack Apple, er, attack America, Make it Europe vs America. 
2 - Talk about all the cool things they are going to do for us
3 - Don't show anything new
4 - Arrogantly insist that they are ok and will dominate smartphones
5 - Insist that MeeGo will save the world
6 - Say that there is a Cupertino distortion field happening.

Ok. Lets see if there is some merit to Nokia doing this. Let me say first, that these are quite reasonable 'talking points' and 'communication strategy' for Nokia today, which illustrate a newer hungrier more 'aggressive' Nokia, run by a new North American CEO. Nokia PR is not as timid as its been in the past, something I have been critical of them in the past. Maybe they are not as elegant at the marketing PR battles yet, as Apple is, or Microsoft is, or Google is, but the points are all valid.

1 - "attacking Apple, America". The truth is, that the USA is only 8% of the world's mobile phones. The view of what is the iPhone and Apple's popularity in the USA does not translate to the rest of the world. While anyone would want an iPhone, it is simply too expensive for the rest of the world. It cannot be a mass market phone in any market, ever. I think this is a worthwhile argument for Nokia (and others like HTC, Samsung, Motorola, RIM etc) to make. And on USA vs Europe, the truth is, Robert Scoble, that US phones are backwards and Asian and European phones are ahead. Look again at what you have now. The new phones? Not every one of US new phones has a forward-facing camera. Apple only put it on its phones in 2010. Nokia had them on all 3G phones as far back as 2005. What of Near Field, what of QR code readers, what of HD output, etc. US phones are still behind, today. This is a valid point by Nokia. Of Apple's 15 improvements to its iPhone in the past 4 years, 14 were standard features of Nokia phones in 2006, BEFORE the iPhone 2G even launched. And the last of the 15, half of that (half retina display) was on a Nokia phone in 2008. It is a fair argument to show that Europeans have demanded far more advanced smartphones for many years before the Americans discovered smartphones, and Nokia has a deep understanding of that. Why is it that Apple's original iPhone didn't support multitasking, or MMS, or videocalling etc etc etc. Apple did understand the PC world, and it optimized the iPhone to be a 'pocket computer' like the son of the Apple Newton, but it was not designed to be a modern smartphone - as you know, Robert, the original iPhone 2G didn't even allow users to install apps to it.

I do not mean that Nokia is miles away ahead today. I do mean, that Nokia has been developing consumer-oriented smartphones far longer than Apple or Google or Microsoft (or Palm or RIM) and they, Nokia, do know a lot about what consumers want. They - Nokia only in its smartphones - clearly outsell the total handset production of Apple, RIM, Google branded Nexus phones, Microsoft's defunct Kin phones and all Palm smartphones - combined.

2 - "talk about the cool things they are going to do". I do think this is something MANY people would like to know. That Nokia is consistently voted the most eco-friendly tech company, the most 'green' handset maker. Does it matter to your techie friends, Robert? I think it matters to some up there in Washington State and Oregon and California, judging by 'my' humble meetings with occasional techie influencers of North America haha. What about Nokia Money? When do we see Google Money or Apple Money to help India? I see Apple wants to charge a million dollars for ads on their iAd platform. I think there is a legitimate story here, where Nokia is really helping the emerging world truly 'emerge'. Like those South African high school students this past week who took their student exams in math and found 14% better math scores, because of Nokia helping them take math tests via mobile phones. Or the bicycle peddaling rechargers for mobile phones.

I think these are relevant stories in a real world of technology. To me, it seems that Google is more involved in lawsuits with regulators about spying on citizens, while Nokia helps bring connectedness to the poorest parts of the planet. That does not necessarily make its smartphones any better, but it is a good story, that Nokia has forgotten to tell in the past. I do think there are journalists who are interested in how socially responsible Nokia is. Don't you think that story has at least some merit, especially compared to say how Apple treats its parteners, fewding with industry standard technologies like the long fight they had with Adobe about Flash, etc. Nokia is the standard-bearer for industry cooperation and by far the most open of all handset makers, supporting open standards. By far!

3 - "dont show anything new" - this is good. Nokia used to show tons of new tech with an indefinite delivery date, and then delayed and delayed and delayed its releases. The ultimate disaster was the N8. So I think its a good thing for Nokia now to take a pause, ideally announce stuff they are ready to ship, rather than promises of something coming sometime in the far distant future.

4 - "Arrogantly insist they are ok, and will dominate smartphones." Ok, Robert Scoble. I put you to task now. Are you Robert, seriously suggesting, that in 2011, any handset maker will sell more smartphones than Nokia? They will sell about 36%- 38% of all smartphones this year (when the N8 was seriously delayed most of the year). Their nearest rival is RIM, which you claim is also in trouble - who will sell about 16% to 18% of all smartphones this year. And the next biggest smartphone for the full year 2010 will be Apple, who will sell something between 15% and 17% of all smartphones. Are you Robert seriously suggesting Nokia will somehow not sell far over 30% of all smartphones next year? You know this market Robert. Are you suggesting that somehow the 'suffering' RIM can overtake Nokia, or somehow even more bizarrely the 600 dollar iPhone can outsell Nokia smartphones that are available in 3 times as many networks on the planet, and sell for less than 200 dollars. Are you seriously suggesting Robert, that Nokia will somehow 'not dominate' in smartphones next year? What are you smoking this evening, haha, Robert, that claim - while perhaps arrogant, is also true. Nokia is utterly dominating the global smartphone space, and they will also utterly dominate next year. Nothing on the horizon is threatening Nokia. All major analysts have already said that Apple's iPhone smartphone market share had stalled this year and is on a plateau or declining. So who is now the rival to eat Nokia's came? Hmm, Robert? Who? HTC perhaps? Or Samsung? Or Motorola? You gotta be kidding. You know Nokia is set to dominate into the near future. Maybe you don't like the arrogance of they saying it, but you know its true.

5 - Insist MeeGo will save the world - I do think MeeGo will save Nokia, I trust the 'save the world' was more tongue-in-cheek haha. But you didn't give any analysis why MeeGo couldn't save Nokia.

6 - "Cupertino distortion field" - well, Nokia didn't invent the "Apple Distortion Field" as you know, and you know also fully well how much that distortion field is truly skewing the coverage of the smartphone market analysis. Most US based analysts will think that Apple has a major share of phones - in reality the facts are that iPhones account for under 4% of all mobile phones sold in the world. Nokia branded phones outsell Apple 8 to 1. And of smartphones, Apple's market share has stalled at about 15% for the full year (say the major analyst houses, not just me) and Nokia sells more than twice that. But if you read any US based analysts or reporters, they tend to talk about the iPhone, Android, RIM and Phone 7, but they conveniently forget Nokia/Symbian. That is part of the Distortion Field, that you know fully well, Robert. I am not accusing you of forgetting Symbian and Nokia, you do know the field. But you do know, that if we see major smartphone market analysis, or the analysis of any significant new phone model, discussed in most US based tech or financial press, they are part of the Apple Distortion Field, and they will dismiss Nokia totally.

That covers the six points you mentioned. We agree on most of it, but I think that 'communication strategy' is far better for Nokia today, than the more timid one they had in the past. But Robert, also, a communciation strategy is not a smartphone strategy. We both know, its not 'how they say it', what will decide who wins. If that was the case, Apple, Microsoft and Google would rule the world of mobile today. It is execution of a 'smartphone strategy' not a 'communciation strategy'. And of that, Nokia's actual smartphone strategy, you didn't respond to my blog.

INFLUENCERS AND DEVELOPERS

Then the Scobleizer goes into his main beef. He says the big problem for Nokia's strategy is, that it is not popular with the influencers and developers. First, I beg to differ. Nokia is certainly not popular with US-based developers and influencers. It is significantly more popular among European developers and influencers who currently do like iPhone and Android more. But Nokia is far more popular with Asian and African developers and influencers. Does that matter. Africa alone has twice the number of mobile phone subscribers as the USA, and Asia has half of the planet's mobile phones. Yes it matters.

But the developers and influencers do not decide on who buys the phones. I have been writing again and again and again, that the mobile phone industry differs from all other consumer electronics, in that its competition is not open and fair. We do not see the best phone for the best price winning globally. The market for smartphones has two drastic distortions, the subsidised phones, and the employee phones. It is why a highly-rated phone - with excellent influencer support and excellent developer support - like Palm or the original Google Nexus One - can fail in the market place. And why even a poorly received flagship phone, like the Nokia N97, can outsell those two better phones, easily, worldwide.

Robert, if the phone business was like the PC business, then Lenovo, Dell and Acer would not all have issued such desparate complaints about how expensive it is to enter this market, so much more so, than they had expected. These are 3 of the world's 5 largest PC makers. Unable to make a dent in the smartphones space, even though they all had the most popular smartphone operating system of the moment, Android. Having the 'best phone' or the love of the developers or the influencers, will not win you the race. There is something else that determines who wins, that is 'carrier relationships' as you fully well know, Robert. That is why Google's Nexus One failed, why Microsoft's Kin was pulled and why Palm died. Not because they made bad phones or didn't have the support of influencers or developers etc.

And who is the planet's master at carrier relationships? Nokia. On every continent except North America. So you say Robert Microsoft Phone 7 is 'already way ahead of Nokia' because your developer friends tell you its easier to develop for than Nokia is. Want to wager a bet, here in public, Robert, on whether 12 months from now, in Q4 of 2011, Phone 7 will outsell Nokia Symbian/MeeGo? I am happy to wager you anything you think is fair. I think you won't dare to put your money where your mouth is, haha. Perhaps you were a bit too hasty in celebrating the inevitable rise of Phone 7. I am 100% certain it won't be challenging Symbian/MeeGo/Nokia any time soon. Android, yes. Phone 7, no way.

APPS

Then his last point is that the consumer is buying apps, including in France. Well, first, there is the consumer survey by Deloitte from October said that only 18% of consumers will consider the apps as a major reason to make their smartphone selection. You, Robert, are perhaps mistaking the view of the early adopter 'geeks and nerds' and using that for the total smartphone-buying public. Deloitte told us that the screen size, camera resolution, keyboard style, cellular network coverage, and style of phone, all came ahead of the selection of apps, in making the decision. If we take a larger size screen - like say the 4 inch screen I have on my E90 Communciator, or the camera resolution - like the 12 megapixel on the N8, or the keyboard style like the QWERTY on the E-series, etc - we find a lot of reasons for the totally normal buyer, to go and pick a miscellaneous Nokia model ahead of that iPhone, even if the iPhone has more apps.

But Robert, you missed the point of my blog article. I told readers we can't compare a luxury PC maker like Apple to Nokia. We have to compare the mass market dumbphone maker Nokia to the other Top 5 mass market dumbphone makers, Motorola, LG, Samsung and SonyEricsson. Nokia has the second best-performing app store, in Ovi. Even if Nokia wanted to abandon its OS and somehow adopt Apple's iOS, they can't. Their only options are Android or Phone 7 - and where is the app store, selection, downloads of those two? Nokia's Ovi is miles ahead of both Android and Phone 7 app stores! Miles ahead in selection of apps, and in downloads of apps, and in paid revenues to content developers - plus, on Nokia, there are far more people earning a lot, than on the Apple iPhone App Store where the 'long tail' is so extremely skewed. Far more apps have achieved a million downloads (free or paid) on Ovi than on Apple's App Store which seems to be only Angry Birds, haha.. (note above paragraph corrected on Dec 17, original said 'a million paid apps')

If you do honestly think, that Nokia is 'doomed' with the world-leading market share, growing unit sales of smartphones, dominant position on all five other continents except North America, and the second-best-performing app store - what is your verdict on all of Nokia's true rivals. Are you willing to say, that if Nokia is doomed, that LG, Samsung, Motorola and SonyEricsson are as good as dead already? That is the only reasonable conclusion of your argument. If this performance by Nokia - so far better than its traditional rivals is so bad, then you must agree that the other top 5 are doing far worse - they can't even manage to sell smartphones profitably even, far less build an app store or create their own OS (with the exception of Bada, but also, all of your arguments against Nokia must be far more so against Bada?)

SOME AGREEMENT

But I would prefer to end on some points of agreement. I will agree, that Nokia's recent PR has become more aggressive, it can be accused of being arrogant - but so too has often it seemed, that Microsoft's and Apple's PR spin has been on the side of arrogance. I would point out, that the PR strategy is not the 'smartphone strategy'.

I would agree, that developers do not like Symbian today, there is clear consensus that the iPhone was far easier to develop for, and now the easiest seems to be Android. However, the new QT development tools, in particular as they allow simultaneous development to multiple platforms - are new to the market, and are changing that perception. I would say its too early to call this race, and the 'convenient' part of Symbian developer community is, that it is tens of thousands of developers strong, built over the past decade. Phone 7 has to start from scratch, as they discontinued continuity with Windows Mobile. Symbian's legacy developer community globally is far greater than Palm or Bada or even Android today. But yes, they hate developing for it, I'll grant you that. But the alternatives are not better - because of the Ovi store, at least Symbian will get you huge reach on the planet (vs Palm, Bada, Phone 7). The Symbian installed base of smartphones in use is as big as iPhone plus Blackberry plus Android plus Palm plus Bada plus Phone 7 - combined).

But I would hope you Robert will agree, that apps today, the developer community opinion and the opinions of thought leaders, is not what decides which smartphones will win globally . That is far more a function of providing phones that consumers want, that the apps are only a small part of that decision - and that by far the biggest criterion is the carrier relationships - something Nokia knows well.

I apprecite the comments, Robert, and I apologize for yet another long posting, but I do enjoy the intellectual exchange. Thank you for writing, I do agree Nokia is not the most developer-friendly currently - but is improving - and especially among US based influencers - is not anywhere near as popular as its range of models would warrant. But on a global basis, I think Nokia is by far executing a smartphone strategy the best, when compared to its traditional rivals, and no, I don't see Nokia doomed in any plausible scenario for hte next few years.

UPDATE - I have just on Wednesday released my 10th book. The 340 page book is entitled 'The Insider's Guide to Mobile' and the best part is, that you can read it now. Its the first time one of my books is made totally free, as an eBook download. For more see link Tomi 10th book.

Some Symbian Sanity - why Nokia will not join Google Android or Microsoft Phone 7

I had a great meeting with my dear friend Ewan MacLeod the editor of Mobile Industry Review and a deeply insightful commentator on the mobile industry, as he visited Hong Kong last week. We had a good discussion about smartphones and both were astonished by the continuing rumors about Nokia operating system future options. All that speculation about 'when' or 'if' Nokia will migrate its smartphones to Google's Android operating system or to Microsoft's Phone 7 (the successor to Windows Mobile). This is ridiculous. Nokia is executing a migration strategy from dumbphones to smartphones - excellently, one might add, and has the best strategy of any handset vendors, for its smartphones.

Yes, you read it right, Nokia does not have 'an adequate' strategy or a 'plausible' strategy, it has the best strategy of any handset vendors, including Apple, HTC, RIM, Motorola etc: the best strategy into smartphones. Its central element now, is Symbian, and its Nokia-controlled evolution path, meaning Ovi store, MeeGo operating system and QT application development environment. And before you can say 'but' - let me add, Nokia is also the most successful legacy dumbphone maker, to migrate into smartphones.

COMPETITION IS NOT APPLE

So, lets first tackle the Apple argument. Nokia is not competing with Apple, much to the chagrin of US investors and analysts. Apple is a computer giant migrating into mobile, where its inevitable future lies. The PC industry has matured into the 'box mover' stage, where there are slim profits on thin margins. The profits are in smartphones. Its rival traditional PC makers all - all - HP, Dell, Lenovo, Acer, Toshiba - they all are on the path to smartphones. Apple is executing that migration path perfectly, from PCs to smartphones, far better than its rivals. Apple's competitor currently is not Nokia, nor Google, nor AT&T. Its competitors are HP, Dell, Lenovo etc, and against those rivals, Apple took an early stab at pocket computing with the Newton (and failed with a brilliant device), but now has returned with a vengeance, with a second attempt, and is leading the pack. And to show how much they are ahead, their integrated strategy with the iPod Touch and iPad on the iOS, iAd and App Store, are brilliant execution of a mobile strategy - for a PC maker.

Apple is a luxury brand, it cannot compete in the box mover races, and Apple understood this years ago, not attempting to fight against HP and Dell and Compaq, but rather focused on the luxury end of the market. Its like Porsche, who know they can't compete with Toyota or Ford for the mass market cars. Like Porsche in cars, Apple takes a disproportionate share of the total profits and because of meticulous attention to quality and detail, it has incredible customer loyalty. That is typical of success in the luxury segment of any industry with luxury goods, look at Swiss watchmakers vs Casio or Seiko or Citizen or Timex, the mass market watches.

The analysts want to position Nokia against Apple, it makes for good drama and a fun parlor game. But then they don't do fair analysis of Nokia. Nokia is not competing against Apple. Nokia's business is the phones business. The PC industry sells about 300 million personal computers of which Apple had about 4% last year. Most of the computer industry last year was not 'mobile'. The mobile phone industry sells about 1.3 Billion handsets globally, and Nokia had about 38% of that last year. Yes, Nokia alone sells more mobile phones than the total global size of the personal computer industry worldwide. Most of the mobile phone handset business was not 'smartphones' ie 'computers'. There is overlap yes, between Apple's and Nokia's businesses, but only covering a small part of the businesses - of either rival.

REAL COMPETITORS TO NOKIA

Nokia's main rivals are the other 'big 5' handset makers, which used to be Motorola, LG, Samsung and SonyEricsson (about 18-24 months ago, just in the last year, RIM, ZTE and Apple have been juggling to fit into the Top 5). The other former Big 5 handset makers were all big giant makers of 'dumbphones' before the smartphone was invented (by Nokia). So that is where Nokia's main competition is. If Nokia focused only on its smartphones, Nokia would abandon 300 million basic phones per year to the competition - notice, that amount of Nokia branded 'dumbphone' devices is as big as the global PC industry. This is the size of Nokia's 'non-smartphone' side. And in the 'real' PC industry, Apple had 4%.. Lets keep this story in perspective. What any dumbphone maker has to do - has to do, during this decade - is to migrate its customer base from dumbphones to smartphones. Nokia does not need to focus on the 'pure smartphone makers' like HTC, RIM and yes, Apple - who all counted together, account only for about 7% of the total handset manufacturing industry. But Nokia's biggest rival, Samsung sells 21% of all phones! That is where the competition to Nokia comes from, not from Apple or RIM or HTC, no matter how much a USA based 'analyst' may love his cute touch-screen smartphone today, or play with his brand new fart-app downloaded for free from the app store.

NOKIA STRATEGY

So, lets start with Nokia's original strategy in smartphones. Nokia was the world's biggest mobile phone manufacturer over a decade ago, when they decided to launch Symbian. They could have done it alone. Nokia invented the smartphone. Instead, Nokia went to its direct rivals at the time: Motorola, Sony, Ericsson, Siemens, Samsung, etc and asked them all to join Nokia in co-developing one smartphone operating system for all, that would be the same, so there would not be unnecessary fragmentation and the eco-system of the applications would be easier to the developers.

Note how radically different this is from say Palm or Apple or RIM, all who developed only proprieatry operating systems, only for their own handsets and not licencing to others. Nokia was the biggest handset maker, they could have easily created the OS for themselves, and without partners, could have evolved it to Nokia's particular strategic interests - including any later touch screen evolution much faster than with their partners. So the solution Nokia selected put the interests of the industry and the community, ahead of the interests of Nokia itself, and helped reduce the amount of confusion that a dozen operating systems in the last decade would have created if every maker had developed their own. By making it a Symbian Partnership with rival makers as part-owners, there was no one ruler, and while committee work is slow and consensus-building is tedious and costly, and bureaucratic - to try to resolve the at times opposing needs of different handset makers, Symbian held the world lead in smarttphone operating systems and still last year shipped as many phones with it, as the nearest rivals numbers 2, 3 and 4 added together.

And Symbian again, in Nokia philosophies of openness and cooperation, was even open to non-handset makers, like Japan's biggest mobile carrier/operator, NTT DoCoMo (which is still using Symbian today).

If you examine this with hindsight, was Nokia's strategy bold, brave, and forward-thinking a decade ago? Yes. Was it the best long-term, guaranteeing the dominance of Symbian, thus guaranteeing Nokia's own R&D efforts, on a platform sure to  win - if all your rivals are with you, you know it will be there. Will it be the fastest to evolve, of course not. Will this be the cheapest way to go, no. Is it best for Nokia's long-term interests, yes. Is it best for the industry's best interests, yes. (Remember, if you think fragmentation today is a problem, it would be at least 10 times worse, if there had been a dozen more smartphone operating systems being developed over the past years)

BETTER THAN ORIGINAL iOS

So, then there is the conventional wisdom, that the Apple iPhone came along and Nokia "lost it all", and Symbian is "outdated" and Nokia is falling so badly behind, and now playing 'catch-up' to Apple - and the evidence seems overwhelming, even the newest flagship handset, the N8, is 'clearly' a 'clone' of the iPhone. The evidence is so obvious, even an idiot like Tomi Ahonen has to see it now. The Ovi store is a pale copy of the App Store, etc. Nokia is clearly playing catch-up to Apple. Nokia is on the brink of collapse. ...Or is it?

Lets go back to Symbian. Symbian was developed from the ground-up to be a phone operating system. Apple's iOS was not. It was evolved from the Macintosh OS/X. So Apple took an existing (excellent) PC operating system, and adapted it for mobile. What it did, was two things - clearly, the iPhone would have an OS which was very well suited for 'computer-like' activities (like all the apps we now see, or like internet surfing) but also, being a compromise, it was not well suited for 'traditional telecoms' type of needs. It was not designed to work as a phone operating system. Symbian was.

The original iPhone with its intuitive iOS operating system and touch-screen interface, was truly revolutionary. It truly changed the whole industry. We measure time in two stages, before the iPhone and after the iPhone. And the iPhone allowed us to do many thing so much better than ever before - looking at photographs on the phone for example, flicking them and zooming them etc.

But for all its brilliance, the iPhone iOS showed its weaknesses when the iPhone was used as a phone. How very clumsy that the original iPhone did not support multitasking (Symbian had done that for years already). So the inevitable conflicts between apps or what if some urgent telecoms traffic came in - a call for example interrupting our game. The original iPhone didn't support MMS picture messaging (the world's second most used data application, more users than total users of the internet). Again, coming from the computer industry, Apple arrogantly announced that the iPhone user didn't need MMS, they could send emails with attachments. That changed in a hurry, the industry taught Apple how much traffic is generated by MMS, how much money and profits it earns, and that the iPhone has to support MMS (it does now).

And folders, and office suite application support, these were standards to Symbian, that Apple didn't offer. Adobe Flash support, again something Symbian had and Apple argued for years in public that they didn't want to offer. Who had the advanced and well-developed OS, and who had the weak, incomplete OS. And most of all, the original iPhone did not even let users install apps! So it was not even a proper smartphone. That didn't come to Apple until a year later, in 2008. But Symbian had supported user-installed apps for a decade.

There are all those who say that Symbian is old - it is old. There are those who say it is poor at touch-screen interface (it is getting better). But there are those who say it is obsolete, and those are simply wrong. Symbian is a rich, powerful and mobile-specific OS, very competent, if elderly, operating system. It is far from dead. And of the improvements (some say bug-fixes) that Apple has done to its 'revolutionary' iOS over the past 3 years, almost every change that Apple did, was copying existing Symbian standard elements. Who is ahead, and who is following?

SYMBIAN EXECUTION

So if Nokia strategy was right, was it then, that Symbian execution was wrong? They missed out on the touch screen preparedness in 2007. Fine. That is only software, it will be fixed, and by now, it is mostly fixed. Those using the latest Symbian on say, the N8, are totally happy with it. Its not anything better than Apple (but who does anything better than Apple, in any area?) but its far better than most others, compare Windows Mobile or RIM Blackberry etc. The reason it took long time for Symbian to evolve, was that it was done in partnership with so many players in the industry. But it is still evolving.

I am not saying Symbian is the best operating system today. It cannot be, when totally new, mobile-optimized, new-from-the-ground, open source, Linux based operating systems for smartphones are now being developed, like Google's Android or Samsung's Bada etc. These are the new generation, taking operating systems beyond what Apple showed was possible, and Symbian will struggle to remain viable into that competition in the years to come. But today there are operating systems that are obsolete - witness Microsoft's defunct Windows Mobile - and there are operating systems which are still viable - like Symbian and iOS. But the future belongs to Linux based, open source, touch screen and smartphone optimized 'next generation' operating systems. Symbian is not one of those, but neither is Apple's iOS.

BUT SYMBIAN IS DYING IN THE MARKET

Is it? If you look at Nokia and Symbian market shares of all smartphones in 2006, before the iPhone launched, Symbian had 67% of the total market. We don't have Q4 numbers for 2011 yet, but if we take the last 12 months up to Q3 of this year, Symbian is 42%. So Symbian has lost 4 out of every 10 customers it had. Thats nearly half, that is catastrophic, over just a 4 year period, isn't it. It sure looks like that, doesn't it. So lets first have a bit of context. In 2006, of the world's giant corporations, those in the Global Fortune 500, only 8 were manufacturing mobile phones. At the start of this year, that had exploded to 23 giant corporations. The battle in smartphones has intensified by 3 fold. Then operating systems. In 2006 there were 5 smartphone operating systems worldwide. This year 2010, we have seen phones sold with 11 different smartphone operating systems on them. So the smartphone operating system war has intensified, ie more than doubled in intensity.

So how have the others done in this space? Microsoft was second largest OS in 2006 and had 14% market share for the full year. What happened to them? Over the latest 12 months, their market share has crashed to 4%. They lost 7 out of every 10 customers they had, far more than half! What of Palm? Palm had 5% in 2006. They failed so badly in this new competition, that they failed in the market and were bought by HP. In terms of market share, theirs is about 1% today (with HP's deep pockets) so Palm lost 4 out of 5 of their customers. But Symbian actually weathered the storms of trippling rivals and doubling competition, and lost less than half of their customers. That alone should say something that Symbian is actually doing quite well.

Except, that it is not the 'truth, the whole truth and nothing but the truth'. If you look at the fall in Symbian market share without looking at Nokia and Japan, then you are going to misunderstand what has happened. There has been a deliberate migration of some of Nokia's former partners, away from Symbian. So if Symbian partnership with Motorola, SonyEricsson, Samsung etc had 67% market share in 2006, and those partners left the partnership, that is not a fair measure of how is Symbian doing with Nokia, is it. What we should look at, is how was Nokia doing before and after the iPhone. And for this, we have to include those manufacturers in Symbian who have not shifted away. Note, Nokia knew fully well that if Nokia took control of Symbian, the rival handset makers would depart. Even then, over time, this would be a better strategy, with hindsight, than Nokia fighting against a dozen rivals with their proprietary OS's over the past decade. Even so, Nokia wins.

So for you, the reader, to understand 'fair comparison' of what happened to Nokia and Symbian, 'because of the iPhone and new rivals' that means you exclude the 'deserters' and only examine the 'loyals'. That is Nokia and the Japanese. Nokia and the Japanese had 52% of the total smartphone market in 2006. How badly has Symbian suffered over the past four years since the iPhone launched, if we only look at the loyal Symbian family, Nokia and the Japanese? The last 12 month market share for Symbian Nokia and Japanese is 45%. About one in five of these Symbian customers had really 'abandoned' Nokia in favor of the newer handsets, 4 out of 5 have remained loyal to Nokia and the Japanese.

That puts the whole Symbian market in a totally different light. So American Apple came along (and later came another American, Google's Android) and radically shook up the market. Who did they kill? They killed American Microsoft Windows Mobile and American Palm. But they only caused the Symbian partnership to split apart, and of the real superpowers of smartphones - Nokia and Japanese carrier NTT DoCoMo, they only hit 1 out of 5 of their smartphone customers. If the competition grows by 3 and the rivals by 2, and you only lose one fifth of your customer base, you are FAR ahead of the game. Symbian is proving incredibly robust, able to sustain enormous challenges and still survive.

So how strong is Nokia's own Symbian part today? (ignoring Japan) Taking the last 12 months of smartphone sales, Nokia alone outsells all smartphones sold by Apple, by RIM and HTC, the biggest rivals numbers 2, 3 and 4 - combined! Do not misunderstand, that the 'departing family members' of Motorola, Samsung and SonyEricsson, when they departed Symbian and their numbers would be reflected, means any disaster at Symbian. You need to look at Nokia's market share, and yes, it has fallen but it has only fallen by a small portion - they are doing far better than any rival dumbphone maker - in this situation. And considering how many new rivals have entered the market, it is a small miracle Nokia's market share has not been cut in half.

There is the 'conventional wisdom' that Symbian is failing in the market place (it isn't). There is the conventional wisdom that Nokia is copying all of Apple to desperately stay alive (it isn't, Apple is copying Nokia far more than Nokia copying Apple). There is the conventional wisdom that Symbian based smartphones are not viable today and into the future (not true). The reality is, that Microsoft Windows Mobile was a casualty, and Palm was a casualty, both USA based non-modern smartphones on obsolete concepts. But Nokia and Symbian had fore-seen consumer oriented smartphones long before the iPhone launched. Nokia had fore-seen the touch screen long before the iPhone launched. Its only that they move with meticulous, methodical and yes, at times slow pace. The industry analysts claimed Nokia dead many times before, supposedly for missing the hottest new thing - remember Razr, just before the iPhone?

And still today, who sells more smartphones four years after the iPhone launched? Nokia, twice the level of iPhones. Nokia is not struggling in any place except the fantasy-land of US based clueless analysts who think the smartphone is the same as a pocket computer. They should go study the previous Apple pocket computer, the Newton, and why it failed, but why Nokia invented the smartphone and has dominated the smartphone space ever since.

LOW COST MARKET

So then there is the reality. The reality is, that in most markets, the end-user surveys say that the most desirable smartphone is the iPhone. Sure, so too in cars, the Porsche is more desirable than the Toyota. But the iPhone is, and will always be, a luxury phone, only for the very rich. The average household income of iPhone owners in the USA is 100,000 dollars, far above the second highest, which is the Blackberry. The iPhone costs, when you remove the handset subsidy (2 year contract price) about 600 dollars. The average of phones sold on the planet is about 120 dollars. Apple's brand is by far the most expensive by average price, of any mass market phone maker, nearly twice the price of its nearest competitor, RIM.

Nokia's average phone price is under 100 dollars. Nokia is not in the business of connecting only the rich people. Nokia slogan is connecting people. All people. They want to bring phones to everybody. It means cheap smartphones. It means a robust, mobile-optimized but efficient and 'cheap' smartphone operating system for the mass market - this is Symbian, not iOS. All analysts of the industry state that the growth in the market is not at the luxury price end, the growth is all in the low-price end of the market. Can Apple sell a 100 dollar iPhone profitably? No. Can Nokia? Yes. It has the reach, the distribution, the scale, and the production capacity to do just that. So can Nokia capture this growth opportunity? Yes. Will it mean low-profit phones, yes. So don't expect Nokia to suddenly take half of the industry's profits. That is as unlikely as Toyota taking the majority of the car industry's profits. The luxury end takes a disproportionate share of any industry's profits. Again, look at the Swiss watchmakers.

But Nokia cannot contemplate a shift away from its mass-market strategy, into a luxury-only strategy (something Motorola and SonyEricsson have both tried and failed miserably in so doing, while abandoning hundreds of millions of customers and annual sales in the process).

So Nokia's Symbian? It is being aggressively rolled out into lower cost phones, that previously used to be 'featurephones' for India, China, Africa, Brazil, Russia, Indonesia etc where there is a huge market for smartphones, but most of those will be mid-tier priced, not luxury premium phones. Is this the right strategy for Nokia? Of course it is. Are they executing it well?

MARKET SHARE VS DUMBPHONES

Here is the ultimate proof that Nokia is executing perfectly. Please remember again, that the rivals to Nokia are Motorola, Samsung, SonyEricsson and LG. Their mission, for all 5, is to take their global markets in cheaper dumbphones, and migrate those customers into the more expensive and capable smartphones. Who is doing this the best? Well, the only one of the top 5, who has consistently maintained a better market share in smartphones than dumbphones - is Nokia. The only one! So Motorola, SonyEricsson, LG and Samsung, when migrating customers from dumbphones to smartphones - have LOST customers. That is failing execution. But contrast Nokia, for every quarter since the iPhone launched, Nokia - and only Nokia - has GAINED customers in migrating them from dumbphones to smartphones! Yes, every single quarter Nokia's market share in smartphones has been better than its (world-leading) market share in dumbphones. This is what you want as a Nokia executive or investor. To successfully transition from the old technology to the new, and to be best at that transition. It is what Nokia has single-mindedly focused on. Not on copying the fashoniable phone of the day, whether that is the Razr or the iPhone. Nokia has focused on ensuring it gains customers, as it migrates from dumbphones to smartphones. This is perfection in execution of a smartphone strategy - by a legacy dumbphone maker. Nokia is as far ahead of the pack against its true rivals, the top 5 legacy phone makers, as Apple is ahead of the pack among its traditional rivals, the PC makers.

DONE IT PROFITABLY

And only Nokia has done this transition profitably. The past four years have seen the introduction of the most desired tech brand, Apple, into the smartphone space (something to hurt every legacy player), and the explosion of smartphone makers from 8 to 23, and the explosion of smartphone operating systems from 5 to 11, and the abandonment of most of Symbian partners leaving Nokia alone with it. This had been the bloodiest time of any tech industry, ever. The most competition in the smartphone space than any technology ever, among Fortune Global 100 players - with major companies utterly bloodied in just the past year (Palm died, Google Nexus killed, Microsoft Kin phones killed). Yet in this bloodbath, Nokia is the only one of the classic Big 5 phone manufacturers, that has reported every single consecutive quarter of profits in its handset unit! LG, Moto, SonyEricsson and Samsung have all reported losses in their handset units for at least some quarters in the past 4 year period. Only Nokia did this incredible balancing act, profitably! And this, while the global economy suffered its biggest crisis in our lifetimes. A time when dozens of global giant corporations went bankrupt, and most industries lost money, and most companies reported losses - including each of Nokia's real rivals. But Nokia reported consistent profits in its handset unit, quarter after quarter after quarter.

Is this not the perfect execution of a smartphone strategy - for a legacy dumbphone maker - and compared to Motorola, LG, Samsung and SonyEricsson - isn't this a 'night and day' comparison? But no, the Apple-obsessed analysts cheer how big profits Apple makes and ridicule Nokia 'for having lost the plot.' All the while ignoring the facts, that Nokia keeps increasing unit sales every single quarter-on-quarter (something Apple has not been able to do). And still today Nokia towering over its rivals, the numbers are clear that for the full calendar year 2010, Nokia will sell at least as many smartphones as its next biggest rivals number 2 and 3 (Apple and RIM) combined. Nokia was 'failing' in the market, exactly how?

OVI STORE - IS A SUCCESS

And then the Ovi Store. There are those who say Nokia lost it when compared to Apple's iPhone App Store. First, obivously, Nokia had an app store before the iPhone. Nokia's first consumer-oriented app store - where apps were not sold via the carriers/operators, was created for the N-Gage. It failed in the market, not because it was bad, but because the carriers/operators hated it that Nokia, a handset maker, was introducing an independent app store. They would not help Nokia sell the N-Gage handsets in any way. But Nokia had seen this opportunity - what Apple then did - of offering consumer apps in an app store - long before we had seen an iPhone. And Nokia was brave enough to launch it too. And was severely punished by the carriers/operators of the world for doing that. So Nokia withdrew its N-Gage store.

Don't say Nokia didn't see this coming. And then Ovi. Nokia waited until Apple had its App Store up, and then Nokia came back. If Apple is allowed to do this, then Nokia can also. But this time, Nokia did it with the operators. Not against the operators, like Apple.

Nokia went through the trouble of getting operator billing for its Ovi Store (none of the major rival apps stores have operator billing). Nokia has negotiated the operator billing portion for over 100 carriers/operators already! Ask any experienced developer, would they prefer operator billing rather than credit cards or Paypal - they all say they prefer operator billing. Who is giving it to the app developers? Not Apple or Android. Its Nokia again. What is best for the whole eco-system. Not the easiest or fastest, but best.

Meanwhile how is Ovi doing? Of the handset maker or OS maker app stores, Ovi is now second best-selling behind only Apple's iPhone App Store. If you cannot - as Apple forbids it - use Apple's own App Store, then if Ovi is the second best performing app store on the planet, you'd have to be a fool to abandon that, in favor of Android or Phone 7 or any other app store, wouldn't you? Nokia is still building its Ovi store, it is gettting better by leaps and bounds, and will reach a far wider range of total Nokia phones than just 'Symbian' phones. Many simpler S40 phones can use the Ovi store, as can soon the MeeGo handsets. After all that investment in Ovi, and the considerable success - second best-selling manufacturer app store only behind Apple - this alone is reason for Nokia to continue on its path, not shift to Android or Phone 7.

NEXT OS

But obviously Symbian is still old. It is ever more costly to maintain and develop. It has a broad global developer community who hate developing for the very old system, and find it far easier to develop for the iPhone or Android. So what, if Nokia once did have the right strategy, it needs something new for this new decade. Ok, I agree with you on that. But that 'something new' is not Android or Microsoft Phone 7. It cannot be. And here is why.

Nokia's nearest three rival smartphone manufacturers - Apple, RIM and Samsung - all have their own OS. Nokia also has its own OS. If your nearest rivals have full control of their destinies, and are not dependent on an outsider like Google (Android) or Microsoft (Phone 7), then in an ideal world you - Nokia - should also maintain control of your own destiny, and develop your own smartphone OS.

The ideal solution for Nokia is to create a new operating system, from the ground-up, optimized for touch screen modern smartphone apps oriented uses. Like the Android and the Phone 7 (and iPhone iOS). And it ideally should be Linux based like Android (but not Phone 7 and not iOS). And ideally it should be open source like Android (but not Phone 7 and not iOS). And ideally it should not be solely proprietary, it should be developed together with the industry such as with Intel (unlike Android, Phone 7 and iOS). And ideally it should be developed with a compatibility level built in, to allow developers to continue to develop for Symbian while the work could be used simultaneously for the new OS (unlike Android, Phone 7 and iOS). And finally, Nokia should make the new OS available for multiple manufacturers, like Android and Phone 7 (but not iOS). And the new OS should be compatible with the current app store and the current OS like Android and iOS (but not Phone 7 vs Windows Mobile).

That would be 'perfection' in a new OS, it would encompass everything that is excellent in iOS, adding everything that is excellent in Android, and adding everything that is excellent in Phone 7. But it would be even better than any of those 3 rivals.

This is Nokia's MeeGo (formerly Maemo) strategy. It is a totally new, from the ground-up, brand new touch-screen optimized Linux based smartphone operating system. The newest on the planet, first phones on it will only ship next year. It is open source (something iOS and Phone 7 are not).

This develpment path is not easy or cheap. It will require 'parallel' development of two expensive smartphone operating systems, but this will be best for the end-users (consumers who already hold hundreds of millions of Symbian phones by Nokia); it will be best for Nokia distributors (mobile operators/carriers); it will be best for Nokia apps developer community. This is the best solution, if not the easiest, fastest or cheapest. And compared to joining Android or Phone 7, only this, the MeeGo strategy, would allow Nokia to maintain control of its own destiny.

If you think Symbian is too old, and must be discarded for a more modern OS, then yes, Nokia is doing that. But it is doing it the best possible way for Nokia and all its existing developers and customers (and investors). That strategy is the new OS, MeeGo. And then Nokia has gone through the extra trouble of branding its app store separately, as Ovi, so that when the migration happens, Symbian developers won't feel their store is closing (look at Windows Mobile) and the new MeeGo developers can find their store with much business (vs Bada, Phone 7 today). Then Nokia went through the extra step to ensure backwards and forwards compatiblity, by creating QT the development environment. Today all Symbian and MeeGo development goes through QT, which means that one development environment can truly provide 'create once, publish twice' solutions to create for both Symbian and MeeGo - and better yet, QT can be used to develop for Android and iOS and Phone 7 too. This was a costly extra step for Nokia, but again, isn't that the best step, considering the developer community? Microsoft simply abandoned Windows Mobile, no migration path whatsoever. Apple has said its backwards compatibility will not be extended to earlier OS versions. Nokia doesn't think that way. Nokia looks after its developers - but this is costly and takes time. But over time, it is the best way for all.

If you subscribe to the theory that IBM, then the world's biggest PC maker, abdicated control of its own destiny, when it allowed the small outsider company called Microsoft to produce its operating system for PCs, called DOS, and allowed Microsoft to sell that to other hardware vendors - then you can see a parallel to LG, SonyEricsson, Motorola and HTC, where they do not control their own destiny anymore. They are dependent on the whims of the operating system makers (Google for Android and Microsoft for Phone 7). Nokia has taken control of its own destiny with Symbian and is in control of it with MeeGo.

If you subscribe to the theory that box-movers in the PC world are in diminishing margins, ie Dell, HP, Acer, Lenovo etc, and the only way out of that conundrum is up the services and apps ladder via software - like Apple - then again, most of the 'second tier' handset makers are in that situation - Motorola, SonyEricsson, ZTE, Huawei, HTC etc - and only a few like RIM, Apple, Samsung and Nokia - are making both their own OS and their own handsets.

IN SUM

Nokia has had the best strategy of any traditional dumbphone vendors, to shift from featurephones to smartphones. Its strategy is in many ways far better than what Apple among PC vendors or Google among internet companies have managed. Those who have complained that Nokia somehow 'lost the plot' have only obsessed about touch screen phones - but even there, have not done a reasonably accurate analysis of that small market-segment (roughly as many QWERTY phones sell globally as touch screen phones, why is Apple not accused of stupid strategy for abandoning this market segment, all 5 of its big rivals in smartphones, Nokia, RIM, HTC, Samsung and Motorola, offer QWERTY based smartphones as well as touch screen smartphones). And if the future of smartphones is cheap 'Africa' and 'India' smartphones costing under 100 dollars, why is Nokia not cheered for the right strategy, and Apple accused of missing out on the obious trend where the market is shifting. No, there is more to the market than just touch screen phones. But even if you believe that the 'only' future of smartphones is touch screens - then Nokia N8 and the latest edition of Symbian prove, that Nokia has adjusted to this challenge well - better than say RIM or Microsoft.

But the future for Nokia is a Linux based totally new operating system, optimized for touch screen smartphones. It will be an open source OS, developed with giant IT partner Intel. That is called MeeGo. It will be one of the best OS's out of the box, and it will be developed with a mobile phones type of mindset, rather than clumsily adapting from the PC world like iOS from OS/X or the defunct Windows Mobile. Nokia has executied its smartphone strategy the best of all dumbphone makers. It also has the best strategy for the future of smartphones, of any current smartphone maker. MeeGo has everything you could want for in an OS, and has several items that none of its rivals can match. Nokia would be utterly crazy to abandon this path, and join Android or Phone 7.

So I say this: shifting away from Symbian/MeeGo would be suicidal for Nokia. If they do that, it is a sign that Nokia is throwing in the towel, admitting defeat. If Nokia abandons Symbian/MeeGo and joins Phone 7 or Android, that is the time to immediately liquidate all Nokia shares, it is a sign that Nokia HQ has gone berzerk and truly mad. But they won't do that, I trust the Nokia HQ is occupied by execs with brains far bigger than mine, and they can see the big picture - and the long game - far better than I can. They have built meticulously a strategy, to take advantage of Symbian, to not forget their developers, to have a migration path, to have an app store, and a future-proof new OS for their smartphones, allowing today's developers to develop for both Symbian and MeeGo, using QT, and selling on the Ovi Store. This is the best strategy in phones - proven not only by Nokia's giant lead in smartphones, but by the fact, that only Nokia manages to gain customers as it migrates from dumbphones to smartphones. And even as its margins have been hurt in this economic global situation - whose hasn't - Nokia has not reported one quarter of losses in its handset unit, that is how good they are in execution.

Don't belive the hype or hysteria, that Nokia might abandon its Symbian and MeeGo strategy. It is truly the best in the market. Nokia will have more than a third of the total smartphone market in 2011, and in 2012, and in 2013... mark my words.

Two comments about 2 hours later: - first, later this week I will have the pleasure of announcing my 10th book. Please come back towards the end of the week for it.  UPDATE - the 340 page book has now been announced, it is called 'The Insider's Guide to Mobile' and best of all, this is the first time a book of mine is available completely free for download. See here for link Tomi 10th book.

Secondly, Robert Scoble (Scobleizer) gave a quick comment, a bit tongue-in-cheek, saying no matter how many words I write, Nokia is still doomed. His rebuttal is here: Why Nokia is Still Doomed, no matter how many words Tomi Ahonen writes  - please go read his reply and I will meanwhile write my response to his posting. He makes good points but, Nokia's strategy and execution is sound, even if the Scobleizer doesn't meet Nokia execs that he might like.. Please read his response first, then read my reply to his blog here: Nokia strategy is right, even if the Scobleizer can't find developers who say they like Nokia.