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« Where is Your Competition Coming From? WSA Awards show surprising breadth in mobile innovation | Main | Nokia Smartphone Strategy and Execution IS Right, even if the Scobleizer can't find developers who say they like Nokia »

December 13, 2010

Comments

Autoexec.bat

Let me say straight out that I am an American. But I am an American who has given Nokia plenty of chances including up to about 3 months ago.

But the pro-Symbian/pro-Nokia mental gymnastics continue. Point well-made and well-taken on how Apple essentially destroyed other *American* competitors in the smartphone race but didn't harm Symbian all that much. That is still true up to this point in terms of market share. So it seems that the biggest factor in Nokia's favor is an increasing rate of population growth and little more.

Nokia is in serious danger of being the phone manufacturer that people can't wait to leave behind once they've achieved a wealthier status in life. In China, for example, brand names matter in terms of personal pride and as a signaling device to others. If Nokia is the phone of choice for the population at-large, those same people will probably leave those phones behind once they have more money to spend. This won't apply in every country but what happens to Nokia if they push billions of low margin handsets to the masses but fail to keep those same people as customers as they "graduate" to a smarter handset?

Niclas

It's good that Nokia took back control of Symbian.

Nokia has lost some of high end market to android and ios but I hardly see them fighting for their life. When Symbian is reaching cheaper devices then it will also go in incredible volumes and the app market will come. I agree that Apple is too expensive. I just got an N8 for free(2 year contract), I would have had to a pay a fortune for an Apple. I would agree, Apple will never ever connect all people.

With Qt in both Symbian and Meego the two OSes will contribute to a Qt market.
I wonder how it goes with S40? S40 is today for the very cheapest devices,
maybe add of subset of QT to s40? that would be create a huge app market. s40 is huge and nobody speaks of s40.

Fai

Just a correction on some facts: Symbian was created by Psion as a spinoff from their EPOC OS. Recognising that they needed licensees to continue development on this, they co-opted Nokia and Ericsson into the deal, forming Symbian in the progress. Motorola came soon after. There's an in-depth article on The Register that covers Symbian's history quite extensively - and the politics behind this.

Gerd

Tomi, the move I describe is not entirely unprecedented. Nokia 6708 was an UIQ phone for the Chinese market only, even when Nokia was throwing their full weight behind S60 at the time.

But basically I agree that it would be an odd move, and especially in the US market. I'm just saying that if there was some market opportunity or operator requirement to sell a few ten million phones, doing a completely OEM Android/Phone7 device might not be totally out of the question.

Raphael

Nokia is well suited for emergent market (bric) because their phone are cheap, solid mobile. Plus there is not 3G/wifi or only in city, there is no or few data plan, weak networks. Apps cost a lot for this kind of customers and they don't reach their firts expectations (make call). But in mature market, Nokia is doomed because people expect far more from a mobile : they want infotainment and the price is ok (less than 0,5% of their revenue for a terminal vs 10% for a bric citizen).

dutchtender

your numbers are off. gartner says that nokia has 28% of the global handset market at q3 2010. Samsung is next at 17%. But samsung is growing units much faster than Nokia and has a credible smartphone strategy. Nokia has an expansive definition of smartphone including s40 devices. It's no wonder they are number 1 for now. But in just about 2 years time Android has captured almost 26% of the global smartphone market. they took this share from somebody and that somebody is Nokia. Your view of the mobile marketplace is decidedly European and Nokia focused. But I suggest you figure out what is going on in the USA because that is a blueprint for what is going to happen globally now that ios and android have defined the smartphone for the next phase of global growth of handsets.

belstaff jacets

good post and thanks for share with us

Walt French

@Tomi:

As you say, Nokia needn't necessarily compete with Apple. But I am mystified why Nokia should keep the loyalty of dumb- or only-feature-phones in the face of similarly-priced smartphones from China, Malaysia, Korea or India. Those phones, maybe mostly based on Android, will come with thousands of experienced app developers, developers who have gained months or years of experience with the software platforms.

Today, Nokia has NO platform that will support the app growth, and if efforts from major software and phone shops such as Google, Palm, RIM and Microsoft are indicative, Nokia will be hard-pressed to have a solid platform for years into the future. (Yes, the Android OS was near-useless for years after Google bought Android, Inc.)

This is the other half of the onslaught that Dardo posited, and which you essentially left unanswered: there is NOTHING in Apple's economics to prevent its cutting prices by half for very capable phones, because the manufacturing is not tied to any high-priced US features. It uses the same ultra-high-volume manufacturers that other phones use.

For example, Apple has been very careful to tune their software to work well in much more constrained RAM; the original iPhone worked with 128MB versus the common 1024MB of today's Androids. They now have superb software design tools that allow speedy app development while still having very efficient code. Very nice app features are available for the programmer to ask for, not for the programmer to build.

So I see Android and iOS as the two big pincers attacking Nokia. Both are aggressively reducing the cost of very-high-end communication tools.

Finally, I note this piece is an extended rebuttal of a series of claims you have collected from others. However well you address those claims (I'd say it was mixed), what I do NOT see is a ringing support for a proposition such as, "Nokia has positioned its OS platforms to maintain share of global communications (which is increasingly mobile).”

Sooner or later, “delighting the customer” becomes paramount. What will Nokia do better than the others to win that increased share?

The evidence for the proposition appears wishful at best, even if the counter- is not as negative as some have stated. I don't see how you could make such a case: what is imminent for flexible, low-cost, high-volume phones; what has Nokia done to encourage the adoption of their devices for today's middle classes in preference to much more flexible devices?

David

One additional thought about how fast can handset market (customers) react to changes in the industry and really shake Nokia position. Taking into acount 5,3B active mobile connection (based on last update from ITU) and roughly 0,5B YoY growth, there remains approx. 0,8B sales to existing handset owners who have the opportunity to evaluate existing handset and upgrade to smartphone or move to another platform. It leads to average age of active handset above 6 year and thought that whatever can happen to Nokia as a result of bad smartphone execution HAVE TO HAPPEN very slowly compared to time period that can be specified as smartphone era.

David

You are so underestimating the assets companies like Apple and Google bring to the market and their own strategy for smart phones. These guys are building digital lifestyles for consumers that go well beyond the mobile phone market they are working to lock users in to digital ecosystems that are all encompassing. From devices, through app's, media content, to e-commerce.

Nokia have had lots of great innovations in the past but not been very successful in making an impact in the market. Think content deals, mobile commerce, app stores etc. Nokia has failed to understand the business strategy needed to make a success of these innovations. Disrupting the music industry or the carriers.

Nokia is not without assets in this fight but has a very long way to go and if it thinks it is executing a winning strategy then it is in for a rude awakening. It's vision is far to narrow.

Daphne

I suspect this is quite an interesting piece, but it's far too long and rambling. However, it's also living in cloud-cuckoo land: Symbian on the N8 is dreadful. Painful. Ghastly to use. The antithesis of intuitive. Lovely handset, but I wanted to throw it out of the window. Nokia should concentrate on what it does well, which is hardware, and pick another OS that doesn't make people want to beat their handsets to death.

Personally my choice wouldn't be Android, as it's fragmenting too quickly now, but I'd really like to see a beautiful handset like the N8 married to the very good Windows Phone 7.

Sry i can't tell, I work at Nokia.

I'm agree that Symbian is not the problem. How's Symbian used it is. N8 is clear not even close to be the best phone that Nokia has. It will lose all comparison, even against C7, his "dumbest" cousin. Not to talk about E7 or the "Older linux based" N900.

The problem at Nokia is in another place, is at user interface design and at Ovi politics

vvaz

@raphael

I am afraid you are wrong calculating percentage of income. Steady mediana per household in western world is $50K. Household is statistically slightly more than 3 people - make it 15K per citizen.

Now iPhone is $600 - it makes ca. 4%. Almost ten times more than you wrote.

Some people may argue that "with subsidy it costs..." . There is no subsidy, client will pay for that with monthly subscription which in total will roughly equal this 4-5%.

Tomi Ahonen

Ok, more replies. Am sorry for the delay (had to get that new book released). So these are all responses to comments on Dec 13-14

Hi mirmit, Dietrich, new, Rob, Geraldo and Billy

mirmit (2 comments) - thanks, yes good reminders of what all went on in the early days. About Apple's role - actually the all-you-can-eat dataplan was also not an iPhone invention, it was done first by the Japanese, as just about everything in mobile, by KDDI I recall, back around 2004 or so. Long long before the iPhone. We had all-you-can-eat dataplans also on several carriers in the Nordic countries of Europe by mid-decade years before the iPhone. I think the iPhone's 'radical' change to the carrier stranglehold on the eco-system was most felt in North America where the carriers were treating their customers and content partners hideously badly.

Dietrich - sorry, this is a complex industry and the arguments are not obvious to those who are not deeply involved in the industry. But for those who are familiar with the details, yes, it can be probably said more succinctly, but note, Dietrich, that most of our readers are not telecoms specialists, they come from the wide worlds of media, advertising, retail, travel etc, and I have to explain some things for the basics, recognizing that there are new readers on the blog almost every day. Sorry.

new - thanks.

Rob - thanks.

Geraldo - ah. Thanks. Yet something else completely meaninghless that I have to memorize eh, haha. This is not a Nokia site, not a Symbian site, not an apps programming site, not a smartphone OS site, not a smartphone site, not a mobile phone site, not even a mobile site - we cover digital convergence, new media - and mobile. But yeah, so I guess now I have to 'memorize' how the Qt people prefer their technology to be 'spelled' - arghhhhh... like I don't have better things to do with my brain than memorize some programming tool, and how it wants to be spelled. But that is not your fault, Gerald, thanks for telling me. I - may - bother to remember, or I may equally prefer to forget all about Qt haha if that is how this blog article will be remembered haha.. Its just like the Apple fan-boys who came here to accuse me of not knowing that the iPhone applications storefront was called the 'App Store' in caps (I think I was calling it the apps store..). Well, I may remember Qt spelling, perhaps haha

Billy - good points and we mostly agree. I think the accusation that Nokia is slow to get onboard with software thinking is valid - but again, they should not be fairly compared to PC or web companies like Apple or Google. I think they should be compared to their rivals - who all saw the smartphone emerge exactly as well as Nokia - as all the rivals were part of Symbian. but compare the software thinking at Motorola or SonyEricsson or LG - or Siemens (remember them?).. I think yes, Nokia is not there yet, they are on a path to change, but are FAR further along than any of their traditional rivals - some of whom may not survive the transition to the new mindset.

Thank you all, I will return with more comments to the rest, please keep the comments coming

Tomi Ahonen :-)

white iphone 4

Merci pour le blog chargé de l'information tant. L'arrêt de votre blog m'a aidé à obtenir ce que je cherchais.

s

i won't agree that nokia is still dominating in dumb phone market, see the case in india, only phone company indian's knew few years back was nokia, that is not the case now, samsung and chinese manufacturers are dominating in low end phone market. chinese manufacturers have reached many remote villages where they are the torch bearers now.
As said in the article real rival of nokia would be samsung, and it is going to be difficult to compete with samsung making all kinds of phone low end phones, smartphones with android/windows mobile 7/linux(bada).
i don't think N8 is even close to iphone, or some of those android 2.2 devices, it will taken few more revisions to come near to the platform android has evolved to.

Henry Peise

Merry Christmas! What's your most desire present you want to get? Hmm maybe you and me have one thing in commend, the white iphone 4.

white iphone 4

White iphone 4 avaiable! It's a great news to tell you the latest white iphone 4 Conversion Kit is on sale. Get the chance to make your iphone more charming!

Michael

I also think that Nokia is doing great!

Here is a challenge for them. Make a device which will make my family buy Nokia after having using various Nokia phones for 10 years.

We have switched to Apple...

Tadasi

"your numbers are off. gartner says that nokia has 28% of the global handset market at q3 2010."

Tomi's numbers are right! Nokia's had 43% of global market 3q 2010 if you do not take into account the following... This quarter Gartner has 137 million handsets or 33% of the global market from noname manufactures in their statistics! And Gartner would never name them by one!!! What are these noname manufactures managed to produce 33% of all the handsets in the world no one knows and please explain how it's possible?

So, Gartner manipulates statistics and in 3q 2010 adds about 86 million handsets to "Others" to get the fall of Nokia's global market share!

As for Iphone and Japan. No one bought Iphone in Japan so SoftBank gave it for free last year! As for Number 1 of the smartphone market share by Iphone in Japan.... it's just the same manipulation/juggling as Gartner's statistics and lies in the field of the definition of the word “Smartphone”... e.g. Fujitsu waterproof smart device with symbian, 13 MP camera, 1080p video recording is called a phone on a Japanese market and doesn't get into the smartphone category and the same is with sharp, docomo and other very smart and very cool devices, some of the Japanese "phones" even have projectors!
Besides, “goo Research” didn't calculate the number of sold Iphones but … it was a poll/an online questionnaire of about 104 people. ONLY members of the goo Research online monitor group completed a private internet-based questionnaire “What smartphones do you have?”. And according to that private poll Iphone got 70% of smartphone market share in Japan. I guess “goo research” poll results are far from being true!

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