It wasn’t much of a surprise but Nokia finally axed Olli-Pekka Kallasvuo in favor of a former Microsoft executive, Stephen Elop. Interestingly enough, Elop is the first non-Finnish person to head Nokia in its 145 year history but the company will need more than a fresh perspective to stay relevant in an increasingly competitive smartphone market. We’d like to congratulate Elop on his new gig and offer some humble opinions on how he should approach this market.
Despite all the hype around Apple and Android, Nokia and its Symbian platform still have the largest market share among smartphones by a large measure and that’s not expected to change over the next five years. But market share doesn’t tell the whole story – Apple is raking in all the profits, Android seems poised to capture a ton of market share, the BlackBerry is still rocking in the enterprises and is making inroads with teens and the mainstream, Microsoft’s Windows Phone 7 looks pretty darn good and Palm’s webOS will get a massive push from Hewlett-Packard. Nokia can still be a major player in this space but it’s not going to be easy.
It’s the software, stupid
Despite a few flubs, Nokia knows how to make good hardware. You can be sure that a high-end Nokia smartphone will come with all the latest hardware goodies and the upcoming N8 even shows that it has gotten its head around good capacitive touchscreen interfaces. The problem is that the software on these devices aren’t that good and don’t seem like a modern operating system.
Spinning Symbian into an open source organization is a bold move by Nokia but the results haven’t been mind blowing so far. Symbian^3 looks okay but still not on par with iOS, Android or even BlackBerry 6. What’s worse is that the next version isn’t slated to hit until next year and the screenshots we’ve seen aren’t impressive.
Nokia may already have its solution with the MeeGo OS, which is a combination of Intel’s Moblin and Nokia’s Maemo platforms. This seems like an ultra-modern OS that should be able to go toe-to-toe with its competitors. Nokia has essentially said that MeeGo will be its go-to platform for its top-tier devices and Symbian will be used for its feature phone-like smartphones.
This is a good strategy but, like any huge market leader, this is taking way too long to happen. When you have so many legacy users and customers, it’s a tough decision to abandon your leading software but maybe Elop can take some of Microsoft’s guts with him to Nokia – Microsoft completely scrapping Windows Mobile with the Windows Phone 7 reboot is surely painful but it does seem like the right move.
Nokia will always be able to keep the lights on by shipping low-end and feature phones to markets like India and China but we’re not just talking about phones, as as smartphones are the future of computing. Symbian had its time in the sun but Nokia should really support MeeGo with killer devices and marketing. There’s a MeeGo event set for November and we’ll be anxious to see what the world’s largest handset maker is cooking up.
Developers, developers developers …
A strong OS is only one part of the equation nowadays, as applications are an extremely important part of the value proposition of smartphones. If Nokia pushes MeeGo, as we advise, it’s still going to be tough to attract developers away from the lucrative Apple App Store and the fast-growing Android Market.
Qt will be an important part of its app strategy, as this framework will enable developers to create programs that work on various platforms (desktop too) with minimal tweaking for each OS. As a content creator, you always want to reach as many potential customers as possible and Qt should help eliminate some of the costs of porting apps.
Let’s face it, the big app players (Facebook, ESPN, YouTube, etc.) are going to be on every mobile platform. These companies have the dollars to support this scatter shot approach but it may be more difficult to attract the smaller teams and that can be a problem. Obviously, you want the big guys on your platform first but those 10-men shops can also add a new layer of innovation to your app market that is quite appealing.
I hate to sound like a broken record, but Nokia needs to ape its competition to get the MeeGo app catalog up to snuff. No company can truly replicate the iTunes ecosystem with its 160 million customers with credit cards but the Ovi Store is a decent approach. It does need rapid iterations that will improve discoverability and navigation though.
It can also do what Microsoft is doing and just pay developers to create MeeGo apps. This relatively small investment will guarantee a large app catalog and it may even endear some developers to this platform.
Get in the U.S. market
I’m obviously biased by living in the United States but I firmly believe that Nokia needs to do a better job in this market, which is the world’s largest for smartphones right now. Sure, India and China will eventually dwarf the United States and Europe in terms of smartphone users but most of the innovation and attention is in the U.S. market right now and Nokia has a piddling presence here.
That’s slowly starting to change though, as the company said the T-Mobile Nuron has sold quite well and the E71X was also launched on AT&T with the bargain subsidized price of $99. Every time we speak with the company it always says it is shifting resources to target the U.S. market but we need to see results.
One of the reasons it doesn’t play well in the U.S. market is that this is a carrier-controlled market – Ask Google how well selling the Nexus One without major carrier support went. It may not like it, but Nokia should grit its teeth and do whatever it takes to get on the carriers’ good side while there’s still a chance.
So, these are a few simple thoughts on how new CEO Elop can help Nokia regain its footing in the smartphone space and you can be sure that Stefan will have more opinions over the next few days. In the meanwhile, let us know what you think in the comments.