Nokia CEO Stephen Elop: Consumers really don’t care which OS powers their handsets

Nokia announced their decision to bet the farm on Windows Phone roughly 15 months ago. They’ve had their Lumia devices out on the market since November 2011. We know they sold 2 million Windows Phones during the first three months of this year, and now we’re waiting until July to hear how many they sold in the current quarter. Why did Nokia decide to go with Windows Phone? How’s the company’s relationship with Microsoft? If you care about questions like that, then do yourself a favor and read “Nokia’s last stand: can the 147-year-old company design its way back?” in the June 2012 issue of Wired. There are several choice quotes in there that we’d like to highlight:

In the absence of control over its own OS, Ahtisaari and Elop believe that Nokia has four competitive advantages. First, there’s its prowess in camera technology, highlighted with the recent launch of the 808 PureView, a Symbian handset capable of taking 41-megapixel pictures. Similar technology is on its way to Nokia’s Windows handsets. Then there’s Nokia’s ability to innovate with hardware. “As a general direction,” Ahtisaari says, “I would say, think [about things happening] off the glass. On the N9 and in Symbian handsets already, if you want to listen to music, you just tap the speaker and music starts playing.”

Next, there’s location and mapping, which Elop describes as the third dimension of search (the first two dimensions relating to “what?” and “who?”). Nokia, which employs 1,600 geographers in its mapping division, offers turn-by-turn driving instructions in 50 languages in 100 countries. Google’s competing service, Google Maps with navigation, covers a mere 28 countries and one language — English. “It’s a huge source of competitive advantage,” says Elop. “These are critical and very hard-to-replicate assets.”

Finally, there’s industrial design: the art of building appealing products with the requisite functionality at, or below, a target cost. “Industrial design should not be underestimated,” says Ahtisaari.

Two years ago, Nokia sold 55 per cent of the smartphones bought by Europeans. By 2011, its market share was down to 11 per cent. According to industry analyst Horace Dediu, Android has “completely absorbed” Nokia’s losses in Europe.

Elop has a picture of the Canadian national team set as the wallpaper on his Lumia 800.

Says Ahtisaari: “We brought together all of the industrial design, all of the colours and materials design, packaging design and all of the user-experience design into a single organisation.” As a result, Nokia’s chief designer now oversees “several hundred staff” in four design studios (London, Helsinki, Beijing and San Diego).

“Design matters a tonne,” says Elop. “That’s why Marko is in every discussion at the top level of the company.”

“Today, we have far fewer engineers working on OS plumbing, which is a huge consumer of R&D resource,” Elop says. “Let them [Microsoft] build it, and we’ll place on top things that differentiate us.” Consumers, he adds, really don’t care which OS powers their handsets. “[What consumers] want is a handset that offers a faster experience and does the job in fewer steps than other platforms.”

However, Nokia will benefit exclusively from some of the things that it proposes to bring to Microsoft’s phone software. Ahtisaari describes the situation in coded terms: “In Windows Phone, there will be things that happen to the core experience, on Lumia, that will be our own.” In particular, Ahtisaari is referring to Nokia’s camera software, which the company wants to integrate with Windows Phone without it falling into the hands of rivals, such as HTC and Samsung, which also make Windows handsets.

Elop also points to Nokia’s research and development spend, which, at 14.5 per cent of revenues, is relatively high, despite the decision to outsource smartphone OS work. “We have increased our R&D spending [on low-end mobile phones],” he says, “so there’s clearly something being developed, underway. There’s some excitement there.”

So there you go. Nokia has made design a priority, so much so that there are several hundred designers working for the company spread out over four different countries. R&D spending has been increased, though we don’t understand why it’s being poured into low-end phones. Elop also says consumers don’t care about the OS their device runs, which is a bit controversial.

Make sure you read the whole piece to appreciate the Nokia of today.

  • Graham Parkes

    Of course consumers care which OS powers their phone. I certainly wouldn’t consider buying a phone running the Windows mobile OS, as I’m firmly wedded to Android. However, I may consider a high-end Android phone from Nokia, if they made one.

  • Graham Parkes

    Well, if people don’t care what OS they have on their phones, then why aren’t we seeing more people using Windows, Symbian or Blackberry OS? LOL!

    Nokia, please fire Elop, and start making Android phones with the high standard of build quality and hardware you are famous for.

  • Anonymous

    If consumers dont care why does Nokia care – put Android, Maemo and Windows phone on your handsets.. 

  • Aetu

    I will never buy a windows phone

  • Die-hard Android people care what OS is running on their phone: it’s got to be Android.

    For everyone else, Elop is fundamentally correct: the customers don’t care what OS is running on their phone. What they care about is that they:

    1. Get a good, smooth, fast, bug-free User Experience

    2. Can access a reasonably-complete ecosystem of apps, media, etc. (“Critical mass” is a big factor here.)

    3. Can protect their investment in the ecosystem across the years.

    Symbian eventually failed on all counts. Maemo/MeeGo was never given a real chance to be measured. iOS succeeds on all counts. Android mostly succeeds on all counts. Blackberry OS was only partially successful and the success of the QNX-based variant is still to be determined.

    Elop has bet that WinPhone will join the list of successful OSs but so far, it has clearly failed to achieve “critical mass”, its UX appears to be an acquired taste, and Nokia+Microsoft bobbled making the initial release “bug-free”.

  • Kishore

    If that is the case why don’t symbian belle is much made better OS and used in coming releases

    •  I’m having some trouble parsing your question but the troubles Symbian ran into are two-fold:

      1) It was allowed to remain stagnant far too long, stuck in the D-Pad age at a time when iOS was first hitting the scene, providing a completely new, highly-integrated way of interacting with your phone, and

      2) The first few touchscreen versions of Symbian were *AWFUL*. They had a bad User Interface (only minimally changed from the D-Pad days), bad User eXperience (with every app having a unique UI), and were *VERY* unreliable. The N97 was the low point in that disgraceful period but none of Nokia’s early touchscreen phones were good. And Nokia turned a lot of customers off from Symbian/S60 with those phones, in part from the initial experience and in part by not providing timely updates.

      At this point, it wouln’t matter even if Belle or Carla were the best mobile OSs in the world; Symbian is dead in both the customers’ eyes and in Nokia’s eyes.

      It’s a shame, really. Symbian was a pretty good mobile OS. It was S60 that was so awful, but it killed Symbian with it.

  • Graham Parkes

    I think relatively technical minded persons, who are into phones, would likely review all available OS and hardware options before choosing their first smartphone.

    That’s what I did, when I decided to move away from Symbian. I studied both IOS and Android and the handset choices in terms of hardware available and that found Apple was just not to my taste in terms of the hardware (non-removable battery, no microSD card slot, relatively fragile and small screen) and restrictiveness of the OS and iTunes.

    Non-techies, who just want a smartphone, because they think it might be useful, or because it’s cool, or because their friends have one, would likely just follow the recommendation of friends.

    In all above cases, a Nokia Windows phone is unlikely to be the smartphone of choice in all but a very small number of cases, as sales so far have shown

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