Mar 5, 2010

Nokia and the failed smartphone story

nokia-supply-doomToday, let us take a look at the future direction of Nokia – the largest cell-phone manufacturer in the world. With a lot of companies biting at its heels in the smartphone business this past year, I was extremely surprised when Nokia posted Q4 sales of $11.25 Billion. They went ahead and proved my prediction completely wrong – and I’m glad they did. We wouldn’t w ant to see the erstwile emperor of the cell-phone industry go down without a fight now, would we?

 

I had based my prediction that theirs was a “Strategy of Doom” based on the fact that they were actually slowing down production of smartphones, especially considering the fact that smartphones were the fastest growing cell-phone segment in 2009. Initially, in 2009, it looked like Nokia had lost 10% market share in this segment while the smartphone market itself had grown by 4%. But now, Nokia boss Olli-Pekka Kallasvuo has been saying that their share in the smartphone segment rose from 35% to 40% after it moved to shake up itsupply-chain-nokia-apple-lions product portfolio.

 

I’M BIGGER It looks like a war of words now with Apple CEO Steve Jobs proudly proclaiming that Apple was in fact the largest “mobile devices company” in the w orld in terms of revenue for what seems to be a quite ‘custom defined’ category. Nokia’s Kallasvuo dismissed these claims saying that it was too broad a definition of mobile equipment. To his credit, Jobs had included laptops and iPods in the mix too. I’ll leave them to fight about who has the lion’s share in the market and take a look instead, at what Nokia has been doing in terms of strategy to help their cause.

THE NOKIA STRATEGY There are certainly a lot of takers in the smartphone arena – most notable of which are the top three – Nokia, RIM and Apple in that order. But let’s not forget the nifty little Android Operating System which is Google’s baby in the field. They’ve the fastest growing app store in the market compared to app-store size. They’ve been releasing newer phones at a quicker rate than most other players. Rounding out the list with Palm and Windows Phone 7 series (a ridiculosly long name), the smartphone war is only going to get bigger. But Nokia is taking measured yet big steps to keep its position solid in this area.

Nokia has been buying up companies that fit in to their overall strategy. I need to thank Fast Company for helping me out on this one. The list includes Navteq for maps, Loudeye Corp. for music, Twango Inc. for photo sharing and Cellity AG for contact management. If you think that’s quite a list by itself, I’ve another interesting piece of news. They have a deal in place with Intel to create apps!! Now, apart from this, there is one fact that is clear. Their new phones have bombed – atleast in the US.

MEEGO The ray of hope, is now a new platform. I’d told you in my previous article that Nokia was betting its hopes on an inhouse successor to Symbian – their  operating system of choice for years – called Maemo. This platform has now been merged with Intel’s Moblin platform to create MEEGO. This is going to be a

nokia-scm-meego-intel“software platform that will support multiple hardware architectures across the broadest range of device segments, including pocketable mobile computers, netbooks, tablets, mediaphones, connected TVs and in-vehicle infotainment systems.”

The reason this is big is it covers a lot – and I mean a LOT of consumer markets.

THE SUPPLY CHAIN PIECE As is true with any successful company, Nokia has a world-class supply chain that gets product out to customer in a jiffy. An important point to note is the level of penetration Nokia has in the developing markets of India, China and Africa is going to fuel the rise of the smartphone business in these countries. The way I look at it, Nokia is far more well-positioned to make use of its network in the developing world and Europe than it is in the US. And with the iPhone bombing in China, I have a tingly feeling that when the time is ripe for smartphone invasion in the developing world, Nokia is going to be in a good position to squeeze the maximum out of it.

For this to happen, they are going to need a proven platform which is what they are hoping Meego will be. The failed smartphone story in the mid-2009s that I was talking about was a necessity for Nokia to innovate. I have a strong feeling that the resurgence has begun. Expect exciting smartphones with compelling software, set to take advantage of Nokia’s top class supply chain.

Do you think Nokia will reemerge in the smartphone space? Do you disagree with my analysis of the situation? Let me know.

Mar 5, 2010

Nokia and the failed smartphone story

nokia-supply-doomToday, let us take a look at the future direction of Nokia – the largest cell-phone manufacturer in the world. With a lot of companies biting at its heels in the smartphone business this past year, I was extremely surprised when Nokia posted Q4 sales of $11.25 Billion. They went ahead and proved my prediction completely wrong – and I’m glad they did. We wouldn’t w ant to see the erstwile emperor of the cell-phone industry go down without a fight now, would we?

 

I had based my prediction that theirs was a “Strategy of Doom” based on the fact that they were actually slowing down production of smartphones, especially considering the fact that smartphones were the fastest growing cell-phone segment in 2009. Initially, in 2009, it looked like Nokia had lost 10% market share in this segment while the smartphone market itself had grown by 4%. But now, Nokia boss Olli-Pekka Kallasvuo has been saying that their share in the smartphone segment rose from 35% to 40% after it moved to shake up itsupply-chain-nokia-apple-lions product portfolio.

 

I’M BIGGER It looks like a war of words now with Apple CEO Steve Jobs proudly proclaiming that Apple was in fact the largest “mobile devices company” in the w orld in terms of revenue for what seems to be a quite ‘custom defined’ category. Nokia’s Kallasvuo dismissed these claims saying that it was too broad a definition of mobile equipment. To his credit, Jobs had included laptops and iPods in the mix too. I’ll leave them to fight about who has the lion’s share in the market and take a look instead, at what Nokia has been doing in terms of strategy to help their cause.

THE NOKIA STRATEGY There are certainly a lot of takers in the smartphone arena – most notable of which are the top three – Nokia, RIM and Apple in that order. But let’s not forget the nifty little Android Operating System which is Google’s baby in the field. They’ve the fastest growing app store in the market compared to app-store size. They’ve been releasing newer phones at a quicker rate than most other players. Rounding out the list with Palm and Windows Phone 7 series (a ridiculosly long name), the smartphone war is only going to get bigger. But Nokia is taking measured yet big steps to keep its position solid in this area.

Nokia has been buying up companies that fit in to their overall strategy. I need to thank Fast Company for helping me out on this one. The list includes Navteq for maps, Loudeye Corp. for music, Twango Inc. for photo sharing and Cellity AG for contact management. If you think that’s quite a list by itself, I’ve another interesting piece of news. They have a deal in place with Intel to create apps!! Now, apart from this, there is one fact that is clear. Their new phones have bombed – atleast in the US.

MEEGO The ray of hope, is now a new platform. I’d told you in my previous article that Nokia was betting its hopes on an inhouse successor to Symbian – their  operating system of choice for years – called Maemo. This platform has now been merged with Intel’s Moblin platform to create MEEGO. This is going to be a

nokia-scm-meego-intel“software platform that will support multiple hardware architectures across the broadest range of device segments, including pocketable mobile computers, netbooks, tablets, mediaphones, connected TVs and in-vehicle infotainment systems.”

The reason this is big is it covers a lot – and I mean a LOT of consumer markets.

THE SUPPLY CHAIN PIECE As is true with any successful company, Nokia has a world-class supply chain that gets product out to customer in a jiffy. An important point to note is the level of penetration Nokia has in the developing markets of India, China and Africa is going to fuel the rise of the smartphone business in these countries. The way I look at it, Nokia is far more well-positioned to make use of its network in the developing world and Europe than it is in the US. And with the iPhone bombing in China, I have a tingly feeling that when the time is ripe for smartphone invasion in the developing world, Nokia is going to be in a good position to squeeze the maximum out of it.

For this to happen, they are going to need a proven platform which is what they are hoping Meego will be. The failed smartphone story in the mid-2009s that I was talking about was a necessity for Nokia to innovate. I have a strong feeling that the resurgence has begun. Expect exciting smartphones with compelling software, set to take advantage of Nokia’s top class supply chain.

Do you think Nokia will reemerge in the smartphone space? Do you disagree with my analysis of the situation? Let me know.