asked by Ardeshir Namazi over 3 years ago
Nokia helped invent the mobile phone business, but those days of technology glory are long gone. Can they regain its status as an innovation leader?
Nokia will absolutely survive. No doubt, there have been big shifts in the industry, and the power has moved to Apple, Google, and other handset vendors. But there are important factors that make Nokia a viable player going forward:
- Most Nokia-bashing comes from the US. But the US knows very little about Nokia. Nokia dominates the rest of the world...and that's no small feat.
- Nokia has distribution and logistics skills, has sales relationships with hundreds of global carriers, and has manufacturing channels, supply lines and relationships and volume purchasing abilities. This is no trivi al industry player. All of these advantages will come into play when Nokia re-attacks the smartphone segment.
- Nokia is not currently a loser in the phone market. They are dominant. They are only a loser in the smartphone segment. They retain the scale of production, and the brand awareness.
- Some 40% of Americans are buying smartphones, and the numbers are lower in the rest of the world. There are literally billions of phone users who will upgrade to smartphones in the next decade. This battle has just begun. And Nokia is the phone brand of choice for many of those billions. If they offer a decent smartphone at a good price, many existing Nokia phone users will prefer to upgrade to a Nokia smartphone.
- Nokia is not the only major player backing Nokia. Microsoft, with Billions in the treasury, is also largely invested in the success of Nokia and Windows Phone 7. Both consider the ongoing success of Nokia as a worthy investment.
- Windows Phone 7 is excellent. It is VERY simple to use, relatively bug free, and modern, social, touch-based, colorful, and fun. This attracts users. Microsoft has delivered Nokia a terrific UX.
- Windows Phone 7 has attracted a good number of developers and apps. The developers are there because they know that Microsoft will invest whatever it takes to make WP7 a success. The effort is too big to fail at MSFT. So with over 20k apps and counting, there are lots of things on WP7 where "there's an app for that." That said, it's no iOS with 500k apps...but does it really need to be? Apple started running their "there's an app for that" ad campaign when they had around 40k apps. Yes, more is better, but how many is enough? I thin WP7 is almost there.
- Nokia, financially, will not be able to command the profit margins they used to get, and they'll be sharing with MSFT. So, for investors this comeback may by Pyrrhic. But in terms of volume and market significance, I expect a comeback.
- I think the turnaround WILL occur quickly. Starting in 2012, and really taking off the next year. Is Nokia-WP7 an iPhone or Android killer? No. But it will be in the same league.
Let's wait and see.
Derek Kerton, www.kertongroup.com (more)
Nokia now has its lowest Market share since the mid 90's and i don't see this improving quickly. They made their name on having impressive hardware but have suffered greatly as competitors have paid more attention to their operating systems.
Here are some keys ways i believe Nokia can turn the tide:
1. Nokia to release its new Lumia 800 Windows phone on the Verizon network in the US.
2. Continue to focus on the emerging Chinese market where they are seeing more success. I can even see a Chinese firm purchasing Nokia in the next 24 months.
3. Not forget their roots and keep pushing simple feature based devices into the developing world.
Overall there is a place for Nokia but is doubtful that place is the good ol' USA.
Nokia already lost its battle with Google's Android and Apple's iPhone. They totally missed the power of the apps over the actual phone itself. I blogged about it here last year:
Will the sexy American blonde bombshell save the Finnish Nokia?
They should get out of the smartphone business and focus on the backbone mobile infrastructure like what Ericsson has been doing. I think there will still be some market left for them in under developed countries like Africa and the Middle East, but even th ose regions will not last that long. (more)