Home > Nokia, Rant > Nokia and the Long Term Strategy – It’s NOT all gloom and doom. Awesome things coming soon.

Nokia and the Long Term Strategy – It’s NOT all gloom and doom. Awesome things coming soon.

It’s not all gloom and doom as “analysts” and certain blogs would have us believe.

Today, 22nd July 2010, Nokia reported Q2 earnings. Despite the fierce competition from all fronts, and without their best fighters on the front line, their smartphone market share still went up to 41%. Some other numbers are less flattering, and understandably so given the lack of new flagship. Many of your industry ‘analysts’ will concentrate on this and will spell yet again gloom, doom and death of Nokia.

  • “Nokia aren’t competing at the high end”
  • “Nokia fail to understand the smartphone market”
  • “Nokia are playing catchup to superior handset makers Apple, and the host of Android manufacturers”.
  • “Nokia’s Ovi store is lagging behind App Store”
  • “Nokia hasn’t got good, slim touch screen phone”
  • “It’s all about Android”
  • “Nokia missed the boat and should make an Android device”
  • “Nokia should have bought Palm and made WebOS devices”
  • “Nokia are making little progress”
  • “Nokia’s market share is collapsing”
  • “Nokia’s losing market share to Apple and Android”
  • Insert own negative Nokia comment.

Nokia still sold equal amounts of phones to RIM, Apple and HTC combined. But being that it’s Nokia, that’s of course a failure, especially if we compare operating margins and profits against Apple. (But then again, Apple is selling one extremely premium device, amongst it’s premium and arguably overpriced devices. Apple’s operating margin is higher than all of their competitors)

Operating margins were low, profits (though still in hundreds of millions) were down. Average price of handsets was down to 61EUR. Nokia handsets aren’t necessarily bad – on the contrary, they’re well priced for the features they hold. But this means lower profit margins on these cheaper, value for money handsets.

Note: for still at least a month there will be no high end handset to raise the average.

Nothing new in this post but worth reiterating as analysts and certain blogs seem oblivious to Nokia’s very open strategy (especially cringe worthy to hear now, suggestions of moving to Android).

The LONG TERM strategy

Thinking ahead - reap what you sow.

Since the N95, Nokia has been in an intermediate transition stage. Phones in between (to me) felt like they were just there to keep some attention on Nokia. N85, N96, N97. Unfortunately, they didn’t turn out to ultimately be positive attention.

In one sense, Nokia’s given iPhone and its competitors an easy ride. S60 wasn’t ready for touch screen. Nokia slapped a touch screen on and voila, S60 5th edition, with its annoyances to boot. Even better for competitors, Nokia gave their S60 5th Edition flagship gloriously underpowered hardware that makes it even harder to use it. Try S60 5th/S^1 on the Samsung i8910 – capacitive screen, faster hardware – it makes S60 5th slightly more palatable (even more so with certain cooked firmwares as default sammy one is missing quite a few features).

Nokia gave us a hint that they do have a very decent game plan with the N900 and MAEMO 5. Nokia were extremely quick to point out that this remarkable handset (which was everything we were waiting for on the power side) was only step 4 of 5 at Nokia World. Software was great, power and potential was amazing. Why dampen down the excitement with this killer honesty?

Step 5 is MeeGo, Nokia’s new open source and and Modern OS for mobile computers. And Nokia aren’t doing this alone; MeeGo is equally the child of the Intel, with a significant amount of partners lined up to make MeeGo devices. Qt which makes app development much easier also gives that cross platform advantage that means the same app will run on any Qt compatible device, whether that be your S^3 N8/C7/X7/E7, S^4 “E9”, or MeeGo N9/Tablet/Car infotainment etc. To those wanting apps, apps, apps, they’ll come. We’ve seen the N900 and N8 play those “iPhone Grade” games with ease. As a content producer/developer, would you restrict yourself from increasing your audience and revenue? As to distribution, MeeGo/Qt apps will be available through the Universal App Up Store from Intel or Nokia’s Ovi Store, the 3rd most popular behind App Store and Getjar.

Nokia World 2010 – ‘sleeping giant’ sets alarm for September 2010 to do some ass kicking.

Nokia’s LONG TERM strategy, transitioning to high end with quality user experience on touch optimized handsets starts coming to fruition this September (14th and 15th) at Nokia World 2010. The N8 may already be released around then, along with announcements of the rumoured super slim, 4″ screen N8 QWERTY (E7? RM-626) and the long awaited MeeGo Phone (N9?) which we all have high hopes on.

Remember our interview with Alberto Torres, Nokia EVP; MeeGo Computers.

  • MeeGo phone will push the boudaries of processing power
  • MeeGo phone will be a very high end product
  • MeeGo is an opportunity to create something well beyond what others are doing
  • MeeGo phone is step 5 of 5 and intended for mass market
  • MeeGo phone will be something everyone wants to own
  • MeeGo phone will try to satisfy all needs into one plate
  • MeeGo phone will be capacitive, more stylish and more beautiful with simpler UI that average users will find as equally compelling as tech leaders.
  • MeeGo has potential to be something deeper than typical smartphone
  • Nokia N8 will be Nokia’s flagship in a few months
  • All future flagships will be built on MeeGo
  • MeeGo phone will be on Nseries (not rumoured Sseries)
  • MeeGo will have higher experience level than Symbian
  • Symbian^3 and MeeGo will have certain minimum base level specification to ensure apps created on one device works in another.
  • N8 is first step in reclaiming momentum at high end.
  • MeeGo is the next step.

Much hope rests on MeeGo phone to be all it has promised to be, all it has expected to be and more. We’ve seen MeeGo on the netbook which has received positive reviews. We’ve seen MeeGo on the tablet, which looks extremely impressive. Finally, MeeGo on phones got a brief preview, and Eldar Murtazin says himself that Nokia’s own version of the UI will look much better than what we’ve seen on the Aava Mobile (and N900 with MeeGo).

N8 and future Symbian Devices

But a lot rests also with the remarkable multimedia machine, the N8 which has tantalized us since April and the almost DSLR rivalling camera. To outsiders of Nokia, that’s the only gun Nokia’s got in their holster (not realising the basement full of weapons being prepped in secret). There is a team of all stars in training. You know their names, you’ve seen one in leaked shots. Without them, Nokia has remained profitable and held ground with the substitutes (S^1 and S603rd and S40 handsets). What more when they come out on the pitch?

But all but one are Symbian devices…Symbian?

Symbian-Foundation really is just that for Nokia, a foundation of their core smartphone experience. As much as everyone else but Nokia would like Symbian to die (it’s the most used smartphone OS, why wouldn’t you want it to die if you were the competitor?) it’s here to stay and why not? Symbian will get better as it receives updates to the user experience to make it in line with today’s expectations.

Maturity of Symbian is a strength not a weakness – it’s highly advanced in terms of features and just needs a facelift in the UI to make the final user experience pleasant, thus ensuring people can use the plethora of features it’s had for many years that some are only recently praising as wonderful and new.

We’ve seen these usability issues addressed in Symbian^3. For the most of it, it will be good enough for the majority of its intended users. Symbian^4 is the real visual refit as we move to Qt/Orbit based UI from the traditional AVKON.

It’s pretty obvious but OPK confirmed more S^3 handsets coming soon in today’s Q2 report

In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia’s fightback at the higher end of the market

Awesome things are on the horizon.

It takes time to turn around a big ship, and Nokia being the number 1 phone manufacturer is the biggest of them all.

Rest assured, Nokia are aware of the increasing competition and aren’t taking things lightly. Services are improving. Awesome handsets are coming. Hopefully, with a touch of marketing flair to do these products justice (perhaps not to the extent of a Reality Distortion Field, though whether Nokia and everyone needs one to even all the marketing confusion is another post altogether).

Here’s a fantastic comment by JFH in the previous post that pretty much mirrors the sentiment of this post:

I know very well that Nokia realised, even before the N97, they were caught off guard by the emergence of touchscreen phones as a status symbol. They were caught off guard when they were building services. At the worst possible time for them.

Since then they have managed to make Ovi maps in a gem of an asset, the Ovi store the 3rd most popular online store, and they expect to have 300 Million ovi services users.

They refocused on hardware & OS, and in my mind built a stellar device with the N900. Now that S^3 is here, S^4 is coming, MeeGo is coming, NFC, Pentaband, all that stuff is coming, with Qt, the way is up from the moment they announce all of this at Nokia World. I expect them to make a splash.

They have basically stayed profitable in the WORST time they have ever had, and they have made the right choices, technologically, strategically, and morally. They have gone through a storm, have continued to focus on long term investments instead of panicking, picking up Android and running with it.

They have 10 Billion is cash. The majority of patents in LTE. They build the largest LTE roll out to date at 7 Billion dollars. None of their new batch of devices is out yet, not even the N8. With an N8, N9, E7, X7, C7 coming out, their entire all star line up is absent, while the rest is digging their grave with the CPU MHZ wars.

Nokia is profitable, as opposed to what we see from Sammy of SE usually, because they have lower costs. Lower production costs, higher volumes, etc. They will not and should not give this away. What they should do is retain the cost advantage without skimping on performance.

THAT is the reason they wont pick up android. It turns them into Asus, or Dell, box pushers that compete on price on similar hardware & software: STUPID. And it is the smart way to go. I completely believe S^3/S^4 will give us equally snappy performance as competitors, but with lesser specs. Those specs are irrelevant, its experience that counts. And Nokia is betting it can deliver the same experience through cheaper chips, because Symbian is simply better at it.

For going all out, for getting perception turn positive again, for getting the spotlight back on Espoo, what better way to do this than lead the way in moving from smartphones to mobile computers. Did you see what just happened with FCam. Think you can do that on iOS?

So we have Nokia, Intel, & Linux foundation working on MeeGo. We already have seen a preview that looks already as shiny or better than the stuff that is out there now. BUT: Its a full real OS. Not iOS, not “look im a java VM” Android, but a real operating system. One that could run open office, or gimp, or what have you. The N9 will be a leap forward. Its the reason no one has seen it yet.

I know it has been said before, but wait and see.JFH

So….

Before you lose all hope in Nokia, just remember what’s coming at Nokia World 2010. Awesome things coming soon.


Categories: Nokia, Rant Tags: , ,
  1. Andre
    July 22, 2010 at 3:01 pm

    Wow, helluva long article, Kudos!
    Wish I had the time to get thru it all 😦
    But alas, deadlines!

    • July 22, 2010 at 6:28 pm

      Thanks – I think JFH’s comment is as long as what I’ve written :p
      My bit is nothing we haven’t heard already, but just needed to point it out again, especially given the recent negativities about Nokia.

      However, it is kinda like preaching to the converted he (being a nokia blog), unlike other ‘analysts’ and blogs of supposedly neutral avenues that revel in Nokia’s perceived downfalls.

      [For proper lengthy great Nokia reads, @tomiahonen’s blog is awesome. A recent piece has 10.5k words 😮 – extremely insightful.]

      • Keith
        July 22, 2010 at 7:37 pm

        Dude! Now I’m hesitating to buy the N8 after reading this article! I was gonna buy it for sure but after reading this, something tells me to wait until the announcement of a MeeGo device 😦
        CONFUSION!!!!

        • N#O#R#U#L#E#S
          July 22, 2010 at 8:18 pm

          buy n8 ,try it…sell..and for xmas get a N9! simply

          • Keith
            July 22, 2010 at 9:25 pm

            sounds good enough to me 😉
            Plus, I can sell it for a good price as I live in Canada and as far as I know, N8 aint coming to Canada…..

          • Keith
            July 22, 2010 at 9:40 pm

            but im thinking of waiting till Nokia to announce MeeGo (probably in September, who knows?) and then compare N8 and the MeeGo phone to see which one I should get. Coz if MeeGo phone (prolly N9) has all that the N8 has, I’d rather buy N9. Camera on N8 is great but My point & Shoot (Sony Cybershot W350) can do all that N8 can so i dunno…..
            however, IF MeeGo is not announced by September, I’ll buy the N8 and then N9 when it comes out. 🙂

  2. Yougo
    July 22, 2010 at 3:01 pm

    The n8 and meego phone look promising

    but we cant buy a decent and complete nokia touch screen phone at the current market! Sad n900 is not targeted at mass market,

    at this moment, we cannot buy a good nokia touch screen phone for gaming!

    So announce the date of n8 today, and announce the release date of meego phone at nokia world

  3. chfyfx
    July 22, 2010 at 3:12 pm

    Nice article. Thanks.

    All nokia needs to do is pushing out a high end Meego phone.

    Also, they might want to also isolate apple by working with other hardware and software giants in the world, e.g. samsung, MS, etc.

    Cheers

    • Andre
      July 22, 2010 at 3:15 pm

      Those guys seem averse to touching anything that Nokia has a hand in. Probably trying to screw them out of business in a sense lol.

  4. Jakob
    July 22, 2010 at 3:17 pm

    Thanks for the article…the problem with TV is that always want to focus on the fluffy stuff.

    http://www.cnbc.com/id/38013312

  5. Jakob
    July 22, 2010 at 3:17 pm

    Thanks for the article…the problem with TV is that always want to focus on the fluffy stuff…

  6. gruik
    July 22, 2010 at 3:20 pm

    “# MeeGo phone will be a very high end product
    # MeeGo is an opportunity to create something well beyond what others are doing
    # MeeGo phone is step 5 of 5 and intended for mass market
    # MeeGo phone will be something everyone wants to own
    # MeeGo phone will try to satisfy all needs into one
    (…)
    # All future flagships will be built on MeeGo”

    Will all of these adjectives they have to be up to these words…

  7. N#O#R#U#L#E#S
    July 22, 2010 at 3:43 pm

    great article jay!

    for now we will wait for these handsets:

    Nokia E6 (TOUCH+S1?)
    Nokia E7 (THAT’S THE N8+QWERTY?)
    NOKIA C7 (AS SPOTTED IN SOMES VIDEO/PHOTOS)
    AND Nokia x7 (again THAT’S THE N8+QWERTY??)

    and off corse Nokia N9(CERTAINLY with MeeGo cpu intel or arm?)

    i’m very exciting to see in particular E6 X7(devices that never see in preview for now) and naturally N9

    5 great cards by nokia for me for a great 2H10 AND 1Q11

    • Jim
      July 22, 2010 at 4:27 pm

      I don’t think X7 will be with qwerty. It’s designed for teens, and they like nice small design.

      N9 will be with ARM. Intel cpu are not ready yet. probably in Q2-Q3 we shall see phones with intel CPU

      • N#O#R#U#L#E#S
        July 22, 2010 at 6:24 pm

        But teens writes huge amount of sms/email @ day! see the nokia 5730 XM example.. it’s pratically a X series designed for young people

    • A-S-D
      July 22, 2010 at 4:36 pm

      Nokia did announce earlier this year that the FIRST Nokia MeeGo device will an ARM processor and not Intel though I wouldn’t rule it out for its successors.

  8. N#O#R#U#L#E#S
    July 22, 2010 at 4:07 pm

    jay i think in london they’ll release N9 and one of this X7 or C7 or E7

    i don’t think nokia wants to uncovered their 2 BIG cards (N9 and E7) in only one manche

    • N#O#R#U#L#E#S
      July 22, 2010 at 4:08 pm

      *i mean X7 or C7 or E6(not E7!)

    • July 22, 2010 at 6:33 pm

      Looking forward to N9. Really want to see what Nokia does with MeeGo Phone UI.

      Also excited to see official RM-626, “E7” and that incredible form factor (super slim, yet with flip tilt QWERTY keyboard).

      C7/X7 not necessary – may appear, but most exciting are N8, RM-626 and N9. 🙂

  9. Yougo
    July 22, 2010 at 4:17 pm

    I hope there is no leak before they announce meego phone!

    • July 22, 2010 at 6:41 pm

      Before the Nokia-Eldar kerfuffle, Eldar said he would announce a preview around 5 weeks before launch, but not certain.

      In a blog post he also mentioned something about betting on how much his preview will affect Nokia stock (I can’t find that article so might as well ignore that)

      But same, I hope Nokia can keep a tight lid on MeeGo phone. At least shut up all those that have MeeGo phone right now.

  10. Chris
    July 22, 2010 at 4:40 pm

    Hear hear, great article! I don’t want to see another moan about Nokia having to adopt Android to succeed.

    Liked this a lot.

  11. zeko
    July 22, 2010 at 5:22 pm

    very professional! great job! cant w8 for these devices, cant w8 to put my hands on the n8 and its camera… then give it to my brother and get me a new meego device 🙂
    just hope it would have the same camera!

  12. Juan
    July 22, 2010 at 6:14 pm

    Great reading, kudos for Nokia to keep profit in the middle of a great transformation, kudos also for them since avoided panic and keep the mind in their strategy. As for the future looks promising and sure will be.

  13. John Wiegand-forson
    July 22, 2010 at 8:56 pm

    I am getting sick and tired of morons saying Nokia should switch to Android its total utter nonsense. Tomi Ahonen has said that Nokia’s long term stratergy is better than Samsung, LG and Sony Ericsson and NOT Apple. Comparing Nokia to Apple is like comparing Toyota to Porsche it does not work and anyone with half a brain would understand that, unfortunately there are huge amount of those in the tech media 😦

  14. July 23, 2010 at 2:48 pm

    Like many, I enjoyed the article. Do you think how the N8 was handled was a big distraction so they can work on the meego phones in private? It is a great way to hide what they are doing. I would like to hear what you all think.

  15. Flufo
    July 24, 2010 at 12:37 pm

    @ Dennis
    No i don’t think it’s anything about distracting etc. There are diffrent Teams working on diffrent project. This is normal in large companies. Meego Team, maemo Team, s3 Team and so on. I just don’t like to buy the n8, and 4-6 months later there will be the uber meego phone, then i have to sell my n8 again. I don’t like to spent much time on phones. learning new stuff and installing the phone to my needs etc. that’s what is slightly annoying, the frequent news updats. if i wouldn’t know, that a meego phone is gonna hit the shleves, then i just buy a n8. But like this, i think twice to really buy one or just to watch and check. Nokia messed up the n97, so i will wait and check if the n8 withstands the tests and reviews. But all in all i’m actually looking forward to the uber meego phones. That is gonna be a big blast =)

  16. visitor
    July 25, 2010 at 4:35 pm

    A very good and very promising article. Thanks, Jay, for giving new hope to stay with Nokia. But there are nearly 7 weeks left to Nokia World 2010. That’s a long time. Typically, it takes some further months until the announced devices will finally be available on the market, except N8. That’s the end of the year, or 2011. A hard job for the N8 to prove that Nokia is or will be the ‘boss’ in the future for such a long time. I wish Nokia would surprise the whole world with the availability of the other new devices (C7/X7/N7/N9) a short time after Nokia World (3-4 weeks max.). I hold my breath. All the best to Nokia and it’s users.

  1. September 26, 2010 at 9:59 pm

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