Can Nokia fight back?

Nokia has had a presence in London this week, launching a series of new smartphones.  The term ‘fightback’ has been used in some of the coverage in the light of Nokia’s changing fortunes, given that it doesn’t dominate the market for mobile phones to the extent that it once did.

The Reuters piece at http://uk.reuters.com/article/idUSTRE68D1JV20100914 links Nokia’s new products to current changes in Nokia’s senior management.

My reservations about Nokia’s prospects for success in the smartphone market are similar to those that I expressed last year in connection with Palm, that it’s a business so closely associated with one generation of devices that it’s having immense difficulty in adapting to a different generation: however here are a handful of factors that I think Nokia needs to consider if it’s to be successful.  There are clues to the first two of these in the photos that accompany the Reuters article.

  • The pull-out QWERTY keyboard which you can see in the first image is a really important feature.  Not everybody gets on with touch screens or with the tiny keys on a BlackBerry
  • Nokia’s strengths have always been in providing a wide range of phones – all may have used very similar internal electronics but Nokia has been able to convince its customers that a particular product works well as, for example, a business phone or as a sports phone.  This is something that Nokia needs to emphasise in the future, as they are doing now by launching a range of smartphones, with different characteristics, all at the same time.  By comparison Apple in the phone market is essentially a one-product player.  Of course there are variants for sale at any time, and inevitably there’s been considerable innovation over the years, but essentially the iPhone is a single distinctive product.  Apple’s brilliance is in creating something which starts out highly standardised, but can be customised by using products from other suppliers, whether they are apps, or skins to make the iPhone look different.
  • There’s still a market for simple phones that work well for voice calls and text messages and it isn’t just among the oldest and youngest members of the phone-buying public.  I’ve some evidence, albeit purely anecdotal, of smartphone users, including those with iPhones and users of Nokia’s own products, complaining that their devices don’t really work very well in pure phone mode, so some people will want a second device that’re really just for voice calls.  This is very different from the dilemma facing Tom Tom, where the device that’s a central product and that led to their succes is in danger of becoming obsolete rapidly.  So of course Nokia needs to adapt, but there’s also a core market that they shouldn’t neglect.  And there’s also a huge market in developing countries for simple, but web enabled, phones which is part of the reason why Sir Tim Berners-Lee was talking to Nokia at http://conversations.nokia.com/2010/09/15/sir-tim-berners-lee-talks-to-nokia-conversations/
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