Nokia’s determination to reverse a tough period of decline was made clear when it announced a raft of new initiatives at the Nokia World conference in Stuttgart, Germany, last week.
Among the announcements are plans to integrate products and services into new devices – such as the soon-to-be launched Linux-based N900 and its first laptop, the Booklet 3G – through partnerships.
One source at the manufacturer admits that Nokia was in a ‘tough spot’ this time last year, after being overtaken by rival Samsung for the number one UK position.
In July 2009, Nokia reported a 66% profit dive to £326m for the quarter ended 30 June.
Despite this, its market share for smartphones increased from 39% to 41%, which Nokia attributed to strong sales of its Nseries and Eseries devices, and it also shipped 3.7 million 5800 XpressMusic handsets.
At the time, the manufacturer announced plans to ‘accelerate’ its strategic transformation into a ‘solutions company’, offering more than just mobile devices with services such as its Ovi Store.
Olli-Pekka Kallasvuo, CEO of Nokia Worldwide, gave an indication of what was to come back in July: ‘We are balancing short-term priorities with our longer-term growth ambitions, as elements of the mobile handset, PC, internet and media industries converge to form a new sector. Consumers will increasingly expect devices and services designed as integrated solutions.’
And most in the industry agree that Nokia is actually doing pretty well in services.
The manufacturer reiterated its commitment at the Nokia World conference. It announced plans to integrate apps with the launch of its new So-Lo concept – a social networking and location based service, which allows users to share location, pictures and status with anyone in their network via its new ‘Lifecasting’ tool.
Nokia’s services plans have now been in place for some time. A few years ago, the manufacturer set a 10 year roadmap to become such a company, looking at contextual awareness of all handsets and location based services. The company sees this as driving loyalty and revenues, but it has been niche so far.
Services and applications
SMS, internet browsing and instant messaging have been popular, but companies now need take up of these new services and applications.
Strategy Analytics’ director of wireless practice, Neil Mawston, says: ‘For services, Nokia has a plan in place – it is trying to fill in the gaps over time. It is launching products and firing off services in all directions, hoping that one or two will fit.’
He adds: ‘They are actually doing OK in services, despite the negative headlines, but they will need to step up.’
The conference also saw a renewed focus on Nokia’s beleaguered Comes With Music service with the launch of two devices, the X6 and the X3. All had been quiet since Nokia’s last attempt to revive the service, by finally enabling the 5800 with Comes With Music, months after launch.
Sources said Nokia’s latest news could be an attempt to relaunch the free music download service, after making it available on more devices.
Mawston says: ‘With Comes With Music, they are trying to build a subscription based service, but they have been struggling – postpay has been very poor in global terms. Also, the branding, product and operator activity was weak at launch. It is quietly trying to relaunch and improve it and get more operators on board.’
But music is only one element of Nokia’s cocktail of services. The manufacturer has its Ovi applications store, and is initially opening up elements such as mapping for developers to use. This ‘open’ outlook, allowing Ovi Maps to be used on any phone, will be applied to other applications; effectively meaning Nokia apps will be available for use on rival manufacturers’ handsets. Meanwhile, it is partnering up with big brands such as Facebook.
Speaking to Mobile from the Nokia World conference, the manufacturer’s UK MD, Mark Loughran, says: ‘Our strategy is what it was. We said a few years ago we were going to go into services.’
To succeed in services, mobile companies need to be developer-friendly, operator-friendly and consumer-friendly. Apple is all of these, as one manufacturer source points out, but Nokia is ‘not quite there’.
The source adds: ‘Without question, Nokia’s biggest weakness is the US,’ but he admits: ‘The Facebook partnership and Booklet 3G seem to address the
Loughran says Nokia’s strategy is ‘mobility services’. He adds: ‘We are looking to bring devices together with services – the performance you can get bridges the gap between computers and mobile phones – that really is what computers have become.’
Loughran explains that a more competitive market has led Nokia to form partnerships: ‘The N97 Facebook widget has been a fantastic success, and access to the BBC iPlayer on the N96 transformed the use of that player on mobile.’
He adds: ‘The Facebook partnership is interesting because we are integrating the ability to update the device, people can geotag and open Ovi Maps – we are combining services together.’
Nokia may be confident of its return to profitability through this integration, but does the industry agree? Mawston thinks there is a chance the company could succeed in becoming profitable in the near future. He says: ‘It is making baby steps – Nokia is a big ship that takes time to turn around.’
According to one operator source, Nokia is ‘quietly and incrementally filling the gaps’ it has missed, and is trying to correct mishaps in the high end that it made in the last few years.
It is already recovering under the enterprise market and fighting RIM with the Eseries and recent Microsoft partnership, which could make way for ‘cloud’ computing.
It seems that Nokia is finally making moves, behind and in front of the scenes, to bring back share and return to the dominance it once had.
Nokia World announcements
Day one (2 September)
- The Nokia Booklet 3G is launched officially. Pricing is revealed as around £504.
- N97 ‘Mini’ and Linux-based N900 are launched. The Nokia N97 Mini is priced at £429 Sim-free, and the Nokia N900 Linux-based internet tablet is £499.
- Comes With Music X6 and X3 phones launched. The X6 has a touch-screen, 32GB of memory and can play up to 35 hours of music.
- The big announcement of the day: Nokia’s So-Lo Facebook and mapping integration signals the start of things to come for the company.
- Nokia makes a green commitment by agreeing to a universal charger and removing non-recyclable components.
Day two (3 September)
- Ovi Maps is opened to external developers, so they can use the service in their applications in the same way Google Maps can be used on the iPhone or BlackBerry range.
- Nokia launches Mobile Money – its mobile banking service for emerging markets.