Business Issues -> Change
By: Rob Bamforth, Principal Analyst, Quocirca
Published: 27th July 2012
Copyright Quocirca © 2012
For a couple of decades, Nokia has been a powerful force in the mobile telecoms industry, from the launch of the expensive, but desirable to city types and aptly named, Mobira Cityman in 1987, right until a few short years ago.
Nokia phones went from being the mobile of choice for city execs to any and all mobile workers. At one time it almost seemed like the aspirant middle manager or sales exec's car brands of choice (BMW or Mercedes) came with a mobile phone kit for a Nokia.
The phones were known as robust, reliable and predictable. Learning the menu system of one still worked fine as you moved on to its replacement. Battery life was great and getting longer while the phones themselves were getting smaller.
So what went wrong?
Like the similarly popular-with-sharp-suits BlackBerry, Nokia missed two vital trends: apps for everything and the consumerisation of business technologies.
It wasn't that Nokia phones hadn't become popular consumer devices, they had. From the late 1990s, Nokia became and remained the world's largest mobile phone maker by unit sales, until overtaken by Samsung in 2012. BlackBerry, too, went from being business only to a consumer favourite.
Yet both brands have stumbled, and many would rightly blame Apple for this. Apple not only had shiny hardware, easy to use software and an ecosystem designed to woo developers, it worked commercially at making its devices desirable, as well. The main thrust in the summer of 2007 was to go exclusively with one operator per country and get it to promote and push the new device.
Roll forward to 2012 and this would appear to be the approach that Nokia is going to use as it launches its new Lumia range, based on Microsoft's Windows Phone 8.
Since the announcement of the partnership between Microsoft and Nokia at Mobile World Congress in February 2011, there has been an expectation that these two industry giants of the PC and phone worlds would eventually come back fighting in the mobile market where both had lately struggled. It looked a bit too little too late after previous attempts and, at the time, some commented that 'two turkeys don't make an eagle'.
However it was likely that with its deep pockets something could be done by Microsoft to make an appealing mobile operating system. After many years in the wilderness, Windows Phone 7 moved it back into the frame with app developers and users, and version 8, with finally a closer tie to what's going on in the desktop and a tablet proposition, looks excellent in the beta reviews.
So that's great news for Nokia as it lines up its new phones to launch exclusively with carefully chosen carrier partners sometime close to Microsoft's expected launch of Windows Phone 8 in November?
Not quite. Although Nokia will probably have a slight lead from its strategic partnership with Microsoft, there are other manufacturers making phones based on Windows Phone 8: market leader Samsung, long-term Windows mobile partner HTC, and Huawei - which wants to make a big splash with its first smartphone. Nokia might be able to jump the gun and get its new Lumia range out first, but is exclusivity and a prime carrier's marketing push going to be enough?
The problem for the carrier doing the marketing push is in deciding what are the messages they are going to focus on. The industry might be trying to create a noise around the coming to fruition of the efforts of three giants - Microsoft, Nokia and operator - but consumer ‘buzz' is most likely to be around what Windows Phone 8 feels like and its apps, not the handset manufacturer or even the mobile network operator.
At one time, exclusivity and rarity might have worked. It fits well as markets are moving out of geeky early-adopter into the first ramp of the hockey stick of mass market when being first or the only one with something that is seen as really cool. It also works better when economies are doing well. People have spare money and can afford to splash out to impress.
Neither of these fit the mobile market right now, at least not in the developed Western markets that Nokia is targeting. While there is still appeal and growth, it has become a mass market with different dynamics to fast growing or emerging ones. The far Eastern, cost sensitive and other fast growing markets are different, but there are other Windows Phone 8 partners who might address them more readily, in particular Huawei.
Windows Phone 8 is going to be a rollercoaster.
This article first appeared on http://www.knowyourmobile.com
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