Nokia’s Comeback Strategy in Smartphones

The challenge Nokia faces in the smartphone market was grimly detailed last week. In the third quarter, according to IDC, Nokia’s worldwide smartphone sales fell 37 percent to 16.8 million phones from 26.5 million a year ago.

Nokia’s retreat comes in a booming market. Smartphone shipments grew 43 percent in the third quarter.

Stephen Elop, Nokia’s chief executive, is not despairing, and he has a turnaround strategy. The game plan is coherent and ambitious, but its success is not assured.

The opening for Nokia, Mr. Elop explained, depends on Nokia’s ability to exploit the rapidly shifting market in smartphones, to profit from its new alliance with Microsoft and to develop services based on its own assets, like the company’s advanced mapping and location data technology.

“There is tremendous opportunity for differentiation,” Mr. Elop said Monday in an interview.

The difference, said Mr. Elop, who joined the Finnish phone maker from Microsoft just over a year ago, starts with Microsoft’s new Windows Phone operating system. The well-reviewed software presents the user with large touchscreen tiles, which can be tailored to collect all the communications — e-mail, Twitter, Facebook — from a person’s family or spouse, for example.

Smartphone Buying Guide

Before developing a purchasing strategy, organisations first need to understand the market including the major players and their operating system (OS) roadmaps. For example, Google’s Android platform and Apple’s iOS combined currently command 60 per cent market share.

The following guide outlines the top platforms and the roadmap issues that need to be considered prior to any significant investment.

Google

Android continues to be the platform of choice gaining 40 per cent of the smartphone market in 2011. Moreover, the platform will continue to mature driving developer interest in its ecosystem.

“The release of the Ice Cream Sandwich version will make the platform more appealing to developers, as the OS will unify user interfaces (UIs) across smartphones and tablet form factors,” according to Gartner analyst, Roberta Cozza.

Android’s position at the high end of the market will remain strong, but its greatest volume opportunity in the longer term will be in mid-to-low smartphones. Gartner expects Android to hold 50 per cent market share by 2015.

Nokia

Symbian’s appeal over the next two years will be limited to emerging markets and more price-sensitive consumers in mature markets. Following its alliance with Microsoft, Nokia is expected to retire Symbian during 2012 and to migrate to Windows Phone as its main smartphone OS.

This will impact Symbian’s market share, which is expected to drop globally to 21 per cent in 2011 and 6.6 per cent in 2012, Gartner said.

Nokia will push Windows Phone well into the mid-tier range of its portfolio by the end of 2012, driving the platform to be the third largest in worldwide rankings, ahead of RIM, by 2013.

Apple
Apple’s iOS will remain the second-biggest platform worldwide until 2014, according to Gartner. However, falling prices and increasing volumes of lower cost devices will impact Apple’s market share.

“Our assumption is that Apple will be interested in maintaining margins and profit, rather than pursuing market share by changing its pricing strategy, this will limit adoption in emerging markets,” Cozza said.

Blackberry

The transition to QNX will enable RIM to bring to market more competitive products which will mitigate an overall decline in market share during 2013, Gartner said.

With the migration of legacy Blackberry devices to QNX (the OS used on the Blackberry PlayBook in 2012), RIM will be able to offer users a consistent experience across its whole product portfolio and create a single developer community.

Gartner said organisations most interested in this platform will be those that have already deployed RIM infrastructure or have stringent security requirements.

HP

HP is currently undergoing a major transition. Earlier this year HP announced it would stop producing hardware based on the webOS with plans to explore new alternatives. The announcement came after continuing poor sales of new webOS smartphones and the TouchPad’s failure to capture consumer interest.

Although the webOS platform had potential as a modern OS with a good UI, Cozza said a lack of applications, services and content limited its appeal.

Samsung

Gartner said Bada has done relatively well at the low end of the smartphone market. But one problem with the platform is that it offers no development path for tablet devices. Users want to share applications across devices so this is likely to limit uptake.

Intel Without the support of Nokia, Gartner believes MeeGo has little potential to become a relevant platform in the smartphone market.

Intel has plans to merge MeeGo with another open source effort, the LiMo Foundation, to create a new platform called Tizen. Gartner said both MeeGo and LiMo have, as separate entities, failed to attract mind share and the support of developers.

“Gartner remains unconvinced that a combined effort will change that much,” Cozza said.

Nokia Lumia 800 vs. iPhone 4S vs. Nexus Galaxy

Nokia is betting its future on Microsoft’s mobile OS, and on Wednesday introduced its first Windows Phone 7 device, the Lumia 800. If the Lumia 800 looks familiar, that’s because it’s similar to the Nokia N9, which runs OS (MeeGo) soon to be ditched. The Lumia 800 brings a few improvements over its relegated sibling, including a faster processor, but compared to the big boys, the iPhone 4S and the latest Android Galaxy Nexus and Droid RAZR, Nokia’s flagship is still falling behind.


The Lumia 800 has a smaller curved 3.7-inch screen than the N9, which had a 3.9-inch display -- a change needed to accommodate the three hardware buttons Windows Phone 7 OS requires under the display. Lumia’s display is slightly larger than the 3.5-inch screen on the iPhone 4S, but significantly smaller than the huge 4.65-inch display on the Galaxy Nexus.

Nokia’s phone also has the lowest display pixel density at 800 by 480 pixels, a far cry from the Nexus Galaxy’s resolution of 1280 by 720 pixels, or the Retina display on the iPhone 4S, which has the highest pixel density in the comparison.

Nokia can’t brag about how slim the Lumia 800 is. At 12.1 mm, it’s the thickest phone in the line-up. It’s also the heaviest, at 142 grams, a hair more than the iPhone 4S and the Nexus Galaxy.

On the inside, the Nokia Lumia does not feature a dual-core processor: it has a 1.4GHz single-core processor with 512MB of RAM. In comparison, the iPhone 4S runs on a 1GHz dual-core chip with 512MB of RAM and at the top of the line there’s the Galaxy Nexus with a 1.2GHz dual-core chip and 1GB of RAM.

The Lumia 800 is a mixed bag in the camera department. It has an 8-megapixel camera with Carl Zeiss lens on the back, like the iPhone 4S, but unlike Apple’s phone, it doesn’t record 1080p HD video, only 720p. Even Galaxy Nexus’ 5-megapixel-camera records 1080p video. Surprisingly, the Lumia 800 doesn’t feature a front-facing camera for video calls, which makes it the only phone in the comparison without one.

Overall, Nokia’s Lumia 800 could be an interesting proposal for those who want a smartphone that’s not an iPhone or Android, with solid guts and shiny looks. But when compared to its competitors, the Lumia 800 does not have anything extraordinary to offer: it’s not the thinnest or fastest of phone, nor has it the best camera or extra features (no expandable storage, no secondary camera, no HDMI, no NFC).

Nokia didn’t say which US carriers would sell the Lumia 800. The phone becomes available in November for around $584 unlocked.