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Nokia wants to lead again as the consumer electronics industry recovers

Ralf Ralf Haller January 30th, 2010


This week the world saw not only Apple’s iPad announcement but also Google and Microsoft showing very strong sales and profit numbers. Moreover, Nokia had a 60% profit rise and promised a healthy 2010 with more smartphones to come out.  The difference with Nokia, though, was that it was achieved with cost cuts and not with new product launches, but that could well come this year as well. That Nokia are not simply surrendering its mobile phone market leadership to Apple is clear from their aggressive move now offering highly data-efficient turn-by-turn GPS navigation for free on some of their phones. I saw that demoed already last year at the Mobile World Congress in Barcelona and was very impressed. So to use this as a differentiator was the right move, I think.

There are many voices out there that say that only a few mobile OSs would survive and among them Apple, Google (Android), RIM, and Microsoft (Windows Mobile). Nokia’s OSs are not mentioned. One of the major reasons brought up is that Nokia is not a SW company but a hardware manufacturer only. I am not sure though if that is correct. In particular if Nokia continue to make the right moves like this free SW GPS, and acquires SW companies, then they have their current market leadership behind them. Also, unlike both Google and Apple, Nokia have a very strong relationship with the mobile operators as their distribution partner. To change a working infrastructure is a tough thing to do and typically requires really big differentiation and benefits. Of course Apple is able to deliver them but also seems to be the only vendor out there with that capability. That would reduce the battle for Nokia to one company “only” which is Apple. And to do that they need to do more than provide SW. Nokia have known that for a while and that’s the reason why they launched their Ovi platform, offering free music downloads and now free GPS capability. Of course free is not a good business model for a CE vendor and that’s why they have to really integrate this all well so that they offer an alternative to the Apple platform (touch phones, iTunes store, music player, apps, ebook reader). Looking at their website that’s exactly what they are working on but you can also see their main deficiency: while maps are free, network download charges for synchronization are of course not, and depend on your operator and your mobile plan. Apple would have provided deals with the major operators offering a complete end-to-end user experience (and if it is only that you can conveniently buy/activate it through iTunes). So still some way to go for Nokia, but first steps look promising at least.

One additional question now is what will happen with GPS vendors when what they offer is essentially a freebee on mobile phones. Worth a new blog post I think…

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This entry was posted on Saturday, January 30th, 2010 at 9:56 am and is filed under Gadgets, News & Our 2 Cents. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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