Business, featured


Elop Ballmer

On February 11th, 2011, Nokia announced that it will be entering a strategic partnership with one of the Software industry’s giants, Microsoft. This may have been great news for Microsoft but it certainly was a shock and in some cases disappointment to fans and employees of Nokia.

Lets not forget, early in February Nokia announced that it would undergo some major organisational changes. Nokia’s CEO took a stance by sending an internal memo to all employees saying how and why Nokia is dropping through the ranks of a phone manufacturer.

Its obvious to anyone who is aware of the market that Nokia does not have a single handset in the market that stands out. Well, it may stand out but for all the wrong reasons.

I remember back in 2000 and the early years of the last decade, Nokia’s handsets were the only one anyone wanted. Nokia was a symbol for reliability, standard and cutting edge in mobile phones. I remember my first handset, a Nokia 3310. I used to call it the brick. It was and felt solid and durable. And best of all Snake, the most loved mobile phone game at the time. The screen was black and white LCD although it seemed like dot matrix 84 x 48 pixels. The menu was clean, easy to use and understand, just intuitive. Now of course those phones did not have features like a colour screen, expandable memory or even Bluetooth or Wi-Fi, but those Nokia phones were a world class standard.

As technology developed, microchips got more and more powerful, handsets started packing more and more power, displays got denser with huge number of colours. New players entered the market later in the decade. Right about now, Nokia had various handsets with different features video, gaming, cameras, Bluetooth, all the flash. But some how it felt like they couldn’t get the right mix. Symbian evolved to have applications and lots more features.

Players like Samsung, Sony Ericsson and LG were jumping on the wagon and producing some great phones. I particularly remember Sony Ericsson K800i, one of the best camera phones of the time. A 3.12MP camera with auto-focus and more importantly a Xenon flash. Delivered great results with speed too. Even now less than handful of phones have Xenon Flashes. But the hardware now a days is similar. They all have similar performances; the only differentiator now is the software.

Software is where Nokia failed, I believe. Symbian was open sourced in hope for better development by the community with all the features that are required. That was shut down soon after. Its venture with Maemo in 2005 up till recently was aimed as a new OS for smartphones and tablets. It was a Linux based OS but didn’t pick up any momentum until Maemo 5 was released on the N900. This was one of the flagship products for Nokia in 2009. You could say at this point in time, Nokia really was experimenting. The development didn’t really go any further. MeeGo was another attempt at a Linux platform for handsets by Nokia, which also unfortunately was unsuccessful. All other Nokias were released with its Symbian S60 OS.

Nokia didn’t really understand the touchscreen experience. Although the OS features were good and features were on par with most of the competitors (minus Apple) the user experience was below par. It was felt that the experience felt clunky, if u can say that for soft keys on a touchscreen. the UI was not optimised for the touchscreen.

Apple and Google then entered the scene. Apple with the iPhone and Google with its Android OS. Both these companies had no previous experience with mobile handsets. I think this made it easier for them to enter the smartphone market. They didn’t have the trouble and complexity of transition from traditional handsets to touchscreen smart handsets.

Microsoft on the other hand, realised that its Windows Mobile OS was not really a mobile OS. With its tiny taskbar and start button, using it felt like using Windows on a extremely tiny screen where everything was cramped together. Although it had great features especially a very mature development environment with hundreds of applications, it was unusual without a stylus and fairy high resolution touchscreen.

Microsoft’s mobile division started from scratch and developed Windows Phone 7 only 2 years ago and released to the public in 2010. Still based on Windows CE, it radically changed its UI and market. It looked great, has a tiled interface and some great apps like the Office app. Unfortunately for Microsoft, only a couple of handset manufacturers adopted it, while Android was still the first choice.

Back to Nokia now. Nokia says 2011 & 2012 are going to be transitional years. I think its better late than never, but Nokia needed to take a radical step early on. Although WP7 is a promising OS, adopting it so late won’t result in a recovery.

In announcing its partnership with Microsoft. it has completely scrapped Symbian and MeeGo upsetting most of its employees. Around 1500 employees walked out in protest for slashing Symbian. Taking Nokia in this new direction is going be a bit of a challenge. In some ways, it is like starting all over again. Although it will have to keep some staff dedicated to Symbian and MeeGo for support purposes of its current ecosystem. Morale will be at an all time low and adopting a completely new OS will be a challenge.

Let’s say Nokia make this transition to Windows Phone 7 by 2013, how are they going to differentiate themselves? Learning the new business will take time in which its output will be low and the market will still be racing ahead, taking on board new technologies. First Nokia need to catch-up with the market and the technology, then it needs to innovate on top to stand out and sell. However, standing out is now even more difficult as Nokia is now dependant on Microsoft for its software and thus potentially its USP. What is under Nokia’s control is the hardware and UI for WP7. Microsoft has said explicitly that Nokia will be able to customise almost anything in WP7 but Nokia’s CEO says it won’t be changing everything.

Two huge players in a strategic alliance should result in a great product. I wait to see the results.

Sources: Engadget, Youtube, Nokia, Microsoft


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