Nokia’s touchiest week

We’ve arrived in Barcelona, Spain for Nokia World, a week where Nokia talks to its top customers.

When we got here a Nokia executive met me and bragged that the Internet has no clue what they will announce this week. I asked “what about the touch screen cell phone that I’ve seen rumors about?” He said that no one had gotten it right yet. The announcements are on Wednesday morning (it’s early Monday morning as I post this) so we’ll have to wait to see what they announce. He told me this is one of the only times he can remember when a big announcement has not leaked. He said that even internally only a handful of people have seen the new device they’ll be announcing on Wednesday. Does that tactic sound familiar? It should, and is only one of the reasons why this is Nokia’s touchiest week.

This is the week when Nokia either keeps its seat at the cell-phone-thought-leadership table or it will give up its spot to Apple and RIM alone.

Here’s some datapoints.

1. At the recent Salesforce.com conference CEO Marc Benioff asked the audience what cell phone they used. 35% answered iPhones. That’s incredible. Apple has gotten HUGE market share among enterprise users, despite having a huge wall setup against them.
2. RIM was used by almost everyone else at Salesforce. Nokia? Hah.
3. When I traveled to China the thought leaders there bragged about their iPhones. Same in Tel Aviv, Israel. These are places that are HUGE Nokia strongholds and that have almost no Apple stores.
4. Apple is just about to pass 10,000 apps for the iPhone, says Webware. Developers are picking iPhone big time. Why is that? Because Apple has thought leadership that Nokia has squandered.

Translation: this is the week that Nokia either shines or moves to the B list of the cell phone market. Yeah, you won’t know how this week turned out for a year or two, but there is no bigger week for Nokia.

Now, can you count Nokia out yet? No way. It has the biggest slice of the cell phone marketshare pie. Its devices are much better engineered than Apple’s are (GPS on Nokia is better, so are the antennas, the cameras, and bluetooth radios that Nokia uses). But engineering does NOT equal a great experience. Yeah, my Nokia does not drop phone calls in places in Silicon Valley that my iPhone does, but generally I reach for the iPhone when I want to make a call or surf the web. Why?

Nokia is behind in experience. The executives here from Nokia that I’ve talked to know that. They know this is Nokia’s touchiest week and one where they either deliver a much better device or they are going to face a very tough 2009 globally.

Oh, and how do you figure out what kinds of new features are coming soon? You visit the suppliers of Nokia like I did last week. I went to Broadcom where I met with (and videoed) the team that does the GPS chip inside your cell phones.

What did they tell me? Well, first, look at how much smaller that Broadcom chip is compared to the prototype that team built back in 2000. Can they make it even smaller? The team says “yes.” How? They are now combining chips. In your cell phone today is three chips. One for GPS. One for Wifi. One for Bluetooth.

Broadcom now makes one chip with all three features. That means longer battery life, lower cost, smaller form factor so you can have sexier phones that are thinner and smaller. By the way, the videos I shot with Broadcom explain how GPS works and how they are making it better so it works even inside buildings. Think that one small group of people can’t change the world? These engineers did. They are now working on new chips that also include MEMS (micromachines on silicon) that will include things like accelerometers (like the iPhone has). As I was leaving, the Broadcom PR people said they were “just about” to announce new chips. Is Broadcom waiting for Nokia to announce its new device? I hope so.

So, what do you think Nokia is going to release on Wednesday? Will it take “touch” and “experience” leadership back from Research in Motion and Apple?

More from Nokia World all week.

UPDATE: more discussion of this over on FriendFeed.

129 thoughts on “Nokia’s touchiest week

  1. We have no doubt that Nokia is announcing a touchscreen of some sort. It better be a resistive screen where the user can use their fingernail, finger tip, stylus, etc versus a capacitive screen where the finger pad must be used. This has already proven to be disastrous for the HTC G1 and now the extremely overrated Blackberry Storm.

  2. We have no doubt that Nokia is announcing a touchscreen of some sort. It better be a resistive screen where the user can use their fingernail, finger tip, stylus, etc versus a capacitive screen where the finger pad must be used. This has already proven to be disastrous for the HTC G1 and now the extremely overrated Blackberry Storm.

  3. The thing that matters:

    It always boils down to making money. How do I feed my kids, etc. So, for phone manufacturers it has always been who can come out with the coolest new phone? Who can offer the coolest new service? Aka, how can we follow old school ways of doing things to make more money?

    Apple followed that same old rule, how can we make more money but they did it in a revolutionary way. Not an evolutionary way. How can you tell? Well, their screen is worse, their camera is worse and their phone’s capabilities are far behind many of their competitors. BUT they did it all in a new way. They focused on user experience.

    So, now companies like Nokia are having to re-think what they’ve been doing. Many of them thought they could solve this problem by repackaging an iphone looking UI, but that’s not it either. It’s about the user experience. How can I, as a user be happy with my phone? Well, phones are moving in the way of computers now (Nokia is already ahead here), phones should be able to take good pictures, and good video (again, Nokia is ahead), but what about HOW those programs operate? What about how snappy the response time is or how fluid it works? This is where Nokia has missed the boat. I purchased an e90 way back when, and it was cool, people were always asking if they could see the server that I carried around with me. However, the problem was, using the phone sucked. It was no fun. It was not enjoyable.

    So, Nokia… can you show us that you can think differently? I doubt it, not because I want to doubt it… I want Nokia to rock the house on this one. The problem is… their so closely tied to their symbian OS. Which is an anchor around their necks. They need to make the user experience more fun, and more personal… I just don’t see how they can do this with the symbian OS…. we’ll see I guess.

    Best of Luck Nokia.

  4. The thing that matters:

    It always boils down to making money. How do I feed my kids, etc. So, for phone manufacturers it has always been who can come out with the coolest new phone? Who can offer the coolest new service? Aka, how can we follow old school ways of doing things to make more money?

    Apple followed that same old rule, how can we make more money but they did it in a revolutionary way. Not an evolutionary way. How can you tell? Well, their screen is worse, their camera is worse and their phone’s capabilities are far behind many of their competitors. BUT they did it all in a new way. They focused on user experience.

    So, now companies like Nokia are having to re-think what they’ve been doing. Many of them thought they could solve this problem by repackaging an iphone looking UI, but that’s not it either. It’s about the user experience. How can I, as a user be happy with my phone? Well, phones are moving in the way of computers now (Nokia is already ahead here), phones should be able to take good pictures, and good video (again, Nokia is ahead), but what about HOW those programs operate? What about how snappy the response time is or how fluid it works? This is where Nokia has missed the boat. I purchased an e90 way back when, and it was cool, people were always asking if they could see the server that I carried around with me. However, the problem was, using the phone sucked. It was no fun. It was not enjoyable.

    So, Nokia… can you show us that you can think differently? I doubt it, not because I want to doubt it… I want Nokia to rock the house on this one. The problem is… their so closely tied to their symbian OS. Which is an anchor around their necks. They need to make the user experience more fun, and more personal… I just don’t see how they can do this with the symbian OS…. we’ll see I guess.

    Best of Luck Nokia.

  5. What you guys do not take into account is that the global possible market for a $200 phone + a $70 month plan (or a $700 phone with a smaller contract) is not that big. For most of the citizens of this world mobile internet is just something cool, but not really useful. I work in IT, in fact even web development, and even I can still manage without mobile internet (i do have mobile internet, but really need it less than once a month). And paying $700 just for fun (every year or once every two years … when switching to new phone models) plus internet plans … hmmm … that means you pay more than $1000 a year just to have a cool phone. If that phone does not help you earn at least $5.000 per year, that is probably a bad business. May be fun, but a lot of phones provide fun. And iPhone has serious limits even on multimedia, by not providing a decent camera, video, a radio, flash support, a stereo bluetooth headset possibility, MMS, etc. So a device costing $1000 per year (assuming you buy it with a full plan) for sure is not for everybody when half of the world dont even make that kind of money in a whole year (Africa, India, China, some poorer asian countries or south american have toghether a lot more than half of the world population). Even in Europe’s developing countries, where average salaries are about 6000-12000$ per year (like Russia, Romania, Bulgaria and even Hungary, Poland), that kind of phone is a luxury for the average citizen. So the countries where maybe 10-20% of the population afford buying this phone are USA, Canada, Australia, Japan, Western Europe. Those togheter have less than 20% of the world population. So the real market is 10-20% from 20% of the world population, so about 2 to 4% of the world citizens. From those a good part dont want/need an iPhone for personal reasons (not liking it, attachement to other brands, etc) … that leaves maybe 1% of the world population as potential customers. That is about 60 million citizens. Meanwhile, Nokia sold more than one billion phones and will keep selling a lot because owning a Nokia can cost you 10 times less than an Iphone (I mean a simple phone with simple plans). The real competitor for Nokia is Samsung … Apple competes only with the high priced Nokias.

  6. What you guys do not take into account is that the global possible market for a $200 phone + a $70 month plan (or a $700 phone with a smaller contract) is not that big. For most of the citizens of this world mobile internet is just something cool, but not really useful. I work in IT, in fact even web development, and even I can still manage without mobile internet (i do have mobile internet, but really need it less than once a month). And paying $700 just for fun (every year or once every two years … when switching to new phone models) plus internet plans … hmmm … that means you pay more than $1000 a year just to have a cool phone. If that phone does not help you earn at least $5.000 per year, that is probably a bad business. May be fun, but a lot of phones provide fun. And iPhone has serious limits even on multimedia, by not providing a decent camera, video, a radio, flash support, a stereo bluetooth headset possibility, MMS, etc. So a device costing $1000 per year (assuming you buy it with a full plan) for sure is not for everybody when half of the world dont even make that kind of money in a whole year (Africa, India, China, some poorer asian countries or south american have toghether a lot more than half of the world population). Even in Europe’s developing countries, where average salaries are about 6000-12000$ per year (like Russia, Romania, Bulgaria and even Hungary, Poland), that kind of phone is a luxury for the average citizen. So the countries where maybe 10-20% of the population afford buying this phone are USA, Canada, Australia, Japan, Western Europe. Those togheter have less than 20% of the world population. So the real market is 10-20% from 20% of the world population, so about 2 to 4% of the world citizens. From those a good part dont want/need an iPhone for personal reasons (not liking it, attachement to other brands, etc) … that leaves maybe 1% of the world population as potential customers. That is about 60 million citizens. Meanwhile, Nokia sold more than one billion phones and will keep selling a lot because owning a Nokia can cost you 10 times less than an Iphone (I mean a simple phone with simple plans). The real competitor for Nokia is Samsung … Apple competes only with the high priced Nokias.

  7. Microsoft has showed many times you don’t need to be the first on the market.
    Microsoft has showed many times their presence in retail stores is decisive.

    Nokia can be late in the market, but their brand and presence is important.
    Nokia and Samsung are present in all the retail stores in Europe and Asia (Nokia not in Japan).

  8. Microsoft has showed many times you don’t need to be the first on the market.
    Microsoft has showed many times their presence in retail stores is decisive.

    Nokia can be late in the market, but their brand and presence is important.
    Nokia and Samsung are present in all the retail stores in Europe and Asia (Nokia not in Japan).

  9. No other phone maker will surpass the iPhone. Why ? Because Apple is the only company that succeed to transform a buyer into a vendor. And this makes a huge difference.

    An iPod/iPhone user is proud of it and proud to show it to everybody. That transform him into an Apple vendor. Apple store are great, but Apple vendors everywhere is even better.

    I have never seen any Blackberry, Android, Nokia guy demo his phone to a regular user (except in phone shop).

    That’s it !

  10. No other phone maker will surpass the iPhone. Why ? Because Apple is the only company that succeed to transform a buyer into a vendor. And this makes a huge difference.

    An iPod/iPhone user is proud of it and proud to show it to everybody. That transform him into an Apple vendor. Apple store are great, but Apple vendors everywhere is even better.

    I have never seen any Blackberry, Android, Nokia guy demo his phone to a regular user (except in phone shop).

    That’s it !

  11. Robert

    I’m also shocked at the speed and passion around the iPhone but market share is a big word (well, two words) that need to be used carefully. To ues you own words, this is more about thought leadership than market share. the challenge for Apple not is to turn thought leadership *in to* market share.

    You’re right, the world has changed and the web often listens to thought leadership but that’s very different from market share

  12. Robert

    I’m also shocked at the speed and passion around the iPhone but market share is a big word (well, two words) that need to be used carefully. To ues you own words, this is more about thought leadership than market share. the challenge for Apple not is to turn thought leadership *in to* market share.

    You’re right, the world has changed and the web often listens to thought leadership but that’s very different from market share

  13. Saying that Nokia will lose clients to Apple and RIM is like saying that Toyota will lose clients to Porsche. There are too few common clients … Porsche is a niche brand, the same way Apple and RIM are. Toyota will keep selling million of good and cheap(er) cars, while Porsche will have a niche market … and there is no way they can compeat with Toyota on 15-20.000$ cars.

  14. Saying that Nokia will lose clients to Apple and RIM is like saying that Toyota will lose clients to Porsche. There are too few common clients … Porsche is a niche brand, the same way Apple and RIM are. Toyota will keep selling million of good and cheap(er) cars, while Porsche will have a niche market … and there is no way they can compeat with Toyota on 15-20.000$ cars.

  15. To clarify – I’m not saying KDE/Qt is a weak platform compared to native Mac or Windows development – just that using any x-platform toolkit is a weaker choice, while on KDE, Qt IS the native choice.

  16. To clarify – I’m not saying KDE/Qt is a weak platform compared to native Mac or Windows development – just that using any x-platform toolkit is a weaker choice, while on KDE, Qt IS the native choice.

  17. It response to David Geller – the moment I thought Nokia had ‘got’ the iPhone was the moment they acquired Trolltech. It showed that they understood the important thing was to own a software development platform.

    Now Qt may have some weaknesses compared to native application development on the Mac or Windows (it is the native platform for KDE Linux), but from what I’ve read up, it looks like a good clean modern platform.

    I also suspect that many C++ developers will find Qt a faster transition than Cocoa/Obj-C, because it allows them to maintain their ‘way of thought’ (regardless of whether it may be more effective to use a more dynamic language).

    One last thought – this can’t just be a phone. It has to be a platform for all their devices. Otherwise it’s just the N-Gage, or the N800 all over again – it doesn’t matter if you have dominant market force if most of the sales are (like my Nokia phone) a simple candy-bar phone. It’s the market size of the platform, not the company, which matters to developers – and that is how Apple are punching way above their weight here.

  18. It response to David Geller – the moment I thought Nokia had ‘got’ the iPhone was the moment they acquired Trolltech. It showed that they understood the important thing was to own a software development platform.

    Now Qt may have some weaknesses compared to native application development on the Mac or Windows (it is the native platform for KDE Linux), but from what I’ve read up, it looks like a good clean modern platform.

    I also suspect that many C++ developers will find Qt a faster transition than Cocoa/Obj-C, because it allows them to maintain their ‘way of thought’ (regardless of whether it may be more effective to use a more dynamic language).

    One last thought – this can’t just be a phone. It has to be a platform for all their devices. Otherwise it’s just the N-Gage, or the N800 all over again – it doesn’t matter if you have dominant market force if most of the sales are (like my Nokia phone) a simple candy-bar phone. It’s the market size of the platform, not the company, which matters to developers – and that is how Apple are punching way above their weight here.

  19. Nokia just needs to be patient and make sure to get the formula right. Once it gets the OS and UI comparably attractive and efficient as the iPhone’s, this 800 pounds gorilla of mobile phones will flood the market with smartphones of all shapes and sizes… and prices.

    By the way, the claim that “Apple has gotten HUGE market share among enterprise users” based on that ad hoc “survey” at Salesforce.com conference sounds too ludicrous to me.

  20. Nokia just needs to be patient and make sure to get the formula right. Once it gets the OS and UI comparably attractive and efficient as the iPhone’s, this 800 pounds gorilla of mobile phones will flood the market with smartphones of all shapes and sizes… and prices.

    By the way, the claim that “Apple has gotten HUGE market share among enterprise users” based on that ad hoc “survey” at Salesforce.com conference sounds too ludicrous to me.

  21. > Nokia is behind in experience.
    True, but not really that far behind. And not far enough behind to make it worth sticking with iPhone when you’re sick of it’s restrictions, poor hardware spec, and poor hardware implementation as increasing numbers of people are. And Symbian/S60′s folder based UI structure can have advantages over iPhones pages and pages of icon screens.

    > will include things like accelerometers (like the iPhone has).
    You do know Nokia Nseries have had accelerometers since before iPhone, and still do, and they’re very good, right…?

    Finally, iPhone sales to date = 13 million. Symbian (mostly Nokia) sales end of June 08 = 226 million across 249 different phone models, so I’d guess around 250 million (or a quarter of a billion if you prefer) to date. Kind of puts things in perspective, no…?

  22. The phone doesn’t matter as much as the service plan. My plan is about $8/month.

    If you fiddle with this gadget in your pocket all day long, don’t you think that’s a little looney? Sorry to spoil your cyborg fantasy.

  23. > Nokia is behind in experience.
    True, but not really that far behind. And not far enough behind to make it worth sticking with iPhone when you’re sick of it’s restrictions, poor hardware spec, and poor hardware implementation as increasing numbers of people are. And Symbian/S60′s folder based UI structure can have advantages over iPhones pages and pages of icon screens.

    > will include things like accelerometers (like the iPhone has).
    You do know Nokia Nseries have had accelerometers since before iPhone, and still do, and they’re very good, right…?

    Finally, iPhone sales to date = 13 million. Symbian (mostly Nokia) sales end of June 08 = 226 million across 249 different phone models, so I’d guess around 250 million (or a quarter of a billion if you prefer) to date. Kind of puts things in perspective, no…?

  24. The phone doesn’t matter as much as the service plan. My plan is about $8/month.

    If you fiddle with this gadget in your pocket all day long, don’t you think that’s a little looney? Sorry to spoil your cyborg fantasy.

  25. I don’t think just coming out with a device on it’s own is going to make Nokia matter. They need to promote the entire package, software, distribution, and hardware the same way Apple and Android have done. It’s just a tough spot for them because practically nobody develops for Symbian which makes the hundred of millions Nokia paid for them seem very misplaced. Apple and RIM are the most useful because they offer great software and hardware, and once Android gets a decent handset out there (hopefully that will be Motorola’s in 2009) then that will be a third major player and that makes this space VERY crowded. Is there really room for a 4th independent mobile platform to be a success?

  26. I don’t think just coming out with a device on it’s own is going to make Nokia matter. They need to promote the entire package, software, distribution, and hardware the same way Apple and Android have done. It’s just a tough spot for them because practically nobody develops for Symbian which makes the hundred of millions Nokia paid for them seem very misplaced. Apple and RIM are the most useful because they offer great software and hardware, and once Android gets a decent handset out there (hopefully that will be Motorola’s in 2009) then that will be a third major player and that makes this space VERY crowded. Is there really room for a 4th independent mobile platform to be a success?

  27. I spoke with someone at Nokia and asked what did she think they will do if Apple keeps gobbling market share in the smartphone space. She said they’d just copy the best bits like the always do. Remember they were late to the party with thin phones and with clamshells. She also said when they do get it right, whether it’s 2009, 2010 or 2011, they will win. Why? They have better technology and more efficient processes. Where they fail at the moment is the OS but that’s the only place they are failing. That’s nowhere near as hard to rectify as processes that are reputed to be the most efficient in the world.

  28. I spoke with someone at Nokia and asked what did she think they will do if Apple keeps gobbling market share in the smartphone space. She said they’d just copy the best bits like the always do. Remember they were late to the party with thin phones and with clamshells. She also said when they do get it right, whether it’s 2009, 2010 or 2011, they will win. Why? They have better technology and more efficient processes. Where they fail at the moment is the OS but that’s the only place they are failing. That’s nowhere near as hard to rectify as processes that are reputed to be the most efficient in the world.

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