Is the Finnish mobile giant well placed for 2010 and beyond?
Nokia unveiled some new products and services, and talked about its current and future strategy with some candour. ME was reporting live from the show, but now we’re back home, here’s the key thoughts we took away from the event.
1. Nokia IS on the defensive a little bit
Nothing spells defensive like telling an industry crowd “We are not on the defensive,”, as Nokia’s Anssi Vanjoki did in his keynote last Wednesday. Following it up by saying Nokia isn’t just targeting “the elite of this planet” only hammered home the point that the company has been stung by the barrage of bouquets being thrown at Apple’s iPhone in recent months.
Is this such a bad thing? On the contrary. It looks like Nokia has been stung into action on the devices side: witness the unanimously-praised N900 smartphone (more of which later), but also the inclusion of a capacitive screen in the new X6 handset, and promises of more aggressive marketing of the Comes With Music offering comparing its value to Apple’s iTunes Store.
A wounded Nokia stepping up to the challenge presented by Apple can only be a good thing for the mobile industry as a whole. As is the seemingly-genuine humble approach adopted by Nokia’s senior execs during the conference, keen to admit to previous mistakes.
2. It’s all about the maps this year
Maps were big at Nokia World. In fact, we’d suggest they’ve vaulted above music to become the biggest focus for the company right now on the services side – although that’s partly because its music initiatives are now in rollout rather than launch mode, so require less talking up.
Even so, Nokia has big things in mind for its mapping services, and they go beyond pure A-to-B navigation. The company coined its “social location” buzz-phrase last year, but it’s becoming clearer what that means, particularly with Nokia’s decision to open up its Ovi Maps service to external developers. Maps plus apps plus social features is a big new area for innovation.
However, Nokia certainly isn’t alone here: iPhone and Android developers already have similar access to Google Maps, so the Nokia World announcement is more about achieving parity with those rival platforms. Meanwhile, areas such as lifecasting and location-based social networking are in their nascent stages: do mobile users really want to attach a map URL to their every Facebook upload? Much will depend on the kind of apps released for Nokia handsets in the coming months.
3. The N900 is Nokia’s best smartphone yet... so why ghettoise it?
We’ll happily admit that Nokia’s new N900 device blew our socks off: live widgets, a slick web browser, intuitive messaging, multi-tasking apps and powerful processing grunt under the hood. The Maemo operating system looks like a winner, too. AND it can make cellular (as well as VoIP) voice calls – something that wasn’t made clear in its original announcement.
It’s the best Nokia smartphone we’ve seen, and knocks spots off the N97. Yet rather than getting the push you’d expect, it seems at risk of being ghettoised as an ‘internet tablet’, and sold with an expensive SIM-free price tag rather than with aggressively-priced operator deals.
Whether this is because of fears of cannibalising N97 sales, or internal Symbian v Maemo politics, or concerns about how operators will support (or not) the VoIP aspects isn’t clear. But it would be a shame if the N900’s sales are muted when it comes out later this year: it’s the first high-end Nokia handset capable of giving iPhone a bloody nose.
4. Ovi Store has made a sluggish start, but it’s early days
Nokia’s app store is off to a slow start: just 10 million downloads in three months, compared to the 200 million in two months achieved by Apple’s App Store when it debuted last year. With Nokia saying each user has downloaded an average of six apps, that means around 1.67 million Ovi Store users.
Not great, considering previous boasts that the store would be available to 50 million handsets on launch day. However, as we said last week, this shows that getting people to download a store client isn’t a super-successful strategy – Apple’s came with a software update. As Ovi Store is preloaded on more handsets, its numbers will rise.
However, six apps isn’t very many per user, indicating that there are still issues with the usability of Ovi Store, and possibly the pricing of apps on it too. New models like try-and-buy and subscriptions will help boost usage, but with Google improving its equally-maligned Android Market, Nokia will hopefully be following suit with Ovi Store, to attract more developers.
5. Games has fallen down the priorities list
N-Gage Mk. II is dead in the water, and has been for some time. Despite one new game unveiled at Nokia World, most of the execs behind the platform have either left Nokia or are moving on, and games publishers privately make no secret of their expectation that from next year, it will be rolled into the catch-all Ovi Games offering.
Games were thin on the ground at Nokia World, as a result. Vanjoki made a cursory mention of them in his keynote, but they’re clearly well down the services list compared to the buzz around Maps and Music. It seems Nokia is taking stock following N-Gage’s second demise, and planning its next move.
But that’s the point: there will be a next move. Plenty of games firms were at Nokia World, and the OpenGL ES 2.0 demo shown for the N900 shows Maemo-powered devices could be excellent for high-end games.
However, a comment by Electronic Arts’ Peter Parmenter during one of the games roundtable sessions hinted that publishers see an even bigger opportunity for Nokia and games in emerging markets like India – which means lower-priced Java handsets.
6. Comes With Music is more about emerging markets now
Comes With Music is another Nokia service that’s faced plenty of criticism, ...
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Download numbers in Singapore are strong, and Nokia’s head of music Liz Schimel is very excited about launching CWM in India in the coming months, following the recent launch of its Nokia Music Store there.
Services boss Niklas Savander said during the event that the company has seen a “cynical” reaction from some Western consumers wondering what the catch is in Nokia’s unlimited music offering. Perhaps that explains why the US launch has slipped to 2010, in favour of countries like India, Mexico and Brazil.
If so, its success shouldn’t be judged solely on user figures in the UK – even if that was a natural reaction in the past due to its status as the first launch market for CWM.
7. Actually, a lot of things are about emerging markets now
Nokia remains the dominant handset firm in a lot of these ‘emerging’ countries – and in many cases, comparisons with Apple in these markets simply don’t fly, as the iPhone isn’t available or is prohibitively expensive there.
Services such as Nokia Life Tools don’t get a high profile, but they could be hugely popular. Meanwhile, the newly-announced Nokia Money will offer financial services to millions of people using technologies like SMS.
It’s not a core focus for ME, but the revenues that Nokia could generate from becoming a bank in the developing world could dwarf anything it hopes to make from its whizzy smartphones in the Western world. However, we’re intrigued about Nokia’s plans to deliver music, games and other entertainment services to its network of users in these countries too.
8. Partnerships are increasingly important for Nokia
Make no mistake: Nokia is continuing to develop plenty of its services in-house, but Nokia World brought plenty of signs that the company is genuinely looking outward, particularly on the social media side of things.
Take its Ovi Maps partnership with Facebook, and indeed the wider acceptance of the fact that people want to share their stuff with friends on their existing social networks. A Nokia-owned service like Ovi Share still exists (for now), but it’s not being pushed at users instead of Facebook.
Meanwhile, Nokia is alert to the negative publicity being experienced by Apple over its approvals policy, with Savander saying that Nokia sees it as essential that owners of its handsets are able to, say, download the Spotify app if they prefer it to Nokia’s own music services. Opening up Ovi Maps is another important sign that Nokia isn’t trying to do everything itself.
And operators? There is still plenty of room for sensitivities to be offended on both sides, but Nokia said repeatedly during its conference that it’s keen to build more bridges with operator partners.
Although Savander made a telling comment when saying that Western operators tend to “have a much stronger central strategy on how to co-operate, which tends to slow things down a little bit” compared with emerging markets’ “slightly smaller operators who maybe have more of an open multiple partnerships strategy”.
9. The Booklet 3G is intriguing, but it depends on the bundling
Following a hands-on demo of Nokia’s Booklet 3G netbook (and yes, it IS a netbook), we came away impressed with its design and styling, not to mention dribbling over the prospect of its promised 12-hour battery life.
We’re not quite sure how Ovi Store fits in with a Windows netbook, and Nokia played a straight bat to questions about whether its Maemo OS might be used for future devices in the range. But the key factor in whether the Booklet 3G becomes a globe-straddling hit or a niche device will be price. At 575 Euros (around £500), it’s much more expensive than the competition.
So it all depends on what operator (or possibly retailer) deals Nokia strikes to bring that price down. The company held out the prospect of operators selling a Booklet 3G, a smartphone and two SIMs on special bundle deals, which is enticing, but nothing has been announced yet.
We’re assuming that other netbook makers are just as keen to secure such distribution deals, but with cheaper devices that may offer operators a better margin. As we said, the Booklet 3G’s success will depend on what kind of deals Nokia can strike.
10. Nokia wants more control over how its products are presented
Ironically, ME’s biggest story of Nokia World came from a conversation in a hotel bar, during which we found out that Nokia won’t be exhibiting at next year’s Mobile World Congress show in Barcelona.
What does it mean? Rather than hail the ‘death of MWC’ as some subsequent reports did, we’d focus on two thoughts. Firstly, if Nokia thinks Mobile World Congress is too expensive to exhibit at and is prepared to pull out, it probably is too expensive to exhibit at.
Perhaps this could be a spur to revamping the way content and apps are presented at the show, though: it’s the hot area for the industry, and deserves a fresh look rather than the same-old ‘enablers hall’ at the back of the showground.
But Nokia’s decision also shows it’s taking more control over the presentation of its products. Nokia will be at MWC, but with an off-site press event similar to the one it ran this year, in a venue of its choice and away from the noise of the main show. Remind you of a certain Cupertino-headquartered company?
