Device operating systems

Don't Count Nokia Out Just Yet

1:05 PM -- Nokia Corp. (NYSE: NOK) capped off a bad week with a horrible first-quarter earnings report and the departure of its head of sales. (See Euronews: Nokia's Q1 Device Disaster and Nokia Loses More Than €1.57B.)

Even so, I think those people that are already writing off the handset maker and its software partner Microsoft Corp. (Nasdaq: MSFT) are short-sighted.

Ovum Ltd. principal analyst Tony Cripps pointed to Nokia's potential in a research note: "There's little objectively wrong with many of the products competing with Apple Inc. (Nasdaq: AAPL), Samsung Corp. and Google (Nasdaq: GOOG)/Android that greater customer awareness and a big budget marketing drive could not cure."

Part of Nokia's portfolio is in that category of products, but the problem is the Finnish vendor doesn't seem to have much support from its wireless partners in Europe right now.

In the U.S., the big two operators still seem eager to help Nokia create the third mobile phone ecosystem. Verizon Wireless CFO Fran Shammo hinted at this multiple times on Verizon's earnings call today, and AT&T Inc. (NYSE: T) promised its biggest launch campaign ever for the new Lumia 900 smartphone. (See Is Nokia Losing Operator Support? , Verizon to Roll Out Sharable Data Buckets and AT&T's Nokia Lumia Drops LTE to $100.)

Nokia's current woes aren't just down to a lack of operator support, though. Nokia and Microsoft need to step up their marketing efforts too, educate sales people on how to pitch the devices and commit to keeping subsidies low to encourage the operators to do the same. (See What the Nokia Lumia Really Costs and Nokia's Nightmare Scenario .)

It's not going to be easy for Nokia and Microsoft -- the first quarter made that clear -- but it's also not fair to call its smartphone push and OS bet a failure. Things change very fast in the wireless industry. Just ask Android, Apple, BlackBerry , Palm or High Tech Computer Corp. (HTC) (Taiwan: 2498) for some good and bad examples of that. (See Google Says Android's on a Tear , RIP RIM: Will Foresight Be 20/20?, Making Sense of HP's Mobile Mess and OS Watch: HTC's Revenue Release.)

There's still room for a third ecosystem, and the Nokia-Microsoft combo has the best shot of occupying that space.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

digits 12/5/2012 | 5:35:52 PM
re: Don't Count Nokia Out Just Yet

It's very true that things change very quickly in the mobile device market.

That means, though, that things could go even worse very quickly for Nokia if it doesn't do something drastic. I think we'll have a godo idea by the end of 2012 which way the company is going and whether the MSFT gamble (and it has always been a gamble) has paid off.

sarahthomas1011 12/5/2012 | 5:35:51 PM
re: Don't Count Nokia Out Just Yet

What kind of drastic measure do you think Nokia needs to take - an internal reorganization or something on the product side? 

digits 12/5/2012 | 5:35:51 PM
re: Don't Count Nokia Out Just Yet

All that and more. The problem is, Nokia can hardly afford to disrupt its internal processes too much at the moment because it has to focus 100% on market growth.

What Nokia needs more than anything right now is a runaway hit that can give it some momentum. Whether it has that in its armory is another question.

paolo.franzoi 12/5/2012 | 5:35:49 PM
re: Don't Count Nokia Out Just Yet


I think that Disney would have liked John Carter to be a great movie as much as Nokia would like a hit.

But that is the problem right?  It is no longer a matter of good engineering.  That test has been passed by MANY competitors (Mot/LG/Samsung/HTC/Apple).  At that point building a well made device is simply assumed.  Anybody have apprehension with any of those makers phones if you were going to buy one?

Assuming not, then the real question is how does Nokia make a hit?  I that the past was where it was and has virtually no relevance to today in the handset business.  If Nokia disappeared as a handset maker consumers would not really notice.

The problem is that Nokia is an engineering firm in a consumer goods business.  Does not seem like a way to win.



ibarrera 12/5/2012 | 5:35:49 PM
re: Don't Count Nokia Out Just Yet

What they should have done... is fire all their PR staff from the beginning. Their phones were quality phones with great features (see N95). Their GPS locking was the best I had in many phones before I decided to upgrade (downgrade?) to a Samsung Galaxy S. Their local repository of maps meaning no data consumption and always available. As I try more and more the new hardware in phones with bunch of bloatware marketed as features, I realized Nokia had more and more features, that they failed to properly market.

opticalwatcher 12/5/2012 | 5:35:48 PM
re: Don't Count Nokia Out Just Yet

It used to drive Intel and AMD crazy when all customers looked at was processor speed. "What about code or cache efficiency?" But they mostly gave up and started a frequency war. Then when they started reaching limits they've moved onto a number-of-cores war and for low power for portables.

Cell phones are going through a similar process. The problem is that Microsoft is strangling Nokia with feature restrictions. No multicore, limited screen and camera resolution. Sure, the Windows OS requires less of the CPU, but customers don't notice that. They look at the numbers.

If Microsoft really wants to make it in the mobile phone marketplace, they really need to let their vendors come out with a groundbreaking phone, with speeds, resolutions, and numbers of cores out the whazoo.

DCITDave 12/5/2012 | 5:35:46 PM
re: Don't Count Nokia Out Just Yet

Microsoft could give Nokia the pieces it needs to build an ecosystem around its handsets (which are not better/worse than anyone else's, as you point out).

I have a podcast that might be up tomorrow that makes some additional points.


quicktime 12/5/2012 | 5:35:42 PM
re: Don't Count Nokia Out Just Yet

but it is late.

Tried Lumia 900, well engineeringed , high quality and easy to use.

But a lot of people already have iPhone & Android,

People are already locked, and can't upgrade in near future.

Also, people are educated to focus on Apps, X-Cores, 

Not sure how many will switch to Windows Phone.

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