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Device operating systems

Is Nokia Losing Operator Support?

Ahead of Nokia Corp. (NYSE: NOK)'s first-quarter earnings report on Thursday, indications have emerged that suggest mobile operator support for the company's new smartphones is not as strong as expected.

Reuters reported on Tuesday damning comments from unnamed sources at four "major telecom operators" in Europe who said that Nokia's Lumia smartphones were not good enough to compete with Apple Inc. (Nasdaq: AAPL)'s iPhone or Samsung Electronics Co. Ltd. (Korea: SEC)'s Galaxy devices and would be easier to sell if they were based on the Android operating system rather than Microsoft Corp. (Nasdaq: MSFT)'s Windows Phone.

Another hint of an operator shift appeared in the wording of a quote from Nokia CEO Stephen Elop in the statement the company issued last week about lowering its device outlook for the first quarter, which Pyramid Research Senior Analyst Stela Bokun spotted. (See Nokia Dives on Lowered Device Outlook.)

Elop said in the statement, "Our operator and distributor partners are providing solid support for Windows Phone as a third ecosystem, as evidenced most recently by the launch of the Lumia 900 by AT&T in the United States."

That may sound acceptable, but the word "solid" caught Bokun's attention.

"When Nokia was switching to Windows Phone and at the beginning of launch of the Lumia phones, Nokia was talking about 'excitement,' 'enthusiasm' [and] 'full support' of the operator and distributor partners, whereas now that wording is replaced by 'solid support,'" she said in an emailed response to Light Reading Mobile.

"I am getting an impression that operators are not as proactive in supporting the third ecosystem as it was initially expected," she added. "Granted, they would like to be able to decrease their dependence on Apple, but I don’t see much concrete movement on their side on this front."

And Bokun isn't the only analyst to notice a change in operator sentiment.

Michael Genovese, managing director at MKM Partners , noted a shift away from Nokia's Symbian OS devices as well. In a research note published after Nokia's reduced outlook announcement last week, he wrote, "Our research, and Nokia’s announcement, strongly suggests that most major European operators have thrown in the towel on Symbian at this point."

Why this matters
If operators are not putting their full weight behind Nokia and the so-called third ecosystem around Microsoft's Windows Phone platform, then that will make Nokia's already challenging transition all the more difficult. And it also suggests that there is a lower-than-expected limit to how much mobile operators are willing to spend on device subsidies and marketing to push Nokia's Lumia smartphones as credible challengers to the iPhone and Android smartphones.

For more


— Michelle Donegan, European Editor, Light Reading Mobile

sarahthomas1011 12/5/2012 | 5:36:07 PM
re: Is Nokia Losing Operator Support?

I'm a little surprised by this, because of the operator's pledged support to Windows Phone, but also because I would think some consumers may have a negative impression of Android based on the malware and bugs reported, as well as the somewhat uncontrolled app store experience. I would think some - that don't want the iPhone - may want an Android alternative, and the operators should be eager to suggest Nokia. 

Michelle Donegan 12/5/2012 | 5:36:06 PM
re: Is Nokia Losing Operator Support?

I agree it's surprising.


There are mixed messages about Nokia's Lumia products. On one hand, there's this Reuters article reporting European operators say Lumia isn't good enough. On the other, Lumia 900 in the US appears to be going down well -- the cyan version is showing as sold out on AT&T's web site.

joset01 12/5/2012 | 5:36:06 PM
re: Is Nokia Losing Operator Support?

Certainly seems like AT&T has been pouring money into subsidizing the Lumia. Don't know anyone that bought one though and no one has asked me about it. Not usually a good sign.

joset01 12/5/2012 | 5:36:06 PM
re: Is Nokia Losing Operator Support?

Well, I would also expect that many, many people are completely unaware of malware on the Android platform when they go to buy...

sarahthomas1011 12/5/2012 | 5:36:05 PM
re: Is Nokia Losing Operator Support?

Anecdotally, I've heard a lot of Android users complain about the OS -- mainly about how buggy it is. I guess that's not something you know until you buy, but I'm a fan of Windows Phone OS.


Random side note, operators should let you test drive phones like you do cars, so you can see if it works in your house, try out the apps and OS and what not before you commit...

krishanguru143 12/5/2012 | 5:35:58 PM
re: Is Nokia Losing Operator Support?

They do.


 


"If the equipment you purchased directly from AT&T does not meet your expectations, you may return or, for all equipment other than equipment sold as a "Closeout Item," exchange it at any AT&T owned retail store within 30 days from the date the equipment was purchased or shipped, except for tablets and MOTOROLA LAPDOCKTM for MOTOROLA ATRIXTM4G, which must be returned within 14 days of purchase. Equipment purchased from att.com/wireless or directly from AT&T over the phone may also be returned by mail. If returning your equipment to AT&T by mail, please retain a copy of the tracking number from the shipping carrier for your records. Depending on the reason for the return, return shipping charges may apply.


 


You may exchange equipment, other than Closeout Items, one time within 30 days, or 14 days for tablets and MOTOROLA LAPDOCK, from the date the original equipment was purchased or shipped. If (1) the purchase price of the original equipment is reduced in connection with a new activation or upgrade and a Service Commitment and (2) the new (exchanged) equipment has a different Early Termination Fee associated with it from the original equipment, you will be required to sign a new agreement. The effective date of the new agreement will be the date the new agreement is signed and your Service Commitment will restart from that date. However, your service activation date will not change for any purpose, including, but not limited to, calculating any early termination fees you may be obligated to pay (See Service Cancellation below)."


 


All of the carriers have similar setups, it was part of the customer bill of rights that the industry put in place to keep the feds out of their business.

Gabriel Brown 12/5/2012 | 5:35:57 PM
re: Is Nokia Losing Operator Support?

I had a Nokia Lumia 710. There's a lot to like about it and it was good value.


The UI is very fast and mostly obvious. The Facebook app is very nicely done. Office is the best I've seen on a phone. Overall, it's very good.


No doubt its tough/expensive to communicate those benefits to the mass-market.


I'd recommend it heartily if it weren't for a) lack of apps b) you can't mount Windows Phone as USB mass storage to a PC (you have to use zune) and c) the "multi-tasking" is not to my taste.


I gave it to my wife who doesn't care about any of that and she hasn't complained yet.


Edit: I think I'm about to go and get one of the new Androids that runs decent spec hardware and ICS.

Soupafly 12/5/2012 | 5:35:57 PM
re: Is Nokia Losing Operator Support?

You have a similar legislative windown if you buy online in the UK. A 7 day cooling off period.


One of the biggest challenges with the policy is the fast-moving highly volatile nature of the handset business.


The segment for handsets and MBB dongles is now classed as FMCG and the items as "disposable" assets by the carriers themselves. Thats at the hardware level.


At the software level, once someone figures out a way to crack/bypass/subvert/circumvent the "Google Backchannel" built into every device - all hell will break loose! The amount of cracker focus on that will increase progressively and that assumes its not already been done... with cloud compute resources now widespread the capability is very real and there.


Software innovation is maturing. For the last 5 years apple have (arguably) held the lead, in that sphere and they have held it by leveraging the hardware to build what Larry Ellison refers to as a combined stack.


Given the price competition around handsets & the speed of innovation/execution its not surprising that carriers have been reluctant to dedicate funds. They want to out-source the risk to the Brand/ODM/OEM supplier, and focus on exploiting the profits & opportunities.


Nokia & MS have to aggressively push up the stack and deliver a suite of cloud & information management services that sit on top of the device. RIM had that market sown up with BBM, but they are now discredited with the outage & are haemorraging customers and momentum.


Deliver on THAT mandate, dedicate Nokia's vast engineering resources to building a hardware range that's at a competitive level (a "fast follower" posture, would suffice for now) and have MS plug everyone into the OS and maybe they have a future. You could argue that this is what they are doing and this is obvious. I would state that for that statement to be true there actions must prove & reasonate those activities. Today, it is not.


This is a 3 horse race, not 2. But Nokia & MS need to make sure they are not the pony left to feed on the offcuts from the 2 stallions!

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