Nokia’s new CEO needs to change the message

Elop must not pander to the markets

New handsets

The devices designed to lead that charge were unveiled by Vanjoki – though, disappointingly, no MeeGo products will be launched this week, even while Intel chatters away about the jointly-owned OS at its own IDF event across the pond. The quartet of phones will bear the burden of Nokia's turnaround plans during this year's holiday period, and their details, well rehearsed in advance, are solid enough.

The question is whether Elop and his team will be able to weave the spells around them to lure consumers and make them stand out from the crowd of Android, Apple and other competitors. Vanjoki introduced the new phones – the C6, C7, N8 and E7. The E7 is a high end for the enterprise focused "E" Series, so far the most popular with the hard-to-convince US carriers. It has a four inch touchscreen display and slideout Qwerty keyboard, and when closed, looks like its new stablemate, the N8.

The N8 was launched so long ago there was scarcely anything new to say, but its stand out features are the 12-megapixel camera and associated video/image capabilities, and the new Symbian platform, which Nokia now calls "the new Symbian", dropping the awkward Symbian^3 label. This comes with various improvements, notably an upgrade to the already popular WebKit Series 60 browser, but the full user experience will be detailed later in the event (and some elements will have to wait for Symbian^4 next year).

The C6 and C7 are the no-brainers of the event, since they fall into Nokia's almost undisputed heartland of the mass market smartphone, for prepaid, budget and emerging markets. The C6 is a small phone with a new user interface, while the C7 has a larger screen and a thinner body. "The C7 is the sleekest, smoothest device in the world. No doubt about that," Vanjoki said.

Support from a US operator would have been valuable to bolster credibility in Nokia's most sceptical market, but instead it fell back on its old love/hate partners, Vodafone and Orange. In a guest keynote, Vodafone CEO Vittorio Colao said: "Everybody north to south, rich to poor must be thought of as a data customer”, highlighting the broad reach that explains why Nokia retains smartphone market share (even as its margins slide) and remains in a different category from Apple and RIM, though increasingly chased by Samsung.

Geographical polarization

Time and again we come back to it – Nokia is a truly global player and should trade on that rather than getting over obsessed with the US. As the US carriers start to fall out of love with Google and Apple, Nokia may (ironically given its track record with US operators) win more favor, as a company that is positioned as the friend of the carriers and their business models, not the harbinger of a new open world - though it always has MeeGo as its fallback option when that open world materializes.

Another reason for Nokia to focus on its emerging economies – the open web/cloud model is a decade away and the power of the device makers and operators will persist as long as users lack the ubiquitous, reliable connections to support the new way of working).

But unless the US cellcos come running, there are far easier battles to win. The executives stressed the increasing polarization of Nokia's power base – in north America, despite many recent efforts, it still has under four per cent market share. In some newer markets like India, it has over 70 per cent share and massive brand recognition.

Colin Giles, senior VP and head of global sales, faced up to the US failure and vowed to re-enter that market – a promise Kallasvuo has made at least two years running. And like those previous promises, there was little to back them up, since none of the quartet of new smartphones unveiled at the conference are bound for north America, as yet at least.

"We're not happy with our current situation in the US, and we're looking for ways to enhance our position in the US market," Giles said on an analyst conference. "But we can't do everything at once. We need to focus on what we do well. And that will open up a cou ple of operators to us."

He said there were no plans to make CDMA handsets, but Nokia aims to get into CDMA carriers like Verizon Wireless and MetroPCS as they launch LTE handsets. The firm also believes its new MeeGo OS will raise its US profile by targeting new device formats and the hi-tech community and also because it has Intel's support.

It was notable that Elop's first public appearance before the Nokia crowd centered on emerging economies. He turned up for the closing speeches, and mounted a clear appeal to the Nokia developer community to keep the faith. In his surprise appearance, he announced the winner of a $1m investment as part of Nokia's Venture Challenge Award for use of technology in the developing world (the winner was Virtual City of Kenya). With many echoes of his current boss, Microsoft's Steve Ballmer, he said Nokia could create great devices but needed developers to bring its ecosystem alive.

"I love developers because you bring the ecosystem to life," he said, in a style that will make some of Nokia‟s less extrovert Finnish executives wince. "I'm impressed and humbled that you take our platforms and do things we would never had thought of."

Mary McDowell, EVP of the mass market Mobile Phones division, used her keynote to focus on the low end Series 40 software plat form and play up the emerging markets message. “Nokia is incredibly proud to bring the internet and mobile devices to people in every corner of the world. If the internet is the great equalizer, then mobile is the great enabler,” she said.

She pointed to the Ovi Life Tools apps – which cover areas like agriculture, e-learning, plus email for those with no PCs and no other internet and Nokia Money. These were “two critical services designed to improve the lives of people in rural parts of developing countries”, she said, claiming 4.7 million active users of Life Tools across China, India and Indonesia.

Among the feature phones geared to cost-sensitive markets, often with slow networks, the C3 Qwerty device has been particularly successful, with “long lines” in India and Vietnam, while the X3 Touch and Type recently went on sale in China. Unveiled at the show was the C3 Touch and Type, which includes 3G and WiFi connectivity.

As low end markets demand smartphone type capabilities, and get 3G, Nokia is enriching the Series 40 platform, improving the user experience and adding its own version of Ovi Store, focused on localized apps and those that do not require full smartphones.

Copyright © 2010, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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