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Profiling the slide at Nokia (Part II)

Posted in Mobile Devices and Company Updates by Manas Ganguly on July 22, 2009

Nokia’s Age of Denial

While touch-screens had always been around, it was the iPhone in June, 2007 that had caught everyone’s imagination with its form, function, features and applications. Till then, Nokia’s N and E Series devices were the ultimate in technology. In Q2,2007, Nokia launched the iconic N 95, a do-it-all smart-phone that captured the imagination of the world. Nokia missed the trend, as it was basking in the glory of N 95! Nokia regarded the Haptile feed as a fad which would mellow down. That was not to be and Nokia realized it the harder way.

 August 2008: Nokia launched an offensive against the iPhone 3G by announcing the successor to N 95, the N 96! By then, Nokia had taken note of iPhone’s initial success in US. However iPhone without operator subsidies outside the American shores was a doubtful starter (as proven in the case of India, where the iPhone could not live up to its hype because the carriers (Airtel and Vodafone) did not subsidize it). Positioning the N 96, which was only a few additions to N-95 against iPhone 3G was only a subterfuge. Nokia was trying to play the game on its own terms where as iPhone appeal to the consumers was becoming painfully evident.

 July 2009: This was the first time that Nokia played Apple on a level game. The N 97 which was Nokia’s haptile flagship device fared badly against the Palm Pre and the iPhone 3GS. Nokia’s smartphone portfolio was getting depleted and except the E 71 and its other versions, there was a serious lack of a smartphone from the Nokia stable! The fight between N 97 and iPhone was already dubbed as the fight between device and software. Apple with its sexy and neat looks, brilliant browser and UI and Apps store turned the game on the N97. Even Palm Pre with its WebOS was cooler than the N97!

 What lies ahead

Nokia will now have to re-think its smartphone strategy in order to stay in the game.

  1. Product design: Most of the Nokia phones look and feel like some other Nokia phone. E71 was a success, they augmented it to E 63, E 72.
  2. A new OS that would make UI and browsing experience pleasurable. There is a space to learn from Apple, Android and even the Palm!
  3. Need to look at open sourcing solutions. While they had the first Apps market (Forum Nokia), they lost the plot mid way and allowed Apple to get away with the Apps Market. Failure to differentiate on Apps and Services was a big mistake on hindsight.
  4. Need to be more collaborative rather than closed in its approach. Nokia’s stiff approach to working with the other partners in the eco-system has cost then dear in the Developed markets.
  5. Mobile Internet may well be the next in devices. Enabling a superior browsing experience is key to greater user acceptability. That is again something that Apple and Palm have perfected.

http://www.thestreet.com/story/10545980/1/tech-rumor-of-the-day-nokia– needs-palm.html

Profiling the slide at Nokia (Part I)

Posted in Mobile Devices and Company Updates by Manas Ganguly on July 22, 2009

Nokia’s slide in the smartphone segment has been well documented and the latest results from Nokia do not inspire confidence about a quick revival. Nokia’s slide draws a sharp contrast from Apple and its Apps store. Here’s profiling Nokia’s smartphone story.

 Nokia’s Decline

Nokia announced a 66 percent yearly drop in Q2 profit while lowering its 2009 market share target for its cellphones. Originally, Nokia had expected market share to rise in 2009, presumably based on a successful launch of the N97 flagship device. However, outside of a core group of S60 diehards, the N97 has been universally panned in both reviews and user forums alike. And with nothing but rumors of an Atom-based Nokia Netbook on the immediate horizon.

nokia-bleed-smartphone-prints

Overall YOY sales for Nokia have fallen by 25% to 9.9 billion Euros in Q2. This is 7% higher than Q1, 2009.YOY Nokia shipped 103.2 million devices during Q2, 15% less than an year earlier, but 11% more than Q1,2009. The average selling price was also down from 74 Euros Q2 last year to 62 Euros currently. In Q1 2009, Nokia had recorded less than 100 million shipments for the first time in 2 years. Q2 2009 was slightly better in terms of volumes but the ASPs are southward bound still.

 Inspite of aggressive job cuts and other measures such as moving out of non core activities, Nokia is now cutting down its profitability and market share outlook. It is now predicting its mobile phone operating profit margin will match the first half at 11.3% (less than the analysts prediction of 17.4%) and its market share will stay the same as last year (compared to original forecasts of a rise).The stock took a 15% plunge after the results were announced last week.

 Analysis

The significant volumes from the lower end have helped maintain the market shares although it is pulling the ASPs down. However it is the smart-phone market where Nokia is taking a big hit in terms of both volumes and numbers. Thus, Nokia is finding harder to stay profitable because of increasing competition in the high end phone segment from the likes of Apple’s iPhone, Palm Pre, Toshiba’s TG01 against Nokia’s N 97 and 5800, which are key support to its margins. Nokia is suffering from low operating margins because it does not have really competitive products at the high end of the portfolio.

 Analysts are dubbing this period as Nokia’s Motorola Moment. http://www.forbes.com/2009/07/17/nokia-apple-iphone-markets-equity-mobile.html?feed=rss_technology.Once a giant of the handset industry, Motorola got stuck with its Razr handset model longer than it should have done, failing to catch on to other innovations that were taking place in handset making, before losing market share in China to Nokia and in the US to Apple.

Nokia seems to now be falling in the same trap. It was late to realizing the popularity of clam shell phones, late to touch screen and now late to the application store as pioneered by Apple’s iPhone, as well as high quality web browsing. The fact that remains is that Nokia has not been innovating and has only been a fast follower.

Services Company

2 years back, when Nokia had suggested a move into services based businesses, the Wall street had welcomed the efforts by a stock price spike. That was the right thing to do. However, Nokia has taken long to do what it set out to do. And its efforts have been largely diffused. Instead of getting one thing right, Nokia tried many and more different things. It launched into Nokia Music Service and Comes with Music, N-Gage Gaming and Ovi Services, Ovi Share (networking platform) and the latest being Symbian horizon (an apps store). Was Nokia doing too many things at the same time? With Nokia’s kind of ability, it could probably carry the gambit as well. The problem perhaps was Nokia trying a plethora of business models, without really doing anything really meaningful. It was a follower and not the original in most of these services. In effect, it was trying to compete, by its sheer size and presence, and not basis its technology leadership.

In many cases, the platforms existed at Nokia, long before competition had stepped in. N-Series phones were regarded as the ultimate edge in technology for a long time. Yet Nokia never regarded applications and software as a differentiating element unless Apple came along with the Apps Store. It was Apple who pioneered the iTunes and Nokia has been playing catch up with its Music store and Comes with Music.

 The problem is complicated with Symbain OS. While Symbian is the most robust mobile OS and leads the smart-phone OS market share at 40%, Nokia probably needs to look at a second option to compete with the likes of Web OS (Palm), Android and Apple OS.

Hottest Gadgets: The T3 hot gadgets countdown

Posted in Industry updates by Manas Ganguly on March 10, 2009

Voila! Palm was dead long time back… and now its back and How! It tops the 100 hottest gadgets on this planet list and the Palm Pre assumes the “iPhone Killer” title beating Nokia N 97 which comes third in the list (the next best Nokia is at 24 and is the Nokia 5800). Surprisingly Apple DOESNOT feature in the top ten (Can you believe it?). The first Apple is the iPod Touch at 12 and iPhone trails at 14. Sony is the comeback kid this time, with its age old Walkman X Series taking the cake at No 2, PRS 700BC Sony Reader at 6 and theP Series VIAO at 10! Bravia and others also make the ranks. Smartphones as a category take 3 (of the top ten  hottest gadgets) with Palm Pre, Nokia N 97 and Toshiba TG01
Read the full list here: http://hot100.t3.com/category/top-10/

Return of the prodigy: Palm (featuring Pre and WebOS)

Posted in Mobile Devices and Company Updates by Manas Ganguly on February 20, 2009

mobile_slide4_ss-11Palm pioneeered the PDA and the smartphone scene way before RIMs and Apples of the world were in the scene. However, over the years Palm lost its way and is almost out of contention. Almost! The recently announced web OS and Pre have been appreciated and its time, we shall see whether Palm has any fight left in it or not!

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For a start, Palm Pre makes a point. It has the works and it works pretty smartly!. It starts with a 3.1 inch 320*480 res screen with a built in accelerometer and a QWERTY keyboard. Inside is a 8GB storage and a 3 MP camera with a LED flash. It has a neat multitouch screen and it supports WiFi.

However, it is the UI based on the new WebOS that Palm introduces with the Pre which seems to be the “meat” of things. WebOS is based on the webkit which uses the Synergy data integration combining data from outlook, Google and Facebook to provide a universal address book and calendar. It also auto updates these sites for changes made in the device address book. The new App store that Palm is making would provide other applications. From the first look Webkit outclasses competition in terms of smoothness, speed, application, switching and menu views.
Palm from the very introduction of the WebOS and the device seem to have the Apple iPhone i its sights! We will wait to see how this one shapes up when it is shipped somewhere around the first half of this year.
Go Palm!
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Online Application Stores: Fad or a Necessity?

Posted in Value added services and applications by Manas Ganguly on February 9, 2009

Apple did it with a good measure and great success for their online application store, which has generated interest both in consumer and developer communities. After the Apple App Store began reporting monumental numbers, however, there was a significant shift; suddenly, those responsible with making the handsets tick wanted to be the ones vending the wares. Google launched its application store for Android in August 2008. http://www.mobilecrunch.com/2009/02/04/not-every-company-needs-an-app-store/ RIM BlackBerry will now be launching its application store, Blackberry Applications, in March 2009. http://www.cbc.ca/technology/story/2008/10/21/tech-rim.html . Not wishing to stay away from the party, Nokia has also announced the launch of its application store, Nokia Applications! http://www.techcrunch.com/2009/02/08/nokia-shaping-up-to-launch-its-very-own-app-store/ Nokia Applications is not a new thing alltogether but a “old wine new bottle” phenomenon. Nokia has owned developer communities in Nokia forums and the Zook – Nokia Search tie up is a resultant of developer – Nokia partnership! Nokia would only look to refurnish the Nokia Forum and re brand it as Nokia Apps! Palm is also debuting its application store Apps Catalogue with Pre, its new OS! And so is Samsung with its mobile applications marketplace! http://applications.samsungmobile.com/en/gbp/index.html. The developers are going to have a party! The only biggie missing from this party is Microsoft, who presently are more engaged in release of Windows 7! With all these race to finish application stores debuting one after the other, it feels that a application store is suddenly a trend now! It is fashionable to own a application store. So it would seem. In the future, other vendors could also open up their application stores! The rationale for these stores is to provide the consumers of their higher end services more applications to experience their products better. With Apple it seemed to create the loyalty glue in terms of the Apple’s music stores! There is money to be made from the application stores business model! However, it is important from the vendors perspective, if you are starting an application outlet, you need to be at the reins of the platform as well. Without having your own platform, your work can be copied on the same platform for other vendors. There is no differentiating factor left! Suddenly you will have many venddors peddling the same content and messing up the market place, segmenting it and creating rapid commoditization! Thus it makes sense for vendors like Apple, Nokia, Google, Microsoft, Palm and RIM to launch their online apps stores. Samsung however would not have any huge justification on building a apps store on what is a Nokia property!

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