Nokia: a tale of two analyses

23 July 2010

Two ex-Nokia executives have given their verdict on what ails the Finnish phone maker in its failure to make any headway not only in the US market but against the onslaught from Apple and the clones the iPhone has spawned.

Juhani Risku’s analysis has only been published in full in Finnish so far but The Register’s Andrew Orlowski has boiled down three hours of interviews on the contents of Uusi Nokia to get a flavour of what’s wrong in Helsinki. Risku’s analysis concentrates firmly on the problems within - and you get a strong sense that if you changed the names, you’d get a good insight of the sorry mess that Microsoft and other companies have worked themselves into. The stories are not all that different from those you find published by Mini-Microsoft.

Tomi Ahonen’s analysis is probably easier on you if you work at Nokia. Because, basically, it’s all Apple’s fault. And Apple’s band of tame analysts who have turned the financial community against poor old Nokia.

However, anyone who describes the N93 as a ‘superphone’ has to be a bit deluded. I used to use one. It was a perfectly good phone. But, frankly, saddled with Symbian with S60 layered on top, it was a usability nightmare. Yes, you could surf the web with it, send emails and download applications. But it was all so much trouble. The iPhone environment may be more restrictive and lack the proper multitasking of Symbian - but that didn’t matter when I found the iPhone to have simply better utility.

What Ahonen does do well is at least point out that while Nokia may have lost its image as a top phone maker, it’s still making a shedload of them and should outsell Apple by a large margin for some time to come even if it doesn’t get its house in order. But, like Microsoft, the indicators are currently pointing down. Turning that juggernaught around is going to be just as difficult. Maybe it’s time for the recipe that Sony used for the Playstation - create an internal startup to think the unthinkable. Or at least do that until the corporate bureaucracy does its best to kill it off.

10 Comments

So Tomi's deluded, but points out good stuff? Lovely bit of ad hominen.

...homineM.... Stupid fart fingers.

I wrote "a bit deluded" about his opinion of the N93. How this is ad hominem, however you want to spell it, is beyond me.

Mind you, a good attempt at using a term for a fallacious logical argument to back up fallacious logic. There must be a name for that.

If you want fallacious logic, why not compare the N93 to a device that wasn't released at the same time? Or deride the usage of a phrase that was used at the time, before we really knew what we meant and thus changed it to a different phrase altogether.
Oh wait, you've already done that.

Nokia is a best-selling phone brand for non-smartphones.
But Nokia *isn't* a best-selling phone brand for smartphones
Sell all the feature phones you want Nokia - that's not Android and iOS's market.
Android and iOS have redefined "smartphone" to include a capacative touchscreen.

What is Nokia's sales for smartphones? I think we shouldn't be too generous in classifying many of their handsets as smartphones. The high profit margin phones?Does Apple care if Nokia sells a gazillion 3210s?

Who cares if Nokia had features coming out of it's ears? The phone experience was awful in comparison. The UI, the UX was simply trumped by Apple.

If you believe that more features = the best product, then, well, that's your opinion. But it doesn't bare out in the real world necessarily. Think of Homer's designed car. Or a Windows tablet vs the iPad. Or an early iPhone vs a Nokia N series.

Nokia didn't need a showman, or anything else - they needed the product, the userbase, to then build a decent store, update the OS etc. How did the N9x go down?

The raw stats show for 2-3% of handset sales of the industry, Apple's pulling in the most profit off them. So not only does Nokia have fragmentation issues and multiple OS issues like Android and Microsoft handset sales respectively, it also doesn't have a clue.

It's foolish to call Apple's market niche, without saying that they also are a major if not one of the 2 dominant players in that market (e.g. >$1,000 laptops)
The current logic is that you've got to be strong on many if not all fronts to sell well - Nokia has no real lock in with their uses, like Blackberry users (to a lesser extent) - whereas iOS and Android does - users are choosing sides, and the more apps they sell the more they settle into an ecosystem.

It's strange that the article doesn't note the derision that Nokia had early on about the iPhone - i've seen user comments about how Nokia engineers wouldn't even want to look at the iPhone, or how it works - rather than analysing it closely. Telling off their sons for getting an iPhone.
Hmm, sounds like Bill Gates and his children. Wonder how the Windows Mobile smartphone market is doing right now? Cut Copy Paste?


It's worth comparing the Insider's view of what Microsoft is doing with Windows Phone 7 - eg the cnet article here:
http://news.cnet.com/8301-13860_3-20007973-56.html

Ah yes, fallacious logic in comparisons. I didn't invent the idea. Here's Tomi:

"So in 2006 Nokia had a true superphone, the N93. By many features it was equal to the iPhone 4 of today and beats it with many features (but was not a touch screen phone obviously)."

I remember laughing like a drain when people started touting the phrase "superphone" mid-decade. Just because someone coins a phrase for a device, it doesn't make it true or realistic.

I'm sorry, your point was...?

Right. This is the N93 released a full year before the iPhone which could multitask and use folders a full four years before Apple got round to it we're talking about, isn't it?

You don't really understand what a smartphone is, let alone a superphone, do you Chris?

@Tom

"Android and iOS have redefined "smartphone" to include a capacative touchscreen."

In your opinion which, since that's not the opinion of the major analysts, is kind of irrelevant.

You could always write to them if you want it changed. Until they do that's the way it is.

Cognitive dissonance. It's a bitch ain't it?

@Mark

I think you missed this sentence (may I suggest reading before commenting if you're going to try to insult people, especially if you're going to use your work computer rather than your all-singing, all-dancing 'superphone'?):

"The iPhone environment may be more restrictive and lack the proper multitasking of Symbian..."

But if you're really willing to split hairs, just about every phone on the market runs a multitasking OS. The iPhone has a warmed-over version of BSD; Symbian is a Unix-like OS. Even the old pre-Symbian Nokias, IIRC, ran Enea OSE which was multitasking from the ground-up. Enea's advertising at the time - a dig at the problems that the Mars Pathfinder had - was all about its approach to multitasking.

Similarly, all these OSs can quite happily run a full filesystem. What you're talking about is user-accessible or controllable multitasking and folder maintenance which, when it comes down to it, a product-design decision.

If you're going to say a smartphone is not a smartphone without these attributes then you might as well confine the definition to whether or not the device has a touchscreen or not.

The PC didn't get redefined when better multitasking arrived. In fact, better multitasking continued to exist on other personal computer platforms at the time but, and this is the point of the post above, those features were not important enough to sway people from going to OS/2 or to VMS. The latter still has far better file and folder handling than practically anything that runs on PC-class hardware today.

However you define smartphone, superphone, Jesusphone, whatever, it doesn't make a great deal of difference to why Nokia has had for the past 15 years little success in the US market or why it's leadership position in phone design is under threat in Europe and, potentially, in the Far East.

Chris is right about one thing.

Apple is winning because of usability, where you press a button to go where you want.

Who would tolerate an elevator where you have to go through layers of menu to get to the 20th floor instead of pressing a button?

Apple's success is primarily a result of the UI design and gesture/touch interface, enabled by Apple's commercial savvy in recognising the potential of touch, their ability to negotiate exclusivity and their marketing genius in presenting their product.

Of course the competition like Nokia left the door open for Apple by failing to recognise that there was a pent up demand for mobile computing as opposed to primarily using phones as communications devices.

This wasn't helped by the network operators who didn't want to scale up their networks to support mobile computing and preferred to squeeze as much out of voice and messaging as they could.

This was at least partially motivated by government greed in auctioning off 3G spectrum etc. etc.

Android has caught up with Apple in some respects, however fragmentation, poor industrial design and lack of real differentiation means that Apple's market share will continue to grow.

At this point only market consolidation in the Android space, or a major screw-up by Apple will deflect from this trajectory.