“Nokia is the world’s largest maker of smartphones – mobile phones that double up as mini computers – but it has been losing market share to rivals led by Apple… Mr Kallasvuo defended Nokia’s N97 smartphone, the company’s main answer to the iPhone, following criticism by some analysts that it is a poor alternative to Apple’s handset,” Parker and Ward report. “He said: ‘We are competitive in the marketplace right now as we speak, and we will make efforts to be even more competitive going forward.’ Apple’s rapidly growing strength as a mobile phone maker is underlined by its securing the second largest share of the industry’s profits in the second quarter.”
MacDailyNews Take: In order to explore the striking dichotomy between pronouncements from CEOs of Apple’s roadkill and actual reality, please see: Gizmodo reviews Nokia N97: ‘If this is the best they can do, Nokia is doomed’ – July 06, 2009
Parker and Ward continue, “In the three months to June 30, Apple took 23 percent of the leading handset makers’ operating profits, compared with 2 percent in the same period last year, say Bernstein analysts… Nokia secured 28 percent of the top handset makers’ operating profits in the second quarter, down from 59 percent in the same period last year.”
Full article here.
MacDailyNews Take: Nokia. The Underwood Typewriter Company of the 2010s.
[Thanks to MacDailyNews Reader “James W.” for the heads up.]
Oh, and MDN … that Underwood – electric or manual ? …
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And … jhmart1 … move your cursor over to the side before you scroll …
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BC
MDN, can you bring up Creative’s CEO’s famous words about taking on Apple and the iPod ?
” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> Nokia may want to read that whole timeline
Nokia has a huge share of the nearly profitless dumb phone category. They have no chance in the smartphone arena, they have no software to build a platform and no ability to produce one.
Their 2 possible options:
1. Accept that they are dumb phone company and reduce their employee count to about 1/3 of its current size, become lean and mean dumb phone producing machine, accept this fate and focus on it and try to make as much money as possible doing it.
2. Go out of business.
If they don’t chose the first option, I’d say they have 2-4 years at most before option 2 becomes unavoidable. They do not have a 3rd option “produce a smartphone that competes with the iPhone.” If they continue to live in the fantasy that they can or will, then option 2 is on it’s way.
Watch out, Nokia sharpening their knife for the upcoming gun fight. lol
Nokia could do several very obvious things to improve it’s chances…
1. Get rid of about 190 of its total of over 200 phone models. How can having over 200 different models of cell be anything more than a logistical, manufacturing, service and support nightmare for customers, telcos, developers and Nokia?
2. Beg, borrow or steal an OS. Symbian, or this other Linux OS their flirting with? Which is it? Why not buy Palm while you still can? In another year, you might not have enough money.
3. Partnership with Microsoft? ‘Nuff said.
4. $599 N97 or whatever it’s called won’t really cut it in the US. Better smooze with some US telcos real soon.
5. Ovi launch wasn’t a disaster, but a compete disaster to use the words of most analysts. Developers love that kind of PR! Not! Fix it.
NOW they get it. Duh! What part of the words, “Uh, sir, there are barbarians at the gates. Should we ignore them some more? They’re running off with our food and women.” did Nokia not understand?
This likely means one of the following:
1. They hope the Symbian Alliance (does that sound like something from Star Wars?) can cobble up a semi-decent OS based on Linux for them
2. Adopt Google Android and build a phone around that
3. Go to the Dark Side and align with Microsoft, adopting whatever crap they announce as their OS
4. Buy Palm (unlikely)
If Nokia opts for #2 or #3 above (it would be unlikely that they could succeed with an in-house OS – that’s not their forte), it means that Nokia won’t be able to offer something truly original. The best they could hope to do is to try to commoditize the smartphone marketplace and compete on price. The company does have a large international footprint and dealer marketplace. But so long as the iPhone is competitively priced, Apple can more than compete.
Even if Nokia makes a smarter phone than it offers now, there’s still the little matter of competing against OS-X, as it connects to the Mac, and the other little matter of the iTunes Music and App stores. That’s a tall order. Apple has the hardware, the OS, the distribution network for content and consumer buzz.
It’s a classic mistake made by a large company to ignore a well thought-out entrant. Apple may have been late to the mobile telephony party, but their brilliance was in re-defining the market entirely, giving Apple the first-mover advantage in smartphones.
Someday, a Ph.D. thesis will be written on this.