Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
What a week for revolutions: Egypt has changed from a dictatorship to democracy in just 18 days, and last Friday, Nokia Corp. announced it was abandoning its 20-plus year history of developing and maintaining its own phone operating system (Symbian). Instead, the company is going to work with Microsoft Corp. and utilize Windows Phone 7.
On Sept. 29, 2010, I wrote an open letter column to Stephen Elop, the new CEO of Nokia. I recommended four major things that Nokia should do in order to become a great company again:
1. Improve industrial design.
2. Create great smart phone devices.
3. Adopt Windows Phone 7.
4. Migrate Ovi to an on-device apps store.
5. Create an iTunes-like service to support distribution of rich media.
6. Move Nokia’s headquarters to Atlanta.
On Feb. 11, 2011, Stephen Elop held a press conference with Steve Balmer, the CEO of Microsoft, to announce that Nokia would adopt Windows Phone 7 as its primary operating system for smart phones. The alliance goes further to provide for mutual assistance between the two companies. Nokia will assist Microsoft on imaging technology, mapping, and location based services – and Microsoft will assist Nokia by providing the OS, Bing search, Office, developer tools and mobile web browser.
Nokia plans to migrate all of their smart phones from Symbian to Windows Phone 7. It’s clear that Nokia plans to phase out Symbian. I suspect that, if they are able to bring the cost of Windows Phone 7 products down in the years to come, the overall percent of sales will be higher than they showed in the press conference:
There’s a lot of hard work that has to be done by both parties in order to bring the vision of the partnership into the marketplace. These include:
1. Build great products: First and foremost, Nokia has to build great mobile products. Over the past few years, they have built impressive technology into the N-Series but, overall, the hardware devices have not measured up to those produced by Apple Inc., HTC Corp. and Samsung Electronics Co. Ltd. It’s really hard to build outstanding products that integrate software and services and industrial design into (pun intended) a “magical experience.”
2. Revolutionize their industrial design: Nokia can’t simply slap Windows Phone 7 into the existing phones. They need to take a step back and put new resources into industrial design so that the hardware, software and services work really well and the impression is positive in the major geographic regions. Clearly, Europe and Asia regions prefer designs that are different from the United States or, saying this another way, in order to be successful in the United States, Nokia has to design products that people in the United States really like. That’s easy to say but very hard to do.
3. Integrate differentiated software and services: Nokia has to develop a unique set of user experiences and services on top of Windows Phone 7. Each of the successful Android handset manufacturers (Motorola Mobility Inc., Samsung, HTC, etc.) have developed additional services that add value and differentiate their products from the competition. This is perhaps the most difficult thing that Nokia has to do, but the rewards could be substantial.
4. Convert Ovi into the Windows Phone 7 Apps Marketplace: Nokia has to work with Microsoft to migrate web-centric Ovi into the Windows Phone 7 Apps Marketplace. In contrast, Marketplace is platform-centric, much like the Apple Apps Store and Android Market. The purchasing of apps should be simple and easy to administer likely using operator billing so that credit and collections can be managed by the operator.
5. Create an iTunes-like service for distribution of rich media: Nokia and Microsoft need to provide users with an iTunes-like service to hold the user’s music and videos as well as provide for each purchase of rich media content including movies and TV shows. This will become even more important as the partnership migrates toward building tablets.
6. Work together to improve Windows Phone 7: Nokia should work with Microsoft and provide recommended improvements to the Windows Phone 7 operating system that will help build a viable Phone 7 ecosystem. And, here’s where Microsoft likely needs to make their leap from the burning platform: develop a version of Windows Phone 7 for tablets. The desktop environment is not going to be successful in tablets. That one decision could be huge for Microsoft in the long-term.
I commend both Nokia and Microsoft for stepping up to the plate to form this partnership. But, it’s just the first inning. Their batting average will depend on how well they execute on the vision. If they execute well, they will hit a few home runs and be very successful. If they don’t, Apple and Google Inc. will simply clean up and take the lion’s share of the market.
I hope Nokia and Microsoft will work hard on the above recommendations and delight customers. If they achieve that, then users will purchase Nokia with Windows Phone 7 rather than other competitive products.
J. Gerry Purdy, Ph.D. is Principal Analyst, Mobile & Wireless, MobileTrax L.L.C. As a nationally recognized industry authority, he focuses on monitoring and analyzing emerging trends, technologies and market behavior in the mobile computing and wireless data communications industry in North America. Dr. Purdy is an “edge of network” analyst looking at devices, applications and services as well as wireless connectivity to those devices.
