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.
On Feb. 11, 2011, Nokia CEO Steven Elop announced that the company would abandon the Symbian operating system. At the same time, he also announced a strategic partnership with Microsoft. The two would share intellectual property and work together to build great mobile products and services. It’s now been over two years since that announcement, and both companies have relatively very little to show for it.
IDC recently reported that a total of seven million Windows Phone units sold worldwide during the first quarter of 2013. This is up 133.3% from 3 million units during the first quarter of 2012, when the operating systems was just getting into the market. Nokia was responsible for 79% of all Windows Phone shipments through their Lumia line of smartphones.
In perspective, during the first quarter of this year, manufacturers shipped a total of 162.1 million Android smartphones and a total of 37.4 million iPhones during the same time with share results of 75% Android and 17.3% iOS of 216.2 smartphones worldwide.
But, Nokia’s seven million units represented only 3.2% market share. It was only seven years ago that Nokia held steady at 40% or more of the worldwide cell phone market. At one point, it seemed everyone had in the United States had one of Nokia’s “candy bar” shaped feature phones. Although sales are increasing on Windows Phone (primarily in Asia and Europe), very few people in the United States have purchased Nokia with Windows Phone.
In Europe, people buy Nokia no matter what OS is in side, whereas here in the United States people tend to by what’s hot independent of the brand, although lately most people have purchased either an iPhone or Samsung Galaxy S-series smartphones.
Neither Microsoft nor Nokia intend to “dawdle around” with 3% to 5% market share, but it appears to be a steep uphill climb for these partners to get a significant part of the smartphone market which is now selling at the rate of one billion units a year and growing.
What do Microsoft and Nokia need to do to get sales up into double-digit market share (and, as a result), sell more than 100 million units a year? Here’s what I think these two companies should do to get customers, particularly in North America, to buy and use Nokia smartphones using Microsoft software.
Microsoft:
–Drop the Metro interface. It simply isn’t working. Give the mobile OS team independence from Windows to create a world class mobile OS that is on par with or exceeds Apple’s iOS and Google’s Android. Or, buy BlackBerry as its new BB 10 OS is very mobile-centric and works very well.
–Eliminate the “start” button. No other mobile OS uses it. Simply start up into the desktop and then let user’s customize it to their preferences. You could even leave Metro in “preferences” if some users wanted to activate it.
–Put the “new” mobile OS on the Xbox as a demonstration of how developers can take the new Microsoft smartphone OS and develop exciting products for specific markets.
–Integrate the new mobile OS into the Surface tablet.
–Provide more integrated messaging so you can see your e-mails, text messages, tweets and Facebook messages all in one integrated messaging area. Microsoft Windows Phone 8 does provide a feature called “Me Card” that works as a one-stop shop for posting to all of your social networks and taking a quick peek at who’s writing on your Facebook wall, Tweeting to you and liking your posts, but we’d like to see it work throughout the inbox – more like what BlackBerry has done with their BlackBerry Hub.
–Integrated search so the user can easily search both the device and the Web.
–Add an easy way to close apps. Apple’s iOS does it by holding down a finger on an app and then hitting “x” when it wiggles. It doesn’t have to use that user interface, but there should be some easy way to make that happen.
Nokia:
–Create a new industrial design for products sold into North America. The current Lumia line, while technically, very good, is “edgy” and not anything like other popular smartphone products sold in North America. Samsung was able to design and build their Galaxy smartphones in a way that’s very attractive for North American users.
–Develop “Nokia Here” (location-based services including maps) for iOS and Android. Why? Because it’s a great app and service, and it operates in offline, local mode which is important when you’re outside metropolitan areas.
–Integrate popular cloud storage solutions besides Skydrive … perhaps via a partnership with Dropbox for consumers and Box or Egnyte for enterprise.
Enterprise markets:
–Go after the enterprise market. You don’t have to abandon the consumer market, but you have a great opportunity to make Nokia a leading brand in the enterprise. How? Offer Microsoft’s enterprise accounts (that typically have an Exchange server) with tools for the IT department to easily setup the enterprise partition and applications.
–Give enterprises control over the user interface so they can easily create a custom startup sequence and desktop. This will help enterprises build custom environments that can be used in the basic form to have the boot up sequence display the logo of the company and go to a standard corporate app or deeper with a specific vertical market application without access to the desktop.
–Leverage the mobile version of MS Office that are pre-installed as this is a competitive advantage over other platforms. [Note: we still recommend that MS should develop and launch MS Office for iOS and Android].
Consumer markets:
–Create a really easy-to-use media service that allows users to either buy a song or movie or TV show and own it locally or stream it using subscription services. You might consider buying a popular music service like Pandora, Rhapsody or Spotify and then tightly integrate that service into the Nokia phones and add access to TV shows, movies and videos.
–Leverage the Xbox by pre-installing the Xbox SmartGlass app to control their Xbox with their Windows Phone. Offer enhancements only available to Nokia customers.
If Microsoft and Nokia do these things, their market share will definitely grow. They have to make it much easier to get up and running either in a consumer or enterprise environment. Nokia could return to greatness in mobile like they had been for so many years.
J. Gerry Purdy, Ph.D. is Principal Analyst, Mobile & Wireless at 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.
