Build it and they will come.
Typically, this old saw is trotted out to underscore the odds that, in fact, “they” won’t come when you build “it,” whether it’s a baseball diamond in a corn field or a “multimedia computing device” hiding out in the open in the U.S. handset market.
Yet Nokia Corp. currently rules the handset world and few doubt the company’s ability to innovate and astonish with high-end gadgets-except perhaps American consumers, many of whom are clueless as to Nokia’s quality brand. All they’ve seen are Nokia’s low-end, bar-style handsets at the tier-one carriers’ stores. Glimpsing ads in The New Yorker for one of Nokia’s N series devices may or may not help connect the dots.
Nokia’s vision for the United States, however, merits due consideration. The vendor consistently says it plans on reversing its fortunes here. Who’s to say whether the company can pull it off?
Bill Plummer, now head of the Finnish vendor’s multimedia efforts in the States, espoused Nokia’s vision as embodied by the introduction of the N95 device.
As next-gen networks are turned on in market after market and consumers glimpse a converged world of mobility, computing and the Internet, Nokia is making a more concerted effort to present its high-end value proposition to U.S. consumers through alternative channels, Plummer said. Call it seeding the market for growth in converged devices.
Ambitious transformation plans
As Nokia’s high-end devices pay off their research-and-development costs, advanced computing, browsing, multimedia and social networking functionality can be driven down into the feature-phone category. Nokia hopes to do nothing less than change the way carriers think about device value and transform carriers’ mainstream product lines.
“What we’re doing is providing consumers with access-outside of traditional, carrier-partner channels-setting the stage for this entirely new product category,” Plummer said. “There’s nothing else out there like this. Ultimately that’s to the benefit of the carriers as well. As we are first to market with a device like this, we’re building consumer familiarity with functionality, features and services that will bleed down into the more mainstream offerings that the carriers bring to the table.”
The N series-six models are available in the U.S.-targets consumers who are technology leaders or stylists, Plummer said. Those tech leaders “crave” multimedia in a high-end device.
“The advent of ubiquitous, broadband mobility with rich multimedia very much suits the American consumer, who has had that experience in the fixed environment and has approached wireless as a voice solution,” Plummer continued, warming to his task. “Now that we have the data speeds and devices like the N95, early adopters are lustful for the N95.”
Plummer spoke of the marriage of “single-purpose functionalities” in the device: when one holds the dual-slider designed N95 in one’s hand and wants it to act like a camera, it looks, acts and feels like a camera. True enough. Perhaps a little less true when one selects the media player or the GPS function, according to one analyst who generally praised the device.
“This consumer segment is not necessarily untapped, but perhaps unsatisfied,” Plummer said. “This is about unlocking the possibilities for those people to unlock their own passions.”
“Carriers are increasingly seeing that Nokia’s vision for converged, handheld, multimedia computers resonates in the marketplace,” Plummer said. “The beauty of the timing is that consumers are ready. The demand exists.”
Currently, Nokia is offering the N95 at its flagship stores in New York and Chicago and riding “viral buzz” on certain techno-geek gadget sites on the Web. Nokia does not spell out its marketing and advertising programs in advance, but Plummer said the U.S. public would see an outreach effort unfold.
Plummer took pains to emphasize Nokia’s “strategic partnership” with U.S. carriers, while extolling the inevitability of alternative channels, particularly for the vendor’s most advanced products. The N95, for instance, retails for about $750, and no carrier has agreed to pick it up.
Nokia’s vision got a more sober scrubbing, if you will, by analyst Avi Greengart at Current Analysis.
“This device is for gadget nuts,” he said. “It’s an amazing product.”
“Nokia needs to have a product in the market to meet Apple’s iPhone challenge. And the N95 comes very close to being a-I hesitate to use the term ‘iPhone-killer’-so let’s say an alternative, premium choice. There’s not much available here for over $200.”
Greengart said that Nokia’s purpose in launching such a device in the U.S. is to build brand awareness and get Americans thinking about spending more than $50 for a mobile device. The N95’s design is appealing and makes “great compromises” between the device’s disparate functions. Making the device available through alternative channels is part of a long-term strategy to provide parallel channels to the carriers’ retail channels, a global trend.
Drawbacks, the analyst said, include the N95’s lack of 3G RF frequencies for the U.S.-a lost opportunity to differentiate it from the iPhone. The camera, which he praised, functions poorly in low light and has unacceptable shutter latency. Memory storage is limited to 2 gigabytes, equivalent to an iPod Nano, rather than higher capacities one might associate with computing and multimedia functions.
As for seeding the market for its own success, Nokia has “more work to do,” Greengart said.
While the iPhone may not drive higher average revenue per user (ARPU), AT&T’s exclusive deal offers the opportunity to steal subscribers away from other carriers.
“Does Cingular (AT&T) believe that Nokia devices can have the same effect?” Greengart asked rhetorically.
“There’s no evidence of that.”
