Photo: Nokia

Nokia isn’t having the best of times. A quick read of most of the articles written by the tech media over the course of this year will point that out. However, the company is so big and so influential that to think it is an also-ran is indescribably careless and irresponsible. In fact, chances are Nokia can (and will) mount a fight back. The extent to which it will recapture lost market share is unknown, especially in the highly competitive top-end smartphone space, but regroup it will, we believe.

Below is a look at the source of Nokia’s problems, and the source of its solutions. Fortunately, I think the company has enough skilled people to pull a comeback off, and under new leadership with CEO Stephen Elop, perhaps the fruits of that labour will emerge sooner rather than later.

Problem 1: The handsets

Nokia sells a heck of a lot of mobile phones. How many, you ask? More than a third of all handsets sold in the entire world are made by the Finnish mobile phones giant. Think about the enormity of that figure.

The problem, however, is that not enough of these mobile phones are the expensive top end smartphones that generally sell for higher profit margins and make more residual income from the applications market. Gizmodo went so far as to call Nokia The McDonalds of phones, noting that ‘[their strategy]is a strategy that used to work, before iPhone and Android came along to attack on all fronts. But Nokia’s got to have a plan to get things back on track, right?’

Right, Gizmo, I believe (or pray, depending) that they do have a plan. Nokia puts out too many mobile phones each year to release any remarkable phones in any given year. While this strategy is fine at the lower end where Nokia’s quality is matched by very few, at the top end this strategy is dangerous and, quite possibly, the reason for the companies woes. A look at the Nokia N8, for example, shows a lot of unrealized potential.

Photo: Nokia

What the Nokia smartphone folks will need to do is reduce the volume of smartphones they release per annum to HTC levels, at most, and to Motorola levels, at best. That’s to say, definitely fewer than eight per year, ideally at most three undeniably brilliant handsets per year. And, at least based on rumblings coming out of Finland, this is a strategy Elop must be considering.

Problem 2: The mobile OS

However, Nokia smartphone quality aside, it will help naught for Nokia to continue to make good handsets if its mobile OS platform is not up to sniff. And while we often get flack in comments for saying this, Symbian^3, when compared to iOS, Android, Windows 7, and even webOS, is not up to scratch.

Yet again, it appears Nokia and Stephen Elop know this. The company reclaimed development of Symbian^3 and any future iterations of the mobile OS platform from the Symbian foundation. Furthermore, the company, in partnership with Intel, is hard at work on its incoming MeeGo platform. Too much rides on this for Nokia to blow it, and I believe they know this.

Problem 3: Corporate management

The last problem Nokia has is its corporate management. While there has been significant upheaval within the ranks at the mobile phones giant, more still needs to be done, one feels, if the company’s business is to start making sense.

A company that sells over 100 million mobile phones in one quarter should never run at a loss in said quarter, something Nokia has done. Perhaps this is an unsophisticated look at Nokia’s financial situation, but in that, it’s illuminating of how Nokia’s current product mix is to its detriment. Nokia smartphones need to be sold at an increasing volume, since the profit margins inherent in feature phones just isn’t sufficient. Just look at the smartphone profit share a company that sells a fraction of Nokia’s overall units is distributed.

With an image revamping in the works, and all hands on deck with their MeeGo mobile OS platform, and hardware/software strategy, we think Nokia is capable of coming back strong. However, with each passing quarter where the company doesn’t bully its way into the smartphones profit high stakes, especially in the applications market, too, is Nokia making their jobs extremely difficult. We don’t envy Stephen Elop, not one bit, but if he pulls off the Nokia turnaround, he will be one of the most revered CEOs in telecommunications history.

Photo: aresjoberg / Flickr

New Nokia CEO Stephen Elop is slowly beginning to reveal how he plans on turning Nokia around. One part of that strategy is obviously formed around building remarkable handsets again – which require an equally remarkable mobile OS platform, too. The second part of that strategy is changing Nokia’s image, and the company’s latest hire, Jerri DeVard, has been tasked with leading the charge.

Reviving a brand

Jerri DeVard will be Nokia’s first chief marketing officer ever, who will be tasked with not only rescuing Nokia’s declining brand image, but likely reenergizing it, too. Her responsibilities will be overseeing Nokia marketing, communications, and brand management initiatives.

Yes, her job will be incredibly difficult, but her pedigree suggests she’s highly capable. Having had leading roles at Verizon, Revlon, Citigroup and Pillsbury, she no doubt has an understanding of consumer marketing for big companies, and it’s this type of leadership that the Finnish mobile giant needs.

Making a name for yourself

Much like Stephon Elop’s legacy rides exclusively on how he performs at Nokia in the coming years, Jerri DeVard also finds herself in a career-defining (or career-breaking) role in heading up Nokia marketing.

When people think of Nokia nowadays, they no longer think of a top quality mobile phone company, with that reputation being grabbed by Apple, HTC, BlackBerry and others. While Nokia dominates the mid- and low-end mobile phones market, the problem it has is in high-end devices where all the big profits are. Popular tech blog Gizmodo went as far as calling Nokia the McDonald’s of phones. Yes, it’s that bad.

All the help she can get

Jerri DeVard will be tasked with leading Nokia marketing so as to change this reputation in the eyes of consumers and industry peers alike. She cannot however do this without the help of her engineering colleges. The Nokia N8, the company’s current flagship phone, hasn’t exactly set the tech world alight, but hopefully what’s to come next is more of what we want (and expect) of the Finnish mobile phones giant.

Photo: CraigShipp.com Photos / Flickr

Some people must have the latest gadget first. They wait in line for days on end just for the opportunity to be one of the first people in the world to have the coveted piece of tech. For some people this makes perfect sense, while others look on with bemusement. Regardless of your personal stance toward early adoption, here’s a brief look at the pros and cons of being an early adopter.

Primary pro: bragging rights

While few people will admit to being conceited about owning something first, having something that many others want but do not have triggers something in us. Early adopters, in particular, tend to be very tech savvy and/or work in the tech industry, so both the bragging rights and the jump on others will give you the opportunity to gain an edge over others in your industry.

Primary con: guinea pig status

The big problem with being an early adopter, however, is that you’re nothing more than a guinea pig. Sure, as Microsoft prepped Windows Phone 7, for example, the company had various usability focus groups and tests, but it’s in you, the first hundred thousand or so users, where the company really figures out if what they’ve put out is up to snuff.

Hundreds upon hundreds of thousands of Xbox 360 owners will tell you how much the ‘Red Ring of Death’ sucked, and the folks who’ve purchased the first batch of faulty Nokia N8Nokia N8 handsets have plenty to say, too.

Secondary pro: witness and influence progress

However, the primary con is also directly related to the secondary pro of being an early adopter. And that is watching a platform develop, as well as being central to how said platform develops. Early Xbox 360 adopters will no doubt lament the red ring plague, but they also have first-hand experience of watching the Xbox dashboard develop year on year. And the fact of the matter is gamers had a key role in shaping Microsoft’s strategy. Buying the latest gadgets first allows you to influence the way they develop.

Should you be an early adopter?

The big question, then, is should you be an early adopter of gadgets (this assumes you aren’t already, of course)? The answer to that question is: ‘It’s complicated.’ Allow us to explain – the risk of being an early adopter, particularly on a platform that could be a monumental dud is very high, especially if it falters and fizzles out. However, the upside is great, too, since your product gets better the longer you own it.

There only area, I think, that’s really safe to be an early adopter in is video game consoles. Microsoft, Nintendo, and Sony are all stable enough to ensure that, even if the console doesn’t catch on the way they need it to, the initial capital outlay is too great to just abandon the platforms. The early success of Kinect and Playstation Move confirms this.

On the flipside, the one area where being an early adopter is a big risk is with tablet PCs and smartphones. In this very aggressive market, it’s possible that if you’re not buying something from a proven company like Apple, HTC, or Samsung on a proven platform like iOS or Google Android, you’re taking a big risk.

If you have the money, though, we would never discourage getting the latest and greatest gadgets first.

Photo: Nokia

‘When it rains it pours,’ so the saying goes, but this is a particular problem Finnish mobile giant Nokia could have done without. It has emerged this past week that the Nokia N8 has been suffering power problems that have rendered the device virtually useless for a subset of its users.

Unspecified number of affected customers

Speaking to Reuters, Niklas Savander, who is Nokia’s sales chief, said the Nokia N8 power issue, where the phone would turn off by itself and not come back on, was experienced by ‘a limited number of N8 users’. A spokesperson later said the problem arose in production, and has since been fixed, so it is likely to affect early adopters only, with Savander reaffirming that ‘the total number of affected users was “a small number.”’

Troubled history

The Nokia N8, which was supposed to mark the Finnish mobile phones giant’s comeback, has been troubled since inception. Though it was scheduled to reach consumers as far back as June, Nokia only began a staggered rollout in November. These problems were attributed to Symbian^3 development timelines slipping, only to later have the mobile OS slated for not being up to modern standards.

Commonplace

Before appropriating excessive blame to Nokia for this manufacturing fault, one needs to be mindful that these types of issues accompany many high profile smartphones. Apple, for example, has had various issues, including antennagate and glassgate, with its iPhone 4, as have a number of high profile Google Android handsets.

The only difference – and perhaps why the media is paying excessive attention to Nokia’s woes – is that the Finnish mobile phones giant is clawing its way back to recovery after years of dominance was interrupted by a sharp decline in profits. It’s a classic ‘fall of the giants tale’, and watching Nokia recover will make for a great business case study one day.

In short, if you were intending on purchasing a Nokia N8, hold off your purchase for a few weeks, until the bad batch has been cleared from market.

Photo: RafeB / Flickr

Nokia recently announced it was taking development control of Symbian back, while leaving the Symbian foundation to do licensing. Some have hailed this as a good move on Nokia’s part and the final roll of the dice for the company if it intends on rescuing the ailing OS. We, on the other hand, think it’s a silly move on the part of a company reluctant to swallow the sunk cost and to move onto better things. At the very least, Nokia could rename it.

Symbian is Nokia

The first thing one needs to note about Nokia and Symbian is that, with Samsung and Sony Ericsson both abandoning Symbian in recent months, the mobile OS platform, as things stand, is supported almost exclusively by Nokia. As such it makes sense that the Finnish giant takes manufacturing in-house. And, respectfully, as things stand, it’s unlikely other handset manufacturers are going to embrace their offerings.

What’s next

Reclaiming development control of Symbian suggests Nokia could throw more resources at making the mobile OS something remarkable and that consumers, resultantly, respond well to it. That is, of course, the ideal case.

The next scenario a degree down in desirability is if Nokia gets the Symbian OS right, but consumer response is tapered due to the bad associations with the OS. Worst case scenario is if Nokia’s mobile OS platform continues to be a trainwreck and consumers continue to ignore it.

We fear it’s likely to be the second scenario, with Nokia pulling an unlikely turnaround of the mobile operating system, only to find that consumers couldn’t care less due to the baggage associated with the name.

Sixth has a terrible taste to it

In essence, if the Symbian OS has a future, it either needs to be killed or have its name killed. Clearly the Finnish giant fully intends on supporting two operating systems – MeeGo and this one – but something as simple as changing the mobile OS platform’s name could make the world of difference.

Objectively, in terms of overall quality, factoring in ease of use and attractiveness, Symbian is widely viewed as being in sixth place on the mobile OS platform desirability list. iOS, Android, Windows Phone 7, BlackBerry OS 6 and HP Palm webOS – and not necessarily in that order – are thought to be better, and this perception problem will take some overcoming.

The Symbian^3 based Nokia N8 is the latest phone released running the OS.

Photo: Nokia

Nokia, who in recent months has struggled to get much good press on this blog, has seemingly turned the profit/loss corner, posting a surprisingly strong Q3 performance. But, as has become custom with Nokia in recent months, the good news is accompanied with some bad, with the company announcing it is slashing 1,800 jobs.

The revenue/profit mix

Nokia revenue for Q3 2010 totaled €7.3 billion, a slight increase over the same period last year, where revenue was at €6.9 billion. Operating profit climbed, too, rising to €807 million, when compared with last year’s €785 million. But these figures are misleading. The pudding, as the saying suggests, is in the net profit, and what a turnaround Nokia has managed. In this quarter, the company had net profits of €529 million, a more than €1 billion increase over last year’s €559 million net loss!

But those jobs

Even with these impressive numbers, an increase in overall Nokia handsets sold and a notable reduction in operating expenses, Nokia has announced the redundancy of some 1,800 employees around the world. That’s a lot of people to lay off, and represents the second major cutting of jobs in recent weeks.

Essentially, newcomer CEO Stephen Elop, who is incidentally the first non-Finnish CEO the company has ever had, is tasked with being at the helm of a massive corporate restructuring at Nokia, with the aim of being more operationally and financially efficient. So, in many ways, for the 1,800 people whose positions will be cut, new leadership has not brought with it the prosperity Nokia has promised investors it will. First getting the Nokia handsets right seems to be the order of day.

The next stop

A rare congratulations to Nokia, who have been taking a lot of stick lately. We hope the Nokia revenue numbers not only represent more prudent financial management, but are perhaps indicative of a better strategy with regards to quality of phones the company produces. The Nokia N8 won’t quite cut it in a Samsung Galaxy S and iPhone world, but now that you have the financial breathing room, perhaps the next wave of Nokia handsets will do the job.

Photo: Stock.Xchng

Writing about Nokia has become a mostly unpleasant experience, simply because what is written of late is rarely positive. That’s not because we dislike Nokia – on the contrary, actually – it’s just that they’re losing badly right now, and consumers are showing their displeasure full force. The latest reports coming out of India suggests that the Nokia marketshare there, too, is beginning to crater.

Indian marketshare in freefall

The Economic Times, and Indian newspaper, reports that Nokia’s market share in India is cratering. Research firm IDC reports that the Nokia India has lost 20 per cent market share, which is really, really bad news for the Finnish mobile phones giant. Nokia naturally disputes this claim.

Prior to this drop in share, Nokia India was the Finnish giant’s second most fertile ploughing field. This market share was predominantly lost to local manufacturers, who upped their share to 33 per cent.

Discounting India, how about that Windows Phone 7!

Let’s assume IDC’s data is somehow off, as Nokia suggests, and that their Nokia India markets hare is stable (unlikely), is the company better off than it was before this announcement? Given the global buzz surrounding Windows Phone 7, probably not. Insofar as Nokia decides to go it alone on the software front, an area it has struggled in for many years, and old, once-written-off organisations like Microsoft can make software as compelling as Windows Phone 7, Nokia’s woes won’t stop. And, for those keeping score, for our money, there are now five mobile OS solutions superior to what Nokia currently offers: iOS, Android, Windows Phone 7, webOS and BlackBerry OS.

What can Nokia India, and Nokia Worldwide do to combat this fall? Even in a post-Nokia N8 world, the way forward is still unclear. Clearly the company feels adopting a third party mobile OS is a sign of weakness, and a potential admittance of defeat, but does Nokia even have any other options anymore?

Photo: Nokia

It’s well documented how Nokia went from being the big dominant king in the mobile phones space to struggling to eek out much profit, even though Nokia market share still blew competitors out of the water. In that period, a spunky young upstart that goes by the name iPhone has come to swallow tons of profit. But how exaggerated is the transformation exactly? Data artist Horace Dediu of Asymco put together an easy to understand graph to explain this transformation in handset manufacturer market share and profit share in recent years.

Look at that transformation

Plotting the data according to market share (x axis) and profit (y axis) showing how the mobile phone landscape in 2007 compared to 2010 is significantly different, we find that in 2007, nobody was touching Nokia in either market share, nor profit share, a time when Nokia market share was nearly 40 per cent and profit share sat on 60 per cent! Apple, of course, had nothing at that point. Fast forward to 2010, Nokia’s market share is still in the mid 30 percentage range while Apple’s profit share is well above 40 per cent – and that’s with tiny market share.

What does this mean?

In short, we can extrapolate that Nokia still has the volumes game, but the problem is the kinds of phones it sells – feature phones – are not the high profit phones it needs to be selling: smartphones. Apple, on the other hand doesn’t have much impact in the overall volumes game, but their profit share is insane. As Asymco explains in the comments section: ‘This is not measuring profit margin, but total profit share. That means how much profit did Nokia retain out of all the profit that was present in the entire industry. I exclude losses. When an entrant takes the profits away from an incumbent, it’s usually a sign of a disruption.’

With Nokia market share unlikely to return to 2007 highs any time soon, perhaps new CEO Stephen Elop will give careful consideration to the Google Android advances, or, at least some kind of stop-gap in the interim, especially seeing the staggered Nokia N8 release will likely prohibit that handset from doing colossal numbers.

Photo: Nokia

Do you live in the UK? And did you order the Nokia N8 from Nokia’s online store? If you answered yes to both these questions, do a skip and click your heels together because the handsets are now shipping to users in the UK.

The long road travelled

The Nokia N8 release has been in and out of the news for months now. The supposed Nokia smartphone messiah, its release date was marred in secrecy, and it had a premature leak that resulted in legal action being taken against the man who wrote a very ho-hum early review about the handset. It was then delayed, and before even being released, it was overshadowed by the Nokia E7, the Finnish company’s next major handset. But it looks like the wait for the handset with the ridiculously amazing 12MP camera is done for.

Nearly arrived

But for those of you who’ve ordered the Nokia N8 online, elsewhere, or through a carrier, your wait continues. What’s worse, if you live outside the UK, Nokia has made it clear that the release will be staggered (read: sporadic at best) so there’s no point in holding your breath for its arriving soon. Honestly, it makes little sense, if this handset is so important to the company, to have such a haphazard release schedule.

A long road to travel, still

But, the reason we’re so excited about the Nokia N8 shipping is because it is the first major smartphone release under new CEO, Stephen Elop. Furthermore, it is supposed to represent the start of the Finnish giant’s fight back in the smartphone business. So, from a technology journalist’s perspective, this represents either the start of something of a Rocky-esque comeback or the complete nail in the coffin of Nokia’s ambitions of dominance in the smartphone business.

The world’s eyes are on the Finnish mobile phones manufacturer.

Photo: Nokia

Aah, the Nokia N8 marches closer to release with the company finally revealing its release date and pricing across several carriers.

D-Day: 1 October

The Finnish mobile giant has confirmed that the Nokia N8 has a brick-and-mortar release date of 1 October 2010 with a sim-free street price of £429 and a carrier subsidised monthly price of £35 on an 18-month contract. If you’re pining for it and must have it now, you can purchase it online in the last week of September.

Specs refresh

In case you were unsure about what the Nokia N8 can do – and why, incidentally, it is so important – here’s a quick refresher. The marquee features are its OS, the first outing of Nokia’s newly minted Symbian^3, and it’s 12MP camera, which is also capable of shooting 720p HD video (and ships with a free HDMI cable for TV output if you purchase it on contract). Its touchscreen is 3.5 inches, and packs an AMOLED. It’s been positioned as the first major release in Nokia’s storied Smartphone fight back.

Price plans

If you go to the Nokia Direct website, you can get a full carrier breakdown, with price plans for Vodafone, O2 and T-Mobile. It’s actually a pretty decent deal, with £35 monthly over 18 months netting you the handset, unlimited text messaging, unlimited mobile Internet and 300 anytime minutes.

Show and prove

The handset, if not mind-blowing, looks at least attractive. It isn’t the handset that anybody particularly cares about, though. It’s Symbian^3 that matters. Nokia’s mobile OS strategy has been bemusing for some time now, with its dual OS strategy of carrying Symbian and MeeGo moving forward seeming a misstep. Nevertheless, Nokia isn’t oblivious to the signs and perhaps the Nokia N8 and Symbian^3 will surprise us all.