FEATURE SMARTPHONES
looking to position its new flagship firmly at the premium end of the market and this aspiration may be one stumbling block to suc- cess, at least if the views of Telefónica’s Simon Lee-Smith are any measure of the situation. “Nokia are coming back at high end levels,
but generally Nokia devices are expensive—and if they want to sell in volume they need to bring out devices that are cost competitive,” he says. “Manufacturers seem to think that a €400-plus price is the norm. Well, it isn’t; customers and operators won’t pay that level of cost for a device which doesn’t differentiate sufficiently.” Nonetheless, Lee-Smith—like his opposite numbers at Vodafone and Orange—stresses enthusiasm for the Lumia 800 as well as the wider Windows platform play. And, while we’ve seen how important it is for vendors to support carriers in the handset space, the relaunch of Windows Phone illustrates how that support
A buyer’s perspective
As the director of marketing for Vodafone’s global device unit, Peter Becker- Pennrich is closely involved in the procurement of up to 70 million mobile devices each year. Like all operators in mature markets, Vodafone has an interest in seeing a third smartphone ecosystem thrive in a market dominated by Apple and Google. Here Becker-Pennrich gives his frank assessment of the prospects for Nokia and Microsoft as they spearhead the Windows Phone challenge, and his thoughts on Research in Motion, which at one point would have been viewed as the natural provider of a third way.
On Windows Phone… WP is not there yet. They are making genuine efforts for WP8 but in WP7 there is still a lot to be wished for, especially when it comes to offering all those things that we need on the enterprise side, and the overall flexibility of the OS.
On Nokia… Success isn’t guaranteed, but it’s not all doom and gloom, as you sometimes see in the analyst opinion pieces. They still have one of the strongest and largest supply chains in the world and their economies of scale are significant. And they still have a significant presence in all the markets that they operate in. They know how to work the channels and they have the sales structure in place. They still have brand value, and a lot of brand recognition, which is a dormant
asset. If they manage to underpin that with more attractive products then I can see how a lot of these things can be leveraged again. Will they succeed for sure? I don’t know, but they have a fighting chance and therefore I’m tentatively optimistic.
On Microsoft… I continue to be confused by Microsoft’s stance in the smartphone market. On the one hand they want to provide a fairly rigid, streamlined experience because they say they don’t want to confuse the consumer and they want to offer a recognisable experience. But this is of no value to anyone in the ecosystem other than Microsoft.
26 They want to be restrictive with their
experience and at the same time they want to appeal to as many OEMs as possible—and you just can’t square that. Why would an OEM be interested in taking the platform if they can’t differentiate on top of it?
On the Microsoft-Nokia partnership… My long term expectation is that, at some point, Nokia and Microsoft will become one, but not necessarily from a financial or corporate entity perspective.
On Research in Motion… RIM reminds me right now of Nokia around the time when they were selling the N97 and a bit later. If you have strong leaders who take credit for leading the company to its present position, they really struggle to see that they shouldn’t be the ones who take it forward. I’m not sure whether RIM entirely understands the magnitude of the problem they have; I don’t think it has completely sunk in. What are their options? Licensing another OS doesn’t really make any sense because, what makes your Blackberry really valuable is not the UE, or the integration, it’s the unbeaten ability to have push email with very decent battery life that is stable and robust. They took a lot of flack for the outage recently, but they ran so many accounts for so many years with no problems. That’s their strength. And the special sauce of this thing is just about where the silicon hits the software. So it’s not going to be easy for them to put some standard soft- ware on top of their hardware and then somehow make best use of everything they’ve developed. It will be a massive effort, but I think they will go for an open OS which they don’t control, which is why they made the QNIX purchase.
Peter Becker-Pennrich
can travel in the opposite direction. At Nokia World 2011, where CEO Stephen Elop unveiled the Lumia 800, he said that the operators car- rying the new handset would be spending three times as much on marketing it than had been spent on any other Nokia handset. In the UK, Telefónica’s O2 has a phalanx of in-store sales specialists called Gurus, schooled to a specialist degree in the work- ings and strengths of various handsets within the carrier’s range. The closer the vendors work with the Gurus, says Simon Lee-Smith, the better the Gurus will be at selling their handsets. “The Guru programme has been very successful,” he says, “and it has increased sales for all of the vendors that have been involved in the programme.” So Nokia, like the rest of the vendors in the
high end market apart from Apple, will now adopt a pro-carrier stance. This position is
neatly summed up by Sony Ericsson’s Kristian Tear in a comment aimed squarely at Apple (and one that might perhaps be aimed at Google, too, were it not for Sony Ericsson’s commitment to Android): “We want to support the operators, rather than try to steal their customers and consumers away from them, and we’ll continue to do that.” A dynamic that sees the market leader
challenging for customer ownership and the chasing pack pledging allegiance to the operator community is nothing new, of course. While New Nokia would never do such a thing today, it was not that long ago that it launched Club Nokia, which can be viewed in hindsight as an overly premature or poorly executed (or both) attempt at the strategy that Apple made its own. And when Nokia was making its bid for supremacy, its peers made similar noises about the importance of the carrier. »
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