Friday will be a huge turning point for Nokia. What can we expect?

Speculation on Nokia’s short and long-term future is running rampant on just about every tech blog this week. This is what happens when a giant in any industry is overtaken by a younger competitor.

With the report of Android becoming the world’s leading smartphone platform everyone wants to voice their opinion on what the Finnish smartphone maker will do after giving up such a big amount of potential market share.

Canalys today published its final Q4 2010 global country-level smart phone market data, which revealed that Google’s Android has become the leading platform. Shipments of Android-based smart phones reached 32.9 million, while devices running Nokia’s Symbian platform trailed slightly at 31.0 million worldwide.

Google gets all the credit for making Android as popular as it is today. But it did help that the N8 was the only major release by Nokia the whole year of 2010. It didn’t begin shipping until early November so there wasn’t much time to join in on the huge growth the smartphone market gained in 2010, up 80% from the year before.

Nokia is in an odd position. Normally you see a company dump their CEO after a catastrophe like this. But that already happened. Stephen Elop just recently took the reigns of the company around 4 months ago and has yet to put his mark on the company. How can he in that short amount of time? Nokia is huge and all of it had to be carefully evaluated. He’s been doing just that and now with Capital Markets Day coming up this Friday he’ll be able to unveil to the world the direction he wants to take the company. Mobile World Congress is next week where Nokia will be able to further explain their plans and show it off in detail. All eyes are on them right now and what moves they will make to try and bring the company back to the glory they once enjoyed.

What is the problem and how can they fix it?

The problem with Nokia is not hardware. It’s software. Symbian^3 development was too slow and many would argue the software still isn’t where it needs to be in terms of the user interface. They already had a path for 2011 before Elop took over in September. They would make the upcoming MeeGo operating system for high-end devices and Symbian (with an updated UI) left for the mid-range. Many people including myself think this is the right way to go.

Symbian is already established and still a world leader. All it needs is a major kick in the ass in terms of UI which Nokia has already started on. A fresh batch of apps would help improve consumer’s view of Symbian and the implementation of Qt has already started that transformation.

MeeGo is intended to power Nokia’s high-end phones that will have the best hardware specs on the market. The Nokia N9 is probably their most anticipated phone ever and there has been absolutely no official information on the rumored device since it first leaked last year. We don’t even know what Nokia’s custom version of MeeGo will look like so there isn’t much to be excited about unless you believe rumors. If Nokia unveils the N9 next week with a breathtaking MeeGo UI and astonishing hardware specs this will be the start of their comeback. Based on rumored comments (that I’ll show you below) by Elop the N9 may not be ready.

Or Nokia can join forces with Microsoft and adopt Windows Phone 7 in their high end phones. I’m sure that option is there for Stephen Elop but will he go for it? Many of the “big” tech sites have speculated that Nokia will indeed bring a Windows Phone 7 device to the market to try and make up for the lost profit. If they do will they ditch future Symbian UI development? Will MeeGo be downplayed and become a minimal focus like Maemo? Will all Nokia smartphones run Windows Phone 7 from here on out? So many questions will have to be answered if this is their plan and essentially the past 4 months of work on Symbian, MeeGo, and Qt would be a waste in the long scheme of things. If Nokia does go this route it will put them in a category with HTC, Samsung, and LG. No longer will they power their own smartphones. Instead their fate will be partially in the hands of Microsoft and the popularity of Windows Phone 7. Will they swallow their Finnish pride and allow an American company to have a roll in their future? Remember, Elop is not from Finland.

Personally I think the WP7/Nokia scenario would be a mistake. I’d rather see them continue on with their MeeGo/Symbian plan and actually give it a chance.

What are the thoughts of Stephen Elop?

You have to check out full context of the “burning platform” entry that Elop supposedly posted on an internal blog this week. At first I didn’t believe it was real until Mark Guim confirmed it with his sources over at The Nokia Blog. His sources are usually right but I still take it with a grain of salt. Interesting, none the less. I won’t post the entire text but here is the part that stood out most to me…

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

Click here for the full entry. It’s a very good insight into the problems with Nokia and I’m glad to see the new CEO acknowledge these issues if this is indeed legit.

So what will it be? Android? Windows Phone 7? MeeGo with a little bit of Symbian thrown in? Whatever the plan is, this Friday, February 11th is Nokia’s Strategy and Financial Briefing and will be a huge turning point for Nokia and the future of the smartphone market.

  • João Luis

    Finally some sensible talk :)

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  • ricman

    Great article! I can live and work with both Android and Symbian, and wouldn’t mind at all to see Google’s platform on some real and robust hardware for a change (tired of android’s devices plastics and crappy cameras). My main all-purpose phone now is the N8, and my Galaxy S roams around my house SIM-less acting pretty much as an iPad on wifi, and I believe the situation would be just the same if both, or neither, had android running on them. But with windows… I don’t want to say already that I’d quit on Nokia in a flash, because never had the experience of the WP7 system, but I’d guess it would port to the mobile platform all the quirks and annoyances not only of Windows, but os MS itself.

  • Mike Maddaloni – @thehotiron

    I’ll add this – there’s a lot of speculation that Nokia will go with Windows Mobile 7 as Elop came from Microsoft, and that should not be assumed, and here’s why, from experience.

    The last company I worked for got a new president who came from a big conglomerate. A few years later, that same conglomerate bought the company. Shortly after it was announced, the president said he was leaving. Although not publicly stated, I heard he left as he didn’t want to work for the conglomerate again, and he left there for a reason!

    In his post, I found it was interesting he used the metaphor of a platform – which is what everyone is talking about. And if this was an internal blog post, he surely knew it would be leaked.

    Looks like I will be up @ 4 am Chicago time on Friday!


  • Anonymous

    well the cats out of the bag, its Windows Phone 7. My n8 sits crying next to me, i guess finally i can go buy a phone from a different manufacturer. All the planned updates for the phone seem to go down the drain.

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