Summary
Success in mobile telecoms devices and services is all about usability. The success of the iPhone proved it clearly, as all of the applications and features it got people to use had been available for many years before without being noticed outside of the geek community.
Nokia has never been about innovation, but needs a strong strategy to keep its leadership position.
Analysis
As technology evolves, there is less and less option for network operators and handset manufacturers to differentiate.
Nokia's strategy to become a service provider has 2 sides: developing its own content and services and supporting existing global brands.
In this way, Nokia has developed Nokia maps, which has a hard time to find its market.
Similarly Comes with Music only has 107,000 users, compared with 2.7m users of Spotify, as of July 09.
While the future of Nokia might be with services and applications, they understand now that there can only be a finite number of successful social networks, map services, etc, hence their new position towards Faceboook.
Further, Nokia now put in charge of the smartphone division a manager with FMCG and branding experience, acquired at Reebok and Procter & Gamble, and hired from Apple to lead mobile applications.
With this in place, while mobile sales will slow down in the coming quarters, services and applications will most likely find a new breadth and should take market share within 2010.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
