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Wednesday, December 29, 2004

Nokia: Build It, and They Will Come

Nokia, as we all know, dominates the market in Europe and Asia, but has had less success in the U.S., home of its up and coming rivals, Microsoft and Palm. The key to market penetration in North America, we often read, is achieving greater uptake in the enterprise space. Or, to put it in something like English: get big business to use your gear, and everything else will fall into place.

In this respect Nokia has its work cut out for it here. Palm is right now widely popular largely because of the Treo 600 (and 650) - there is a huge amount of software written for it, and it syncs well, so I'm told, with Outlook. At the same time, Microsoft is sure to leverage the predominance of its server OS, by tightly integrating to it its handset offerings. (We all know that, if necessary, Microsoft wouldn't be beyond giving away handsets, and/or the handset operating system, to its "corporate enterprise" customers, in order to gain massive market share and lock it down. The fact that they haven't done this might have more to do with their recent delicate dealings with Europe, than with willingness or ability.) Linux for mobile, meanwhile, threatens to sweep in out of China and take everyone by surprize.

What can Nokia do? Clearly they need to do something, and "business as usual" isn't it. In my view the only course of action for Nokia is to take a lesson from the Japanese auto manufacturers.

Remember when the so called Big Three had the U.S. market locked up tight? This market dominance led to such sterling examples of engineering as a Pinto (I believe it was) that had no coolant going to the transmission, and a Cadillac that you had to pull the engine from in order to change spark plugs. It led, in general, to "planned obsolescence", so that every American was assured of never being without a car payment (because your car's life was over about the time you finished paying for it).

The Japanese ended this disgraceful state of affairs by doing what now seems obvious: they made good cars. In fact, though, they didn't stop there. They made vehicles better and better with each year, built them to last as long as possible, and innovated features that were really useful to people and companies. I'm sure that Detroit's lunch was American food Toyota and Honda didn't mind eating.

If Nokia were to concentrate its efforts on just four or five models of handset, engineering each to be as highly functioning and long lasting as possible, it would go a long way toward dominating the market in the U.S., and maintaining its dominance in the rest of the world.

Two or three 3G models and a couple of 2.5 G models, all tightly integrated with the most popular enterprise applications, as well as a couple of basic "consumer" handsets, would be a great start.

Whatever form they take, the non-basic models should offer plentiful RAM, and sound ergonomics. Convergence and ease of use should be stressed.

If it were me, I would build, first, a flagship enterprise/advanced user phone, looking very much like the Sony Ericsson P series. It would feature an updated UIQ version of the Symbian OS, and be intended as a totally converged 3G-capable device, replacing my laptop when I'm out and about, and also functioning as my entertainment center.

I'd give it
Wi-Fi capability calls into question another requirement, battery life, but I think people could accept that their battery life is going to be less if they're using Wi-Fi. Carrying a spare battery or two isn't that big a deal.

I'd fill my device with applications out of the box, including a good web browser, something for MS Office and Outlook, a messenger application, a scaled down version of Photoshop Elements, and a blogging application.

On the remaining 3G and 2.5G handsets, I'd offer similar capabilities, but go with Series 60 and forego the stylus. And on the basic models, I'd simply stress ergonomics, build quality, and sound quality.

Of course, Nokia is known for its innovative, interesting, sometimes wild designs. I'd continue that with all models, but not at the expense of ergonomics or ease of use (as is sometimes the case today).

As a corporation I'd step up my entry into the photography market by linking myself to a prestigious photography name: I'd buy Leica Camera AG and put that name on the lenses of my camera phones.

I'd link up with a major movie studio and offer content downloadable for viewing on the phone. I'd take immediate steps toward making a phone capable of receiving TV broadcasts, as well.

I'd present the carriers with a daring and well thought out plan for market growth, getting their buy-in, and offer my handsets to them at significant margin.

Those are some of the things I'd be doing, if I were Nokia. And they may already be doing some of them. Let's hope so.

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