|Nokia woes should spur carrier rethink |
April 24, 2012 By Tony Cripps
Reuters’ report highlighting a possible lack of faith among European mobile operators in Nokia’s new Windows Phone smartphones characterizes the products as not good enough to compete with established market leaders from Apple and Samsung in particular. Such beliefs are clearly widespread – Ovum too has heard similar criticisms from carriers directed towards devices and platform that exist in the smartphone badlands beyond Apple and Android-powered products. And the beleaguered Finnish handset maker’s latest financial results appear to bear this out.
But they are also missing the point. There’s little objectively wrong with many of the products competing with Apple, Samsung, and Google/Android that greater customer awareness and a big-budget marketing drive could not cure. And European carriers need to do a great deal more to assist the underdogs if they aren’t to be the engineers of their own self-fulfilling prophecy of handing all power over their subscribers to the duopoly of Apple and Google.
Are Nokia’s smartphone products really to blame? If the combined forces of Nokia and Microsoft are ultimately incapable of swaying consumer opinion away from the current zeitgeist – despite offering products that are the equal of and in certain aspects more advanced than those from the current industry leaders – then they most assuredly have a major problem on their hands. They also most assuredly need help if they are to challenge that orthodoxy. Failing to address these problems will almost certainly drive Nokia towards Android in an effort to save its business, while Microsoft’s strategy for interconnecting users and services across all connected devices will be dealt a potentially fatal body blow.
Although Microsoft was heavily castigated by industry observers over the “mini-desktop-on-a-phone” approach to smartphones it previously pursued with the Windows Mobile ancestral line, Windows Phone is a completely different beast than its predecessor. In Ovum’s view, and clearly also Nokia’s, Windows Phone is fully worthy – at least from a technical perspective – of similar success to that currently enjoyed by iOS and Android devices.
Objectively the only fair criticisms of Nokia’s Windows Phone devices (and by extension Windows Phone devices generally) are that they haven’t achieved the same amount of consumer uptake as rival products and that there are fewer apps available to download than on Android or iPhone.
While that should not be taken as an endorsement of Windows Phone, or for that matter a suggestion that Ovum doesn’t appreciate iOS or Android (neither of which is true), it does indicate to us that the product itself is not flawed.
Marketing money talks louder than technology But if not the product, then what? The only reasons for the apparent failure of Nokia and Microsoft can be those of branding, marketing, and retail. And if that’s what’s wrong with Nokia’s Windows Phones, then operators are deceiving themselves if they think anything is going to change without a major ramp-up in their own involvement in brand building and promoting these devices. Any expectation that other OEMs or platform developers will be able to challenge the smartphone industry’s dominant providers solely through their own efforts looks increasingly misguided to us.
In Ovum’s view, if carriers want to see a more diverse, more competitive smart device market – which they undoubtedly do – then they themselves need to help make that requirement a reality. Of necessity this would include a greatly increased investment in helping market and retail such products, at least in the establishing phase of new software platforms (such as Windows Phone) or to reinvigorate weakened hardware players (think Nokia and RIM, especially). US carriers are typically more proactive in this area, although even they may well need to deepen their investment.
More vigorous involvement by carriers seems vital if the near-duopoly of Apple and Samsung/Android is ever to be challenged, let alone broken. The smartphone market clearly favors relentless and compelling marketing efforts that only a very tiny number of device-side protagonists can themselves muster.
Unfortunately for carriers, Apple and Google (in particular) are also the companies causing the most erosion to carriers’ relationships with their subscribers through their powerful disintermediating effects. As such, it would appear to be in the best interest of carries to provide a great deal more in the way of marketing and retail support to other smartphone OS providers. In return, grateful OEMs and platform providers would surely return the favor in terms of greater subsidies (and potentially other benefits) if they felt their efforts were being adequately supported.