Nokia's management screwed up royally on several fronts. But it's not too late to save the company.
There have been persistent rumors, however, that Nokia might be ditching Microsoft’s Windows Phone at least for entry to the mid-level smartphone market, while it looks for an alternative platform in the low-end smartphone market segment.
Taiwan’s Digitimes recently quoted an unnamed source from Taiwan-based supply chain makers saying that Nokia is expected to continue to release orders for Windows Phone 7.5 handsets to Taiwan-based ODM makers in 2013. The point is that Nokia appears to be sticking to Windows Phone 7.5 through next year, instead of upgrading its entry-level feature phones to Windows Phone 8 in the emerging market.
At this point, however, there is no hard evidence indicating that Nokia is actually working to develop Android handsets.
Nonetheless, dabbling in Android, in my opinion, is at least the first step Nokia could take to accept reality.
A second step Nokia must take is to re-set its expectations for the future of its feature phone market. According to International Data Corp.’s latest report, the worldwide mobile phone market is forecast to grow 1.4 percent this year compared with 2011, the lowest annual growth rate in three years despite a projected record number of smartphone shipments in the high-volume holiday season.
Make no mistake. While smartphones continue to rise, sales of feature phones are shrinking.
But Nokia and a few other industry pundits seem to believe that Nokia’s feature phones could save the day for Nokia–or at least put Nokia back on the recovery path.
In recent weeks, Nokia released the Nokia 206 and 205 handsets (shown left). Nokia is hailing this move as “reinventing the feature phones.”
Upon closer examination, calling these “feature phones” seems like a misnomer. Both 205 and 206 allow users to link instantly to Facebook, as well as e-mail. The phones allow downloads of “1000s of free and paid games and apps” in the Nokia Store, according to Nokia. A camera integrated into each phone will automatically resize pictures to around 700KB for easy sharing and posting.
The only things that make these phones look like non-smartphones are a traditional keypad and a 2.4-inch screen. Both phones come in single and dual-SIM varieties.
But with Google’s Google Play store today offering 675,000 applications and Apple 700,000 apps, is Nokia wasting precious resources on its own, less impressive Nokia Store? Couldn’t all the unique features Nokia has designed into its feature phones be brought over to Nokia’s future Android phones?
Nokia may be right thinking that the future for growth is in entry to the mid-level market. If so, why not address that market with entry-level smartphones, instead of Nokia’s proprietary feature phones?
China remains the last but not least problem Nokia faces today.
Without brand appeal equivalent to that of Apple or Samsung, Nokia can’t expect Chinese consumers to shell out more for its feature phones than low-cost Android smartphones made by HTC, Renovo, Huawei or ZTE.
However, the announcement this week that China Mobile is launching Nokia’s Lumia 920T --the first TD-SCDMA Windows phone in China–offers a glimmer of hope.
Nokia still has close relationship with leading carriers in the world. A partnership with China Mobile – which has close to 700 million subscribers – is one thing Apple has not been able to pull off.
It’s not a slam dunk, but Nokia may have close to a one-year lead over Apple (Apple and China Mobile might come to a deal in the second half of 2013).
For now, Nokia has a good chance to leverage the growing market the world’s largest mobile carrier offers in China. If it seizes the opportunity, Nokia could be making its first baby steps toward recovery.