Home > Focus on.... > Nokia’s plan for World Domination: Part One

Nokia’s plan for World Domination: Part One

I raised my head above the water a few weeks ago, asking why no one seems to have recognised the big plans Nokia are making. Over the last few days a few blog sites have started to pick up on some rumours on this topic, but they have still failed to identify the true goal, so I will now share it with you.

Nokia believe that the key to regaining their status as the premium brand and fend off the rising threats of Samsung, RiM and of course Apple,  is the PND industry.

When it comes to consumer focused mobile innovation, Nokia has been more of a follower than a leader. Their share of the global market (over 30%) has never been due to producing “best in class” devices, its always been about familiarity. Their customers are loyal, having grown up with Nokia devices that have always matched their needs. This allowed the Finnish giant to become complacent, focusing more on market share (i.e. iteration over innovation) and bringing exuberant smiles to shareholders’ faces.

While Nokia was counting the coin, the market was changing. A company that refused to make flip phones because it was “simply a fad” and in the early days refused to jump onto the 3G bandwagon as it “wasn’t what their customers wanted” was slowly being forced to take notice of the world around them. They saw that Motorola had risen again from the ashes, only to quickly be overthrown by Samsung. Sony Ericsson with their Walkman devices were making waves, only for LG and HTC to clip their wings as they seemingly released new “best in class” devices month after month. And of course, there’s the iPhone. Due to its size and lack of true direction, Nokia’s reactions to these new and varied threats have not all been positive. While recognising the need for change, they were struggling to identify the best way in which to achieve their goals. Their attempts to use their engineering superiority to win customers spectacularly failed – this is after all a world where the all-conquering iPhone fails to handle a simple 3G to 2G handover, but their customers are more than satisfied.

The truth is that Nokia has always known that its greatest strength is also its greatest weakness – its UI. Without delving into too much detail, they knew it needed an overall almost 3 years ago but recognised that such an undertaking would amount to a lot of pain and suffering. In a market that evolves as quickly as this however, delaying the task was only ever going to make things worse. This again was always known, and devices like the N85 were released to simply buy them time while they got on with the painstaking process.

Well before the N85 however, in the middle of brainstorming this redesigned UI, it became clear that a new UI alone is not enough. No matter how good it is, without the developer support that Windows Mobile and the then new iPhone seemed to have, along with that unique “cool” factor thrown in by Apple, there was no way they would be able to get across how a great a difference this new UI really is. Software still being the key, they had to look for a marquee feature that would set them apart; something that would open up new revenue streams and have their name associated with an entirely new and modern function. The answer of course, was Navteq. In 2007 this purchase had already been marked for differing reasons, but by the middle of 2008 with the purchase just coming to completion, it became clear that there was an even bigger part this company had to play in Nokia’s future, bigger than anyone had ever realised.

While many recognised that Nokia was heading down a different road, it was still not read as a market altering purchase, as navigation on mobile phones was still seen as slow, clunky and just not fit for purpose. at this stage the analysis was indeed correct, but only in the short term. Google finally releasing one of the worst kept secrets in the industry – their free navigation app – opened the eyes of the world to the true potential of not just navigation on mobile devices, but location-based services. This had been seen as a potential growth area for years, but concerns over hardware, especially battery life issues had hindered investment. Google releasing their free navigation product however immediately squashed that barrier, since it was clear that as long as its free, people are willing to take the hit on battery.

We return to the Espoo base of Nokia, where the realisation of what free means to the industry fully hit home. The writing on the wall was clear – within 2 years, navigation products on mobile handsets would be seen in the same light as the calendar app – simply a standard utility. Many believe that this forced s drastic re-think of their strategy, but I very much doubt this was the case. Nokia already had plans in place to setup a standard API for interfacing with vehicles, recognising that being able to share information between devices (including map data) would be one of the marquee features for mobile devices over the coming years. they are still following their original plan, just at an increased pace.

Over the last few months Nokia has signed deals for the use of their Terminal Mode technology with some of the planet’s most well known car manufacturers including BMW, Daimler, Fiat, Audi, VW and Porsche. From the OEM and after-market side they have deals already in place with Alpine, Clarion and Harman Becker. These deals allow Nokia devices to connect either wired or wireless to a car’s infotainment system, potentially providing diagnostic information, music and navigation to the vehicle. The potential for this type of integration, and the choices it can offer to a user are simply incredible. While the world has been focused on purely convergence, bringing as much functionality to a mobile as possible, Nokia has recognised that there is another way. Imagine but for a moment, the ability to use a device the size of a Palm Pre for in-car navigation by having the map displayed on the built in screen in the car. Maybe you use your pocket-sized device to view movie trailers on the car’s LCD display before heading into the cinema. What Nokia’s Terminal Mode APIs allow are for smaller, more pocketable devices to still offer the same multi-purpose functionality of their larger brethren, without sacrificing a larger screen. It would no longer be necessary to only look at devices such as the HTC Incredible or Evo 4G with their +4 inch displays if you intend to use your phone for navigation. Handsets the size of Sony Ericsson’s Xperia X10 mini with its 2.55 inch screen become a lot more appealing. You can even “go large” with something the size of the HTC HD Mini with its spacious 3.2 inch display.

Questions are already being asked when it comes to screen sizes and where the breaking point is and many would note that Apple has not increased their screen size on the new iPhone, although there are also technical reasons for this. This type of option for smaller devices brings this discussion forward, as more alternatives are presented. Let’s not forget that while the new functionality coming to devices from Nokia is unique to the market, there is another, more established reason why smaller handsets could be appealing. Tethering for tablet devices such as the iPad is already being recognised as a viable alternative to purchasing a tablet with built in 3G. The opportunity to have a small handset and a tablet tethered offers the best of both worlds whilst undoubtedly being more cost-effective at the same time. A small device offers maximum portability, but when a bag is easily taken there’s no problem bringing along a 7 inch tablet for reading or browsing on the go.

This is Nokia’s grand plan, but only part of it. There are new devices involved as you would expect, and one or two in particular will be flagship products in their attempts to establish a new market category and ultimately, World Domination….

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  1. September 8, 2010 at 6:45 pm

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