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back to article Nokia's cheapies strategy bombs

For a decade after 1998, when it first grabbed the top spot, Nokia was a bellwether of the mobile handset business. So much so, that small modulations in Nokia market share caused earthquake scale upheavals across the industry. That's because Nokia was credited with understanding (and blanketing) the world with phones so …

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Andrew for Nokia CEO!!

He seems to have a bundle more perspective than Mr Elop. Maybe if the latter's team are reading they can lure Andrew on as a consultant?

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The problem is nokia currently have nothing to offer

Sure, lots of 3310's out there.. but they're generally owned by people who replace their phone only when it breaks. If I were to buy a phone tomorrow I have a choice of some nice HTCs, LGs, etc. but nokia? They don't appear to be even attempting to sell me a phone these days. I can't name a single model I'd consider.

I had a stream of nokias for years, but they've lost it. Brand loyalty only exists as far as the next device, and they're learning that the hard way.

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Boffin

Its not just the phone anymore...

It used to be that if you built a better phone, within 2 years the market will choose your phone over the competition because either their existing phone died, or their contract ended. (In the US we have contracts because the phones are subsidized by the telcos.)

But when you have your phone, and then your paid for apps, and then your tie ins to other products in a personal use digital ecosystem, you have more resistance to change phones. If a lot of the music I've purchased is in iTunes, unless my phone supports iTunes, I'm not going to be able to take my music with me. (unless I have another Apple product that's portable and I want to carry two devices....)

So Apple is creating a barrier that locks consumers in.

And then there is Android. Same issue here.

Third Party Apps won't transfer licenses from one brand to another. So if you have an iPhone then get an Android, you're going to have to buy another copy of dirty birds.... have enough $1.00+ apps that you like and use? You're going to think twice.

As to Nokia, their kit is well made. OS? Maybe Apps? Hardly. Sorry Nokia but other companies synch mail accounts, contact books, etc better.

While Nokia can fix this, they will have to create some sort of compelling reason to get iPhone and Android users to switch.

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Stop

@Ian Michael Gumby

"So Apple is creating a barrier that locks consumers in."

No. You made a decision that locked you in. My mp3 music collection will transfer to any device, and my total spend on propritary phone apps is less than 10 dollars.

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semantic pedant

You're missing the point here. While you may be super clever most consumers aren't. Whether Apple lock them in or they chose to be locked in the fact is that if they've invested time and money in content for a device they're not going to want to chuck that content away when they buy a new device.

And never mind the 10 dollars spent on apps, do you want to buy them again for a new device? Can you be bothered to try and find them all again in the Android store (where searching by app name doesn't necessarily put the app in the top 40 returned?) Wouldn't it be more convenient for the new device to access the same account and therefore the same content as your old device?

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Boffin

@zooom

What I gave was a simple example of something that I knew wasn't portable.

However the basis for the argument still stands.

There are vendor lock-ins which now exist that make it more difficult to move from your basic phone platform.

What you spend on your phone apps is not what others spend on their phone apps.

Of course I'm waiting for the N9 to hit the streets. I got to see one and its not bad.

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WTF?

iTunes and other phones

"If a lot of the music I've purchased is in iTunes, unless my phone supports iTunes, I'm not going to be able to take my music with me."

That's wrong. My Nokia N8 happily plays all my iTunes songs, even when knowing jack shit about iTunes. I just transfer my iTunes song via the Ovi application to the device, that's all. With my old Sony P1 I did the same with Sony's MediaGo.

"So Apple is creating a barrier that locks consumers in."

No, they don't. iTunes is DRM free for quite a long time, and the songs play on most better cell phones.

"In the US we have contracts because the phones are subsidized by the telcos."

It's the same here in Europe, but we also have lots of cheap prepaid packages from a dozen or so different vendors, and we don't get charged when being called. When I'm in the US I'm always amazed how much you pay and how little you get for your money in terms of cell phones. But then, that's the USA with the Republican dream of a free unregulated market, which resulted in an oligopol ripping of its customers. At least for the cell phone market Europe has shown that regulation is necessary and required for a healthy market.

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Commentard fail!

How does an article on Nokia low-end devices (ie. candybar non-smartphones) get hijacked for a rant about Android and iphones?

Low end devices have very little margin and never really made Nokia much money and since everything is based on price-rather than features- China etc can kill Nokia easily.

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New Nokia strategy suggestion

Move back to making wellies...

It seems that almost everything they have done in the last few years is just accelerating them downhill even faster.

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Trollface

Microsoft wellies?

*Shudder*

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Scale

It's a question of scale. Without the cheap phones Nokia would lose some of the cost advantage it has when producing smartphones. What Nokia needs to do more than anything is persuade its loyal users to upgrade to a Nokia Smartphone - to ween users on to more expensive and more profitable devices. If it could do that then it would be back in the game.

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show me the phones

I'd buy a X1-01 or even a C2-00 this afternoon if I could actually find one. Still with Elop's kill everything and wait for windows and they will come stragety it won't be long before Nokia kill off their cheap division too.

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FAIL

Yep same here.

I've been hunting around for a few of Nokia's phones but cant get them in any of the shops. In terms of phones I like to hold one and have a use before I pay for it.

Oh sure I can play with iPhones, Blackberrys, Galaxy IIs etc. but Nokias are like hens teeth.

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Coat

stragety!

when the feelings gone and you can't go on!

stragety!

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A formula that worked

Nokia used to produce well built, workhourse phones with excellent performance such as the 6310i and 6230i

Apple then brought out the iPhone and it decided it had to jump on the bandwagon but it sacrificed quality so is it any wonder its in the state it is in now?

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And what part of the phone quality was sacrificed?

The only part of a Nokia smart phone that isn't as good (if not better) as an IiPhone is the GUI, and even that works well enough for most people.

Build quality is very good, camera quality is better than iPhone, call quality is probably best in class, battery life is best in class.

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Boffin

what part of the phone quality?

Firmware, it seems anecdotally; even the generally-decent 6230i, it so happens I've got a virtually-bricked 6230i here that Nokia wrongly refused to reflash the firmware under warranty for

that, in a few words, is the reason I for one see Nokia's slide as poetic justice

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@James Hughes 1

It depends what you use your phone for - go on the tube, for example, and you'll spot that quite a few people use them for games. In that case, Nokia's obsession with cheap Broadcom GPUs and its failure to ship anything with an ARM7, even more than two years after the relevant Android and Apple handsets, is a problem.

The standard Symbian touch screen resolution of 640x360 has less than 38% the number of pixels of the iPhone 4, so even static images look significantly less sharp. 256mb of RAM as on the N8 is 50% of that in the iPhone 4 and several Android handsets, limiting third party app producers.

The N9 would address some of these issues but has yet to launch and isn't exactly intended for volume distribution.

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FAIL

The "GUI", however, is the most important feature.

Remember when iPod first came out? All the analysts said it would fail because it didn't do all the things that similar products did, or didn't do it as well. They all missed the boat by not truly understanding the importance of the user experience (and the resulting "cool" factor). Same thing happened with the iPhone. And the iPad. "well enough" isn't.

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@James

Call quality is great. Cameras (on the top end) is great. Battery is great.

Actually using the phones are shit. They have had plenty of time to sort that out.

I only hope Microsoft can help with this. It would be a shame to see Nokia go bust :/

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Devil

It sacrificed quality long before that

In between the 63xx and the iPhone came the original N95.

It is a good example of a badly built phone with badly built software. Without any attempts to actually go for the iPhone crown.

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WTF?

CPU and RAM in handsets

"In that case, Nokia's obsession with cheap Broadcom GPUs and its failure to ship anything with an ARM7, even more than two years after the relevant Android and Apple handsets, is a problem."

No, it isn't. It is a problem if your OS is a ressource hog like Android, Windows or iOS. Symbian needs far less resources than these OSes.

Another reason why not using the fastest CPUs/GPUs available isn't actually a bad thing is battery runtime. Most Android smartphones last less than two days (the majority of them has probably difficulties to get over a day). The Nokia N8 I got lasts between 5 6 days, and if I didn't use internet and music/video player every day then probably longer. If you want a 1+GHz multicore CPU in your cell phone which needs recharging every day then fine, I need something which I can take with me on a trip without having to carry a charger around.

"The standard Symbian touch screen resolution of 640x360 has less than 38% the number of pixels of the iPhone 4,"

The standard resolution is 640x480, which until recently was in line with other offerings with Android.

"256mb of RAM as on the N8 is 50% of that in the iPhone 4 and several Android handsets, limiting third party app producers."

Again, if you run Symbian and not iOS/Android/Windows then 256MB are plenty. This is only a limitation if you're a developer who doesn't have a clue what he's doing, and many great apps which are also available on Symbian show that memory isn't a problem.

However, what is a problem for developers is the fact that Elop has publicly declared Symbian to be a dead platform.

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Anonymous Coward

You get a thumbs up from me, but...

...for most other people, the only thing that matters is the gui (and marketing).

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Megaphone

Well I love my N8

And from what I saw of the N9 it seemed to cause quite a few bloggers to get the tissues out.

Not a popular view I know but how's about we wait till the bring out a Windows phone and see what they can do with it rather than slagging them off with the same old story. Is'nt this the same story that has been published for the last few months?

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Happy

@ how's about we wait ...

er... you and Nokia can wait.

The world is moving on.

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Well if you keep moving on...

You will eventually come around. :-)

The point I was trying to make is that you can't just build a better mouse trap anymore and expect people to come.

This isn't to say that if you build a better product, people won't buy your product.

People point to Android phones. Ok. sure. But you still have a couple of ghosts that you will have to deal with down the road. Oracle v. Google. Security, those sort of things.

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Cant find anything I like.

I'm sticking to Noka for now. Noka make good phones with amazing battery life AND the batterys can be replaced without a screwdriver! My next purchase is the e6-00, knocks spots off any blackberry and nokas sync fully with outlook unlike Android. Android does NOT sync with outlook without requiring additional software and lots of fiddling about.

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Facepalm

Nokia need cheapies

They use technology researched and developed years ago. Their cost is practically nil, they just slap an FM radio, extend the battery life a little bit more to something ridiculous like a week and a half, and put a new case on yesterday's model and on the software side include the bugfixes to the standard apps and update Ovi integration, and Bob's your uncle.

What they don't need are cheap smartphones. They need to get the value back on those but they've just announced a price cut two months ahead of time (who in their right mind does that?). All the details have been done while the rest are still working on them: They sync without being tied to Google or MobileMe, it's just the phone and the computer. They've got a power saving mode. If you're really low on power you turn them off and all the alarms and calendar reminders still work. Bluetooth is not nobbled and you've got complete control over connectivity. They're the last to give up when it comes to dropping a call or data connection. Battery life is obviously not like their dumphone range but much better than Android or iOS. With the dishonourable exception of My Nokia and the E-mail setup wizard they don't slurp data. Ovi Maps beats any other map app hands down. They just don't tell anyone this.

They're not going to get value with Windows Phones, but they're in some kind of self-imposed death spiral where they're refusing to roll out mid-range and top-end phones in any meaningful quantity. They've practically sorted out their own platforms but nobody believes them, destroying confidence in their own Symbian and MeeGo as they treading water for an expensively licensed WP7 which isn't impressing anyone.

The icon could be a facepalm or could be me covering my eyes because the car crash is too horrible to watch.

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I just gave up on Nokia's

The last (jul 11) update for the E72 broke the exchange client and I could no longer sync my Google contacts/calendar. That's a BIG fail for me. The other thing, every god damn time I tried to do SIP or some other cool thing with the phone, I had to view 10's of Google pages trying to figure out how to do something. Old FAQs, old answers on the forums, nothing current, SCREW NOKIA. I've got a nice LG Optimus now, and it rocks with google stuff and it's cheap. And I can figure out the interface by just reading the manual for a few minutes. Why oh WHY did nokia not switch to android since they FAILED so badly with symbian.

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It's too late for Nokia now.

It makes no difference what they do. They have already committed suicide.

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gta

Also love my N8

It seems like a solid, decent, feature-filled device to me. Sure it has some flaws but what hasn't? My android-toting colleagues don't seem any happier. Some of the QT apps which have been coming along recently are really very nice, and suggest the old symbian/meego/QT strategy might have been pretty good. Certainly execution was painfully slow, but it's not as if WP7 seems to promise any rescue.

Back to the point about cheapie phones - I don't see anything which says Nokia made a loss on these, so what's wrong with being in that market?

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Facepalm

MENA Market not tapped by Android, mostly ignored by Apple

A few years back, when GSM based mobile phones were just picking up, Nokia introduced Arabic support to the MENA market and completely dominated the market place. Now you can't buy an HTC with Arabic language support, Apple supports arabic language, but has iTune stores in a very small limited number of Arabic speaking countries, and Nokia in general is considered an outdated type of phone to get.

Samsung on the other hand is busy Arabising its phones and with Google Market place supporting almost every single Arabic country, they are slowly taking over the market place in the middle east. Already in Oman, they are selling like hot cakes, especially with the official launch of the Galaxy S2 with Arabic support. They have already taken over Sony as the premium TV brand in the country. I think that in some regions, with huge population masses and a very fashion conscious population willing to spend on a phone more than they can really afford, most mobile phone makers are loosing the opportunity and will be taken Samsung and everybody will be sitting there wondering what hit them.

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Bod
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Forget smartphones, concentrate on featurephones

Yep China is hammering them. They're hammering everyone in every market and are making vast amounts of money whilst the rest of the world sinks into debt.

Smartphone market has been lost for Nokia though. Microsoft is not going to win it for them.

Ditch the smartphones entirely, and concentrate on feature phones. Compete with or join the Chinese manufacturers.

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