Will 2011 be make-or-break for Nokia?

As many know I was recently privileged to attend the Linux Foundation Collaboration Summit 2010 in San Francisco, California.  After running out of juice trying to maintain community enthusiasm at maemo.org while simultaneously whipping it up for MeeGo, I was reinvigorated by the fresh energy permeating the conference.  Seeing old acquaintances again, finally greeting others in person for the first time and making new friends always helps… as did the endless talks at various pubs and eateries about MeeGo’s future.

One aspect that renewed my faith was that even though 2009 did not turn out to be the breakthrough for open source that I had hoped, it looks like 2010 is setting the stage for this to be the case in 2011.  For one, Nokia and Intel’s MeeGo venture strengthens the possibilities in my opinion.  True, proprietary solution drivers are hardening their positions more now than ever, setting the stage for an eventual showdown that’s long overdue– but I expect open source to ultimately prevail and allow us to move past that exhausting argument and into the next awaiting world.

But even with its 5-year Maemo (along with Moblin) legacy, MeeGo still represents a beginning of sorts, and it will indeed be 2011 at least before it truly bears fruit– especially if recent product launches are any example.  Meanwhile, what else will Nokia be doing to ensure its continued relevance?

Today’s announcement of yet another reorganization may hold a clue at other developments for next year.  But before I go there, some history.  While I was still working for Nokia in 2008, we underwent a significant realignment that sliced Nokia into three clear divisions: Software + Services, Devices, and Markets.  That may be seen now as a failed experiment in the light of mixed market results for early 2010.

Back to the present and future.  Nokia is still doing well overall but continues to struggle in the areas where it needs to exceed, and that’s primarily in cultivation of new business.  As third-world markets mature, entry-level phones will be traded up for smartphones or mobile computers, and current trends show competitors like RIM and Apple to have the momentum there.

Perhaps realizing that the last restructuring created functional silos that have hampered Nokia in this race, the new organization brings services together with high-end devices to create Mobile Solutions.  Markets seems mostly unchanged, and the new Mobile Phones segment appears to draw a solid line between the high-end and the entry-level– something I have championed for some time now.  I’m convinced that’s necessary to overcome the perception, at least in the US, that Nokia is strictly a producer of cheap phones.  Beginning July 1 of this year we can start measuring the effect.

Palm’s recent troubles (which may be mitigated by HP’s purchase)  are likely just a hint of the fierce competition high-end communications devices will be increasingly facing.  RIM has stayed steady and Apple has been relentless while Nokia seemingly dithered over direction.

So what needs to happen now for Nokia to turn things around by next year?

The reorganization looks to be the right step as long as Nokia does not lose key contributors in the process.  Same should hold true for the big MeeGo move.

Still, Nokia continues to come up short with high-potential offerings like Ovi, which if done right could be huge for the company.  Coupling a more functional Ovi with mobile computers (note: Ovi still only offers pitiable support for the powerful N900) will give Nokia a significant edge over competitors.  The recent gift of free navigation to customers is a great selling point, but it’s offset by a shortage of compelling applications.  The rapid evolution of acquired development platform Qt should go a long way toward improving that, especially with the upcoming 4.7.

In closing I’ll bring this close to home for me.  I wondered about Nokia’s prospects at reclaiming the US market some time ago.  Company statements asserting it would happen by now are ringing hollow as share in developed markets slides toward zero.  While it’s true Nokia is making its money in developing markets right now, as the US has gone, so too will they eventually.  Apple and RIM have shown success with the high end is possible in the US; no real reason Nokia can’t do as it did years ago and unseat the leaders with the right combination of products, software, services and marketing.

Like I said before: launch MeeGo BIG.  That will indicate Nokia’s degree of seriousness.  And 2011 should reveal the phone giant’s future.

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24 responses to “Will 2011 be make-or-break for Nokia?

  1. Great post, Randy.

  2. I think nokia can do it if they consider the consumer satsification like apple do and this not easy to nokia compet with the mighty apple and google with the new os ANDRIOT

    • They should look to Apple only for mind share magic– anything else will disrupt one of the best aspects of their business model: consumer freedom.

      Android is the greater threat market share-wise. Its growing popularity is what MeeGo will have to overcome.

  3. Agree. The apple iphone has a certain stigma that a nokia just cannot compete with.

  4. nokia can do it but apple they have the softwear and the hardwear togther in one time they are invent own staff you who invent the mouse for computer apple and first time when steve jops invent a computer it’s not even exist in that time 1985 or 1984 i don’t remaber . So for nokia i can say still need lot of work to catch up with apple in smart phone inveation and the only phone from nokia can compet with iphone it’s the n900 not the new n8 i know it’s diffrent than crapy n97 with new symbin 3^ with open sources but still can compet with iphone.

    • Actually the mouse was invented at Xerox. Same for the GUI concept. And there were many varieties of personal computers in the mid 1980s– Jobs and company (More Steve Wozniak actually) added to that number with the Macintosh (which was preceded by the Lisa).

      Nokia has no problem innovating– just with executing. We’ll see if the new structure helps.

  5. God knows what will happen but nokia still stick with symbin os i don’t know why? i think nokia owning sybmin org who knows thats why they still with and they are going to develop it more with the new UI and impeove the ram of all new nokia smart phone . What is your impreation about the new nokia n8 ?

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  7. i think nokia have the best product than apple, every time nokia always show a new product which have best design.

  8. nokia is never die in new product, every time they always release a new product

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  10. Hey Tex, do you have any idea how Nokia’s MeeGo (previously Maemo) team works when compared to other teams developing for eg. the c-series phones?

    I think the N900 is very different to anything else that Nokia has ever made, so could it be that the MeeGo team adheres perhaps to a different set of developmental rules?

    For example: There was a lot of criticism about stuff like how the menus are structured in Nokia phones, and Maemo5 fixed almost 90% or so of these issues. Yet none of these changes were seen on any Symbian devices of 2010. This leads me to believe that the Maemo team was maybe the only team with a real influence over what they were doing.

    • Well, Chris, the original Maemo team was smaller than equivalent Symbian teams, and I had the feeling they had more autonomy as well. So I think they were resourceful by necessity but also free to experiment.

      In theory Nokia has the culture to enable that across the board, but some managers don’t seem to support that sort of empowerment.

  11. When I wrote this, I had no idea how prophetic it would become! :o

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  15. Just prophetize (have I just invented that word?) that Nokia will release N9 worldwide, that it will be the huge success Nokia right now needs, and that MeeGo will be again Nokia’s main smartphone OS, making Nokia highly profitable again. That will make me happy again about Nokia. ;)

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  18. Excellent write-up. I absolutely love this site. Thanks!

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