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Is Nokia losing its magic touch?

Posted: 03 Sep 2009     Print Version  Bookmark and Share

Keywords:Nokia handset business  smart phone  processor  3G 

Once the darling of the booming cell phone business, and still the largest handset maker, Nokia has become a Finn sandwich. I predict its PC and cell phone competitors will surround and slowly eat the market leader.

Nokia's latest products tell the story of its loss of leadership.

The N900 announced late last week is Nokia's attempt at an iPhone killer. In fact, Nokia has already lost the battle for smart phone dominance and even the race to be a runner up to the iPhone.

While the company experimented with Internet tablets, Apple not only launched the most compelling mobile experience for access the Web, it defined the smart phone battle as PC 2.0—having the biggest, most active ecosystem of software developers.

For a year or more Apple's ads have been trumpeting the notion that for any cool idea you might think of it has "an app for that." Behind the scenes of its fight for consumer mindshare, Apple has rallied developers behind a solid OS based on a subset of its well known desktop software. Kleiner Perkins' Rs.488.48 crore ($100 million) venture capital fund for iPhone app start-ups didn't hurt, either.

By contrast, the N900 is based on Maemo, Nokia's Linux variant which has been rarely by the company despite five generations of development. Developers are getting mixed messages from Nokia about whether they need to support Maemo, the upcoming open source version of Symbian Nokia is developing or Moblin, the mobile Linux variant of Nokia's new design partner, Intel.

No doubt there are some lively meetings in Espoo on this issue these days. Meanwhile, Apple is winning the smart phone battle, and developers are getting the idea that the Google Android OS might morph into their second-best bet, an iPhone like environment for the rest of us. After all HTC and Samsung are already shipping iPhone-like Android handsets.

While Apple has taken leadership of the consumer smart phone, Research in Motion is doing a decent job hanging on to its lead in the corporate world. It has long owned this market with the "Crackberry," the addictive handset for mobile email. It is already selling its Storm and Bold handsets that deliver iPhone-like cachet to its business users while Nokia is still getting the N900 ready for an October release.

Make no mistake, the N900 is a great design. It packs a Texas Instruments OMAP 3430 with the ARM Cortex-A8 processor, up to 1GB of application memory and OpenGL ES 2.0 graphics acceleration. It supports 10/2 HSPA, Wi-Fi and Adobe Flash 9.4. It has 32GB of storage expandable to 48GB and a 5Mpixel camera with Carl Zeiss optics.

One heck of a device—and at an estimated 500 Euros (Rs.34,373.56)—one heck of a price. Were it not for the high price, slowness to market, software confusion and wide availability of alternative handsets, it might have been a decent but distant number two to the iPhone.

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