Nokia, the longtime leader in mobile phones, is struggling to compete with Apple, RIM, and others in the fast-growing smartphone market. Nokia is hoping to regain momentum through initiatives like improving its phones' software and attracting more app developers, but it remains well behind competitors in areas like its app store offerings.
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Nokia: Outsmarted On Smartphones: Innovation & Technology
Nokia, the longtime leader in mobile phones, is struggling to compete with Apple, RIM, and others in the fast-growing smartphone market. Nokia is hoping to regain momentum through initiatives like improving its phones' software and attracting more app developers, but it remains well behind competitors in areas like its app store offerings.
Nokia, the longtime leader in mobile phones, is struggling to compete with Apple, RIM, and others in the fast-growing smartphone market. Nokia is hoping to regain momentum through initiatives like improving its phones' software and attracting more app developers, but it remains well behind competitors in areas like its app store offerings.
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Nokia: Outsmarted On Smartphones: Innovation & Technology
Nokia, the longtime leader in mobile phones, is struggling to compete with Apple, RIM, and others in the fast-growing smartphone market. Nokia is hoping to regain momentum through initiatives like improving its phones' software and attracting more app developers, but it remains well behind competitors in areas like its app store offerings.
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056 INNOVATION & TECHNOLOGY
Nokia: Outsmarted On Smartphones
The leader in mobile phones is scrambling to regain ground lost to Apple, RIM, and others By Olga Kharif and Andy Reinhardt
going to start seeing [a larger] While shares of Apple and Research impact in three f o In Motion have surged this year, Nokia is unlikely four years," says Nokia's have stumbled to lose its top spot Andrew Sheehy, in mobile phones. co-founder of SHAREHOLDER RETURN But it could see Generator. 100- RESEARCH IN MOTIONrevenues and APPLE Nokia is fight7B- NOKIA profits suffer if inghardtostop Apple takes over as that from hapthe largest player pening. The comin smartphones, pany is hoping to which some anaregain momentum lysts believe could with a series of DEC 31.'08 MAR. 2. 09 happen. Generator initiatives, the Data; Bloomberg Research, a Britmost important ish consulting of which is aimed firm, forecasts that Nokia's share of at making Nokia phones as good as the smartphones will slide from about iPhone at running software programs. 40% now to 20% by 2013, while Apple The company is trying f o attract more climbs into the top spot. "If Nokia independent developers to create apgets dispositioned in the segment and plications for Nokia phones, and it's Apple starts calling the shots-which pushing to make Nokia devices vastly is what's happening nowyou are easier to usea key shortcoming
Is Nokia losing its mojo? The Furnish company has been the largest mobile-phone maker in the world for more than a decade, and it remains a financial juggernaut with $70 billion in revenue. But Nokia is losing ground in the fast - growing and lucrative smartphone business. Apple, Research In Motion, and companies such as HTC that use Google's Android operating system have come on strong, creating a serious challenge for the industry leader. "Apple has [created] a superior user experience; Android is also gaining a lot of traction," says Jari Honko, an analyst at eQ Bank in Helsinki. "Yes, Nokia is in trouble in smartphones."
LEFT BEHIND
foday. "We're not happy with fhe current situation," says Anssi Vanjoki, executive vice-president at Nokia. "But you need to be careful not to focus too much on one slice in time. You will see major improvements." Nokia is getting some traction with developers. Last year it dropped all licensing fees for the tools people use to create software for Nokia phones. And in July it created a global library of ap plications so developers can distribute their new apps to any wireless operator Nokia works with. The result ? The number of apps in Nokia's Ovi Store has doubled in two months, to 3,500. Still, that remains far behind Apple, which offers 65,000 apps at its store. Nokia is trying to capture some Silicon Valley magic, too. London-based Symbian Foundation, which builds the operating system used in most Nokia smartphones, has set up an office in the VaUey and is recruiting heavily. Symbian expects 30% of if s 200 -person staff to be in the region eventually. "People say, 'What doyoumeanyou're hiring?'" says Larry Berkin, Symbian's head of global alliances. Vanjoki says Nokia won't rely just on Symbian, which some techies view as limited. The company has created an operating system called Maemo for tablet computers, and it could be installed in high-end smarfphones. "It will be a key future asset," he says. Investors are nervous about Nokia's fortunes. The company's stock has slid 16% so far this year, while shares of Apple and Research In Motion have zoomed more than 80%. Apple's market cap is now three times Nokia's, though Nokia has twice Apple's revenues. Still, Vanjoki vows Nokia will come out on top. "I'm confident about the future," he says. "We are going to strike back." 1 BW 1
BUSINESSWEEK I AUGUST 10,2009
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