This is an interesting article at eetimes, I thought some of you maybe interested in it.
Best Regards
/Farhad
Analysis: Is Nokia under pressure?
Junko Yoshida (05/23/2008 5:06 PM EDT)
URL: http://www.eetimes.eu/wireless/208200353
Nokia, under pressure from Apple's iPhone, Google's Android platform and a host of new devices based on open source operating systems, needs to demonstrate its S60 platform will offer advantages like compatibility. MANHASSET, New York — In business or politics, it's tough for an incumbent to win against up-and-comers advocating "change" customers can believe in.
In the mobile world, that's Nokia challenge today. Lately, things are a little rough for the Finnish giant, because its fresh competitors happen to be red-hot brand names like Apple and Google. Even though these competitors' smart-phone market share tends to be either small (in the case of Apple's iPhone) or non-existent (Google's Android platform) yet, the problem for Nokia is the buzz. In a fast-moving consumer world, hot and new trumps tried and true. (see: Users' love affair with iPhone stumps Mobile World panel)
Nokia's antidote to all that buzz is its S60 mobile platform, based on Symbian OS. The S60 mobile software platform isn't exactly new. It's been around long enough to be licensed to a number of mobile device manufacturers, including LG, Panasonic and Samsung.
Next week in Barcelona, Nokia is holding an "S60 Summit," featuring its S60 partners, software developers, handset manufacturers and mobile operators. Nokia will run a host of seminars and showcase new capabilities of the S60 platform. Although Nokia is not disclosing anything, the summit's highlights seem certain to include several cool new mobile handset announcements.
The two day event will surely be a love fest for the S60 "eco-system" community. The 500 participants range from application software developers to semiconductor and handset vendors, according to Matti Vanska, vice president, mobile software sales & marketing at Nokia.
With the ability to flash big numbers — like 150 million S60 mobile devices shipped thus far by licensees, and 75 S60-based device models on the market today — Nokia would seem to be sitting on top of the world.
Well, are they?
Frank Dickson, co-founder and chief research officer, at MultiMedia Intelligence, among others, is dubious. He said, "Nokia's position in smart phones is absolutely under pressure."
He said the pressure is coming from two directions: "a head-on attack" from a wave of new devices based on open platforms; and "an attack from behind" by feature phones increasingly loaded with PDA-like functionality.
Indeed, the lines between feature phones, often known as multimedia handsets, and smart phones have been blurring.
Nokia recognizes this. Noting that the price of future S60-based mobile handsets could range from well below to far above 200 euros, Vanska acknowledged, "We are stretching our S60 product category [from smart phones to feature phones]." But the bigger issue for Nokia is the attack from newcomers.
"The iPhone initiated a new handset market dynamic," said Dickson. "Google's Android and LiMo Foundation's OS are the next elements of a developing trend." These devices are internet browsers, music players, text messengers, and e-mail devices first. But they still make voice calls, he explained.
Meanwhile, Web-based applications are already proliferating on handsets. Widgets — small applications that don't need to launch a browser — are also everywhere. In parallel, bringing full web-browsing to handsets has become the latest mission among most handset vendors.
Many vendors, including Nokia, are coming to realize that the most popular future handset application may be developed not by mobile software developers, but by web application designers.
The race is already on among handset vendors to court millions of web-based software developers. Vanska said, "You never know who will come up with the big innovation of tomorrow." Nokia is reaching out to those millions with limited mobile experience by offering web runtime tools. "If they want to leverage our device capabilities deeper, they can do so in the native environment later," he added.
That sounds good. But in essence, the trend for an open-source community and more web-based applications is leveling the playing field for everyone. So what advantages are left to those S60 developers? There are plenty, says Vanska.
Context-aware Internet
The buzzword around Nokia these days is "context-aware" Internet.
Adding location information to Internet services makes the Internet more relevant and powerful. It offers "mash-up information from the Web with information on your mobile device," said Vanska. It enables new communication means through mobile messaging. It can create user generated online images (shot by camera phones) and enrich the service. Those are a few examples touted by Nokia as new features enabled by adding GPS and sensors to mobile devices. Nokia's S60, presumably, provides a support for framework to add such new sensors.
Still, the biggest leverage S60 has is its large installed base. One should never underestimate "a promise of compatibility," said Vanska. Once a feature or an application is developed, it can run in every smart phone based on S60.
But that may not be enough. Analyst Dickson suggested three things Nokia should execute to defend its S60 platform:
First, aggressively integrate multimedia features into its smart phones. "The pressure from feature phones on smart phones is coming faster than most expected," he said.
Second, focus on the User Interface — the OS is only part of the smart phone equation. "The usability of the handset is the new basis of competition," he said.
Dickson observed: "It seems that every handset vendor is scheduled to launch their version of the 'iPhone killer' this year." If Sony Ericsson's Xperia, based on Microsoft's Windows CE, is indicative of the competition that Nokia will face, cautioned Dickson, "Nokia needs to make sure that the S60 delivers a series of elegant designs to match multiple usage scenarios."
Third, improve U.S. penetration—Nokia is dominant in the global smart phone market, but it's just a rounding error in the United States, according to Dickson. With the US growth rates for smart phones growing faster than the worldwide average, Nokia's position could be weakened if it does not improve its US penetration, he added.
Nokia claims that S60 has been holding approximately a 50 percent market share.
As for its competitors, Multimedia Intelligence estimated that RIM had 11% of the market for the last year.
Motorola is 6%. There is a sizable group of others with 5% or less, Dickson added. Meanwhile, Apple shipped close to 4 million units in the last half of the year.