Nokia’s problem

Recently Nokia CEO Olli-Pekka Kallasvuo (OPK for short) was replaced by the first non-Finn to lead the company, Stephen Elop, head of Microsoft’s business division (mainly Office). This is big news that might change Nokia’s perception as well as its strategy.

Republished with permission

OPK’s tenure as Nokia chief was not lucky. Barely in office he was confronted with the launch of the iPhone, and this issue overshadowed the rest of his career. For the full story of OPK, see, as always, Tomi Ahonen.

After four years of doing little except producing one of the worst touchscreen phones in history, the N97, Nokia was perceived as a loser, and pressure on OPK to resign was growing. Things came to a head when Elop’s anointment as his successor was announced.

Politics

The politics of this move are well thought-out. Elop is a software man, and he is an American — well, technically he’s a Canadian, which makes him more palatable to a European company, but for all practical purposes he comes from the US.

Externally, Elop’s appointment is aimed at placating the US financial world and blogosphere. That seems to have worked: from John Gruber on down Nokia is cautiously given the benefit of the doubt again.

Internally, Elop’s appointment is aimed at the entrenched hardware culture within Nokia,

as they are described in the Risku Manifesto a former senior executive wrote. This manifesto calls for the wholesale removal of dead wood in the senior management, such as Marko Ahtisaari, whose job qualifications are that he’s the son of the former Finnish president and Nobel Peace Prize winner; Mary McDowell, who was hired to break open the American market but mysteriously didn’t; and CTO Tero Ojanperä, who released no new technologies in the past two years.

Gruber’s piece contains valuable extra material. A former Nokia software engineer remembers:

That will have to change. Software matters nowadays.

Logic jump

It’s at this point, however, that Gruber makes a curious jump of logic that I can’t follow and he doesn’t explain:

Gruber’s likely source, Jean-Louis Gassée, is more explicit:

Others make a similar point. The conclusion is that Nokia must embrace either Android or Windows Phone 7. I find this argument distinctly uncompelling, not to say misinformed and out of touch with reality.

(To his credit, Gruber does not draw this conclusion, although he still sees Android or Windows Phone 7 as potential options.)

Two OSs

Why on earth wouldn’t Nokia be able to maintain two operating systems?

Apple does it: Mac OS and iOS. Google does it: Android and ChromeOS. Microsoft does it, 7, Vista, XP, and maybe even older versions. And Windows Phone 7, of course. And I’m sure HP has a few OS skeletons in the contractual closet.

Samsung has firmly settled on a two-OS strategy. It will serve the high-end market with Android, and the mid-range market with its homegrown bada OS. I haven’t heard any chuckling in assorted US halls about the Samsung Galaxy.

HTC has become a very strong player in the high-end Android market, and seems poised to do a repeat performance for Windows Phone 7. There’s a definite two-OS strategy at work here, and I haven’t heard any complaints about it.

Nokia’s only sin seems to be that it doesn’t use an OS that the US chattering class has decided is worth chattering about. In penance it should adopt either Android or Windows Phone. (But not both. It can’t maintain two OSs, after all. Only American companies can do that, although they chuckle about it afterwards in their halls.)

I’ll let you in on a dirty little secret: Nokia has even more OSs than just these two. It has S40, for instance, and I wouldn’t be surprised if they have even more OSs for really cheap feature and basic phones. But talking about S40 is not hip and cool, so let’s not.

Nokia’s OS strategy

Nokia has serious problems, but they do not include its fundamental OS strategy. Rather, the problem lies in execution.

Symbian

Despite everything Symbian is a feature, and not a bug.

Yes, Symbian is a turd. Its UX was gang-raped by a committee, its architecture is complicated and weird, and its attempts at running a touchscreen horrendously lousy (so far — I haven’t seen Symbian^3 yet).

So you could conclude that Symbian is no competitor for Android or iOS, Windows Phone 7 or webOS. Fine. I agree, actually.

But this conclusion is worthless. Symbian isn’t supposed to compete with those OSs — that will be MeeGo’s job. Instead, Symbian is now firmly aimed at the mid-range market. It must compete against BlackBerry and bada.

Truth to tell, it has a problem there, too. bada is shiny and new — not an iOS-class operating system, but a lot better than Symbian. BlackBerry’s OS6 is heading in the same direction. Symbian is getting old even in its own market.

But the very fact that Symbian is old means that it can run on low-specced, hence cheap, hardware. And Nokia’s ubiquity in the developing countries will make sure that the world’s poor are going to get access to our high-brow mobile ecosystem via Symbian. And not via one of the more sexy OSs.

Yes, Symbian is in a slide from the top of the market to the bottom. But what’s wrong with that? Nokia serves the bottom part of the market, too. Apple doesn’t. HP doesn’t. Android might, but doesn’t right now. Why on earth is Nokia wrong when it serves a market that the US companies ignore because they’re too busy chuckling in their halls?

MeeGo

Nokia desperately needs a high-end smartphone OS, that much is true. And it has one: MeeGo is being groomed for exactly that task. But where, you might ask, are the MeeGo devices? Isn’t it time one or another of them hit the market?

And here we have finally reached Nokia’s true problem: it isn’t fast enough in its software development. Not to say bloody slow. If you want to criticise Nokia for that and hope Elop’s appointment will help here, be my guest.

The Nokia N900, which runs on MeeGo’s precursor Maemo, was released about a year ago. I tested it and it is … not bad. It’s certainly light years ahead of Symbian, and I can see, in time, and with a lot of effort, a N900 descendant becoming a serious competitor to iOS, Android, webOS, and Windows Phone 7.

But a year has passed and there is still no successor to the N900. That’s a big problem that has to be addressed and solved. Feel free to criticise Nokia here; I certainly do.

Finally, Nokia must take MeeGo seriously as a software platform. This is a subject we can’t say anything about due to lack of data. If you want to be skeptical of Nokia’s software strategy, be my guest. Just remember that something might change after the current shake-up.

Android? Windows Phone 7?

However, embracing either Android or Windows Phone 7 is nonsense. It would lead to another year of doing nothing. Nokia would have to incorporate the new OS, create prototypes, then decide on a device to bring to the market. That takes time; time its competitors will use for bringing out even more advanced phones.

Also, switching OSs would mess up Nokia’s partnerships with Intel and other device vendors such as LG who want to jump on the MeeGo bandwagon. That’s not a very good idea.

Finally, if Nokia would switch to somebody else’s OS it would give away its chance at vertical integration of device, OS, and app store; and this integration is currently the Holy Grail in the mobile world. (That’ll change; these things are dictated by fashion, but for now it’s true.) It would become beholden to Google or Microsoft for a crucial part of its platform.

As business advices go the Android/Windows Phone 7 idea is absolute nonsense. What Nokia should do is clean up its MeeGo act and get phones out there. As to turning the hardware-centric outlook of the company on its head, that has to happen, too, but it will take longer.

Nokia’s problems

Yes, Nokia has very real problems that will have to be solved. Yes, these problems should be discussed. But let’s please concentrate on the actual problems at hand, and not invent new ones that have no base in reality.

Nokia’s basic OS strategy is sound: MeeGo for the high-end, Symbian for the mid-range, and S40 for the low-end. But now it has to actually execute this strategy instead of fooling around.

Nokia, release a MeeGo phone. Before Christmas. But don’t bother with Android or Windows Phone 7.

Peter-Paul Koch is a mobile platform strategist and founder of QuirksMode.org