Categories: AndroidMobile

Is Nokia Doomed?

There’s been a lot of discussion regarding whether or not Nokia is Doomed or not.   The people who say Nokia are doomed basically point out that Nokia doesn’t have any attractive products at the high end, and at the low end the margins are extremely thin.  The high end products suffer from the Symbian being essentially dead (even Nokia is recommending that developers not develop native applications for Symbian, but to use Qt instead), and Nokia doesn’t have much of a development community following it, and it certainly does have much in the way of 3rd party applications, either targetting Symbian or Qt at the moment.

So what do I think of the whole debate between Tomi and Scoble?  First of all, I think there is a huge difference in American and European assumptions and perspectives, and a big question is whether the rest of the world will end up looking more like Europe or America vis-a-vis two key areas: cost of data plans, and whether phones become much more application centric.

Tomi took Apple to task in the comments section of his 2nd article for not having an SD card slot (how else would people share photos with their friends?) and for not supporting MMS in its earlier phones.   My first reaction to that was:  Um, isn’t that what photo-sharing sites are for?    Is it really that hard to attach a photo to an e-mail?  And then it hit me.   In Europe, data is still like MMS a few years ago — a place for rapacious carriers to make way too much money.  Many European telco’s don’t have unlimited data plans, and charge by the megabyte — and even if you’re lucky enough to live in a country which does have an American-like data plan, the cost of data roaming is still incredibly expensive.  In contrast, in the US, I can pay $30/month for an unlimited data plan, and I can travel 2000 miles south or west and it will still be valid.   Try doing that in Europe!   The US had consumer-friendly data plans much earlier than Europe did, and so perhaps it’s not surprising that Nokia has engineered phones that were far more optimized for the limitations caused by the Europe’s Wireless carriers.

The second area of debate where I think Scoble and Tomi are far apart is whether phones of the future are fundamentally about applications or well, making phone calls.   Here I don’t have proof that this is a fundamentally European vs. US difference, but I have my suspicions that it might be.   Tomi spent a lot of time dwelling on how Nokia was much better at making phone calls (i.e., better microphones, better radios, etc).   And my reaction to that was, “Who cares?  I rarely use my phone for making phone calls these days!”   And that was certainly one of the reasons why I gave up on Nokia after the E70 — its contacts database was garbage!   It was OK as a phone directory, but as a place for storing multiple addresses and e-mail addresses, it didn’t hold a candle to the Palm PDA.   And that’s perhaps the key question — how much is a smart phone and about being a “phone”, versus being a “PDA” (and these days I want a cloud-synchronized PDA, for my calendar, contacts, and todo lists), and how much is it about applications?

This is getting long, so I think I’ll save my comments about whether I think Meego will be an adequate savior for Nokia for another post.  But it’s worthwhile to talk here about Tomi’s comments about most smartphones being much cheaper than the “luxury” iPhone, and so it doesn’t matter that Nokia’s attempt in the higher end smart phones has been a continuous history of fail.   First of all, it’s worth noting that there are much cheaper Android phones available on the market today, which are price-competitive with Nokia’s low-end smartphones (i.e., available for free from T-Mobile in the States with a two year commitment).  Secondly, the history in the computer market over the last twenty years is that features inevitably waterfall into the cheaper models, and prices will tend to drop over time as well.  Apple started only with the iPod, but over time they added the iPod Nano and the iPod Shuffle.  And it would not surprise me if they introduce a lower-end iPhone as well in time as well.   It would shock me if they aren’t experimenting with such models even as we speak, and have simply chosen not to push one out to the market yet.  So even if you buy Tomi’s argument that the high-end smartphones don’t matter, and you only care about volume, and not about profit margins (talk to the people at Nokia that will need to be laid off to make their expenses match with their lowered revenue run rates; I bet they will care), the question is really about whether Nokia has time to execute on the Meego vision before it’s too late and the current application-centric smartphone ecosystems (Android and iPhone) start eating into the lower-end smartphone segment.   More on that in my next post.

tytso :

View Comments (29)

  • @16:
    sry, but i can't agree on that. i think you're comparing apples with oranges. it seems like you're forgetting, that there is an enormous difference between countries and states. you're country being bigger is a pretty lame point.
    let us talk again, when your unlimited data plan covers the entire northern american continent.

  • My guess is that 99% of europeans only leave their country for longer period when they are on holidays. So roaming costs don't really matter to most people. You infer Nokias doom by your geeky frequent flyer world view? How often do you leave the US?
    Europe was and is always way ahead of US in the mobile space. We send billions of texts when US send thousands. We have sub-10€ data plans that work for most use cases and you don't have to buy unlimted voice and text to get a subsidized phone.

    Bottom line in europe people get better service a lot cheaper and more people use smartphones (the ones with long battery life)

  • Oh and if you willing to pay a stupid amount like 30€ for data in Europe Vodafone or T-Mobile or Telefonica will give you a data plan that works in all the countries where they have networks.
    That just isn't useful to most people, so they buy useful cheap ones for their country where they are 99% of the time.

    Why do Americans always have everything supersized? Get unlimted text, voice, data and an iPhone for just 150$ a month! It's super cheap! ... Yeah, right.
    ( http://mashable.com/2010/01/05/nexus-one-vs-droid-vs-iphone/ )

    We don't eat so much fast food and don't drive so many SUVs and call mp3 players "mp3 players" not iPods, maybe, just maybe people in Europe are just different.

  • Oh, and for the 150 bucks you get terrible service and broken phone calls for free with that iPhone. It's the deal of century. Millions of Americans can't be wrong.

  • @Tom,

    Actually, I'm travelling all the time. I generally clock between 80,000 and 120,000 miles on airplanes every year, not counting train travel. This year I've visited Australia, New Zealand, Brazil, and Spain, so it's actually been a relatively light year for international travel compared to previous years. I didn't actually make it to Japan and Germany in 2010. (And this doesn't include stop-overs where I didn't clear customs at say, London Heathrow).

    Stacey and I get 500 minutes of voice calling, unlimited text, and unlimited data for our two Android phones, and we pay $109 for the two of us on a family plan. So that works out to just under $55/month for the two of us, on T-mobile. Having unlimited data is just nice. We don't have to worry about keep track of the data plan when we're using Google Maps for Mobile to give us driving, walking, and public transportation options. (The last is just wonderful when we're in some city like Portland that we don't know well, but which is rich in public transportation options.) I can comparison shop in stores by scanning barcodes and getting information about what that item might cost at other stores or on-line via Google Shopper, and so on. Google Goggles is another really cool tool that I'd only use if I didn't have to worry about every single megabyte that I use when I'm 2500 miles from home (roughly the distance between Portland and Boston).

    Compare and contrast that to some poor mobile user in Luxembourg, who might travel 45 minutes by car, and whoops! Roaming rates apply. Do you really think this is a good thing?

    And if it really is true that most Europeans never leave their country except when they are on vacation --- I pity you Europeans. I guess that whole cosmopolitan image thing was just a fake, eh? :-)

  • tyso: the cosmopolitan image is not true for most europeans I guess. They might visit many more countries than your average American, but still most of the time they are at home (even on the weekends)

    55$ for your contract is not bad, but from what I hear T-mobile american network isn't the largest. In Germany such plans are now about 30€ (for everybody, you don' t have to be married)

    Have you checked how much data you really use with your unlimted plan and your heavy use?

    • Tom,

      I average around 1.5GB -- 1500MB -- per month. Some web searching shows the European Commission capped the cost per megabyte that carriers could charge (in their own country, not even when roaming) to 0.8 Euro per MB as of July 1, 2010. For me, that would be 1200 Euro per month. Nice! And of course, I use my wireless data service much more when I'm travelling --- when I'm in California (2500 miles away from home) or Chicago (837 miles from home) or more recently when I was on vacation in Hawaii (5000 miles away from home). If I had travelled that distance in Germany (which is about the size of the state of Montana), would I still be in the same country?

      I hear you when you keep asserting that states are different from countries. But the amount of cell towers you need to provide coverage in a given area is the same whether those cell towers are in a state versus a country. (And besides, as long as Germany benefits by having a stable Euro to benefit its export-driven economy, it's going to be forced to keep bailing out the peripheral countries like Portugal, Ireland, Greece, Spain, and Italy, and as long as the EU is forcing national wireless carriers to cap their data plans to a "reasonable" rate of 0.80 Euro/MB, which means it's passing when looks to me like Federal laws, the differences between "country" and "state" are starting to blur a bit, don't you think? What does "Ever Closer Union" mean to you? I mean, you don't need a passport when you travel between Germany and France; I don't need a passport when I travel from Boston to New York. Someone from Germany doesn't need work papers when they work in Ireland; I don't need to get special permits if I want to move to California and get a job. And the rivalry between fans of the Red Sox and Yankees sports team is probably just as great as between the Germany and French teams during the World Cup...)

  • Re low end iPhone: does the iPod Touch qualify? I can make calls on it with any of several apps that work over wifi, and you'll notice that other iPhone features are slowly creeping into the line.

  • Oh, Germany and French supporters _might_ get along, but you have nothing like the rivalry between German and Dutch or English fans in US. I don't think that the Red Sox have whole countries of fanatics + media etc behind them (with the Sun always bringing up Panzers and the war again. Before the English loose that is ;) ). You might be right about most things, but World Cup and Europe is a whole different story. Come to Germany next time our team plays in the World Cup.

    Europe and the US might look very similar from the outside, but the cultural and language differences are still a major stumbling block and roaming is still crazy expensive, but I just checked my contract and I have to pay 5cent per megabyte abroad. Very expensive, but at least there is a price cap at 60€, so on Holiday I might just say: "Fuck it" and use my phone without too much worry.

    Oh and Europeans have a very different perception of size. Your comparisons might be correct, but they are not how your typical European would think. There are big countries and small countries. Monaco and Austria are small. France and the US are big. That the US is 17.61 times bigger than France is not something people worry about. Just like that Austria is 43011 times bigger than Monaco. Geeks think that way, but normal people just have their drawers with bigger and smaller than what they know (or live in) unless they really think and investigate (just like I just did. Thanks Wolfram Alpha ;) )

  • Yes, European travelers are indeed getting pretty screwed on data. The reason is that we travel less, so there is little incentive to fix the problem. (the EU has a big "Free movement" program to get us to travel more, but that is another story).

    Equating that with all of EU getting bad data deals is not correct. For our actual usage-patterns, it is fine.

    Here in Sweden I am paying 6.5€ for 1Mbps truly unlimited data (no throttling). 3/10Mbps is 11/27€.
    I usually never bother switching to wifi unless i need to download something quickly or accessing my phone via SSH (all carriers seem to block incoming traffic to phones).

    All that said, I do hope the EU does something radical about the data roaming charges. We regularly get stories about people going on holiday, forgetting to turn some data-sucking app off, and getting huge bills.
    The most common advice seems to be to just buy a pay-as-you-go-SIM where you are going and use that instead.