3 Projections About Nokia’s Smartphone Reboot

I have written a book on Nokia’s smartphone problem. The name of the book is Nokia’s Smartphone Problem: The End of an Icon? and it chronicles the Finnish company’s journey from a mobile handset maestro to a smartphone also-ran.

Nokia’s smartphone story began with the launch of the Communicator 900—arguably the first commercial smartphone—at the CeBIT fair in 1996. And it came to a sad end in September 2013 when Microsoft announced to buy Nokia’s mobile phone business for $7.2 billion.

An account of Nokia’s past and present situations

Here are three projections based on the chronicle of Nokia’s first smartphone play that spans from 1996 to 2013.

Leaner Business Model

The fact that Nokia is back in the smartphone game is hardly a surprise. The mobile handset is in its DNA, and the Finnish firm can’t keep away from it for long. However, more important is the fact that a far more cautious Nokia will play it safe this time around and won’t drain its resources by trying to establish full-fledged smartphone operations. Instead, Nokia will return to the smartphone market in a gradual and calibrated manner.

Nokia, probably taking cues from China’s Xiaomi, the third largest smartphone maker, will try to create an innovative business model for its smartphone market reentry. The Finnish company will most likely design the handset and then license the design and Nokia brand name to its partner who will carry out the phone manufacturing, distribution, marketing and sale.

Nokia N1 tablet provides cues on the firm’s future smartphone roadmap

Nokia demonstrated this model with its N1 tablet last year. Foxconn acquired the license for the tablet’s manufacturing, distribution, sale and after-sale support. The licensing model is similar to the approach that photography pioneer Kodak has taken after the bankruptcy.

It’s pretty ironic that the book Nokia’s Smartphone Problem has found some analogies between Kodak and Nokia. Kodak’s internal teams argued for the shift toward digital photography that the top guys ignored. Similarly, back in 2000s, Nokia’s senior management didn’t heed engineers outcry for Internet-centric, touchscreen-based app phones. A leaner Nokia seems to have learned the lesson and is moving carefully in the cut-throat smartphone business.

Continued Focus on LTE Networks

The new Nokia will remain focused on its core business of wireless infrastructure for 4G networks. Inevitably, the company sees its future in the LTE-centric mobile infrastructure business. The mega acquisition Alcatel-Lucent is a testament of that shift.

The new Nokia is led by the infrastructure man Rajeev Suri

However, the Finland–based firm still boasts valuable resources and intellectual property related to the smartphone technology. So it’s not in Nokia’s larger interest to put all eggs in one basket: mobile networks. It’s worthwhile to note that Nokia seems open for selling its HERE location business at a good price.

Moreover, mobile business with both network and terminal units is still seen as a panacea in the wireless telecom world. The two businesses have a natural synergy. It’s just that consumer-focused mobile phone business will merit a lower priority for Nokia than engineering-heavy business-to-business focus of LTE-based mobile networks equipment.

Choice of Mobile Platform

It’s most likely going to be Android. The book Nokia’s Smartphone Problem narrates the story of how Nokia secretly began to work on an Android fork in 2012, and the outcome was Nokia X phone launched at the Mobile World Congress (MWC) in Barcelona in February 2013. Apparently, Nokia’s mobile OS partner Microsoft didn’t like it. In the hindsight, Nokia’s advances toward Android became a factor in Microsoft’s decision to buy Nokia’s mobile business later that year.

Nokia’s Android phones launched in 2013

The fact that Nokia has based its N1 tablet on Android mobile operating system further reinforces this premise. There are some industry watchers who point to Jolla’s Sailfish operating system, which is a MeeGo progeny. MeeGo was the mobile operating system that Nokia co-developed with Intel as an alternative to hopelessly buggy Symbian platform.

But Nokia’s liaison with Jolla’s Sailfish platform is unlikely because the new Nokia won’t take an unnecessary risk and will go with the flow. And the flow is apparently with Android.

Also read:

Nokia on Top of the World, Again

How the iPhone Ended Nokia’s Reign

The second edition of Nokia’s Smartphone Problem: The End of an Icon? was published in November 2014. It’s available in both paperback and e-book formats.