Nokia and MSFT: 2 Mobile Turkeys?

Today’s WSJ Article

http://online.wsj.com/article/SB10001424052702303822204577465771376539532.html

My detailed analysis in April

http://tomnoyes.wordpress.com/2012/04/11/nokia-apple-android-and-the-stage-4-value-shift/

Rumor is that when Google’s Andy Rubin was told Elop spurned the Google opportunity he responded: 2 Turkeys don’t make an Eagle.  Nokia is a tremendous engineering organization, just like RIM was, and Apple still is. What sets Apple apart? Marketing Genius and business planning that DRIVES engineering (not the other way around). When the “value” equation shifts from feature/function to “experience” engineering is stuck.. as few companies can lead the vision that excites customers.

Elop needs to be taken out.. 92% of Nokia’s value has been destroyed … he has led them toward a huge miss in perhaps their last opportunity to restructure.  What a shame.  There are many growth opportunities in this market where Nokia could compete (if they still have any of those great engineers left). However the current path for Nokia resembles a HTC style contract manufacturer that only builds Windows phones (and low cost handsets for emerging markets).

What would I recommend? something distruptive.. leveraging existing handsets. Example:

- Leverage MSFT and Skype to create solid urban phones no longer dependent on carriers.  Enable local wi-fi providers to be paid for their bandwidth in early stage to encourage them to set up stations. Create integrated backhaul to ensure that the ISP Carriers to not influence pricing.

- Integrated Retailer. Big stores are a black hole for bandwidth… retailers don’t want to enable 3g/4g services as consumers only use it for price comparison (a slight exageration). How can Nokia/MSFT create integrated retail experiences.. example femtocells in all retailers (Samsung is market leader here), integrated into new mobile POS systems (MSFT does own  RetailDynamics) and some new ad platform.

- Integrated Home.

- Integrated Auto.

Thoughts appreciated.

 

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3 thoughts on “Nokia and MSFT: 2 Mobile Turkeys?

  1. TN: “Marketing Genius and business planning that DRIVES engineering (not the other way around)”

    Some of our services with TEDIPAY are based on prepaid cards. When we first started approaching key partners, we were flatly told: “Here’s the standard product, go and market it”. We were shown the door when responding with “No, here’s the product which we want to offer to our customers because they demand it, go and create it for us”. Eventually, our message got through and we are now listened to. As Tom says, it’s all about value proposition: form and function are important, but they come second – Apple, for example, didn’t just designed a cute MP3 player, they created a new user experience.

  2. #1 is a good idea, however I think it would need to fall back on “commodity” (prepaid) 3G/HSDPA+ as wifi coverage is simply too expensive to put in an entire city unless you are a telco or cableco with fiber/coax Internet passing most buildings. There are also a lot of coordination issues between wifi radios that make it impossible today to carry on a wifi Skype conversation while walking/driving unless you are in a place with an expensive network administered + setup by a single provider (e.g. airport Boingo, and even that still has some blind spots).

    I don’t think Nokia has anywhere near the relationships necessary to have a compelling integrated home solution. As far as auto goes, I guess Navteq could help them here, though I can’t think of how since they license out to Garmin and others today. Maybe Nokia could try to compete with Garmin and become a bigger, better Garmin? Not sure about this. Selling Navteq to Apple for a load of cash could also be a good move since Navteq is much better than the mashup of TomTom and OSM that Apple has decided to use for its in-house maps app. (See http://blog.telemapics.com/?p=386 )

    Integrated retailer (femtocells/Wifi/hetnet in all retailers) seems very CapEx-intensive at an NSN already bleeding cash…it is a very good idea and it’s just dying to have one app rather than several – I know Boingo is already trying to do this with in-store wifi. However you will have to build a huge team to build a codebase that will serve up relevant coupons, market your app to users, etc. It’s a nice idea though, but if Nokia has to subsidize some/all of the CapEx you could be looking at a very expensive speculative project with low short/midterm ROI.

    In all these cases, ex maybe auto if they directly built navigation devices, there is a chicken/egg problem: Nokia needs to come to the table with a large installed userbase in order to be taken seriously by potential partners.

    Personally I would go with something like seeding an app store focused on India, and another focused on China, and maybe others focused on the Philippines, Malaysia, etc. The apps would only work on Nokia handsets and would be things middle/lower-middle class users would find valuable, like detailed subway and bus apps, Wifi maps, etc. Then I would pray that MSFT gets serious about emerging markets for Windows Phone. Unfortunately Android and iOS have so much more emerging-market app momentum here that Nokia may just be too far behind by now, but they can try.

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