Last week, Nokia announced a long-term relationship with Santa Clara, Calif.-based Intel to establish a new class of mobile computing devices. Could the Finnish OEM finally be warming up to U.S. shores?
Nokia for a long time has enjoyed a fantastic market share lead in the global handset arena, but its North American share has been dismal, at best. The company frequently has been criticized for what some see as an indifference to the North American market, particularly in the United States, often bringing its high-end devices to the United States sans subsidy or months after a global launch.
says Mark Louison, Nokia's head of North American operations, but adds that incompatible CDMA and GSM technologies in the United States have presented a challenge for Nokia’s business model. "Each of the major operators [in the United States] have unique technology road maps and to be successful, we need to align our approach to the market with theirs. In other parts of the world, a one-size-fits-all approach has worked very well,” he says.
Avi Greengart, research director for consumer devices at Current Analysis, echoes those sentiments. “Traditionally, [Nokia] tries to build one thing and sell as many as they can. They’ve sold tens of millions of the 1100 series, if not hundreds of millions. They have a massive supply chain that allows them to go head to head, even with Chinese companies, and win,” Greengart says.
But Louison notes that establishing a base camp on U.S. shores is already having a positive effect on Nokia’s ability to focus its resources on developing products specifically for the North American market. “Something new in our strategy is that you'll see products that are announced here first and built and launched here and go to market globally later,” Louison says, citing R&D and manufacturing facilities in Los Angeles and San Diego.
The Intrigue 7205 is one device that Louison notes as an example of a recent Nokia feature phone that was built first and foremost for Verizon Wireless at one of those facilities, adding that there will be more of that kind of cooperation with carriers in the future.
Greengart rejects the strategy of Nokia bringing more feature phones to the North American market, citing the reinforcement of a persistent stereotype. “In the U.S., a lot of consumers think that Nokia is a Japanese company that makes boring bar phones. [Nokia] isn’t doing themselves any favors by bringing exactly that to the U.S. market."
Stereotypes aside, Nokia’s technology is rarely viewed as anything but top-notch. However, the company, focused as it has been on feature phones and emerging markets, has taken some flack for being slow to react to the latest trends. Greengart notes Nokia’s slow reaction to the “RAZR threat” and implementation of touchscreen devices in the wake of the iPhone’s success.
“Nokia has been focusing on the existing S60 and adding touch to it and adding services to it, but their products don't necessarily meet the expectations that consumers have in an iPhone and Palm Pre world,” Greengart says.
“Tired Notion” About U.S.
While Greengart concedes that Nokia is doing just fine selling its devices to the rest of the world, he says the U.S. market is an incredibly important one for any OEM that wants to be seen as innovative. “The tired notion is that the U.S. is behind everyone else. You’ve heard it all before. The trends start in Asia, move to Europe and 18 months later, it comes to the United States. But that certainly has not been true in the last five years.”
Greengart notes that Motorola changed the face of the industry with the RAZR. “The whole fashion and thin trend started in the U.S. One-hundred million RAZRs sold can't be wrong. That was a huge trend that still drives phone design today. You just kind of expect your phone to be relatively thin and to look like a designer actually spent some time with it.”
He points to e-mail phones, which started in Canada with Research In Motion’s BlackBerry, and then, of course, the iPhone, which has revolutionized mobile Web browsing, not to mention application usage and mandatory data plans.