Nokia pursues digital dominance

18 Nov 2003

Nokia made its global intentions clear last Friday in a deceptively low-key Dublin event: it wants to be a leader in what is describes as a ‘converging digital world’. The changing landscape of personal communications now finds the Finnish multinational competing on disparate fronts, from games to business solutions, with only Microsoft for company on such an ambitious journey.

The Irish office of the world’s most successful mobile manufacturer is never very interested in grabbing the headlines or engaging in local debate. Occasionally it will spend buckets of money transforming train stations into one big Nokia billboard, but for the most part it gets on with the business of quietly pushing product that has made it the No. 1 mobile infrastructure company in the world, as well as the number one handset manufacturer with around 40pc of the market.

With all the talk of mobile fashion fads (anyone for an MMS necklace?) and snazzy gadgets, the business market received only an honorary mention at last week’s briefing. This is ironic when you think it was the business customers that kick-started the whole mobile revolution. Until the arrival of MMS and camera phones, each evolutionary step was driven by early adopters in the corporate sector. They were the first to buy big ugly handsets that came with exorbitant tariffs; the first to upgrade to digital with the GSM networks and the first to dabble with data over GPRS networks.

The rise in prepay and the texting phenomenon saw the onus switch to consumers as cellphone sales rocketed and the abiding image of the 21st century became teenagers at bus stops fiddling with their phones.

“It’s all about behaviour,” said Martin Elliot, business application manager, Nokia Ireland. And true to his words we were regaled with a phone for every imaginable occasion, ranging from the 6600 camera phone for hip young ‘picture messagers’ to the feature-laden 6230 aimed at what Nokia calls ‘mobile professionals’.

Of more significance in terms of growing the company is the arrival of its debut touchscreen phone-cum-PDA which is its first head-on attempt to take on Microsoft’s Pocket PC, the platform which has underpinned the success of the iPaq range and a growing number of PDA-type devices.

At the other end of the spectrum is N-Gage, its mobile gaming device that single-handedly thrusts Nokia against Sony and Microsoft in a multimillion dollar console industry that’s already chalked up blue-chip casualties like Sega and Commodore. It’s a brave venture, one that not only demands the acceptance of consumers but also of the retail channels and distributors that can make or break a product. N-Gage only launched this Autumn and the jury is still out.

“We have a number of competitors in a each of these spaces,” said Gavin Barrett, entertainment and media manager. “But we’re totally different,” he added. In the mobile business space the ‘difference ‘ seemed to centre around some established partnerships that would be like-minded in their attempts to usurp Microsoft. “We are starting from further back but we have direct contact with the likes of IBM and Oracle,” said Barrett. “With them we’ll bring different skillsets to the market based on open standards.”

More fanciful was his assertion that camera phones, which still deliver fairly feeble picture resolution, have propelled Nokia centre stage in the digital imaging sector. “We want to be seriously competing with Canon and Fuji,” he said, with more than a little optimism.

Typical of mobile industry events over the last year, the imminent arrival of 3G was played down in an ongoing bid to brace the launch countries for a sense of anticlimax. “It’s all about bandwidth,” said Barrett, reminding us that many of the 3G services are already with us in various shapes and forms. There was no mention of any plans for a Nokia videophone, touted by Hutchison’s 3 network in the UK as at least one of the killer applications, and a general reluctance to divulge any plans for 3G for fear of stepping on the toes of all-powerful operators.

Still, Nokia has plenty to be getting on with. From a company that has been around for more than 100 years and has had such diverse business interests as wood processing and rubber manufacturing, its capacity to change and survive is unquestionable. But it was its move into building mobile networks at the start of the Nineties – at a time when competitors like Motorola and NEC underestimated the impact of GSM – and its consistent prowess at building handsets with an intuitive interface that made Nokia first a European force and now a global success story.

Its foray into other technology markets is not entirely new either – there was an ill-fated move into TV manufacturing that nearly crippled the company a decade ago – but it is certainly its most ambitious. At a time of increasing convergence, the simple truth is that it cannot afford not to make a move. The mobile market is strewn with companies who failed to adapt and evolve. Nokia clearly has no intention of becoming one of them.

By Ian Campbell