Nokia’s brave new PC world

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Nokia has made an impressive array of announcements this week in the lead up to its Nokia World event in Stuttgart, Germany next week. All have been geared around cementing the company as a solutions provider – a strategy it announced two years ago at the same event in London, where the ‘Ovi’ services platform concept was first revealed.

With all the information released this week – of its Nokia Money mobile banking service, its N900 3G internet tablet, its Solutions division to sit alongside its devices and services functions, and, most notably, its Booklet 3G sub-notebook device – it is hard to imagine that next week’s event will serve as little more than an exaggerated demonstration platform from which to show off its new devices to an eager audience of technology and telecoms journalists.

But perhaps its media strategy is more savvy than we give it credit for and a super-announcement to trump all of those fed to the press this week will take the stage in Stuttgart. It is certainly the opposite media strategy of that deployed by rival Apple, whose code is to say nothing until it absolutely has to.

The N900 device is significant in that it highlights Nokia’s affiliation with Linux’s Maemo operating system (OS), which it claims will deliver a “PC-like experience on a handset-sized device”. Previous Nokia internet tablets have run on Linux software, but the biggest difference is the N900 can also be used as an actual mobile phone, while others only offered web browsing.

Nokia has refuted comments that this relationship will overshadow developments it has made with Symbian, and in particular, Symbian Foundation’s open source OS, which is said to not be ready until the end of next year despite major handset manufacturers already committing to release devices powered by the software. A Nokia representative said its smartphones would continue to be Symbian-based, regardless of moves towards Linux on its internet tablet models.

Arguably the move that raises the most interest and questions is the Nokia Booklet 3G, which will pit the company firmly against established names in the PC/netbook market such as Acer, Asus, Dell, Toshiba, LG, Samsung and Sony, all of which are already rivals in the handset space. And need we mention Apple, whose success Nokia has been looking to thwart over the past year, with little gratification, although it has yet to enter the netbook space also. But Apple is now rumoured to be launching an internet tablet as well, which will no doubt pander to the thousands of Apple aficionados who were quick to swallow each incarnation of the iPhone.

Nokia has already differentiated the Booklet from standard netbooks by offering integrated GPS, a HDMI video out slot and a 3G SIM slot, which presumably will make SIMs easily transferable and will eliminate the need for a mobile broadband dongle. Nokia has not given detailed specification, pricing information and market availability, reserving these tidbits for Nokia World next week, although analysts have predicted that the Booklet will find a place in the top tier of devices. At any rate, the announcement will be well-timed if the Booklet will be out ahead of the Q4 Christmas shopping season.

The device will fill a gap in Nokia’s portfolio, making it the last of the major handset manufacturers (except for Motorola) to join the PC fold, and increasing its offering to its mobile network partners. Good feedback from critics within the tech press has already been forthcoming surrounding the device’s paper-based potential, winning a thumbs up in the design and operability stakes. It is yet to be revealed whether the Booklet will be stocked in outlets beyond the traditional mobile realm such as PC World, Currys or Comet; partnerships that would be essential to confirming Nokia’s identity in the netbook space.

Industry commentators have welcomed the move, but there are mixed responses as to whether the Nokia Booklet will really shake up the netbook market and throw up a real threat to established players, based on its status as handset market giant, albeit with declining market share.

IDC analyst Jonathan Arber said: “I’m not sure that this poses a threat to any other company. Nokia has considerable brand value to consumers, but it has been identified as more of a manufacturer of solid, dependent, mid-range products, not like the flashy consumer devices from Apple. This creates a potential issue for marketing a high-end netbook, but it could work well for Nokia to attract consumers that are looking to purchase their first netbook.”

Whether it is Nokia’s intention to bundle the Booklet with its smartphones in line with data-rich network tariffs has yet to be seen, but Arber said this probably would not happen for another 18-months as ARPU could be affected. “When you increase bundle sizes, it drives ARPU down, and by bundling smartphones with netbooks you could run into severe margin issues,” he explained. “It needs to be managed very carefully so we probably won’t see phones and laptop bundles within the next 18 months. Essentially you are selling the consumer two very different products. Bundling doesn’t make sense just yet and we don’t yet know how the market will respond to a Nokia branded computer.”

On the other hand, Gartner principal research analyst and PC market specialist Ranjit Atwal, did think Nokia’s Booklet, and future netbook-type devices, could prove disruptive to existing players. More importantly, he said the move solidified the convergence of the PC and handset markets.

Atwal said it was likely that Nokia’s brand power would resonate in the PC market but it would have to tailor its marketing cleverly. “Anyone who has a Nokia phone will instantly recognise the Nokia brand on a PC. That it will be a Windows device is a good move for Nokia to gain quick acceptance in the PC market, as most PCs are run on Windows.”

Atwal also noted that Nokia’s PC strategy appeared to be more integrated with its handset division, while within other brands these units seemed to have greater separation. Indeed, the newly announced Solutions unit will aim to align Nokia’s handsets and services divisions more closely with its strategy to create and distribute mobile and PC solutions.

Ovum senior analyst Tony Cripps has questioned not only whether Nokia’s brand is strong enough for it to hold its own in the PC space but also whether the company has more ambitious plans for its growth in the sector.

UK-based Microsoft Windows product manager Laurence Painell would not comment on the partnership specifically, but said netbooks were a high growth part of the PC market which Nokia could potentially take a large share in if its software and hardware combination could invoke consumer desire.

But Painell said Nokia would be “just another player” in the PC market, and would not be disruptive to the firmly established businesses of its competitors. “It is just another competitor in the space, which was originally dominated by Asus. We have since seen all major manufacturers produce netbooks.”

 

Mobile News will be attending Nokia World in Stuttgart, Germany, from September 1 to 3. Check our website for regular updates. Coverage will also appear in Mobile News issue 447, out on September 7.

 

 

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