Nokia fights back

There was, understandably, a battle theme to this year’s Nokia World event held in London. When your longtime CEO is replaced, just days before the yearly meet, by a Canadian Microsoft senior executive, it seems like a good time to circle the wagons.

Keynote speakers for the two-day event sounded a call to arms, not just among their ranks, but to thousands of applications developers who also filled the hall to hear about the roll-out of several new Nokia smartphones… and to find out what happens next.

During his opening remarks, Niklas Savander, Nokia Markets executive vice president put it in three words, words that sounded like a battle cry: “Nokia is back.” Guests were treated to a widescreen clip of Tron: Legacy, coming out late this year. The high-def clip was shown on 15-foot screens surrounding the keynote hall. And  surprise!  the huge, clear images were transmitted straight from a new Nokia N8 via a simple HDMI cable. No backup computers offstage, no smoke, no mirrors. It was a dramatic display of Nokia’s confidence in its N8, a touchscreen mobile that at last matches, if not rivals, every single other smartphone out there.

Absent was well-known Nokia president Olli-Pekka Kallasvuo, who stepped aside Sept. 21 to make way for newly appointed CEO Stephen Elop. This comes after word (from London’s Financial Times) that the Finnish mobile giant’s shares have dropped by 50 percent since 2006. Also announcing his departure  dramatically, onstage  was longtime Nokia Mobile Solutions EVP Anssi Vanjoki. Yes, there was an embattled feel to Nokia World, and it was hard to decide if the tone was more First Blood or The Empire Strikes Back.

During his remarks, Savander dished out twits to Nokia’s competitors, even adopting the “Oh, and one more thing…” catchphrase to counter the impression that Nokia lags in smartphone sales. “In the past quarter, people bought far more Nokia smartphones than Apple and Android combined. I mention this only because there’s been thrown around a lot of misleading numbers in our industry lately. So let’s set the record straight: every day, people buy 260,000 Nokia new smartphones. That’s more smartphone sales than any other company by far. Period.”

Call me: With the sleek, speedy N8, Nokia hopes to win back some “mindshare” from its smartphone rivals.

Of course, this largely depends on how you define “smartphone.” Since Nokia pretty much invented the concept with its 9000 Communicator back in 1996, the term has undergone a lot of changes. But Nokia continues to be the world’s leader in handset sales, and most of these feature some kind of Internet connectivity and computing ability, a baseline definition of a smartphone.

While Savander acknowledged that “Nokia is going through a tough, challenging transition,” he added, “We’re not going to apologize for the fact that we’re not Apple, or Google, or Samsung or anybody else. We’re Nokia.”

Nor is the proudly Finnish company about to abandon Symbian, its operating platform since 2001, instead promising that the new “rewritten” Symbian 3 is “faster, more efficient, and more developer friendly.” Symbian 4 is also on deck in the near future.

Nokia made it clear it will stick to its guns, thank you, not go the competitors’ way of “one device fits all,” instead trotting out a line of new Symbian 3 models that include the touchscreen N8, the smaller, cuter C6 (“fits in a purse”) and the manlier C7 (more gadgety, in smooth stainless steel) as well as a new version of its popular Communicator business phone, the E7.

The best news is that the N8 will be very affordable when launched in the Philippines in late September, selling for about P23,000. That makes it very competitive with comparable touchscreen models sold here.

One of the great things about Nokia World is testing out the phones in the Experience Lounge. It’s a vast convention hall transformed into a white-themed playpen of gadgets and smart toys. There are live bands, forums for discussion on everything from “The Future of TV” to “The Next Dimension of the Social Web.” Users can try out the latest Nokia phone games (blown up onto large flatscreen TVs), sample the HD quality of the N8’s 12-megapixel camera (“The best camera in the mobile world,” according to Vanjoki, with Carl Zeiss optics and a full mechanical shutter), surf its million-song free music library on Ovi Store, and explore the truly world-straddling Ovi Maps (which now features Pedestrian Maps, allowing you to find the fastest route on foot using sidewalks and pedestrian shortcuts via your mobile device).

Also launched in London: the E7, a new version of Nokia’s popular Communicator business phone.

The role of navigation was a key theme. Nokia is justly proud of the Ovi Maps feature, which goes way deeper than competitors’ navigation systems. Where does all this global positioning end? Savander hinted at the future: “Soon, your phone will be able to analyze your location, your friends’ location, your schedule, what you’ve been doing and what you’re planning to do… Everything on the Net will have a location coordinate. The potential of this area is huge, and it will transcend the user experience as we know it today. And it is a space that Nokia intends to own.” (Cue: Empire Strikes Back music.)

Another interesting room was the Hackathon Lounge. There, application developers slaved over hot code for 24 hours straight (the stacked boxes of pizza in the lounge apparently served as their fuel) to come up with killer apps that would compete for a prize on Day 2 of Nokia World. The winner? A Brazilian team that came up with Facelock, a face-recognition feature for locking and unlocking your cell phone. Nokia had an even bigger prize for a Kenyan developer who won the Calling All Innovators Challenge, coming up with mobility solutions for countries that live on under $5 per day: his team was presented with a million dollar check by newly installed CEO Elop.

In short, Nokia is not acting like a company that’s ready to throw in the towel.

The strengths of the company are obvious: Nokia still leads in global sales of handsets (yes, in the Philippines as well) because it believes in handsets for everyone (“not just the well off,” as one speaker put it in another jab at rival phone makers). Its goal to sell phones to “the next billion”  whether they’re in India, Africa, or Asia  is on track. Symbian, for all its critics, still drives 41 percent of the smartphone market (though industry reports say this number is shrinking.) It’s also a company that pioneered green technology in its handsets, recycling parts and encouraging users to turn in old devices.

But Nokia has had its setbacks. High-end mobiles over the past three years (notably the N series) failed to capture the market’s attention. Critics have said Nokia needs a “killer” phone to win back its “mindshare.” And just what is “mindshare”? “That’s difficult to define,” said Benoit Nalin, GM, Nokia Philippines in a side meeting. “That’s really about branding.”

Has Nokia had a slow learning curve when it comes to glitzy smartphones? “I think the learning curve is more with PR. It’s our fault, really,” says Nalin. “Volume-wise, our market share never went down from around 70 percent. In terms of mindshare, for us, it’s just a matter of getting a product like the N8, competing from a hardware standpoint.”

In truth, the N8 mostly lives up to the hype. The models we handled were not only elegant, tactile, easy to hold and to look at  what goes on inside is sleeker and speedier by far than older models.

In the mobile market, there will always be slick new gunslingers. Does Nokia have the muscle to mow ‘em down, one by one? One area where they’re pumping up is not abs  but apps. This year’s Nokia World was held simultaneously with its Developer Summit, a sign of how important those little download applications have become in the mobile world. In the Philippines, Nokia holds Code Camps every six months or so  a chance for budding code writers, applications technicians and corporations with content to learn the ropes and get their apps downloaded in the millions. Nokia takes a select few under their wing, offering dedicated developer technicians, access to prototype Nokia devices, distribution deals on Ovi Store and other keys to spreading their apps to the rest of the world. (Not surprisingly, social network and media apps are growing at a fast clip here.)

Another area where Nokia needs to catch up is in North America. It’s long resisted changing its devices to meet the guidelines of US service operators. “It took a long time to get some kind of compromise with US operators,” says Nalin. “Lately Nokia has become more flexible, and they have become more flexible, so we’ll see what happens.” The appointment of Elop, with his knowledge of the North American market, may also help.

Not surprisingly, Nokia doesn’t want to talk about trends outside of mobile phones, such as tablets, netbooks and other “immersive” devices. Mobility  tied in with global positioning  is still the key story for Nokia. “I think Nokia is really trying not to get this smartphone story disrupted too much,” says Nalin. “The feeling is, this tablet thing is a very, very small segment. For us, we are more mass-orientated, and this is a niche.”

But niche can turn big very quickly, I point out.

“That’s why, as a leader, we’re trying to get all our signals out. If you don’t really focus on one thing, you go nowhere.”

It used to be enough for Nokia to simply make sturdy, handsome handsets  things that were beautiful to the touch. In recent years, it has had to adapt swiftly to a new smartphone world: going into social networks and services through its Ovi Store, retooling its own look to attract “mindshare,” tinkering with its operating platform to meet changing times  meanwhile pleasing its shareholders. That’s because, even though Nokia still sells the most entry-level phones, the real revenue promises to be in high-end smartphones. And there are quite a few high-stakes marbles up for grabs.

“Today,” Savander intoned in his opening remarks, “we shift into high gear in Nokia’s fight back to smartphone leadership.” Don’t bet against Nokia taking back some of those marbles.