By BLOOMBERG NEWS, Published: June 27, 2010
The marketing effort by Nokia, of Finland, to take on Apple in France, the biggest iPhone market outside the United States, is among the Finnish company’s steps to reclaim lost momentum by putting applications at the center of its smartphone campaign.
The world’s biggest maker of mobile phones also placed ads with applications in free newspapers on the London Underground and is embedding software trainers in its local sales units to attract more developers to its Ovi Store.
“Apps are going to be more central to Nokia’s conversation,” said Purnima Kochikar, who heads the Forum Nokia developer-support unit for the company, which is based in Espoo, Finland. “It’s no longer about selling devices.”
Twelve years after it began working with outside developers, Nokia is struggling to claw back ground lost to Apple, whose application-rich devices are flying off store shelves. Nokia’s catch-up effort is an acknowledgment that it has failed to capitalize on its 41 percent share of the smartphone market to become the platform of choice for software writers.
Apple appears to be extending its gains. After selling 600,000 handsets in pre-orders for the iPhone 4, it was expected to sell a record 1.5 million units on the day of the phone’s debut.
IPhone’s first-quarter share of the smartphone market rose to 15.4 percent from 10.5 percent a year ago, while devices that run Google’s Android software soared to 9.6 percent from 1.6 percent, according to the research firm Gartner. Symbian, Nokia’s main operating platform, slid 4.5 percentage points to 44.3 percent.
“Forum Nokia is improving some areas of what they’re doing, but the biggest issues Nokia faces have been elsewhere, in the devices or the software or the discovery mechanism for the apps,” said Martin Garner, a London-based analyst at CCS Insight. “There is much more profile-raising being done. It’s a good idea,” he said. “Unfortunately, Apple has paved the way.”
Mr. Kochikar, a former manager at Verizon Communications and an entrepreneur who joined Nokia in 2003, says the company’s performance in applications should not be measured by the number of items in its Ovi Store, which Nokia has declined to disclose.
Apple has said that 225,000 applications have been developed for the iPhone, while Google’s Android Market, which is also winning favor from developers, has about 80,000, according to AndroLib.com.
“I think the market has been brainwashed to think it’s about counting apps,” Mr. Kochikar said. “If you look at all these apps, they’re not in a store.”
Nokia’s current high-end smartphones have fallen short of the expectations raised by the iPhone, leading the company to cut its outlook for sales and profit margin. Nokia shares have fallen to their lowest level since October 1998, about €6.8, or $8.40. They have tumbled 24 percent this year, giving the company a market value of €25 billion, about a tenth of Apple’s $246 billion and slightly less than that of Research In Motion, the Canadian maker of BlackBerry phones.
Much is hinging on the Nokia release in the third quarter of its N8 smartphone, the first device running the company’s Symbian 3 operating system, which has been improved for touchscreen phones.
“If Nokia continues down its existing path, betting on Symbian, it will always be one or more steps behind Apple and Google as well as a low priority for applications developers,” Adnaan Ahmad, a London-based analyst for Berenberg Bank, wrote in a report dated June 24.
He says Nokia should switch to the Android operating system.
Nokia has said that future models of its N series of high-performance devices will be based on MeeGo, an operating system it is developing with Intel. The company said last year that it would use the new software on its most powerful mobile devices while continuing to develop Symbian.
Mr. Kochikar’s team is charged with introducing developers, who have long complained about the difficulty of Nokia’s smartphone platforms, to the better tools, including Qt, a cross-platform development environment that could be a “secret weapon” for Nokia, according to Mr. Garner. “To develop apps of the same functionality on the iPhone and Nokia, you’d be looking at three, four times as much effort on Nokia,” says Andy Nugent, a director of Manchester-based Ravensoft, a software development company. “We really like the push toward Qt. It’s easier. You get better-looking results.”