Who are Nokia’s biggest customers? Is it Finns, Europeans, Indians? No! It’s the mobile operators (carriers). Only around 20% of mobile phones are sold through other channels than through operators. If a company wants to succeed in this business it needs to have exceptionally good operator relationships and products that operators will want to sell. This has little to do with actual consumer demand. In many countries it is fairly impossible to buy a so-called unlocked/operator free phone. Your choice is ether to get one of the devices that the operator is offering or nothing. This means that product’s sales are not bound to its quality, but rather availability. Assumption that sales of mobile phones would indicate consumers preference towards platforms (Android, Symbian etc.) is false. All it really indicates is which devices the consumers prefer out of those that are available for them. There are also other factors that affect the purchase, such as price of the service plan, network switching costs and point of purchase to name a few. In another words, people buy what they are offered, and nowadays it’s increasingly not a Nokia. In Italy the phone of choice is still often a Nokia, in Latin-America it’s a BlackBerry, where as in Australia it is the iPhone whereas Androids are really hard to come by. Does this mean that Italians prefer Nokias over iPhones or that Australians don’t like Android? No! It only reflects what is available and at what price. I bet many Finns would love a BlackBerry over a Nokia, if it was available.

Nokia’s smart phone strategy, especially with touch devices, has been to concentrate on low-end devices. Sell to the masses. Nokia has offered massive amounts of devices to operators with hefty discounts. Lately, this has also been Nokia’s only option to stay competitive. Especially in networks that offer devices from all the competitors. This is the situation mainly in developed countries.

The thing is that the operators know very well that they are the main customers. Thus, they try leverage this any which way they can. The power of operators has decreased somewhat after Apple changed the game. But it does still exist. What Nokia would need to do is to make Symbian instead of S40 their “cash cow” and offer it to operators with such a good premium that no-one could turn in down. Operators will advertise and push whatever device or platform that gives them the best profits, this is a fact! In order for this strategy to be effective, Nokia should increase (not decrease) their product portfolio. Offer a device for every segment and at every price point.

American operators

Honestly, I don’t see Symbian ever succeeding in the USA. There is just too much prejudice and negative attitude towards it. What Nokia needs is a modern OS. I think the best strategy would be to introduce a device with the absolute best hardware and a new OS. The price doesn’t really matter; the point would be to show the American consumers that Nokia is back! And then offer this device subsidised through some major operator. Same could be done in Europe and other places as well. But in those markets the product portfolio would be bigger and include Symbian and S40 as well. I think S40 Touch-and-Type devices could also work in the USA, if subsidised.


Nokia should give operators free hands to develop Symbian and design their own devices around it. It has become evident that operators are not too keen on Apple’s terms or with the fact that Android is so tide up to Google’s services (which are free). Some operators such as China Unicom are pursuing their own mobile phones developed in-house and coupled with their own operating system. Operators clearly have the ambition and interest to differentiate their offerings from the competitors. Why not do it with Symbian and Qt?

What ever Nokia will announce next Friday will emphasize strong operator relations and a strategy that will consist of multiple operating systems. Operators have their demands and Nokia needs flexibility in the form of a large portfolio to fulfil these needs.

Update 8.2.11: According to Finnish Kauppalehti (financial newspaper) Vodafone, Telefónica and France Telecom have asked Nokia not to use Android or iOS, but rather to stick with MeeGo. According to sources Windows Phone 7 would also be an acceptable alternative.

Part 4/4 will be published in a week.

Nokia talks strategy – Part 1: Possibilities

Nokia talks strategy – Part 2: Speculation

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