New platform, new possibilities

Nokia has been instrumental in shaping the mobile device market, but today it is facing tougher competition than ever. Tom Farrell, VP for Nokia Middle East, says the company has the strength and the right strategy to fight back.

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New platform, new possibilities Nokia’s tie-up with Microsoft has already delivered award-winning devices, says Farrell, but the potential of the two companies lies in developing a joint ecosystem of content. (ITP Images)
By  Mark Sutton Published  June 24, 2012

Nokia has been instrumental in shaping the mobile device market, but today it is facing tougher competition than ever. Tom Farrell, VP for Nokia Middle East, says the company has the strength and the right strategy to fight back.

For mobile phone giant Nokia, the past 18 months have been disruptive, to say the least. In February 2011, under new CEO Steven Elop, the company embarked on a major strategic overhaul, dropping its own Symbian operating system and platform in favour of a tie-up with Microsoft, cutting several thousand from its workforce, shifting manufacturing to Asia and pushing to be the first to market with devices running the new Windows Phone OS.

Under pressure from both high-end competition from Apple and Android devices, and from low-end competitors from China, one of Elop’s first milestones as CEO was to spell out to company employees, in what became known as the ‘Burning Platform’ memo, how he thought Nokia had lost its lead in innovation, and the choice facing the company – stay with its existing platform and software, or jump into something new. Nokia jumped, and made the tie-up with Microsoft.

Since then however, despite delivering several well-regarded smartphones based on Windows Phone OS, Nokia has continued to see its market share decline. Analyst company Strategy Analytics reported in April that rival Samsung had taken the overall market lead in mobile shipments in Q1, a position that Nokia had held for the last 14 years.

For Tom Farrell, vice president of Nokia Middle East, the disruption is just symptomatic of the wider changes going on in the mobile sector as a whole.

“I think it is a pivotal year in the industry, and even more so for Nokia. If you look at the industry, look at what has happened in 12 months – Google acquires Motorola, Sony Ericsson split, the industry loses an extraordinary individual in Steve Jobs, Nokia appoints an outsider CEO for the first time in its 147 year history, and Nokia and Microsoft decide they are going to fight together. All this shake-out is just extraordinary – it is just an amazing industry,” Farrell says. “Absolutely we are a company in transition, it is a difficult year, but it is a hugely important year for us, we have very good momentum in this company.”

At a local level, the high degree of mobile penetration, large disposable incomes in the GCC and the young user demographic, all point to huge potential, Farrell says. The brand is well established, and Nokia’s wide product range, which goes from entry level handsets to high-end smartphones, allows the company to offer devices that suit all budgets.

Farrell also points to the success of Nokia’s app stores for the region to show that its platform is in demand locally. The Saudi app store recently crossed the 100 million cumulative downloads mark, and the company gets around two million downloads per week across the GCC, for around 90,000 apps, with social networking apps making up eight of the top ten downloads.

“What is interesting is [downloads are] across about 75 different devices, from the low price point, to very high – that tells us that mobility plays an important role in everybody’s life, everybody wants to be connected, irrespective of your income. People are really engaged with mobility, and they really want to be connected,” says Farrell.

The tie up with Microsoft has resulted in the first Nokia Windows Phone devices, the Lumia range, which has picked up awards at both the Consumer Electronics Show (CES) and Mobile World Congress at the start of the year. Farrell says that the awards, which included the overall Best of Show at CES, are proof that Nokia can still deliver innovative products, and that the new Windows Phone UI is proving to be very popular with users.

For now however, the new range is not available in the region. Farrell says it will be available soon – “the sooner the better” – but Nokia and Microsoft are working to ensure that they have all elements in place for a Middle East launch.

“We have not launched in the Middle East,” he says. “First and foremost, today, the Windows Phone platform from Microsoft does not support Arabic. As Nokia, we want to launch in the Middle East when we have a market beating proposition – you’ve got to have Arabic, there is just no debate. Secondly we want to have really strong local content and apps ready for the proposition. Third, we want retailers, mobile operators behind us, and really willing to drive this new eco-system,” Farrell adds.

Farrell is confident that the ecosystem is something that Nokia is already well versed in managing. The company has always worked closely with local telecoms operators, and it also has an established distribution channel.

“We work very closely with our distribution partners, our retail partners and our mobile operator partners. On top of that, we have really put a big focus on going beyond just the telco entities, into the application developer, software developer space,” he says.

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