Mobile markets keep everyone guessing

Developments in the mobile sector over the past few weeks look likely to bring more change to what is already a highly volatile market.

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Mobile markets keep everyone guessing (ITP Images)
By  Mark Sutton Published  July 22, 2012

Developments in the mobile sector over the past few weeks look likely to bring more change to what is already a highly volatile market.

Google announced the latest version of its Android OS, and dipped another toe in the hardware market, with the release of its own-branded tablet. Apple remains tight-lipped as ever, although the buzz is building around iPhone 5, which is rumoured to launch in August. But the really interesting news came not Google and Apple, the two challengers turned leaders in the mobility sector, but rather from the past leaders RIM and Nokia.

To look at RIM first, it’s becoming increasingly hard to see a future for the company in its present form. Last month RIM announced a 33% drop in revenue, and that its BlackBerry 10 handsets have been delayed until the start of next year. For the company that once set the bar on enterprise mobility, it looks like a fatal delay. I’ve spoken to more than a few mobile developers who are deserting the platform, and IT managers are turning away too. As business end users increasingly choose their own devices, they just aren’t willing to wait for a new BlackBerry. There are plenty of other devices to choose from, and businesses are rolling out Mobile Device Management solutions to accommodate those choices. RIM’s CEO Thorsten Heins has warned of more belt-tightening, but RIM needs a radical solution that will likely involve opening its platform or selling off the hardware business to continue.

A more interesting picture is painted by Nokia. The Finnish phone giant also announced in June that it was ‘sharpening’ its efficiency measures – ie. cutting more jobs, shedding R&D, manufacturing and business units. I don’t think the picture for Nokia is quite all doom and gloom – but it is going to need to line up the ducks if it’s going to make a comeback.

For a start, unlike RIM, Nokia’s hero phone, the Lumia is available in several markets, and getting good reviews. The partnership with Microsoft, and switch to Windows Phone OS, looks like a good move, even if the two companies haven’t been able to deliver the Lumia to the Middle East yet, and good reviews haven’t translated into strong sales. Nokia’s integration with Microsoft is appealing to business users, however, because it promises to fit with their Office deployments and applications. It is also a plus for developers, by giving a familiar platform to work on.

The next step however will be critical, with the shift to Windows 8. Windows Phone 7 isn’t upgradeable to 8, so anyone looking at Nokia Windows phones at present, can either buy now and get stuck on 7, or wait for 8 – and there are no guarantees of when 8 is coming, or if it’s going to deliver everything that Nokia and Microsoft hope it will. Nokia needs Windows 8 sooner rather than later, and it needs it to be good.

Microsoft’s decision to release its own tablet range based on Windows 8 could also be a boost to Nokia, in terms of showing what a tight integration between hardware and software can deliver, and in proving a commitment to the wider ecosystem.

Nokia also needs to maintain an effective investment in R&D. The company was a famous big spender on research, but the cutbacks have included the loss of some R&D facilities. In a highly competitive market, Nokia needs to capitalise on the strengths it has in technology like location-based apps, and to continue to add new technology to differentiate itself. The Android market is looking a bit homogenous, but to compete with Apple, it has to provide the ‘wow’ factor.

So if Windows 8 Phone actually gets to market in a reasonable time frame, and delivers on all its promises, if developers commit to the Windows platform and Nokia retains its ability to crank out standout handsets, then we could still be looking at a three horse race in the mobile sector.

Or perhaps not. Nokia chairman Risto Siilasmaa recently hinted in a television interview that the company wasn’t quite betting everything on the Windows OS. Siilasmaa wouldn’t be drawn on details, but he hinted that Nokia has an alternative in case Windows 8 is not up to scratch. What that alternative might be, and whether Nokia really has an alternative to making a success out of Windows 8, remains to be seen.

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