At the press conference last week, Nokia’s CEO Stephen Elop repeated his now standard mantra about the company’s change in direction, announced February 11, which will culminate in tossing out the Symbian operating system in favor of WP7. But that won’t happen right away. Until 2016, plenty of handsets for the masses will be produced running Symbian. The company’s flagship devices will be based on WP7 and Elop assured journalists worldwide that he is “very optimistic” that the first of those smartphones will be unveiled later this year and will ship in volume in 2012.
In the meantime, something needs to be sold to cover some of the company’s operating expenses, and so Nokia whipped out the pacifier N9. It is a lovely handset. Nokia has always done hardware well. But since its operating system is an albatross, the N9 will likely only have limited appeal in markets where Nokia is still strong and handset subsidies are uncommon. Saudi Arabia is one such market and Nokia claims that consumer focus groups in the Kingdom have been favorable to the device.
While work toward WP7 continues, Nokia will have no option but to release more Symbian smartphones. Elop advised that over the next year up to 10 more are planned. And in July, Nokia will start shipping Nokia N8s, E7s, C7s and C6-01s loaded with a renewed version of the Symbian operating system (OS), known as “Symbian Anna.” Consumers who already own any of these devices will be able to download the updated OS in August.
It is likely that Nokia will have the most success in coming months with its feature phones. At last week’s event, the company unveiled the C2-03, a touch and type dual SIM phone that features “Easy Swap.” With Easy Swap there’s no need to turn off the phone in order to change the SIM card. This is ideal for individuals who travel or for those who use multiple SIMs due to differences in call pricing. The primary SIM is kept in a holder inside the phone, but a second SIM is placed in a holder on the side of the phone for easy access. That SIM can be changed at anytime without shutting down the handset. The C2-03 will also offer an enhanced web, maps and messaging experience as well as an FM radio, media player and memory support to 32 GB.
On the sidelines of the event in Singapore, Imran Mahmoud, GM, Nokia International Oyj based in Saudi Arabia and GM, Near East, Nokia Corporation, discussed Nokia’s still overwhelming position in the Saudi market. He stated that in the Kingdom consumers are very favorable to Nokia as a brand and across Saudi Arabia, Nokia is outselling all other cell phone manufacturers for both smartphones and feature phones.
Mahmoud chalks up the company’s success here to the huge network of care locations throughout the Kingdom, particularly the emphasis on second and third tier cities. Nokia also has the largest app store in the Kingdom with about 1.2 million weekly downloads from Nokia’s Ovi Store to its handset users located in Saudi Arabia. Downloads in Saudi Arabia since the Ovi Store was launched total around 45 million. Globally, the company has more the 100 app developers who have achieved more than one million downloads.
“My consumer lifecycle tells me that an average Saudi consumer waits for 12 to 18 months and then switches to a new phone anyway,” said Mahmoud. “You can buy an N8 today and then the Windows phone will come in. I can fulfill my brand promise and compete. I have more relevant content then Apple. I have more running on my devices than Blackberry. I am still meaningful to the average Saudi consumer. We have not fulfilled all the promises that today’s consumer expects from a smartphone, but at the same time for Saudi Arabia, 80 percent of the market is in the feature phone arena.”
With all the emphasis on the importance of local content and being locally relevant, it was strange to realize that Mahmoud is unable to interact in the most personal of ways with Saudi consumers since he doesn’t speak Arabic. Unlike other global tech companies such as Microsoft and HP, Nokia hasn’t seen the value in having an Arab as country manager for the Gulf’s largest market.
“I don’t believe that you need to have the local language to understand consumer insights,” explained Mahmoud, “because consumer insights are always given to you on a page. As a marketer, if you have to get down to being language specific then actually in my view, you’re shortening the vision. I’m a marketer. I can sit in a cafe and watch people walk by and understand a certain behavior.”
Mahmoud depends on research companies to pull the consumer data from Saudi Arabia and interpret the consumer insight interviews. Some Saudi consumers and channel partners are able to explain to him their “needs and desires” in English. But explaining to someone is not necessarily the same as that person intuitively knowing and understanding the Saudi psyche, especially in a nation with such a large, rapidly evolving youth population.
What does the future hold for Nokia? Mahmoud admitted that while the handset giant is still leading in the Saudi market, its position is under assault from numerous challengers. The situation for the company elsewhere is grim. It is anticipated that this quarter the company will lose its leading market position in smartphones to Samsung and Apple for the first time.
