Wednesday, October 27, 2010

Things you might need to accept about Nokia

"The customer is always right" as goes the saying, but there's still one irrefutable fact invisible in this saying. This is the lack of power of the customer to affect the product he is being sold or is buying. It isn't quite as straight-forward as this in a long-term perspective, but irrefutable in the present moment: the customer cannot affect the product he is buying.

I think this is an important thought when we think about how people perceive Nokia and on what grounds they base their demands towards Nokia.

This will be another "thinking straight about Nokia" feature, where I will share with you some (in my opinion) common misconceptions about Nokia and business models Nokia might pursue. This piece attempts to address all common gripes I hear about Nokia on a regular basis.


Accept with me now: "Nokia is a business"

First and foremost, Nokia is a business. Therefore Nokia operates on exactly the same basis as the company that provides you the tapwater you bathe in or the company that provides you milk to drink: they're there to make a profit. Difference is, you might not be quite as demanding or even aware of the difference in attitude you have for these different companies.

For example, very often you'll hear people issuing demands for Nokia in respect to their product line-up, choice of OS or overall market strategy. You'll hear people asking for latest features for their age-old products or demand reprimands for when their device receives its successor. Here people show a total lack of understanding for how a business works, which of course is based on getting customers, getting the maximun amount of money from the customers and to constantly generate new products for people to buy to keep your company gaining new venues for gaining more money.

People rarely base their expectations on such realities when talking about high-tech, but hardly ever question if in fact the water from their taps could be bought cheaper or if the watercompany should somehow remember you for being a long-time customer. After all, most people drink the same water from the same company for their entire lives! But only Nokia receives demands for giving former customers new devices when, for eg. a device has flopped (à la the N97 and sometimes when talking about the N900). I often wonder if people understand that even the cheapest supermarket they know is in fact making a profit when they're selling milk at the lowest price. Based on the incredible demands I've heard said out aloud to Nokia, I'm tempted to think that they don't. If any company had to reimburse all their customers at the slightest whim, not many businesses would still be around.

Nokia will rather lead than follow (read: OS strategy)

Nokia is a pioneer in the mobile business. You know this. It's just that lately it hasn't really seemed that way with iPhone ads on your TV, Android populating tablets as well as smartphones all over the globe and the internet being full of pro-iPhone and pro-Android banter. Where is Nokia in all this? Still releasing Symbian based devices? Well, yeah. But I still dare claim that Nokia's strategy is to be a leader, instead of a follower. Let me explain.

The easy solution in many peoples' minds is that Nokia should adopt one of the now popular platforms that have surfaced relatively recently. We all pretty much agree that Nokia's hardware has been pretty good so far, mostly we just dislike the UI of the Symbian operating system. So, why not load up Nokia phones with Android or Windows Phone 7 and be done with racing with the competition?

Well, we know what Nokia's answer is: to stick with Symbian. And MeeGo for the highest of the high-end. MeeGo is nowehere near release (probably only around mid-2011) and Symbian just feels really outdated, even the latest Symbian^3. Still, this is no reason for Nokia to adopt Android or WP7. Here's why: to adopt Android would for Nokia mean that they had nothing to compete with, so they had to adopt a winning platform. This is bad for Nokia in a pride sense, but also when thinking about the future. What can you compete with if you have exactly the same weapons as your competition? Now, Nokia will tell you that Symbian and Ovi are unique strengths of Nokia, but personally I feel that more about what Symbian and Ovi can possibly become in the future. This is Nokia's strategy. To develop what they already have towards a greater vision. Its just like Anssi Vanjoki put it, to adopt Android would be Nokia "pissing in its pants for warmth in the Winter". It's nice and warm at first, but in the long run you'll freeze and be more cold than before the urinating.

Nokia plans to provide everything for everyone (read: device strategy)

There's another point that Nokia is absolutely adamant about: offering everything for everyone. In practice this means that Nokia will push the bar lower and lower to get higher-level features and functions into cheaper phones. Sometimes Nokia receives criticism for blurring the difference between a high-end device and a low to mid-range priced device, as some features may appear to be the same. You can get 5Mpix devices in pretty much all price-points.

As I'm also in sales selling mostly Nokia products (I live in Finland after all...) I sometimes grow incredibly fustrated in the way Nokia prices its devices. Very often I'm faced with a situation where two devices have identical features, but the price difference between two devices can be up to a hundred euros. It's really difficult to try to explain to the consumer which is the better phone for them, but above all its really difficult for the consumer to decide which device to choose. I, as someone who's really interested in mobiles, know that if you get a 5Mpix phone for 200€, it probably won't have the optics of, say a 400€ device with the same amount of megapixels in the camera, meaning that the 200€ device will take far poorer pictures than the 400€ one. But the average consumer has nothing else besides listed statistics to choose from. Even worse, Nokia packs Carl Zeiss optics into cheaper devices as well, but in the end they still don't take pictures as good as the 400€ device for reasons that even I can't be sure of.

It simply has to be understood, that Nokia has a streak of altruism running through its every policy, meaning that Nokia doesn't want to constrain anyone from getting a Nokia phone just because they can't afford it. This results in just these "invisible differences" between devices and the feeling that Nokia is producing a thousand models per year. Nokia creates a variety of devices for every single price point to offer the best selection of devices regardless of how much money you are ready to invest in a new device.

Acknowledgements

I understand how it might seem that I'm completely settled in a position where I perceive that I have no power over what I buy and that I don't believe that you can influence service providers. As much as I think that people should be active about trying to influence all things around them, including hardware vendors, I think people could sometimes use a reality check. This is my aim in writing this piece. I am all for demanding more and more goodness for the consumer and feel that this is in part the role of companies: to answer to the needs of consumers. And I stress: Not the other way around. But I must persist, that you need to take into account realities so that you can form constructive opinions and suggestions to your service providers so that maybe one day one of your ideas will go through and you will get what you want.

4 comments:

  1. NEEDS MOAR RAGE.

    Kidding. It was delightfully insightful.

    ReplyDelete
  2. Okay, next time I'm a bring lil' more SPUNK!

    No I didn't mean for this to be a rage-piece. I just wanted to address some common views that always fly about and give them a basis in reality.

    I my self am somewhat a Nokia fan boy even though the only satisfactory Nokia product in my eyes is the N900. But oh how do I love my N900... :)

    ReplyDelete
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    ReplyDelete
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