Phone
Then in February, he invested in an Apple Inc. iPhone and started loading it with applications. He finds Helsinki restaurants using eat.fi, identifies songs on the radio with Shazam, checks the weather for cycling, follows the Huffington Post, and gets European football scores on his iPhone.
Nokia is unlikely to win him back anytime soon.
“If I just wanted a phone, Id buy a Nokia,” said Iso- Markku, a 34-year-old officer at OneWorld Finland, a non- government organization. “I wanted something more like a small computer.”
Iso-Markkus switch shows how Espoo-based Nokia, the worlds largest maker of mobile phones, is struggling against application-rich competitors such as Apple as customers increasingly want their handsets to be catch-all devices. As more and more of the industrys battles are fought on content, Nokias piece of the $50 billion market for smartphones, the industrys fastest-growing segment, is shrinking.
“The Apple store provided a very simple path for developers to create stuff and get it into the hands of users, and theres no question theyve done it more effectively than anyone else,” said Nick Jones, a Egham, U.K.-based analyst with industry researcher Gartner Inc. “Now everyones playing catch- up to Apple.”
The irony is that Nokia should have been way ahead of rivals on software. It had the first Internet-enabled mobile device in 1996, even before mobile broadband was available. Its Nokia Communicator was a narrow handset the size of a paperback book with customizable applications and a full Web browser.
Market Share
The failings on software are costing Nokia some market share even as it ramps up its own Ovi Store for applications.
Nokias share of worldwide smartphone sales fell to 41.2 percent in the first quarter from 45.1 percent in the year- earlier period, according to Gartner, while Apples doubled to 10.8 percent. Smart phones run sophisticated applications and can handle large amounts of data. They accounted for about 13 percent of Nokias total sales of 468 million handsets in 2008. Most phones Nokia sells are medium and low-end mobile phones, while Apple only makes the iPhone.
Nokia faces other rivals in this segment, including Palm Inc., which this month started selling its newest model, Pre, and opened its App Catalog with 18 applications. Research In Motion Inc., maker of the Blackberry smartphones, and Samsung Electronics Co. have also opened applications stores.
Management Focus
“Software distribution didnt have top management attention or marketing power,” said Ari Hakkarainen, a former Nokia manager and author of “Behind the Screen,” a history of the company published this year by Finlands Readme.Fi.
Nokia also hasnt made it easy for software developers.
“Apple has tools for developers that are attractive and make it a pleasure,” said Tina Aspiala, the Helsinki-based founder of the eat.fi restaurant-finder service. “People go out of their way to think up things they can do to use the tools. With Nokia, its like you have an idea and then you have to slog through the snow to implement it.”
Nokias multiple devices with different configurations make designing more difficult, time consuming and expensive, developers said.
New Attention
The companys software efforts included Club Nokia for images and ringtones, N-Gage for games, Mosh for content sharing, WidSets, Software Market, and Download! Most are now folded into Nokias Ovi, which offers maps, e-mail, file sharing, games and backup of phone information.
Software downloads now have management attention. Ovi is central to Chief Executive Officer Olli-Pekka Kallasvuos vision of Nokia becoming a software provider that gets revenue from customers continuously, and not just every few years when they buy a new mobile phone.