iPhone Competitors: Nokia’s Convergence Device Strategy

WSJ has a good roundup on the various iPhone competitors.

One of the top iPhone competitors is expected to be Nokia’s N95, a high-end smart phone that, like the iPhone, has a relatively large color screen (2.6 in), can surf the Web and can play music and DVD-quality video. Unlike the iPhone, the N95, however, cannot access the iTunes store. It costs $749, accesses Wi-Fi, and is available in Europe and Asia, primarily, and in some US stores. It is not available through any major US carriers, making it a non-event for the US market. The iPhone, on the other hand, is primarily focused on the US right now, so the Nokia vs. Apple battle will take place in different geographies. The Nokia N95 is a dual mode (GSM/WCDMA) phone.

Quite possibly, both phones will be successful as music phones in their respective core markets, as Consumer phones.

But what about the convergence device that the industry is moving towards? The N95’s Operating System is Symbian, possibly inadequate as a full-steam OS for a laptop. It claims to be able to handle email, web browsing, Microsoft Office files and PDF documents, all essential ProSumer functions. How well? The screen size is a limiting factor, as is the size of the keyboard, for any serious office function.

What I would like to see from Nokia is a Linux phone that is somewhat larger (screen, keyboard), if they are serious about playing the convergence device game.

Nokia has had a fantastic run so far being a cellular handset company. However, on June 29th, with the advent of the iPhone, the industry will switch, and start sprinting towards a convergence device, that will impact both the laptop and the handset businesses. What happens to Nokia then?

Their lower end handset market will continue to go strong. In India, the fastest growing cellular market, they are extremely strong.
However, the lowend business is also almost a non-margin business. Thus, it is critical for Nokia to get its high-end strategy right, and in that segment, they almost need to become more of a computer company, than a handset company at this point. Apple, on the other hand IS a great computer company, but with little experience being a cellular phone company. It is, however, also the world’s best music player company, a position that it will, presumably, leverage well.

Nokia’s lack of presence in the US market is also a problem in the highend strategy, because the US consumers tend to pay for expensive gadgets. Nokia needs a strong US carrier partner to achieve this, and it may likely not be Verizon, since Nokia’s battles with Qualcomm is an issue, and Verizon is a CDMA shop. A Verizon-Nokia partnership would otherwise be perfect, because Verizon needs a strong handset / convergence device partner for the US.

Below is the WSJ summary table of the various current iPhone competitors. We will talk more about Samsung, LG and HTC shortly.

This segment is a part in the series : iPhone Competitors