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An outgoing high-ranking executive of Nokia said that usage of Google Android operating system would eventually reduce differentiation between manufacturers and phones, which would easily inspire price wars and dramatically reduce profit margins among makers of mobile phones.

Anssi Vanjoki, outgoing head of Nokia’s smartphone division, in an interview with the Financial Times compared mobile phone makers that adopt Google’s software to Finnish boys who “pee in their pants” for warmth in the winter: temporary relief is followed by an even worse predicament. By contrast, Nokia is funding development of MeeGo and Symbian operating systems, which gives its phones a deserved difference compared to competing products.

But it costs too lot for Nokia to keep everything in house: the company spends roughly 10% of its revenue on research and development (R&D), while companies like Apple spend about 3.5%. One of the options for Nokia is to adopt Google Android platform, cut the spending and concentrate on things like design. Unfortunately, there is a problem for Nokia, which Apple - the company that commands less than 1% of cell phones market as well as a fraction of PC market - simply does not have: it has to develop tens of models per year to serve over 30% of the market. As a result, large R&D budgets are compulsory for Nokia. The company has dropped several software projects in the recent years and started to install open-source applications.

The immediate problems of Nokia seem to be different than spending on MeeGo or Symbian. Traditionally Nokia has announced its products months before actual launch; it worked when the rivals were weak, but it does not work today, when companies like HTC or Samsung can offer very competitive products and Nokia's handsets simply get outdated before they reach the market. Moreover, as the biggest market player, Nokia cannot afford updating firmware of its phones constantly unlike other companies, who carry just a number of models.

Even though it costs a lot to develop an own operating system for mobile phones, loads of companies are doing it: HP continues to work on webOS, Samsung is developing Bada. Perhaps, designing of own operating system is better than relying on a third party and becoming a maker of commoditized devices based on a popular OS?

Tags: Nokia, Symbian, MeeGo, Bada, webOS, Android, iPhone

Discussion

Comments currently: 3
Discussion started: 09/23/10 12:26:22 AM
Latest comment: 09/23/10 12:41:35 PM

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1. 
Just 2 months ago, I was using a nokia E51, which I thought would last me a long time. Last month, I switched to HTC Legend because of 1 thing: web browser.
Another thing is that my dad has a Nokia N95, and when I need to change something on his phone, I never find what I want (although my E51 has the same platform). So the "deserved difference" is what I hate from the phone market. Granted, you should control what the phone is doing (like automatic sync updates), but by providing similar interfaces is how you can capture more people (because switching phones should be easier). That is how MS got it's desktop share.
0 0 [Posted by: mathew7  | Date: 09/23/10 12:26:22 AM]
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2. 
I also went with the Nokia E71 thinking that it would last me a long time. Heck, on paper that thing looked incredible - build quality is excellent, physical keyboard, and only $250. GO Nokia! .. .. Err wait.

I get the phone. Okay, it doesn't seem bad... Until I try to install applications off the net - only to realize they need to be signed in special ways. The signing can't be expired and/or needs to be signed SPECIFICALLY for my device. Wow. I need to read threads upon threads on how to sign these applications before I can use them.

Bluetooth to my car was brutal. I bought my deck in my car specifically for bluetooth use (and mp3/ipod of course) and so that feature is a deal-breaker for me.

Web-Browser. Don't get me started. Loading 1-2MB pages would cause the thing to hang more than Ron Jeremy and most of the time give me "Out of memory" errors - a common issue. Plus, it was slower than molasses.

Some friends told me I was dumb for going with this Symbian phone. I figured I'd give it the benefit of a doubt. However, there are so many unpolished things about this phone - it's crazy. And Nokia refuses to acknowledge or fix these issues.

I promptly returned the phone. Luckily my friend gave me his extra iPhone. Sure, the battery life isn't nearly as good as the E71, but if I can't use my phone then what's the point in having it.
0 0 [Posted by: precurse  | Date: 09/23/10 10:45:41 AM]
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3. 
What can I say... this is what you do when you do not know to make it better: start to point out vague advantages plus vague flaws on other companies products as for those with no O.S. awareness will believe such statements are relevant than perhaps Nokia will sell some more phones for a few more months... always relied on Nokia phones but I want no more Symbians on my next high end phone. Cause when I finally decided to go for a full spec model instead of simple Joes I bought the X6 16Gb due to free Ovi Maps and a big list of nice capabilities but it broke my legs. If the Symbian was a desktop OS it would be Win 3.11: do the very basic / elementar stuff and it is great but do any multitask or expect any app compatibility or any usefull one to be compatible or try to convert any kind of video to play in it and you are in for great let down. Even my wife's chinese Hiphone clone is much better. But not the touch or battery though.
0 0 [Posted by: fullgrip  | Date: 09/23/10 12:41:35 PM]
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