The Prodigal Guide’s Open Letter to Nokia’s CEO

Have you read the Prodigal Guide’s Open Letter to Nokia CEO, Olli-Pekka Kalasvuo?

It’s been doing the rounds since it came out on Thursday last week and — well, frankly it makes for depressing reading.

But I don’t think it’s going to get better any time soon. There are indications from Nokia that they’ve got the message. We’ll get a very good idea of this when we see the next set of Nokia handsets. I’m sure they’ll have a few announcements soon.

In the meantime, super work, Prodigal Fool — I really enjoyed your letter.

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

3 replies on “The Prodigal Guide’s Open Letter to Nokia’s CEO”

Some good points in that letter that need to be said, but some bad errors too. The whole letter is undermined by saying “The fact is that your market share is flat at the moment and, unless you act today, you’re going to start losing it.”. This is 100% wrong, and the exact opposite is the truth, and the Fool should make an edit to the article – surely they wouldn't incorrectly leave it there just to support their later assertions?
“Nokia's device and service division's profits were up 130% year on year, Margins in devices and services were 14.9% (up 5.5% YoY and 3.5% QoQ), Converged devices sales (smartphone) were 20.8 million, compared with 15.1 million units in Q4 2008 and 16.4 million units in Q3 2009. As such, worldwide converged device ('smartphone') marketshare increased from 35% to 40% sequentially”.
Meanwhile Apple marketshare was flat which is seriously bad news for them as Tomi Ahonen has said “The Christmas quarter had previously been a big growth quarter [for Apple], now they only maintained their relative position. The really bad news is that the first quarter of the year is then always bad sales for Apple all the way to June when the next new model is released. Apple's iPhone 3GS is now seeing a lot of competition from ever better smartphones that are cheaper, or have better 'specs' and the 3GS starts to look very outdated to customers.”.

And the Fool was saying…?

The second point to pick up on is point 3 “Put an end to penny pinching”. Yes if they're talking purely about Nokia's highest end smartphones, the Fool may have a valid point though I haven't confirmed spec for spec vs. iPhone (etc). But then I could pick up on iPhone's rubbish camera compared to Nokia's generally Carl Zeiss ones which are acknowledged as the best around, or the iPhone's GPS which really is pretty inferior (hence the necessity for the hardware add on for iPhone TomTom). But outside the high end, the Fool's suggestion is just plain wrong.

If we can get smartphones into the hands of those in the developing world we can give them the true personal computing they currently lack, not to mention poorer people the world over. Nokia is the only handset maker pushing down into the low end smartphone sector, high end featurephone sector. Also the Symbian Foundation has as a stated aim to push smartphones cheaper and cheaper. Nokia rules in the low end smartphone sector and in the developing world. Most mobile market growth is now in the developing world. This will be a perfect storm of success for Nokia and Symbian. Most commentators have yet to spot this, obsessed as they are with shiny iPhones etc.

So penny pinching is essential, and highly welcomed. Mobiles do not just exist to help rich spoilt developed world consumers enjoy yet another different form of entertainment. They can also exist to help much greater numbers of the poor have real computing power in their hands, in a way that laptops etc never ever will.

Other than that, some fair points, lets hope Nokia read them.

There are some good valid points raised in the letter. I think points 5 and 6 are particularly salient as they spoil Nokia's reputation in the high end smartphone segment.

The buggy first versions of the software in recent Nokia S60 phones is a major issue which has also been pointed out in AllAboutSymbian. In the last podcast I was listening to they were particularly scathing towards the X6 whose music player can't cope with having large number of media files to process, and is thus is not even fit for its purpose as a music playing device with large storage capacity.

My personal experience getting a phone fixed at the Nokia Store on Regent St was OK. However, a major problem was that for the repairs my phone needed (my 5800 was one of the earlier ones which had the earpiece issue) I had to go without my phone for a week (I can only get to London on weekends). This is a big issue if you don't have a spare phone. I have not had to use Apple's support service yet so I cannot compare, though.

Alex's reply has a very good point about penny pinching – in the lower end smartphone segment where buyers are more price sensitive this penny pinching is what Nokia does to make feature-laden smartphones more affordable and still make some money from them. It does, as he says, put real computing power in the hands of those who cannot afford PCs, and this is why I think Nokia is a great company. Certainly in terms of number of devices worldwide Nokia/Symbian is virtually untouchable in the near/medium term.

However, the argument for penny pinching no longer holds when you move up the model range to the high end flagship Nseries devices for which Nokia charges more than £400 SIM free. It does not seem fair that the buyer of an N97, for example, gets the same ARM11 processor and 128MB RAM as the buyer of a Nokia 5800 which costs half as much. A premium model needs to be better specified in every respect to justify the extra money spent on it; high end buyers are less price sensitive but they still expect to get more in return for the extra money. This, I believe, is the point of the open letter.

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