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Real time example of Nokia’s utter irrelevance

I’ve published quite a lot today on Nokia. We’ve had Tomi Ahonen’s extensive piece then the Risku Manifesto post. And now, I thought I’d tie it together with this superb example of American mobile policy that totally excludes Nokia completely.

Tricia Duryee over at mocoNews reports on AOL’s VP of Mobile (“Ex-Palm VP Says It’s A Two-Horse Race Between Android And iPhone“) making it clear that since they’re ‘in the eyeball business’ it’s all about iPhone or Android.

Have a read of this quote:

As Palm’s VP of developer platform, part of David Temkin’s job was to build out the app catalog. But now as VP of mobile at AOL (NYSE: AOL), his focus is on Android and iPhone. “We are in a eyeball business. To the extent that Palm or Microsoft turns it around, we’ll pay more attention to it. It’s a two-horse race.”

Today, AOL is launching two apps for the Android, including an AOL portal and a stock-tracking site called DailyFinance. It also modernized its mobile site from being accessible on feature phones to being more multimedia heavy using HTML5. The AOL portal is the first app that’s launched on Android first before iPhone.

It’s breathtaking, of course. No mention of Qualcomm/Brew. No mention of BlackBerry although AOL do develop for the platform.

Tricia finishes the post with this statement:

Temkin declined to discuss how much of an investment AOL was making in the area, but said: “We are investing and hiring aggressively and trying to up our game, specifically in smartphones and on the iPad.”

‘Smartphones’ of course — as we’ve already seen — means iPhone and Android. Nothing else.

Which becomes a self-fulfilling prophecy.

Obviously there’s next to no decent Nokia phones in the United States for AOL to be focusing on so, the strategy of focusing on iPhone (easy, the senior executives like it) and Android (a growing presence) makes (some) sense since the company is, I imagine, only interested in America’s 200-300m consumers.

There’s no point AOL developing for Nokia.

Nokia is nowhere in America.

So AOL doesn’t think about Nokia.

So when their executives speak, they talk iPhone and they talk Android. (And sometimes RIM).

But they never, ever talk Nokia.

Nokia is laughed out of the room as a genuine irrelevance.

The problem with is is — as we’ve oft commented here at Mobile Industry Review — the rest of the planet generally pays attention to what America thinks and does, especially in the West. And the pervasive view (‘Nokia is haemorrhaging market share against the iPhone’ — entirely false, by the way) becomes the accepted one.

So Nokia is nowhere.

So in the UK, where Nokia has a phenomenal smartphone presence, Nokia is nowhere to be seen in terms of development. Why? Because it’s iPhone and Android man. Even the guy at AOL says so. (Which quickly gets distilled into ‘Everyone says so’ and ‘received wisdom’).

So when you unwrap your new N8, that’s why there will be next to nothing decent available for it.

Anyway, I wanted to document this because it’s a good example for when utterly, utterly stupid Nokia executives tell me otherwise, I can look this post up quickly.

You can check-out AOL’s mobile site here: http://mobile.aol.com/

(Found this via David Wood’s tweet)

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.

52 replies on “Real time example of Nokia’s utter irrelevance”

Love the Dropbox quote. Although I’ll still buy the N8 if only for that camera. This time I’ll wait a little while before ordering it so as not to be burned à la N97… What an utterly bollocks device!

Of course, the fact that the N8 comes with video editing, social integration and push email (and much more) out of the box does mean that many of the killer apps on other platforms don't need to be developed for Symbian – it's by far the most complete out of the box solution. You almost don't need the Ovi Store at all.

Maybe to buy the odd game or Gravity 😎

Nope. But the man in the street buying an N8 won't even know what Dropbox is. 😎

Also, the Drop box mobile web site is great for picking stuff out of your online disk on-the-fly…

Aye… I could go on all night. This is the fundamental issue though, isn't it Steve — the fact that the smartphone buyer expects some level of parity with what the consumer consciousness has come to expect (i.e. iPhone style)

Actually the issue is really about control, Apple's iPhone, and Android give the U.S. Carriers the illusion that they still have some control of a smartphones features and services. Or Rather a Delusion of control, in the case of Apple's iPhone, Job's thinks he's in the drivers seat. Other players in the market are only in the U.S. market as arguments to the carrier in control illusion. Nokia just doesn't kiss enough ass.

It's certainly true that if someone comes to, for example, the N8, expecting iPhone ecosystem apps, they'll likely be disappointed. But then the N8 beats the iPhone in other ways, in terms of out of the box functions, camera, speaker, USB, openness, price. I could go on all night too 😎

Apps are nowhere near as important as you make them out to be Ewan. They couldn't be. Otherwise why has Nokia which is alleged to be: Nowhere, dying, running a crap OS (Symbian), having a crap and out of date flagship (N97), zero mindshare anywhere, no apps, [insert nonsensical accusation of choice here]

– why then has Nokia just sold it's most ever Symbian smartphones in a quarter, grown sales again, still on 41% market share and so on and so forth.

I've given up taking these sorts of posts from you seriously Ewan because for all your mighty experience, you have lost your objectivity and balance and been sucked into the warped and weird world of the American view of mobile.

I am STILL not the slightest bit worried about Nokia's position or prospects. This is a hiccup they're going through at the moment. They will execute correctly and retake the high end. Android will plateau and iPhone will remain niche as it was always destined to do. You wait – you'll be crowning the N8 and Meego devices king of the hill soon.

Surely AOL itself is an irrelevance – and now it’s suddenly returned to being a trendsetter? I’m not convinced that anything AOL does is an indicator of any kind of trend.

From the perspective of a smart consumer who is trying to make the most out of their money. One of the reasons why Apple is still successful, even though other mobile devices are able to easily outshine the iPhone in out of the box functionality, is due to the American mentality of not really researching their purchases.

I tell someone I paid $500 for my unlocked N900 and it was cheaper than their iPhone and they don't even stop to think about what comes out of their mouth next: “It only cost me $200!” Depending on the person I give them 5 to 10 seconds to think that over. Not one single person has corrected themselves. $200 for the device and $30(when it was priced such) for the required AT&T data plan for the length of the two-year minimum contract. Total cost of ownership for iPhone: $920.

Unfortunately, that same mindset carries to applications. It doesn't matter to these consumers that some non-iPhone devices can do everything and more without having to purchase applications. It doesn't even enter their mind once. Those micro-transactions are a way of justifying their purchase to begin with, it makes them feel like they are really making the device purchase a worth while investment. Usability aside of course, I am making the assumption that most applications have a near similar level of functionality and productivity in their given field, which is mostly true.

Apple made the single most strategic move I have ever seen a company make in the US: They released the slickest, coolest looking, well-built, user friendly, DUMBphone knowing people would gobble those applications up since the device lacked native functionality. It has worked very well for them and sadly, some other companies are trying to follow the flawed business model.

I believe Nokia is resisting it and hoping it blows over, which it eventually will, but can they stay afloat long enough?

Nokia’s star is fading and they have to do something special to rescue it. There appears to be lots of anecdotal evidence to substantiate this, not least in their results, whilst market share is holding up their margins are plummeting. There is no cachet in owning a Nokia phone. In the first mobile revolution young people wanted a Nokia phone because the aspirational role model owned one. Now they want iPhones, Androids and maybe Blackberries. Nokia are the Levi’s of the mobile phone world, remember 501’s. If Nokia want to regain relevancy they need to make some hard business decisions.

The best anecdotal evidence of their decline is a trip to the local mobile store. All the phone’s are identical and it is impossible to really differentiate the different manufacturers. That is except for the iPhones, which have a special area and tariff that marks them out as a premium product and phones powered by Android. The Nokia’s are on a shelf with everything else.

All that differentiates the phones now are the services that run on them. This is where Nokia are at a complete disadvantage. As an example Nokia maps service. How can this realistically compete against Google or to a lesser extent M/Soft maps? To use the Nokia service I have to buy a Nokia phone and then experience the benefits of the service. I use Google maps everyday on my computer, I like it, it works and provides me with the services I need. Android supports Google maps I know what it does and how to use it so why are people going to migrate to Nokia maps and see this as a key benefit of owning a Nokia device.

Nokia have to make a decision are they a hardware company or a service/software company. If they were the latter they would look to exploit maps across every channel they could. Instead it is a feature on their handsets that just doesn’t compete. Whilst they are the dominant handset OEM they have no chance that the rest of the OEM’s will adopt whatever OS they develop. It doesn’t matter if it is the best OS in the world Motorola, HTC, Sony Ericsson etc.. aren’t going to support it as it cedes too much of an advantage to Nokia.

I may be opening myself up to a world of abuse but … your $500 device N900 – do you not connect it to any data plan or call plan?

$500 for the handset + 2 years worth of calls to ensure it’s a fair comparison etc… I’ll give you the benefit of the doubt and assume a cheap plan of $20 is possible – I’m not in the US, so I don’t know but £15 seems cheap.

That’s $500 + $480 = $980

I’m not a fan of Apple but your argument (or the way you presented it) seems just as short sighted as the argument that the iPhone costs $200

Oh, and it’s hardly a flawed business model if “DUMBphone knowing people would gobble those applications up”

I don't necessarily disagree with your post. It's a lot about perception over facts. Nokia is not able to use the facts (41% smartphone market share – as reported yesterday) to their advantage. And in US the fact is not 41% but closer to 0.41%.

But you gotta love the irony of this statement coming from AOL – who tries keep up in a one horse race (and that one horse is Google). Should there be other contestants, I would not bank on AOL, but rather on Yahoo or Microsoft.

I think apps are important. And they will be. The question is going to be: will developers continue developing same apps on multiple platforms? That's one of the reasons Nokia did not succeed in applications: Developers did not want to develop the apps over and over again to make them run on new OS versions. (I suppose Symbian was not the easiest platform to develop apps on in the first place).

For developers there are three / four options:
1) develop for multiple platforms (iOS, Android, RIM, Symbian, Win 7 mob, Bada?) – will be expensive as hell.
2) Support only few of these (iOS, Android) – but that'll exclude > 50% of current potential customer base.
3) Go with a common “runtime” – which could be Qt (if Nokia gets their way), Flash or HTML5 (Apple has already closed the door on two of these.)

I'm putting my money on HTML5. If that becomes the standard to develop apps on – it'll be a major blow to Apple's walled garden – and winners would be Android and Nokia [I suppose].

I posted a commment on a nokia post a few weeks ago on here about their falling status etc.

The same thing is being said here. Everybody pro Nokia (i.e. they are fine etc) don’t seem to have a clue about consumer mindshare, marketing etc. and keep thinking that consumers are rational purchasers that purchase based purely on price and feature sets.
They do not taken into account the cache of owning a certain brand. Ewan is one of the only people on here combining the techy arguments with the branding/marketing and crucially ‘perception’ side of things.

There seems to be no appreciation for how things can ‘change’ and people are stuck in the mindset of current figures etc.

Alex being an unbiased symbian developer, says its not fair to compare N8 sales with iphone 4: of course it is, its flagship device against flagship device. Mentioning the better hardware feature set of the N8 again and again shows no understanding of a consumer and that this is now more of a software business and he is living in the past.
The iPad didnt have a usb port, fron camera, does not support flash etc. and every tech blog was bashing it upon the announcement of its feature set. It has now sold over 3 million of these (earning a few billion in the process) in three months for a whole new electronics segment from a standing start with a version 1 release. However according to Alex a rational consumer would say that I can get a netbook with a 250GB harddrive, inc a camera for skype for 50% cheaper etc.

Stop going on about sales, Nokia just revealed a big fall in profits and that is what counts not how many you sell. Turnover is vanity and profit is sanity as they say. Plus with the trouble at the CEO position shows a company in a great state! Nokia is never going bankrupt, however it can easilt be reduced to an also ran company. The Levi example was excellent from somebody on here. In the 90’s their adverts were talked about, it was cool to have a pair etc and they had huge sales and now they have become just another pair of jeans.

Android and Rim on the more affordable end with iPhone on the premium is a triple threat to Nokia that a few years ago didnt exist and it is a fact that they have been caught asleep at the wheel. Denial by their executives will put them into downward spiral.
I know that social networking is not the same as the mobile phone market but just as an example on a shift: Look at MySpace it had the most users etc. and in 2006 was ‘the’ social network and as Facebook was growing it was dismissed as the university network and MySpace in a few short years is now scrambling around with decreasing traffic and changes of management at the top etc and Facebook is the undisputed king.

One last key thing is that once someone uses an iPhone or android etc and gets locked in with the apps/ease of use/status or blackberry and connect to their friends with messenger they are not going back! Once consumers move away then most likely they will be gone. All of my friends including me use to be Nokia freaks and now have moved away and aren’t going back and if that same pattern is happening all over the U.S, U.K etc then of course Nokia are in trouble! Quoting sales in Malaysia is not relevant.

I don’t think he was claiming the N900 is cheaper, but that the average American consumer had no idea of the actual price of his iPhone.

Nope. Nokia phones don't have that celebrity/star quality that iPhone has (incidentally the ongoing iPhone 4 saga, overblown or not, will take some of this shine away from iPhone too). But don't confuse that with Nokia failure etc etc. (and it also depends where you're talking – witness recent Indonesian queues around the block for the new Nokia C3, not even a smartphone). Let's compare iPhone sales in a year with N8 sales. N8 will be less no doubt as Nokia has the obvious multi-device strategy to address multiple segments whereas Apple only have the one device. So a comparison between iPhone and Symbian^3 device sales would be accurate I think.

Sure Murat, but
a.) One survey of a limited number of people is not the be and all – and what was the survey's (and other's) demographic, and to what extent did that demographic overlap that where Nokia are getting all their sales from, i.e. as I said Nokia have GROWN sales and smartphone market share with no new devices, the last one an alleged failure, and allegedly poor showing on the app front. Kind of doesn't tally with your and Ewan's point eh?
b.) The sales material I see about Nokia phones from both Nokia and networks generally mentions apps in some form or another. Now, how many consumers will then dig deep and find out Ovi Store is not as well populated as iPhone app store, and veer away from the Nokia and how many will consider that to tick their “must have apps” box (especially considering all the other advantages e.g. the N8 has over iPhone and Android – aside from display res – an arguably less important benefit – N8 hardware is miles ahead).
c.) Yep, Android will plateau (not very soon though, it's still in growth phase), Nokia will retake the high end. Let's wait and see who's right 🙂

Are you sure Apple released iPhone with the app market in mind? Why then did they resist the whole app thing initially, providing an SDK and try and talk people out of it all and focus on the web instead and then eventually relent when they saw demand?

Why do you need a National Rail app? Why in the name of would I pay £5 freaking quid to look up train times when they have this thing called, you know – a website. Looking up train times isn't exactly my idea of a hobby, so whether it's done through a slick app or a website doesn't really matter to me. What doesn't make sense is this:

– National Rail chose to spend money on creating an app for a tiny portion of phone users rather than creating a mobile website. So you have to question what is their motivation here? To make money or provide a service. No prizes for guessing.

– Anyone who chooses to spend £5 on an app to look up train times is really not thinking rationally. If this is the sort of person who buys an iPhone then no wonder the app ecosystem is so good there – there are plenty of people who are willing to spend lots of money on stuff they DON'T NEED!

Hi

Interesting discussion, and one which I have pondered over many a late night kebab.

I have an iphone and Xperia and of course we have all used/owned Nokia phones. I don’t believe apps are the savior, as we will find out soon enough when the android market outguns iphone app market.

Devs will cross develop, I mean why would they not. They want increased distribution, so why would they curtail their growth to just one platform. Also more and more platforms like phonegap/appcelerator are appearing to make cross platform dev easier.

So assuming this will happen, the app differentiation no longer exists. The only other differentiation is possibly form factor of the device and also the pre-installed exclusive apps the device may have (Although the latter again is limited, since someone will copy that app for the other devices).

For me form factor and the ability to choose a ‘cool’ handset is crucial. I don’t want to sit at a dinner table and pull out the same handset as everyone else. Now I do not believe I am unique in this, we as humans all want a level of exclusivity….

Now back to the app store battle. The story is soooooooo boring these days. Who cares how many apps iphone has, when we bought a PC did we fight over how many games/apps there were there for the Amstrad 6128K (ooh 128K of RAM), I guess we did, BUT BUT, only at the start of the PC revolution, not later down the line.

CNET/Tucows were websites where we could download software for our PC, and clutter it with useless ‘apps’. Is this not analogous to what is happening with phones now. We have appstores (before we had software stores, ftp sites,), today, but just as CNet type software stores eventually drifted into obscurity so will our concept and count of how many app the platform has.

Seriously do people care about how many apps are on a platform (now that we are at 100K+) or do they care it can do what they want it to do……

@iqbalgandham

There is no reason, technically, why you need an app to look up train times. The mobile web can in theory to location-aware, live-updated with ajax, etc. It's just not as nice at the moment; the interface in a dedicated app is miles better than using the web on a mobile device, at the moment.

A mobile website which remembers my favourite destinations, knows where I am at the moment through GPS, and has some fancy graphics (through web APIs that let a web page look more like an app, with all the nice-looking lists etc) to make it feel like an 'app'. If that existed I wouldn't need the app.

As it is, the national rail app really is a nice experience.

Totally agree. I don't mind how it works functionally, I just want it easily accessible and the experience to be smooth and seamless.

Totally agree. I don't mind how it works functionally, I just want it easily accessible and the experience to be smooth and seamless.

That argument doesn't stack up. Why would I wear an 800 pound pinstripe vs the 49 quid one from Tesco? Both do the same job of clothing me correctly for a business situation.

Your argument says I should just wear a bin liner as it does the job at 0.03 pounds. And that I'd be crazy to buy an 800 quid pinstripe when a binliner (or a Tesco suit) would do the same.

Who are you to judge? 😉

I saw the National Rail app experience and wanted it. And I use it daily. Me and hundreds of thousands of other folk.

Who's wrong and who's right? Provided I'm happy, what's the problem?

National Rail win. More cash.

I win. Better utility.

iPhone/Apple wins all round.

So National Rail's app experience is now the standard for me and hundreds of thousands of other folk. I thus will decry the N8 as 'useless' if it can't offer precisely the same level or better experience.

Isn't the whole point of capitalism — after you get beyond food, shelter, etc — selling folk stuff they don't (actually) need?

Hey Ricky, good to hear from you. I only used AOL as an example because the VP of Mobile recently came from Palm. I was trying to demonstrate that most senior American mobile executives don't think about Nokia at all.

Well, an app can deliver the same amout of information without needing to transfer nearly as much data. Even if you have an “unlimited” data connection, it still takes more time to download the webpage, render it, enter the data, send it off and wait for the results to download and render.
Coupled with which the webpage is probably designed for either a PC (so is huge and takes forever to download) or the lowest common denominator (S40 anyone?).
So all in all a well designed app can offer a much better experience.

If Nokia is irrelevant because Google and Apple are more relevant, then this is only going to get worse for them when Windows Phone 7 enters the market. WP7 is going to come in for a lot of criticism on first release for things like not having copy and paste (remember the original iPhone) but the ingredients for getting and keeping peoples attention that you talk about and Wyndham amplifies below are crucual in comprehension of the change that is going on in mobile.

You see, Nokia were successful because they made the best mobile phone – the 2110, and then they made the best mobile phone – the 6310i, then the best mobile phone – the 6630 (arguable I know). But that is not relevant in todays connected world of devices. Mobile phones are only a part of a set of devices and services we have now – phone, tablet, netbook, laptop, desktop, server services.

Whether that group of devices comes from Apple, Google or Microsoft the platform for development excludes Nokia, Rim and Palm.

If I use Bing and Live I want one set of accounts and apps for all my devices.
If I use iTunes and Mobile me I want the same.
If I use Android, I want Google Calendar and Apps to 'just work' single sign on.

So you see, single technology manufacturers make the end-users life more complicated and make the software developers life more complicated, which means that in a perfect world you would see more 'alignment' across platforms and less single point success.

This doesnt explain the Apple effect though. If my hypothesis is correct then Windows users using iPods and iPhones will buy Macs and Apple TV's and iPads rather than Windows 7 and Slates. We shall see this Christmas…

Well from your American buddy, Ewan, hear this:

AOL is the Apple of web service providers! And not the phone selling Apple we know as visionary, innovative, and fly, but the old desktop selling Apple that keeps things in a garden, wins mindshare and squanders it later with its silly lock in policies and philosophies.

These types of moves are exactly why AOL is seen as an IM company, and not much more. They literally controlled the ISP game in the 90's, and in trying to lock in consumers to their proprietary interface and browser software, they were left behind within a decade. Now they are a web company with a focus on JUST the US web!

This is stupid, and just the type of stuff they do. The web is a global market, not local only. Now the new mobile browsing experience, which I consider Web 3.0, is more popular than desktop browsing. Instead of thinking of addressing standards and choosing technologies for proliferation, they go with buzz, as if they don't have consultants to tell them this stuff.

For instance, they will probably make a web portal that is only accessible to iPhones and Android devices, but not ANY MOBILE BROWSER WITH JAVASCRIPT AND HTML5 SUPPORT AT X RESOLUTION AND SCREEN SIZES. So when Symbian and MeeGo become more accessible here, and they will, they'll have to waste more money strategizing and making those browsers accessible as well. They'll probably still get it wrong in the end, and someone else will beat them to it.

The entire smartphone and mobile movement in the US is coming along. The N8 will be a big part of that, being the first universal, carrier independent, 3G ready device to allow us to change carriers at will and avoid contracts. I'm sure TMobile will jump on it, already having a Symbian/Nokia device already on deck. at&t will be looking for a new focus once Apple's exclusive is over. And ALL of the major brick and mortar CE dealers are selling unlocked Nokias.

At this point, the moment I'm waiting for is a premium Nokia smartphone commercial, produced by Nokia themselves and not the carriers, to play during primetime on national TV. That will be when Nokia's disadvantage will change.

It is the carriers stranglehold on the marketing that limits the US. Apple broke that barrier, and it was an overwhelming success. Nokia has to show them this, and negotiate the same thing. When they can and if they will is the question. If they do, and at&t will likely be perceptive to it post iPhone exclusivity, they will DOMINATE the US.

You can't get mindshare when the carriers prohibit you from marketing at all. Apple broke the barrier, and look at them now. No one else has this luxury.

Android is lucky that Verizon has its hero marketing campaign, and TMobile does okay as well. But it is not always good to have someone else create your image for you. And it sucks when the carriers embargo your devices, and make no commercials at all, giving the perception that they don't exist. This is where the regulatory bodies are failing the US consumer, and ruining things for me.

Ewan just knows how powerful the US perception machine is globally, and how damaging it can be.

Nokia is getting aggressive again, and I hope their new lineup is better recieved by carriers. Also, they could also work with the brick and mortar stores, like Best Buy, Fry's, and CompUSA (welcome back from the dead, guys.) to do ads, or maybe use some of the ones produced for Nokia's UK markets.

Another avenue Nokia can persue is TV shopping networks. It worked well for the PC makers. They usually get about 20 minutes of face time, and can talk about everything, including direct competitor comparisons. There are plenty of avenues to recreate their image, and they have to get creative.

I've wanted to talk to Nokia marketing for years. As a former hustler, I know when its hard to sell on one corner, you find another…

Now less apps didn't hurt Android, did it? Nor Apple when Symbian was king. The new money in the high end can be recouped abroad, and Nokia just needs to improve on its US share. Growth in the high end will be there if they can get carrier support. 5 band 3G forces some hands.

But the real big growth will continue to be in the low end. Remember who the next billion will be, and don't discount that number. As long as Apple ignores this segment, and Android is too cumbersome on low end hardware, Nokia will control this end. And all those folks will likely upgrade to Nokias, and favor their interface.

And plus, not everyone stays broke, or in BRIC countries all their lives. Go to an African neighborhood or near the mosque in Arlington Texas and count the Nokia phones…

Nope. They stated that you are welcome to use safari/ajax and 'app like wrapper' to develop apps for it. It took about 6 months for the idea of native SDK to be even considered.

Of course they don't have a clue – but they probably don't need one either. They know that it's free + 24×30 dollars for line rental including X minutes, data and texts.

The cost isn't going to differ that much if you use your old phone (sadly) so it is, in effect, free. Why pay for a phone and also pay for line rental when you can just pay for line rental.

Even doing the maths with discounted tariff it still works out cheaper

Sure, after the devs realize they can port the NR app to Qt in a matter of hours.

Do you realize how powerful Qt is? Devs wanting to make money WILL port their apps to Qt to reach hugely more people. Needless to say, both S^3 (and^4) and MeeGo are Qt by nature. 🙂

A good example might be Rovio (Angry Birds):

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