Posted in MWC, 28th February 2013 10:04 GMT
Get a life! says Elop
Managing money with your mobile was a topic conspicuously absent from the debate - until Stephen Elop took the stage. He talked about Nokia Life, a suite of lightweight applications and services that run on low-end, that is to say Series 40, phones for the developing world. One component, Nokia Money, an ambitious mobile money-managing project in a couple of Indian cities, was a casualty of his efforts to slim down the company.
Instead he touted the value of something he doesn’t make: “You may not have a driver's licence or a birth certificate, but to gain access to a digital economy all you need is a phone number and” - wait for it - “a mobile device”. And then Elop fell into the presentation style he carries so well.
"Historians reckons the industrial revolution affected 10 million. We are going to affect 100 times that. The individuals may only make a few dollars a day, but will have access to technology that was the preserve of the middle class or, in the case of cloud, of big business," he said.
He bigged up Nokia in the way you would expect, listing the things it had been first at and ignored those, like 3G, where it had been late.
In the entire 15 minutes he spoke he didn’t mention the word “Microsoft” once - despite various opportunities to namedrop - and only mentioned the Lumia to say that the top-end Asha phones were close in price to the low-end Lumias.
Nokia has some excellent anthropologists, and this is reflected in Elop’s comment that young consumers are the first generation to have a phone not shared with their family or village, but it’s a daily fire fight to provide capacity.
Those punters can’t afford a traditional data plan so Nokia is looking at addressing network constraints with a cloud-backed web browser that gets data compressed by up to 90 per cent. The Nokia express browser apparently saves data consumers $1m a day and the low-bandwidth transfers reduce the strain on the battery.
Nokia’s 301 has standby of 39 days - a statistic that provoked a low whistle from the Apple fanboi next to me. It was interesting to hear Elop singing the praises of a browser which isn’t Internet Explorer - a crown jewel of Microsoft, Nokia's closest pal and biz partner. A browser that transfers significantly less data than others may not be good for the revenues of the previous two speakers, but it echoes what they said in making the service affordable to everyone.
Elop's solution for apps was similarly distant from its Windows 8 partner in Seattle. He talked about how successful the Series 40 had been, adding that Nokia had more than 300 app developers whose Series 40 programs had been downloaded by the million. And that's because they did what the users in far-flung places wanted: the software, built locally, was relevant to their lives.Then time for Mozilla's Firefox OS to shine
So the stage was set for Gary Kovacs, of Mozilla to promote the Linux-powered Firefox OS for phones with which he wants to replace native software with web apps. All I can say is, Kovacs is an entertaining and engaging speaker.
“I’ve been around in mobile for more than a decade, I know that some of you have me beat by orders of magnitude,” he admitted. I had a quick scan around the audience and failed to spot Marconi. His hyperbole was further unrestrained.
Kovacs complained that having to download an app every time he wanted to do something messed up his home screen, and that the need to compile code for apps shut out non-developers from building software. Using HTML5 is apparently democratising in a way that using C is not. There may be some credibility to his argument but it’s a fine line.
He portrayed Firefox as opening up the web browser market, which it certainly did, in the face of one company that held 98 per cent (and yet again Microsoft goes unmentioned).
The Firefox model of not having a single app store, and allowing anyone to sell their code directly, could well be the best one in the developed world, and it plays exceptionally well to those operators (cough, Telefonica) who’ve been #$%$ about the apps duopoly - but it exacerbates the discovery problem.While Kovacs is all for newbie-friendly HTML5 web apps, Elop sang the praises of developers in the emerging world who are building apps that work well on the phones their fellow citizens can afford, and Nokia has been training people to code. In Indonesia, the mobe maker taught programming to more than 10,000 people. The result was good locally built apps and income for those developers. And one particularly successful app brought in substantial international revenue, we're told.
Mobile World Congress, which is focussed on future tech, where LTE is seen as here and now and everyone has at least three multi-processor-core smartphones, it’s good to know there are some people looking to embrace those who have never seen the internet. ®
Sentiment: Strong Buy
Good article/post - thanks!
NOK investors should closely read Elop's comments. Nokia is at the leading edge of bringing mobile phone and internet to a huge population. There are dozens of manufacturers who can make an inexpensive mobile phone - Nokia is one of them - but Nokia brings added value to that inexpensive phone though apps that are tailored to the emerging market customer, and other phone attributes (e.g., long standby batter life).
Apple (essentially) makes one phone, roughly updated yearly. It makes that phone in volume, and it has high margins. It is a model that makes Apple billions of dollars in profits, and it's a model that depends on the consumer's willingness to pay a premium for an iPhone. That willingness will decline in time as other producers make phones that cost considerably less that offer comparable features.
Other phone manufacturers offer models at a variety of price points for a variety of markets, and the value features, price points, and markets will vary from producer to producer.
The question to NOK investors - does Nokia have it right? Does Nokia offer phones that consumers see as good values, phones that generate good profits to Nokia? That will vary from market to market, phone to phone, one consumer decision at a time.
Overall, I think the answer is yes, and Nokia will increase their market share and profits in coming quarters. Nokia is active and potentially effective at a variety of markets with a variety of products/phones, using a variety of mechanisms to offer increased value - maps and cameras in developed countries, specialized software/features in emerging markets, overall quality of build/performance, Today, in developed markets, Windows 8 is seen as a modest value-added feature (that will vary person by person). but I think in time, as Microsoft continues to develop with Windows 8 OS (apps, xBox, Skype, Skydrive, tablets, enterprise adoption of W8, etc), W8 will increasing be seen as a plus.
I didnt take the time to read that when it was first posted, but I'm thinking now that Elop is executing with the same vision to support global connectivity in the same way as Jobs executed when Jobs brought the iPod/iPhone/iPad, Folks may confuse style with substance, there is way too much focus on quarterly number, who tops whose production volume. Elop is executing a global vision and I dare say, that was even more challenging than what Jobs did with his vision for the US market. There are powerful under currents with what Elop is doing that folks are not understanding, getting too caught up in details of minuiate. Nokia is definitely a buy and hold (always thought accumulate as hard as you can under $5/share), When the subtle becomes very obvious, the situation from a share perspective in going to be quite differemt, still believe will hit somewhere in the $60/$70 range however.