Future of mobile: How Nokia shows what's really important - and it's not apps

Future of mobile: How Nokia shows what's really important - and it's not apps

Summary: Smartphones all look the same and every platform can offer the same set of apps. That means smartphone innovation is going to come from an unexpected angle.

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Smartphone hardware continues to become more and more similar, with minor, iterative improvements being added as time progresses. 

Whatever your phone is nowadays, if it's a smartphone, it will have the staples of Wi-Fi, mobile data (3G/4G), Bluetooth, a camera, and an app store where, regardless of what platform you're on, the top apps will be pretty similar. However, where manufacturers continue to expend more and more effort in order to differentiate themselves is through the mobile features and services they offer.

For example, if you saw the articles I wrote about the good and bad elements of the Nokia Lumia 920, you'll know that I spend most of the time while I'm out and about using Nokia's Mix Radio feature. Similarly, for the 'out and about' part of that sentence, I use Nokia Maps, Transport and Drive, and despite my reservations about some of the public transport routes suggested, they're all excellent apps and have quickly become my preferred mapping service.

Unexpectedly, for me, it's not the hardware or the apps that matter, but those services.

Now, fast forward a few years to when ample bandwidth means you're no longer tied to a specific handset, and you could see a very different smartphone ecosystem developing - one where you don't necessarily have to be a handset maker to be a big player in mobile.

Nokia's services play

This is interesting for players like Nokia. Unlike almost all of its rivals in the smartphone space, Nokia doesn't have a platform of its own to support in the long-term: it's using Windows Phone for the foreseeable future, leaving OS development and updates in Microsoft's hands.

On the plus side, Nokia has worked hard to get the services on its handsets up to scratch, and as a result now has market-leading apps for mapping, free music and has arguably some of the best imaging software in a phone in the form of the PureView system.

Maps is one of Nokia's most interesting services to look at. The company has a long history with mapping and in 2011, it introduced 3D modelling. Since then it's continued to develop the services, adding public transport and driving navigation to a growing list of features, which also includes offline access.

Most recently, Nokia's mapping services were rebranded as Here, bringing the introduction of an HTML5 web-based version of the maps, accessible via an iPhone or iPad. This has been its smartest move for a while, and one that could be a precursor to appealing to a wider market and deriving more money from what is currently a key asset.

Carolina Milanesi, a mobile analyst at Gartner, agrees that Nokia is making the right moves in the services business.

"Maps or now 'Here' certainly has a bigger opportunity to draw money for Nokia outside of their own devices," Milanesi told me. "The multi-platform approach, now supporting iOS and Android and working with companies like Amazon, proves that Nokia has bigger plans for its location and commerce business."

Can services add enough value for Nokia?

While its achievements with mapping are no small feat, the company isn't being fiercely protective of the service. Instead, it's allowing rivals to offer a slightly cut-down version of its maps software on their own devices, indicating that the company can see the value in mapping far beyond that on its own handsets.

It's done a similar thing with its cameras too, adding Nokia-specific features and image processing software to create a range-topping, if not class-leading, camera experience on smartphones. However, unlike its mapping moves, Nokia hasn't made a sound about allowing other manufacturers to include its image processing engine or other photo-trickery, but that doesn't mean that it won't one day.

Putting a figure on the value added to a Nokia handset by the inclusion of its maps, imaging or camera software is hard, but it's the stuff that is keeping Nokia releveant to the market right now.

Nonetheless, even with Nokia's solid moves in services, it's not a segment that's making the company any money.

In its last financial quarterly statement, Nokia's Location and Commerce units posted a total loss of €56m, which is a less than stellar performance. Even so, and in the face of a year-on-year decline in revenue for the unit, Nokia's fortunes here are actually improving, albeit slowly.

Despite the slow progress, Nokia clearly believes in the value of having plenty of fingers in plenty of pies. Since 2009 alone, it has acquired Bit-side, Cellity, Plum, Dopplr, MetaCarta, Novarra, Motally and Smarterphone, all of which are service-based companies.

This move to services is almost as applicable to RIM, than Nokia, after all, in RIM's most recent financial quarterly figures, nearly 40 percent of its revenue came from services and software. However, with the trajectory that the two companies are on, the outcomes are potentially very different - Nokia has the potential to 'go big or go home' in the consumer space and RIM has the potential to dominate a niche market.

"As an asset [Nokia's] location and commerce platform is more relevant to where the market is going than RIM's back end," Milanesi said.

Even with Nokia's strides to differentiate its products from competitors by delivering unique services or features, its future without hardware wouldn't be easy. It will need to continue to developing its non-core activities massively if it wants to secure itself a future in the mobile market, with or without handsets.

Topics: Networking, Nokia, Smartphones

Ben Woods

About Ben Woods

With several years' experience covering everything in the world of telecoms and mobility, Ben's your man if it involves a smartphone, tablet, laptop, or any other piece of tech small enough to carry around with you.

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24 comments
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  • Year after year...

    Nokia gets someone in the media, usually the state-run AP, to write some irritatingly dumb "We got that" piece that is patently ridiculous in face of the reality of no products and stunning losses.

    Was gonna go on, but I made my point already! :-)
    Tony Burzio
    • Not this time

      The new Nokia phones are really something, that is if you actually take time to look at them before criticizing.

      Nokia made a lot of mistakes, the biggest one was trying to go heads on with Apple and Google in the OS arena. and even when they decided to use Windows Phone, i personally thought they would fail, but that was before WP8 came out, WP7 was ok, but nothing that could threaten or even scratch the mighty iOS or Android, with WP8 however, Microsoft, and to everybody's surprise, didn't only show that it can work it's Windows magic to compete with the two giants, but it demonstrated that it can outpace them. if any neutral non biased person would have to chose between iOS, Android and WP8, it would go for WP8 because of it's clear superiority on both ease of use and functionality. the only downside of WP8 so far is its small ecosystem/ app market, that is comparing to iOS and Android's massive stores. but unless you feel the need to have 3500 apps of paper toss and 1000 apps for phart ringtones, you should be fine with WP8 as it is, it has all critical apps, that is twitter, facebook, youtube, netflix, new readers etc...

      I think this article is right somehow, Nookia really outdone themselves onto trying to distinguish themselves from the competition, , the 920 is indeed bulky and feels like a brick, but for people who do not care about that and want features, it is indeed a fortress of features, other smart phones can only dream of its camera for example, for $99 on AT&T, i think it is great deal.
      samiup
      • well put

        Anyone who is still running around with notions that Nokia stinks is basing it off of information from back in January before they even launched a WP7 handset in the US. They are showing signs of improvement and the 920 is a huge leap in the right direction. Yes, it's big but small isn't always better. Just ask the gal to your left of right. The 920 is a beautiful phone, has amazing display and camera tech and its $99. For $99 I don't think you can match what the 920 brings to the table.
        Rob.sharp
      • "Windows magic?"

        Sorry, you lost me there.
        Synthmeister
        • Yup.

          Yup. You heard him.
          Ehsan Irani
      • He wasn't criticizing the phone....

        he was criticizing the author and the article and he has a legitimate point. The author has made a pointless article. Basically he's trying to differentiate Nokia's phones from Android and Apple by saying, "And it's not apps!"

        So the author goes on to list 2 items: Maps, and the camera. Apparently that's how Nokia shows what's really important. Sorry bro, but apps is where it's at. And by the way, you tripped over yourself when you refer to the maps as an app, which you did in one of your paragraphs.

        So the author says it's not about apps, yet one of the items he mentions is in fact an app. Let's give author the benefit of a doubt and call it a service. Is Google's mapping service not leading class? Is Google's mapping service not available on iOS? The answer is yes, Google's map services are leading class, strike one, author has not scored any points here.

        The camera. There's nothing about Nokia's camera that makes it head and shoulders above the best cameras on either iPhone 5, or HTC's cameras, or Samsung's cameras. If you took a pic with any of the best cameras for any platform they would all be quite good. So strike two, no points for author= pointless article.
        Maha888
    • I agree. He's trying to make us believe Nokia matters...

      The services you pointed out have been available on most other platforms for years, but somehow Nokia having them means that's the future? Sorry, but you are deluded. Those services are the past, not the future. Does Nokia make decent smartphones? Yes, after a really rocky start, they're turning out a couple of decent models. Are they more advanced than others which already exist? No. There is nothing offered on a new Nokia that the rest of us haven't already been doing for years. The only thing keeping Nokia in the smartphone game at this point is Microsoft.
      BillDem
  • Nokia

    I suppose somebody has to use and review Nokia products, but there is a price: total contempt.
    Nokia's recent offering, Here, was universally panned. Other than the poor saps in Finland or Indonesia, nobody is going to use or care about Nokia.
    Black Barack
    • Nokia is another pain in the German's side...

      Nokia was in a death match with Qualcomm a while back, and decided to push WCDMA to keep the French Military happy (no GPS). Anyway, they borrowed the entire contents of the German federal worker's retirement plan to buy spectrum, then they gave the money to the government who promptly spent it on social programs (ever wonder how Germany is so much better off than the rest of Europe?) Well, WCDMA was a flop, and Nokia wanted their money back. No schnitzel, says the German government. So, when do the Germans find out that their hard won retirement is no more?
      Tony Burzio
      • erm

        Germany actually hated Nokia due to them shutting down a massive factory, but seeing as the 920 hsa been sold out there since day 1 i guess they are getting over it.
        danjames2012
        • oh

          and windows phone has a 12% share in Italy... so its not doing to bad there either.

          Add to that a 6% market share in China(May 2012, no new figures but it was growing rapidly), which is probably the same amount of users than their are combined on Android + Iphone in Germany..... do you start to see a picture shaping here?
          danjames2012
        • Rubbish

          He's been spouting that rubbish about WCDMA, the French military & GPS for ages. A rudimentary knowledge of recent mobile phone technology demonstrates his ignorance.
          DJL64
    • Scorn?

      I don't really care if some Internet user whom I don't know and have never met views me with scorn.

      I've used the new Nokia phones and they rock! I would not hesitate to buy one, and my wife's getting one to replace her Samsung Android just as soon as she's upgrade eligible.
      bb_apptix
  • Apps

    But all of these services are just that, apps, with a cloud component but still just apps.
    sysop-dr
    • Apss are just a shell

      for the service...
      Tomas M.
      • apps vs services

        I'm a little confused by this as well. The article uses the teaser headline of "it's not apps" and then delivers the big reveal in the body "it's actually services!" Um, ok. Seems like semantic hair-splitting to me.
        frylock
        • Except the service isn't tied to a specific app

          Multiple apps can offer the same service. Think of it as Twitter vs Twitter clients. Nokia can allow other app makers to tap into the Nokia maps service, even offering things like downloaded maps, like they did with Bing Maps for all non-Nokia based WP8 devices. I downloaded all of Texas to my phone, so I can drive anywhere in the state and have mapping and POI search available. Considering the huge areas of Texas with weak signal, given the size of the state, it's actually quite useful. Plus scrolling, zooming, etc. on the map program is incredibly fast compared to anything I've used, including any web-based system on a full desktop.
          LiquidLearner
          • Yeah, but...

            The point is, those services AND the app front ends for them have already existed on other platforms for YEARS. So, the fact remains that Nokia has done nothing new, despite this article. Services are NOT the future, they're the past and the present. This article tries to make Nokia seem like they are doing something innovative when they are really just playing catchup to every other platform. The only thing saving Nokia's smartphone business is Microsoft and even that was a fairly recent move. I still think Nokia is irrelevant to the future. They don't innovate. They duplicate after others work out all the details.
            BillDem
          • So do they all...

            Every single handset maker out there does this, in fact I have heard this exact same argument used to judge Apple and their practices. Didn't stop Apple and I don't think it will stop Nokia either. Yes Nokia is being saved by Windows Phone and rightly so, it's a great OS miles ahead of symbian/maemo/meego and in many respects I feel better than iOS and Android. Apple is ahead in the service front although iOS 6 has had some major bug bears from users maps and all but they are not finished yet. ALl of the OS/Handset makers have a long way to go before they provide a fully integrated, efficient and individually targeted service provision. There not playing catch up, they are taking things in their own direction based on how they perceive a service should be, and based on what I hear it sounds like an interesting alternative to the Apple drone and Android open mentality.

            I say it's great, anything that let's me have more choices based on the services I want is a good thing.
            Jayelzibub
          • Wake Up And Smell The Roses Brother

            If you think Nokia isn't playing catch up you you're deluded. Their latest 900 line is the first smart phone in years to get anyone's attention.

            And if you think Nokia can take things in their own direction based on how thing should be you got another thing coming to you. MSFT controls everything on the software front. MSFT says what goes. If MSFT wants to bring their own map to Windows Phone, BYE BYE NOKIA MAPS!!! They can cut off Nokia altogether if they wanted to but they don't want to cause they are close partners.

            Nokia's future is tied to Microsoft's success or failure on Windows Phone. If Windows Phone fails, so does Nokia.
            Maha888