Windows Phone to be bigger than iOS, Android - in Nokia's Finnish homeland, that is

Windows Phone to be bigger than iOS, Android - in Nokia's Finnish homeland, that is

Summary: Nokia's decline and swingeing job cuts have been tough on Finland, particularly on its software industry. The country's developers are staking their future on Windows Phone - could the gamble be just what the Finnish tech sector needs to get back on its feet?

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Finnish mobile developers are rallying behind Nokia's new platform Windows Phone, yet the handset maker's precipitous decline could be the sour medicine the nation's software industry needed, according to researchers at Finland's Aalto University.

Nokia's new smartphone platform is Windows Phone, which in 2011 replaced Symbian and its short-lived successor MeeGo as the handset maker's OS of choice. It's no shock then to find in the Aalto University BIT Research Centre's 2012 Software Industry Survey (PDF) of Finnish software companies, the seven percent that built on MeeGo or Symbian in 2011 is expected to fall to two percent by 2013.  

However, an even more dramatic shift is expected to occur by then: 34 percent of Finnish developers plan to be building for Windows Phone, leaving Android (33.4 percent) and iOS (24.3 percent) as the second and third most popular mobile platforms.

Developers plan for Windows Phone
Source: Aalto University BIT Research Centre 2012 Software Industry Survey

While it may seem counterintuitive – Windows Phone has just a single digit share of the global mobile market – it has a greater presence in Finland. According to one local report, Windows Phone has a 32-percent market share in the country, and analytics company StatCounter is also tracking a rapid rise for Windows Phone in Finland, which overtook former Nokia golden child Symbian this August.

While there is some loyalty to Nokia amongst Finnish consumers, developer interest in Windows Phone more likely stems from delivering services to local businesses, according to BIT Research Centre's researcher manager, Mikko Rönkkö. 

"It used to be almost a de facto standard that Finnish companies provided Nokia phones for their employees," he tells Norse Code, adding that BlackBerry is almost non-existent in Finland.

"A large share of Finnish software companies are serving other Finnish companies. Because of the earlier popularity of Nokia phones in Finnish enterprises, many software vendors probably assume that Nokia phones will be popular in the future as well."

Another explanation, according to fellow researcher Juhana Peltonen, is that firms that develop Windows desktop software see a continuum to high-growth mobile through Windows Phone.

"They're not making the next Angry Birds, but there are a lot of these small business-to-business firms that have been able to sell this software to small manufacturing plants perhaps. And they think, OK, it works on Windows, so why don't we try it a mobile version of this."

Nokia's stamp on Finland's window to change

The shift towards Windows Phone among mobile developers comes at a time of upheaval in the wider Finnish software industry, which not so long ago faced a serious shortage of software engineers but is now facing a sustained oversupply, and not just due to Nokia's layoffs.

One of the challenges the industry has faced is that Finland has had a handful of large buyers — Nokia being one, along with manufacturing and government — that concentrated contracting with a few large suppliers.

"Finnish public-sector IT procurement has been a lot about buying from the biggest service companies and then on the other hand you have Nokia. So you think about where do growth companies come from — you have these big firms that are blocking the sunlight," says Peltonen.

nokia-research-centre-helsinki
Nokia's research centre in Helsinki, Finland. Image: Nokia

Along with Nokia's mass layoffs, other large IT services firms in Finland, including Digia (which bought Nokia's QT in August), Ixonos, and Accenture (which absorbed 1,200 Finnish Symbian developers in 2011), have laid off hundreds of staff in the past year — some of these decisions were related to the Nokia cut backs, and some independent of them.

None of these have the visibility of Nokia's layoffs, but says Rönkkö "when Nokia announces something, usually within a few months [these companies] follow up".

Peltonen's "conservative" estimate of the overall number of Finns laid off between 2011 to 2013 as a consequence of Nokia's downsizing is 10,000, a figure that includes both laid-off Nokia staff and those at contractors that depend on the handset maker for their bread and butter. "That's in Finland, not the world," says Peltonen, noting Nokia itself accounts for 6,900 of the 10,000.

Nokia's contraction has doubless been painful for Finland. However, Peltonen points out the concentration of the software industry with the company was not good for the country either.

"It's a good idea that there is more space for firms to come and grow and even out the infrastructure, both in terms of the software industry but also overall in Finland. It kind of gets us on this path of renewal, but on the other hand it came so quickly and so massively, so it's hard to say that it's all good."

Luminous lining to dark clouds

The Finnish employment market for software engineers has been turned on its head in the past four years.

"There was an unmet demand for software talent, but [the change] has been like putting out somebody's thirst with a fire hose" — Juhana Peltonen

"Around 2008-9 there was not a lot of software engineers. A lot of SMBs were complaining about it, there were active recruiting campaigns, firms teamed up and bought ad space from major papers and TV stations. There was an unmet demand for software talent, but [the change] has been like putting out somebody's thirst with a fire hose," says Peltonen.

Peltonen estimates there won't be a similar shortage of software engineers in Finland for the next four to five years.

By settling on Windows Phone, Nokia changed its own course, but also made third-party software firms that built on Symbian and MeeGo redundant. This wiped out one escape hatch that ousted Nokians had turned to find employment prior to Nokia's platform shift.

"There was a lot of other companies doing Symbian and MeeGo development and these had been hiring a lot of folks that had been coming out of Nokia. But now these companies developing for Symbian and MeeGo — it's collapsing," says Peltonen. 

Rönkkö's and Peltonen's 2011 survey found that software companies that built on Android and iOS showed no preference for Nokia employees over any other candidates. On the other hand, Peltonen points out that Intel has hired 200 for MeeGo/Tizen development while Jolla plans to hire 100 in Finland for its MeeGo phone, suggesting possibly better prospects for those platforms than Symbian.

"One reason why these mobile [development] companies might not be so interested in people from Nokia is the image that they are used to this big company culture and most of these mobile development companies are small. So those companies that hire Java developers typically might be a bit larger than the mobile development companies," speculates Rönkkö.

As for the middle-management and marketing folk, whom Peltonen estimates made up half of those laid off in Helsinki, there are even fewer options.

"It might be more difficult to employ these middle management people because there is really no other company that is like Nokia."

While the immediate future might be tough for the thousands of Nokia staff exiting the company, the software companies betting on Windows Phone could come out very well should the platform take root outside of Nokia's Finnish heartland.

"Certainly it's risk-taking, but you could say if Windows Phone takes off, then Finland could be in a good position — and not just through Nokia," says Peltonen.

Topics: Nokia, Apps, Microsoft, Mobile OS, Mobility, EU

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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9 comments
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  • Users Attract Developers To A Platform, Not The Other Way Round

    Those developers would do better to see what needs their potential customers might have, and catering to those needs, rather than trying to push them towards Windows Phone.
    ldo17
    • Not so simple...

      It's the classic Catch 22: users don't want the device if it has no apps, publishers don't want to write apps if there are no users. This is why any new device launch requires a decent apps ecosystem from the get go (and why it's so hard to launch a new platform). From the developer's side: in many ways the first apps will be loss-leaders, but developers will code them if they feel the hardware is promising enough that it will attract users. Also, being first on the scene confers benefits such as "lock-in", name recognition and goodwill.
      dsf3g
      • Don't put the cart before the horse

        Developers need an SDK first.
        Info Dave
      • So how many apps you installing on your Phone 100K ?

        I find almost every major apps on my windows phone... Infact few apps I find really useful on windows phone .. I cant find on Anroid!!! Microsoft already have 100K apps... and its growing everyday bringing major apps on Platform ... I guess 100K apps should have something for everybody .. or may be not ???
        nayanspatel
    • LOL

      Thats exactly what they are doing, in Finland Windows Phone sales passed the iPhone and equals Android.
      Xenon8
      • yet another microsoft fanboy spewing lies

        http://gs.statcounter.com/#mobile_os-FI-monthly-201108-201208
        theo_durcan
        • 32 % can be true

          1. Marketshare of 32 % probably refer to sales and not owned device share.

          2. Your link is for web browsers and NOT for numbers of devices owned.

          I know from experience that I use the browser less on my WP 7.5 than on my IOS devices. WP got hubs that you often can use instead if browser or apps. Many websites is not yet well adjusted for WP, so I avoid using the browser when I don't have to.
          Oden79
  • I dont live there...

    Yet I going to buy a Windows Phone 8... count me in I am just wainting for prices details
    pepe-el-Toro
  • W8 Synergies

    We'll know in about 12 months what WP8's probability of success will be. Ultimately, its success will be tied to synergies driven by W8 adoption of tablets, laptops and Ultrabooks. If these devices take off, the apps will follow very quickly as will strong adoption of WP up to at least 10-15% market share by the close of 2013.
    jjworleyeoe