Nokia today announced that the Finnish cellphone company is choosing Windows 7 Phone as the operating system for its future smart phones. It’s not a surprising move given that Nokia CEO Stephen Elop came from Microsoft and it’s not even that risky a move given that the alternative was a slow but certain death for Nokia smart phones running Symbian and Meego. Sure Nokia could have gone with Android, but Google has less at risk than Microsoft so Redmond had much more to offer. The only real question here is whether Nokia can make the new strategy a success? I think they can, but there is only one way to do it — by rushing the net.
I’m no tennis player, but my understanding of this tactic (rushing the net) is that you hit deep into your opponent’s territory using a lot of topspin to make the ball harder to return then run right up to the net and attempt to slam his return shot into the forecourt while your opponent is still in the backcourt and unable to reach the ball. The Nokia version of this tactic would be to introduce the best-ever Windows 7 Phone (faster processor, better screen, expanded services, competitive price) then simultaneously introduce another line of Windows 7 phones that have 80 percent of that capability for 20 percent of the price.
Nokia has already lost the elites but they have to make a credible showing toward the top of the market to stay in the game at all. This is one of those instances, though, where the company really can make it up in volume. They have to essentially cannibalize their own feature phone business to save the smart phone business.
Think about it. The life expectancy of a mobile phone is 18 months, meaning phone users are literally forced to change on a regular basis, often switching platforms in the process. Even buying another phone from the same vendor is a decision because the phones change so much in that time. That’s what makes the mobile handset business such a bloodbath where Motorola can be on top one minute with its Razr then a dog the next with the same phone. Phones are getting ever more powerful, too, thanks to Moore’s Law and the many cloud services coming online. So a Nokia decision to lean-into smart phones at the expense of feature phones is really just a decision to accelerate the inevitable.
Feature phones have one generation left to live. Three years from now every mobile phone will be a smart phone.
To embrace this, however, means going aggressively down-market. Apple has done this with the $49 iPhone 3GS. Nokia needs to do the same thing only even more aggressively. They need a $29 smart phone.
Here is the transition we are likely to see. Cheaper smart phones are coming. There was a story just this week about Apple announcing a cheaper smart phone this summer. I can see it now: at the WWDC in June Apple will announce the expected multi-core, 4G, international-ready, whiter-then-white, 1.2-GHz iPhone 5, but the “one more thing” will be a repackaged, smaller form-factor, $29 iPhone 3GS. Nokia has to not only have a response to this move by Apple, they must preempt it with an earlier announcement of their own.
Nokia (and Microsoft’s) survival in the phone market is dependent on staking out the lower end of the market where people buy on price as much as features and brand loyalty is less of an issue. Apple is heading there and Android is there already. Only by rushing the net — by following the time-honored Microsoft technique of throwing bodies and staggering amounts of money at a problem in a market-changing way — can these companies remain relevant in the mobile space.
But they have only one chance to make it work and they’ll have to take that chance before June.
Timing is everything, which is why HP’s inability to set dates on any of their recently introduced (albeit nice) products rings in as an epic fail in my book as well.
Our first cell phones were Nokia’s. They were the most durable, most reliable phones we’ve had in many years. Last fall when it was time to replace our phones there were no Nokia phones available through our carrier. It would be nice to see Nokia back in the game. The competition would be a healthy thing.
A suggestion to Nokia: Design a very reliable and durable phone, then include a free 2 year warranty with it. I am tired of the overpriced service plans and the parking lot warranties — when you are out of the parking lot, your phone is out of warranty. The electronics industry can do better. Nokia can be the trend setter.
Consumer laws in the EU require a minimum of 2 years of warranty for all such products, and Nokia (as well as other manufacturers) have no problem meeting that requirement.
If they don’t offer 2 years of free warranty elsewhere, I submit that the problem lays with local consumer laws, not at technical level. Clearly, Nokia’s phones already ARE sturdy enough to last 2 years.
Things must be going badly for Nokia, if they throw the towel so spectacularly. They can’t blame lack of resources, lack of engineering talent, or lack of time for not coming up with a competitive mobile OS, competitive HW, and a competitive software distribution platform.
They’ve always sucked badly at software, but the skills were present on the market to be bought.
As the Reg put it – losers Alliance, indeed.
I think we’re seeing the dawn of something interesting here. A new hardware platform, not just for phones, but for everything. These little devices are rapidly catching up to the big ones, which makes me think that I want to experiment with clustering them. How many jail-broken iphone 3gs’s do you think I can fit in 1u? Probably about two dozen of them. So that’s what? 24×800 (or so) mhz? Now what if I had a rack to play with? That’s an awful lot of computing power for very little money.
You may be onto something here. My sentiments on this matter are similar. As such, I object to Bob’s statement:
Feature phones have one generation left to live. Three years from now every mobile phone will be a smart phone.
If that happens, it won’t be by unanimous consumer demand. It might happen because the industry pushes hard for it (new kind of device, huge profits). But there are two counter-issues that drag against it:
1) Lots of price-conscious mobile phone users. I mean LOTS. I’m talking Asia, Africa, South America, Eastern Europe. 2nd and 3rd world countries. The smartphone price will have to drop in the $100-150 range if they want to reach these masses. Unsubsidized! because in poor countries people don’t go for 2 year contracts; they use pay-as-you-go/prepayed plans.
2) The actual need for smartphones is debatable. So far, as much as 80% of mobile phone users are still using non-smartphones. Why? It may just be that they don’t feel the need for a true “smart”phone. The mobile phone is a phone first of all. Some additional needs (calendar, alarm, mini-games, music player, FM radio and simple Web browsing) can be perfectly met by feature-phones and a “dumb” OS.
IMHO analists tend to underestimate the lingering attraction of 2.2″-2.6″ screens (big-enough, not as fragile as 3.2″+), a hardware keypad or keyboard, a more sturdy build (drop it, scratch it, in and out of your jeans pocket all day), and a much longer battery life.
I’ll grant you that as generations succeed so will the taste in devices change. But I posit that we’re talking human generations (~15 years), not tech (<5 years).
I will also point out that the smartphone is just one Internet-enabled device format among dozens. While the need for "rich" inteconnected media is pervasive, how people actually consume it varies wildly. And there's no shortage of alternatives to what the smartphone has to offer: ebook readers, tablets, netbooks, laptops, PCs, gaming consoles (living-room or portable), wearable and handheld music and movie players, Internet-enabled set top boxes, media players, home NAS devices, smart TVs etc. A modern person can very well stick to a "dumb" phone and get their kicks from one of these other devices.
And let's not forget that most of the carrier services have yet to switch to full IP support. There will be a while yet until we see GSM/CDMA replaced with WiFi everywhere. Smartphones are primarily IP devices with 3G slapped on top. Those 3G adapters are a kludge that drives up the price of the device. They haven't make inroads anywhere else, except a handful of tablets. (Netbooks and laptops can use external USB-connected dongles so they don't need built-in support.) For as long as 3G survives, so will the featurephones, because they're the most efficient devices that support it.
Overall, I think we may very well see "dumbphones" survive in one form or another throughout the '10s decade, maybe longer.
Windows 7 on a smartphone, when they could have had Android for free . . . but who know how much Microsoft is PAYING them to go with Windows 7? That could be the deal maker.
This just in: “Nokia Corp. will get billions of dollars from Microsoft Corp. to ditch its current smart-phone software in favor of Windows Phone 7…” https://www.signonsandiego.com/news/2011/feb/13/nokia-ceo-co-to-get-billions-from-microsoft/
And since Android is still free and better, the only reason Nokia is not hedging it bets and doing both, is the payment contract forces them to only use the 7 OS. Gotta love Microsoft’s tactics . . . ! They play hardball. With friends like that who needs . . . .
Does phone price really matter since the carriers give huge rebates on pretty much everything they sell? The reason I will not buy a smart phone is the recurring cost of the data plan. A phone++ is not worth ~$100 per month to me.
I’m with you Alex. I really don’t want to spend the money for a data plan. I have even thought about buying a phone outright (no subsidy), but they still require a data plan.
And what are we going to do when the only phones that the carriers sell are smart phones with data plans?
If you buy a phone outright, a data plan is not required. 2 of my kids have Android phones, no data plan. Also, T-Mobile now has $10 data plans for 200 Mb. If you go over, it’s $40 for that month. 200 Mb is really pretty adequate, with reasonable rationing. The biggest flaw is that they don’t do much to help you with the rationing. The apps are there if you know what to look for, but that takes a high level of sophistication. They should really roll it all together, to make it easy to actually stick to the $200 Mb.
Totally agree.
It’s the data plans keeping me out of the game. Just way too pricey for my household.
I picked up my Incredible because of the $15 data plan. I never would have paid $70/month for a phone but $55 – workplace discount is doable for an 8MP 4.3″ android phone. The phone lets me turn off 3g connections when I want to and the My Verizon widget makes it easy to check data usage (although, amusingly, it refuses to work over a wifi connection.)
Agreed – the price difference between a $29 and $49 smart phone is negligible when compared to the amount paid to the carrier over the course of the 2 year contract.
Also, it’s not just the contract length. If you change your lifestyle to depend on an always available data plan, the length of time is the rest of your life. I use a prepaid gophone w/o data and a umpc for anything that can be done with Windows 7 (not Windows Phone 7). My Sprint data plan on the umpc is unlimited (probably to 5 GB) and costs just $50/mo. The gophone costs 25 cents per call though but I have managed to get by with $100/year (1 call/day).
I don’t understand why nobody seems much interested in the overall contract price. How much does it really matter if the phone is $29 or $49 or $199 when the price of the contract over two years is more than $2000 regardless of the phone?
I think the carriers will eventually have to fuel the move from feature phones to smart phones by creating some new kind of billing category with data options at feature phone prices.
Don’t forget who ‘pays’ for a ‘free’ subsidized phone… The carriers, and if you think the carriers don’t think the subsidy isn’t a real cost to them, then think again. If ATT has a Nokia that costs them $49 and the subsidize it to zero vs a $500 phone the subsidize to $299 , that 250 dollar difference is $$$, especially if the plan is same.
To the consumers… As a parent… spending $49 for a iPhone3GS vs spending $0 for $29/$0 for a competing phone, especially if I’m a ‘feature phone’ family (read: no apps that tie me to a platform), then I’m buying the least expensive phone for my kids.
And if you’re so behind the tech curve that you’re in the market for a new PC and a $300 Win7 desktop looks good, then if Nokia/WP7 can build out a famiily of phones and tablets AND somehow bring synergy to my XP/Win7 desktop at home… I’d probably buy it.
Remember, this is a race to the bottom… who can get the last adopters who buy only on price. Whatever percentage you are able to maintain ‘stickiness’ to the platform is gravy.
that ain’t no rebate, friend.
consider the “untethered” price of an iPhone is $800. you can get it from VeryZoned for $200 with a two year contract (post $100 rebate.) that’s $30 for 1500 minutes, $50 for something like 5 gigs of data. $70 a month. times 24 months. round it off to two grand. you got 4% back of $2200.
if you toss it early, you have to choke out the $600 of the real price of the phone you didn’t pay for early termination.
no, that ain’t no rebate. they snapped one tooth off the Ginzu knife they gouged you with.
Bob, you’re brilliant, I love your articles / commentaries and I thank you for the effort you put into you work.
Failing phone maker + failing phone O/S + rushed engineering = success?
you forgot “a miracle happens here” in that business case review.
oh, say, so did Nokia.
I have one question for your vision of all phones being smartphones in three years’ time. What happens to those of us who would love a smartphone’s usefulness, but don’t want to fork over the money for a data plan? Will we be forced into one anyway?
There’s already a dismally limited set of Verizon feature phones with keyboards available for those of us who don’t wan’t to sign up for a texting package. (I like the keyboard for calendar entries and other offline stuff.)
There are prepaid plans available for at least some smart(ish) phones. The T-Mobile Comet is sold for prepaid use, but it’s relatively underpowered.
It should be possible to buy an unlocked smartphone (for US AT&T or T-Mobile) and mostly use it on Wi-Fi with a prepaid sim for phone calls. The expensive part is cellular data or contract plans of any kind which can be avoided. I’m not doing that myself since I use a umpc for data and a gophone for calls but that’s what I’d look into if I wanted to get by with only one smartphone device.
This is an excellent question. Three years from now we’ll have a LOT more wireless bandwidth available a more spectrum is released for that purpose. Ultimately this will lead to lower data plan prices. Yes, smart phones and their associated services will cost more than feature phones, but eh price differential may be small, say $5.
Nokia engineering is abysmal. Their software talent is non-existent, they’re the butt of all jokes amongst mobile phone makers. Too little too late.
They’re like the Radio Shack or the Tuesday Morning or the TJ Maxx of mobile phones. Their Finnish pride (I’m Danish) is a huge part of the problem, at least within engineering. My brother in law works for them & has told me the same thing.
Stick a fork in Nokia, they’re done.
Probably the same for Microsoft on mobile platforms – unless their product somehow blooms on the tablet level.
A year or two ago RXC told us that there would be only three platforms in mobile phones. That to me appears to be Apple, RIM and Android. RIM is corporate, Apple is BMW-esque, Android is chevy-esque. If there’s any room at all, its for Chrysler-esque player in Windows. The thing is, they just aren’t very good at writing software.
In a few years, every student is going to be carrying around a tablet computer, it will either be an Ipad or an Android. In which case Microsoft will be seen as a dinosaur. So I expect lots of $$ thrown at this effort.
Around 1991, IBM had a vastly superior operating System in OS/2 than Microsoft had in Windows 3.0. (Windows didn’t get to that level until nearly 10 years later with XP). But IBM was late to market. IBM should have given OS/2 away for free. They’d still be a player.
Likewise, Windows needs to more than give their phones away for free, they need to pay people to take them. They should buy a cell phone company, and pay people to take their product. Short of that, they are history.
off topic – around 1990, Microsoft wrote a great os for i m b – that was os2. when ms left, it was quickly ruined. not that I like ms, just the os2 argument always makes me laugh when used against ms.
Losers leap. Send them a card.
When I saw this story the first thing I thought was seeing what bob had to say. 🙂
As far as “rushed” goes, let’s not forget the Windows NT vs. OS/2 battle — OS/2 was a rock solid os, but the rushed one still won (unfortunately).
Say what you will about Microsoft, I’m no fan, but they *know* marketing. I’d say the success of this alliance is almost entirely based on marketing … which was prettying bob’s point.
Not so sure it’s a safe bet to bet on Moore any more. SSD supplier OCZ is getting lots o heat for their 25nm NAND Vertex 2 parts. The original Vertex 2 runs on 34nm NAND, but now the NAND vendor (Samsung?) will only ship them 25nm parts. Turns out that the drop to 25nm has kicked the crap out of performance. The SandForce controller hasn’t (won’t) been able to compensate.
Moore is getting to the point of failure. The point: it’s no longer safe to assume that folks will routinely replace phones every X months going forward. Just as the multi-core cpu has made upgrading a PC/Office machine no longer a given, those same forces will make it impossible to make phones yet spiffier every X months. Toss in the bandwidth issue (it ain’t infinite), and routine upgrading is a pipedream.
An industry’s got to know its limitations.
at the bottom, obsolescence and failure is built in. Moore’s law has less to do in consumer electronics, other than driving component cost down… profits then lean up, until a functional quantum makes it feature obsolete. but I’ve bought probably 20 phones in the last 10 years, and the MTBF was about 21 months.
Assuming the ‘bottom’ [those that seek profit not by driving up value, but driving down costs/quality], will continue that trend, that means most ‘free’ phones, smart or otherwise, will wear out in 1 duty cycle (2 year contract).
OTOH. My iPhone’s appear to last 2+ years, and I’m able to get some serious salvage value for the time being (hand me down, or sell).
So, the key to Nokia (and MS) is to build out build out a ecosystem unique to retain customers. That’s how MS succeeded on desktops… Invariably, either by hook or by crook, they were the cheapest ecosystem entry price, and the most expensive to exit. If MS can build that into the Nokia relationship, then they survive a another few years…. Nokia… well, we may be soon be witnessing the death spirals of the Dells and Acers of the world… It may foretell the future of WP7 OEMs
In the context of this thread, Moore was offered as the reason that all phones will be ever Smart-er Phones going forward. That can only happen if Moore continues to be true: without Moore, it isn’t possible to stuff ever more smarts into the envelope. Without infinite bandwidth, it isn’t possible to supply these Smart-er Phones with bytes to gobble. The Wall may be closer than it appears in the mirror.
You won this round Robert Young, but you haven’t won the war!!
[…] This post was mentioned on Twitter by Thijs Niks, newsery2. newsery2 said: Rushing the net: Nokia's coming fight to the Finnish – http://bit.ly/eQQWsw – [Hacker News FH] […]
My first thought on reading the news (Nokia news were expected) was Clucking Bell (or something which sounds like that).
My second thought was, wonder what Bob’ll say about this.
One local tech commentator expressed his take (on the radio, so no link folks) so eloquently, that I can’t better him: “It’s like the two last middle-aged patrons, still hanging out at the local boozer (after everyone else has left for downtown trendier bars) finally noticing that they have something in common.”
A loosers alliance? We’ll see, but at least I’m not having any regrets anymore about carrying an iPhone.
In the phone (nobody over 30 says “smart phone”) market, Microsoft + Nokia = Titanic + Hindenburg.
Well, I will agree that this was hardly unexpected given Steven Elop an ex-Microsoftee; however, it is far from a sure thing, and I wouldn’t be surprised if it resulted in the ousting of Elop by the shareholders either.
Okay, now why?
Well, WP7 is not going to get Nokia back in the game. Elop referred to Symbian as a “burning platform”, and well, WP7 is already smoldering in the cinders of a fire from long ago. It’s dead, and despite the $500 million USD Microsoft has thrown at it in marketing alone, it isn’t selling. Symbian is better selling than WP7, which until just recently (within the last week) was selling more than any other platform, only to be usurped by Android – so not even iOS could do it. WP7 will not gain anything.
But now, Elop has thrown gas on the fire, so to speak, by alienating all the communities that have supported Nokia – from Symbian, to Maemo, to Meego, to Qt. This move alienates them all, and as a result wreaks of Microsoft motivation.
So, no – Microsoft did not have more to offer than Open Handset Alliance and Google with Android, which btw comes with no strings attached. Nokia could have very well taken Android and dumped Qt and Ovi on it, added a Symbian compatibility layer and done the same thing you suggest. All without Microsoft, and for much lower costs – all showing they support their communities instead of alienating them.
So, did he really do what is in Nokia’s best interest? Or the interest of the shareholders? Or is he just buddying up with his old pals from Microsoft?
Based on the stock price – which has fallen since the announcement – the shareholder’s don’t agree with him. How much will it take to oust him and get someone that really will look out for Nokia’s best interest in place, instead of Microsoft’s best interest that is.
I think you’re missing the point.
It’s all about getting APPS, and getting them quickly.
Look at what Microsoft did with WP7. They essentially created an App recipe that goes as follows:
1) Write it in Silverlight or XNA
2) Put it in a WP7 code wrapper
3) Publish.
Now… Nokia can build high-end phones that run full-bore WP7 with the UI and everything according to spec — AND they can build mid-range phones that use a different Silverlight/XNA “wrapper”, that allows those already-developed apps to run without all the restrictions of the WP7 UI standards.
Partnering with Microsoft guarantees that the wrapper will never break — whereas the Android development cycle can pretty much go wherever it wants to in the future, Nokia’s hardware be damned.
It benefits Microsoft too, because it rewards those developers by letting them repurpose their Silverlight/XNA code to a wider audience.
Apps for Microsoft may be, not for Nokia. Nokia already has the Ovi store with apps for Symbian and apps written in Qt too. And Nokia already has a massive number of developers writing for embedded targets, though not all using Ovi.
Microsoft, OTOH, is desperate for someone to use WP7 and be successful. To date, no WP7 phone is successful by any means, and their App Store isn’t attracting developers despite the recipe you describe.
So Microsoft is now trying to take the behemoth in the room – Nokia+Symbian – and destroy them too as the WP7 sinks – in the sub-marine hatch-made of fishnet sort of way.
Don’t forget Microsoft Office. If Nokia is able to offer a version of Office on their phones/tablets, it could be a big hit with corporate America.
“Don’t forget Microsoft Office. If Nokia is able to offer a version of Office on their phones/tablets, it could be a big hit with corporate America.
”
Oh for crying out loud. Corporate America has had YEARS to play with Office on their phones and Win slates. And they hated every moment of it.
The only way Office would be successful on a tablet would be if it came with a completely revised UI. This is
(a) not a trivial undertaking
(b) not obviously something MS can do — Metro is not bad, but do they have the skill to upgrade it to an Office-sized project (with a whole new set of UI metaphors)? For god’s sake, WP7 today has not tablet edition and doesn’t even have cut&paste.
(c) no obvious lockin for MS. After all, there’s no issue of muscle memory. The only win MS has is that (in theory) their Office is more compatible with Office documents than AndroidOffice or iPages and iNumbers or Open Office for Tablets. And, sadly, MS has a TRULY CRAPPY record of inter-app doc compatibility. Try opening a Win Office document on a mac sometime. It’ll work if the doc is basic, but if it contains Chinese, or math, or a complicated diagram, good luck.
MS can try to sell some random crap as Office for Tablets. I expect it to do as well as Office Live Mesh Bing for Clouds has done.
i don’t really see any dumb phones in the stores anymore, just feature phones. and these typically have cameras, extensive off-sim contact lists, multimedia and web browsing abilities, occasionally even GPS nav; exactly the features that smartphones have. main things missing are downloadable apps and wifi support.
what that tells me is that what smart phones are really about is breaking out of the captive world where the carrier dictates what apps you can run, and makes you use their air time.
With Apple, Android and RIM increasingly pulling away in the First World, Nokia should concentrate on the Third World where costs and durability are everything. Few PCs, dodgy electricity, lower rates of literacy and far less money mean that not too many iPhones are floating around sub-Saharan Africa.
Apple isn’t going anywhere, because Steve not only wants a 30% cut of the app, he wants a 30% cut of any content that goes through the app. Too greedy.
Rim doesn’t know how to compete with Android or Apple.
Android is in the same position the IBM PC was vs. the Mac. Steve is making the same big mistake twice.
p.s. Hundreds of Symbian developers just walked off the job in protest . . .
Again, SHOCKING ignorance.
What is the cut that Best Buy charges for content that “flows through it”?
How about the cut that Amazon charges?
How exactly do you think the retail world operates? Where do you think they make their profit?
Apple behaves like any other retailer, no worse, no better. And the prices they charge are basically the same as other retailers charge.
When you buy a DVD player from BestBuy, do you have to buy every DVD you play in it from BestBuy? Does that make sense?
And you don’t have to buy music that plays on your iPhone, or videos, from Apple. You can buy them from Amazon or anywhere else.
So what’s the issue?
IF you are willing to use a STANDARD format for your content (eg PDF for books, or whatever the standard format is for ecomix or whatever) then you can sell your content wherever you like, and people can transfer it to the phone however they like — PDF is a perfect example of this, with dozens of different ways that different apps use to get PDFs into the various PDF reading apps.
The issue only comes about if you insist on using some proprietary format that only your app can view, and that you won’t allow anyone else except yourself to sell. In which case, them’s the breaks — you want to behave like a monopolist, and a stronger monopolist is limiting what you can do.
Your argument basically boils down to “Apple sucks for making life more difficult for DRM’d and proprietary content suppliers”. You don’t want to admit it but THAT is the fundamental logic of your arguments.
Seriously, do I have to say anymore?
You haven’t been reading the news about Apple banning Sony’s eReader or they plan to force Amazon to sell Kindle books through apple?
https://www.slate.com/id/2283381/
According to the New York Times, the company has rejected Sony’s e-reading app from its App Store. The Sony app would have let people read books they’d purchased for their Sony Reader on Apple’s devices. This isn’t anything new—Sony was looking to offer the same functionality as existing iPhone apps made by Amazon, Google, Barnes & Noble, and Kobo. As a consequence, it’s hard to imagine that Sony will suffer alone.
Or this one?
http://preview.tinyurl.com/4b8kn42
European publishers have added their voice to the chorus of criticism surrounding Apple’s plans for iPad newspaper subscriptions.
Until now, many consumers have been able to read newspapers on their iPad. But newspaper publishers claim Apple has informed them that free access to their publications via the iPad would end, with subscribers able to access to such publications only through its iTunes store — where Apple charges a 30 percent fee. The Belgian authorities are already investigating the matter following complaints from Belgian publisher Roularta and Dutch newspaper NRC Handelsblad in January.
Apple’s plan would disrupt the relationship between publishers and their readers, said the European Newspaper Publishers’ Association (ENPA). “Without direct access to their subscribers, this vital bond between newspapers and readers would be broken, to the detriment of both.”
Another:
http://preview.tinyurl.com/4n4bzxs
BRUSSELS — European newspaper publishers are complaining about apparent plans by Apple Inc. to require all newspaper subscriptions for the iPad tablet computer to be purchased through its iTunes store.
The European Newspaper Publishers’ Association said Monday that newspaper publishers in at least five countries – Belgium, the Netherlands, Germany, Italy and France – have received letters from Apple ( AAPL – news – people ) in recent weeks informing them of the planned change.
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In an online statement, the association said it fears newspaper publishers would lose access to critical information about readers of their digital editions.
Apple spokeswoman Trudy Muller declined to comment.
Francine Cunningham, the association’s executive director, said Apple indicated it would charge a commission for subscriptions sold through iTunes, which in some cases is 30 percent of the overall subscription price.
@Francis, your examples prove the point Maynard Handley makes! All of those are DRM’d content.
It’s not the DRM pe se that’s bad. It the business policy that forces you not only to buy all content from the app store too, once you buy the app there.
Rhapsody dares to fight back:
http://news.cnet.com/8301-17938_105-20032119-1.html
In my experience, it’s people with weak arguments who resort to personal attacks. Educate yourself Maynard, look up the definition of ad Hominem attack, and then stop using it.
Ad hominem attacks are never helpful whether the argument is weak or not. My slolution to the Apple problem is to avoid Apple products, especially those that require iTunes for full funtionality. But he has a good argument in that the iTunes store is proprietary so Apple gets to choose what they stock. Of course we can complain about it and maybe Apple will respond and maybe not. There are plenty of other places to take our business. As an outsider, I am still greatful to Apple for eliminating the drm from it’s music sales at a reasonable cost, which caused other sellers to do the same.
I would have bought an IPAD last year except the choices are Jail Break or buy all software etc from Apple
I hope a smaller iPhone comes with sandpaper so people can whittle down their fingers.
The only company that could compete with Apple on design and engineering is Nokia. Just take a look at the Communicator from 2000 or so. They owned the smartphone category for years, before people knew what the hell to do with a smartphone.
Nokia still has great hardware engineering, it’s just that their software has sucked badly for several years. Going from their Java platform to their hybrid Linux platform was a bet that did not pay off. They had a product that virtually nobody wanted, and the product that was stable languished without proper attention.
Now, Nokia can take the world-class hardware, marry it to the new kid on the smartphone OS block, and they can potentially have some great looking kids.
I’m looking forward to an E7 or E8 with WP7!
Here’s a report on the ARM/MSFT marriage from last July. Note the last sentence.
https://www.geek.com/articles/mobile/microsoft-licenses-arm-technology-for-windows-phone-7-but-will-they-design-their-own-cpu-20100723/
Dude, heard ’bout KIN!
Wow… last week I went along to a Nokia roadshow seminar where they preached the gospel of Qt running on Symbian then later on MeeGo.
Somebody should’ve maybe mentioned this to their sales/marketing/tech support department before they went all out on selling the betamax… :-/
Suits never, ever let the bad news out until they can do it themselves.
suits don’t ever have bad news to release. they announce a new future. and they never walk through the crowd after they announce the new future, and everybody else in the room is supposed to go to group meetings immediately afterwards.
Some basic thoughts… WP7 is having very slow start. It’s launch partners are not happy but they all, at least, have Android phones with similar hardware. Copy and paste has yet to be folded in! Nokia says it expects 2011 and 2012 to be transition years. They will not have competitive hardware/software for at least 6-9 months. Meanwhile, Nokia is selling dead-end handsets. Their developers are not in bed with Microsoft and have far more incentive to shift to iOS or Android. The other WP7 licensees may decide Nokia is getting too much love and go Andriod only leaving MS/Nokia as the sole supplier – a little like Zune vs Plays for Sure. But Nokia is writhing internally as it’s re-organized it’s development teams to the career transition office for 2011. This is perhaps a predictable move, but it’s also a desperate one as the execution leaves much to be desired. 6 months ago, this would have been seen by the markets as a bold but limited risk move. With the lackluster WP7 launch and the massive success of iPhone/iPad and Android, it’s the Hail Mary of Hail Mary’s.
Bob, I’m quite sure you wrote some time back that the mobile version of Windows was doomed, to be killed off by Android+Blackberry+Apple.
Why do you now think Nokia has a chance to succeed with that very same OS?
Bob is NOT giving Nokia much of a chance! I agree with his prognostication, but either play is almost impossible separately, and they need to be closely coordinated. Bob is not predicting Nokia will pull it off, but he outlining their only opportunity…
Nokia should consider producing low-priced multi (4) SIM card phones.
The Chinese brands control this niche market segment, but their OS sucks.
Nokia has a user friendly OS and good after sales record goodwill.
If Nokia enters this multi-SIM market, then that stretch of land mass from Hanoi to Morocco will be opened to it for exploitation, leveraging on its past performance.
As for smart phone, Nokia should think out of the box.
It should come out with a smart phone-tablet combo as a single sales item to beat the competition as it will provide a single learning course (curve) for two daily indispensable gadgets in this high tech age.
Consumers will be keen to consider this idea if the features and pricing schemes are attractive.
If this strategy succeeds, it kills two birds with one stone as it denies its competitors from selling either one more smart phone or another tablet.
Bob, you seem to be saying that Nokia must flood the market with Windows Phone 7 phones in the near future in order to establish the brand of the platform. They haven’t shown any sign yet that they have even started. There isn’t even any Nokia/WP7 phone available to the public yet, so they are already months behind the other manufacturers. Nokia themseves say that will be producing another 150 million Symbian handsets, so the switch to WP7 will be slow.
The very least that Nokia and MS could have done to convince anyone to take their alliance seriously was to present an impressive new WP7 phone at the same time as the announcement. But ex-Microsoft exec Elop has shown the typical arrogance of that company by thinking if it makes an announcement the world must follow.
Apart from the lack of devices, a big question is who is going to develop the apps for the OS. Their best bet is that developers who are already using Visual Studio to write PC apps can also use it for WP7, but even they are not going to rush into a commitment to port to a platform that has hasn’t taken off yet. And they’re not going to trust Nokia to stick to the OS after they dumped Maemo/Meego as well as the Qt development platform.
Nokia’s decision has completely alienated its own community of third-party developers (just look at the uniformly negative reactions at their own web site at http://blogs.forum.nokia.com/blog/nokia-developer-news/2011/02/11/letter-to-developers ). Nokia has not even extended Qt to support WP7 even though this should be fairly easy since WP7 is based on Win CE which is already supported by Qt. The big attraction of Qt is that it’s cross-platform, which means that developers don’t have to put all their eggs in the one basket and commit themselves to any OS that might disappear very soon. The lack of Qt support for WP7 means that many Nokia apps won’t be developed for any other OS except Windows, and vice versa. This is a victory for Microsoft and possibly fatal for Nokia, because the apps are more important than the OS itself which does very little on its own.
Who’s Afraid of a marriage of a Virginia and a Woolf?
Are they true or will the fireworks lead to the divorce court and penury?
From Steve and Stephen’s open letter dated yesterday:
“There are other mobile ecosystems. We will disrupt them.
There will be challenges. We will overcome them.
Success requires speed. We will be swift.”
Good luck gentlemen, you will need it!
I have to agree this looks like the end and hope that Nokia
(a) run like hell before Windows is implemented
and (b) find a plan B
In the remoter boonies of Oz, Nokia handsets are preferred because they can get a signal when nothing else can.
I just picked up a quasi smart phone for $29 (BB) with no contract. Service from Net10 costs as little as $15 monthly for 200 minutes and unused minutes roll. The phone is the LG 900g (LG GW300 elsewhere). You can download apps, texts cost 2.5 cents (.25 minute), it has a keyboard, but is not a touch screen.
For someone that doesn’t make a lot of calls/get calls it’s perfect. I have used the service for 2 years now and have a bank of 700 minutes. I am one of the slowest texters in the world with a numeric keypad, so it’s nice to have a keyboard.
Sure I want a fancy smart-phone, but I can’t afford one. My family sticks with a Tracfone or Net10 phone for $10-$15/month per phone. Paying $1000/year for a fancy phone might be worthwhile for some people, but it’s not for me. So who’s going to stick around and take care of this low-end part of the phone market?
The logic here I find strange.
There’s little difference between a $30 phone and a $50 phone, ESPECIALLY since the serious money in using either of them is in the data plan.
Sure, there’s an idiot market in the US that will fixate on this difference — but that ignorance only lasts until they’ve received one or two phone bills.
The problem, again in the US market, is that the inane concept of carrier subsidies means that the visible part of the phone price means nothing — and we see this in T-Mobile’s “any phone you like free over valentine’s day weekend” promotion. When the data plan includes what, a $400 subsidy or so over the life of the contract, the sticker price is meaningless.
Which means that, in the US market at least, there’s very little scope for ANYONE to compete on price, at least until the cell billing system rationalizes itself and god knows when that will happen.
Meanwhile, OUTSIDE the US, in the non-subsidized markets, I don’t think these numbers are realistic either. I’m damn sure a non-subsidized iPhone 3GS is more than $50, and I don’t think a Nokia WP7 phone can hit $30. IF MS are willing to cripple/dumb-down the OS maybe — but MS does not want a crappy lame OS bearing the WP7 brand, and it doesn’t want developers having to deal with essentially two very different tracks for app development — or having the claim “works on WP7” be meaningless.
It’s interesting the number of people trying to avoid data plans, when in 3 years phones will probably use nothing but data. The likes of Skype and Fring already work well on Android phones, T-Mobile is adding VOIP with seamless transfer between 3G/4G and WiFi to all of their high-end phones, and Verizon is doing serious work on VoLTE. Dedicated voice phones are on their way out because voice as an application over a data stream is much less expensive and much easier for the carriers to deploy and manage.
We avoid data plans simply because of the high price and because it doesn’t replace the original charges for voice and sms but is added to them. Just like cable doesn’t want to charge you for “bits” alone when they can charge for bits in addition to “programs”. Maybe $100/mo is reasonable for unlimited everything on a cell phone but not if you still need to pay for cable TV and Internet and Telephone at home where the cell phone either provides poor service or limits the bandwidth.
Hmmm,
The cost of the phone is almost always hidden by the carrier. we all know that. Frankly Im looking forward to a nokia wm7 phone. The elephant in the room with most smart phones including the iphone is the very average voice quality. I have a samsung galaxy s that is a fantastic hand held computer but a rubbish phone. My nokia on the other hand is a great phone but a rubbish hand held computer. Im hoping that the synergy of winmo7 and nokia is a good hand held computer and a great phone…
Yes the cost of data sucks and has to come down. Of course the real reason why its kept high is to discourage Viop that bypasses the telco, but I guess we all know that.
Oh and the secret in the sauce is always the apps and the distribution channel. Writing anything for winmo7 is a snap compared to the archaic objective c of apple, or the java of andriod.
just my $2.50
I still have my RAZR. It works fine. It makes phone calls. I know where my priorities lie…making phone calls. No plan. I buy the time I need. I have a computer for “computing”. I’m so old hat!!
Both Nokia and Microsoft are the looser of the smartphone business in the past important years.
Microsoft is looser with its own phone, even offering with promo offers, as a “2 for 1” or with bundled with a free PS3.
Nokia might have made mistake to get an ex-MSFT guy as CEO.
He will be ripped now in the light of this latest deal for not owning Nokia shares, but owning plenty of MSFT shares. I would not be surprised if shareholders would force him resigned, after the huge drop in Nokia share price, following the deal.
Glad to see so many other posters who don’t need wireless data – maybe we won’t be ignored. The phones can all be smart so long as there is a low-end tier available.
I’m just not that mobile right now – I have a short commute and little work travel. Internet at work and home meets my needs.
Under the subject of “isnt that interesting” comes this little fact. The eight largest holder of Microsoft Stock is Nokia CEO Stephen Elop.
http://i.imgur.com/3nN2k.png
How much more complicated can these phones get while staying so small and usable by someone with less than a technical PhD? All I want to do is make and take calls and deal with an occasional text message. I don’t want to type on a nano-sized keyboard. I don’t want the ability to do complicated things on a microscopic keyboard to determine my value as a human being.
[…] Robert X. Cringely echoes this prediction, guessing that the new iPhone Nano will likely be introduced along with the iPhone 5 sometime this Summer. Simultaneously, Apple will capture both the high-end and entry-level mobile phone segments, completing a coup of the mobile phone industry that took just over four years. […]
Windows phone is not going to win the corporate. MSFT has had 10 years to do it but lost to RIM. No tech framework or Office hitch will help it become popular among top execs who want the most popular gadget. WP is not going to win the consumer market. They’ve already a non-factor there with zero mind-share. By the time NokiSoft rushed the net, Chinese manufacturers would be flooding the rest of the world that cannot get/afford iPhones with low-end Android phones.
What you propose makes sense, but that requires management team(s) that can lead and execute, which we know do not exist around Ballmer’s circle (which Elop is part of). I see Nokia rush to offer 1 or 2 flagship phones aimed to compete with the best of iPhone and Android, and then rush to make tablets or build tie-ins with XBox to try to hook the consumer market. A couple of years from now, when you can buy a gaming handheld from Apple for $29-49, Microkia still will not understand what happened.
AppleOutsider.com said it best, “Microsoft Buys Nokia for $0B.” Nokia shareholders ought to quickly look up the history of how well Microsoft partners/purchases have fared.
I think you are leaving out the factor that for smart phones, you are required to buy a dataplan.
Nokia is an interesting. When the world was switching to Windows and needed bigger and better monitors, Nokia produced a very fine monitor that was the equal of anything you could buy from Japan. Later during the dot-com hay days, Nokia produced a very fine firewall appliance. Nokia was successful in the early cell phone days because they produced a very fine product.
Nokia is a good company and can be good again. Their current problems seem to be the result of weak leadership and not being able to quicken their product development cycles. These are problems that can be fixed. The nice thing about the cell phone industry is the 2 year contract and replacement phone cycle. Every month 4% of cell phone users are renewing their plans and are shopping for new equipment. If Nokia can get its product development act together, they can get back into the game pretty fast.
Rushing the net will be futile without apps. When Apple announces the low end device you claim they will announce this summer, it will come out of the gate with 150,000+ apps that will run on it. Windows Phone 7, even on awesome or not so awesome Nokia hardware, can’t touch that. People don’t buy low end phones to save money, everyone’s smart enough about phones by now to understand that the initial purchase price is effectively nil of a discriminator. They buy smartphones to run apps, be they high end smartphones or low end smartphones doesn’t really matter.
Game over. A $49 iPhone makes Nokia cheap smart phones irrelevant. Although I am assuming that AT&T will be selling low end iPhones for $0 within a year. The next major “thing” may be a killer app – probably on Android. Another major “thing” will be the AT&T and/or Verizon $0 smart phone that has nothing to do with Apple or Google. AT&T and Verizon own the bandwidth: they will prevail.
R.X.C. –
Great analogy — and I can see where that strategy is likely to work for Nokia. Microsoft is hungry, and are likely to bend over backwards for Nokia – providing all kinds of technical development support and a concession on licensing for the first versions to give Nokia a chance to catch up and bring Microsoft 7 portable deeper into the marketplace.
My next phone is still going to be a Linux/Android phone. I don’t want anything to do with the closed environments of Microsoft and Apple … and most every other “intelligent” device I own is Linux powered (my laptops, PCs, network devices – even my IP Telepony … so why not my phones?).
If you think your data plan gouges you in the US, try living in Canada, where our telecomms oligopolies are a national scandal.
Since its generally impossible to get a signal between towns in the province where I live, when travelling I generally make my calls from Starbucks over VOIP. That way my iPad gives me free or very cheap calls via Skype, an abundance of apps, and no data plan. Seriously, at the cost of even a cheap plan in these parts I use the phone so seldom that I’d pay about $25 a call.
So my iPad plus wi-fi is the equivalent of the old-time phone box, but I get a cup of coffee thrown in.
[…] oneself. While there are some good ideas for Nokia out there, like Cringely’s rushing the net strategy, I couldn’t come up with one that gives me a warm fuzzy. At the higher level of the stack, […]
[…] the original: I, Cringely » Blog Archive » Rushing the net: Nokia's coming fight … This entry was posted in Uncategorized and tagged Blog, Nokia. Bookmark the permalink. ← […]
“the lower end of the market where people buy on price as much as features and brand loyalty is less of an issue”
Bob – who says that Brand Loyalty is less of an issue at the lower end? In fact, it is MORE of an issue at the lower end. Let me explain:
You see, a $30 investment for a person earning $60 a month represents a great deal of that person’s total investment capacity. He (it is almost always a he) needs to take as little of a “brand risk” as possible, and would want a reliable product from a reputable company. If anything, it is the mid-end where people can “afford” to be experimental. Ultimately, experimenting and exploring a new brand world is a luxury for those who have their subsistence needs met already.
The market-share figures bear this out. In India, GfK reports overall mkt-share of ~50% for Nokia; but more than 66% in the segment below Rs. 2000 (roughly $40).
Please double check these facts, and then project your biases onto the “market”.
Nice article overall, but marred by this oversight.
Cheers.
Amandeep
New Delhi
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[…] Robert X. Cringely echoes this prediction, guessing that the new iPhone Nano will likely be introduced along with the iPhone 5 sometime this Summer. Simultaneously, Apple will capture both the high-end and entry-level mobile phone segments, completing a coup of the mobile phone industry that took just over four years. […]
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SO, it’s now June 30th — why didn’t Apple introduce the iPhone5 and cheap iPhone?
I will continue to focus on
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[…]I, Cringely » Blog Archive » Rushing the net: Nokia’s coming fight to the Finnish – Cringely on technology[…]…
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