June 14 (Bloomberg) -- As Nokia Oyj prepares to introduce its latest flagship smartphone, developer Jan Ole Suhr says he knows why the brains behind addictive applications are shunning the Finnish company.
“It’s difficult for small developers to invest in the smartphone segment of Nokia when nobody knows its future,” said Suhr, creator of Twitter application “Gravity,” which was showcased by Nokia when it opened its Ovi applications store last year. “The new shiny things aren’t available and there’s only the old-fashioned stuff, where it takes a lot of work to make the software look good.”
Nokia’s 41 percent share of the smartphone market, the fastest-growing piece of the mobile-phone industry, has failed to make it the platform of choice for software writers. It is instead at the bottom of the pile, behind Apple Inc.’s iPhone and devices based on Google Inc.’s Android.
Developers of games, music, videos, media and other apps want to see if the N8, Nokia’s first device running the Symbian 3 system for touchscreen phones, delivers on promises of improved look and feel, an easier interface and operability across devices -- in short, if it’s more like an iPhone. For many, the device scheduled to be released in the third quarter has been too slow in the making and may still disappoint.
“Symbian needs a more competitive platform to attract users, early adopters who are the sort of people who download lots of apps,” said Gartner Inc. analyst Nick Jones. “We may have to wait until Symbian 4 to get a really compelling Symbian device, so that the ecosystem may not start to achieve its full potential until 2011.”
The world’s largest mobile-phone maker’s failure to lure apps developers, whose products help sell iPhones and Android devices, adds to the perception that its devices are behind the times. With Apple last week unveiling iPhone 4, with a video-chat feature, and Android devices chalking up sales, the Espoo, Finland-based Nokia risks not being able to recoup lost ground.
Nokia may post lower-than-expected second-quarter profit because of a weak product range and falling prices, Macquarie Group Ltd. analysts said last week. There’s “no visibility on the N8, continued heavy competition in handsets and softening demand,” Phil Cusick and colleagues wrote in a June 9 report.
Chief Executive Officer Olli-Pekka Kallasvuo said in April he expects sales of handsets and associated services to be between 6.7 billion euros and 7.2 billion euros in the second quarter. He cut the company’s full-year margin forecast, citing the slow development of the N8.
Nokia shares have plummeted 51 percent since Apple opened its App Store on July 11, 2008. Its market value has shrunk to 29 billion euros from 203 billion euros in 1999, when it was Europe’s most-valuable company.
Nokia, which doesn’t disclose its catalog size, says it has 1.7 million downloads a day of apps including QuickOffice, Skype Internet calling service, Shazam music identifier, Spotify music, Snake games and Lonely Planet travel guides. The company’s secrecy about the number of apps is “probably because it’s still rather small,” said Gartner’s Jones.
Its offerings lag behind Apple’s App Store, which has more than 225,000 apps. Android has more than 70,000, according to Androlib.com, which tracks the platform’s apps.
More than 5 billion programs have been downloaded from its store, Apple says. IPhone users spend more on apps than people with Android devices, who in turn spend more than users of Nokia handsets, developers say. That drives software efforts.
‘Six of Six’
Nokia opened the Ovi Store to offer developers a channel to the 68 million people a year who buy its smartphones. Developers spoiled by iPhone tools say they found Nokia’s software and storefront clunky. Many are turning to Android and Research In Motion’s BlackBerry.
“The Ovi Store doesn’t have any traction in the U.S.,” said Ken Willner, CEO of Zumobi Inc. in Seattle “They’re probably number six of six,” behind Apple, Google, Palm Inc., RIM and Microsoft Corp.
Willner’s company, whose applications present media content such as MSNBC and Parenting magazine on iPhones, chose Android-run devices as its second platform, bypassing Nokia.
“Large numbers of developers see Nokia as less relevant for distributing apps,” said Martin Garner, a London-based analyst at CCS Insight. “They prefer to work with software that has obvious growth momentum in the market.”
The market share of Symbian, Nokia’s main smartphone operating system, fell to 44.3 percent in the first quarter from 48.8 percent a year ago, according to Gartner. Although mostly on Nokia phones, Symbian is also used by Samsung Electronics Co. and Sony Ericsson. iPhone’s share rose to 15.4 percent from 10.5 percent, while Android soared to 9.6 percent from 1.6 percent.
Nokia says its new line of smartphones with Symbian 3 and Symbian 4 improves the user interface and carries a new version of tools for developers, making cross-device development easier.
“You’ll see a big improvement in terms of the store experience with the introduction of the N8, as well as with subsequent devices,” said George Linardos, the Nokia vice president who runs the Ovi Store. He cautioned that there won’t be any “immaculate moment” when the store is perfect. “I look at this as the first innings of a very, very long game.”
Switching to Android
Many developers don’t want to wait, and say they can’t take the risk of developing for a yet-to-be-perfected platform. Even long-time Nokia software authors are looking elsewhere.
Take Alan Masarek, chief executive officer of Quickoffice Inc. in Plano, Texas. Nokia helped his 150-person company become one of the biggest independent mobile apps developers with its stripped-down word processor and spreadsheet running on more than 240 million mobile devices worldwide.
About 1 1/2 years ago Masarek, whose software is preloaded on all Nokia Symbian devices, began working on Android phones.
“That in hindsight has proven to be a good move,” he said. “The numbers on Android are very ascendant right now. We’re on all these devices that just started shipping in meaningful volumes the last two quarters.”
Android-based smartphones threaten to top the iPhone in 2013 in market share, according to Framingham, Massachusetts-based IDC. Shipments of Android devices may reach 68 million that year, making it the second-most popular operating system after Symbian, according to IDC.
For Quickoffice, Apple and Android now each account for about 30 percent of shipments against 40 percent on Symbian.
Some developers are shunning Symbian entirely so far.
“Development on Symbian has historically been difficult and Google and Apple leapfrogged Nokia in terms of developer friendliness in the past two years,” said Phil Libin, chief executive officer of Mountain View, Calif.-based Evernote Corp. “There’s no comparison.”
His 30-person company’s main product is a note-taking application that runs on desktop computers, iPhone, Android, BlackBerry, Palm’s WebOS and Microsoft’s Windows Mobile -- all except Nokia’s Symbian.
Apple has a system in place that makes selling and buying apps easy and painless, said Joseph Darling, a long-time Nokia user in Sydney, Australia, who opted to develop his ParkWatch parking monitor application for Apple.
“They have a payment system that was already popular for music and video,” he said. “That takes you from browsing to buying in a couple of clicks. They’ve brought that entire community over into apps. It’s hard for others to duplicate.”
Gravity’s Suhr, who lives in Berlin, is one of the few developers to have worked on mastering the Nokia system, supporting himself by writing apps for it since 2002.
His application, which lets users read and write Twitter messages on phones, was touted by Nokia at the launch of its N97 smartphone last year. Suhr says Gravity is “almost the only application that makes a Nokia device look like an iPhone.”
“It should have been very easy to create Gravity-like applications to cover other functions,” he says. “And then I bet the whole reception of the platform and the phone would have been very different.”
To contact the reporter on this story: Diana ben-Aaron in Helsinki at firstname.lastname@example.org
To contact the editor responsible for this story: Vidya Root in Paris at email@example.com