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Nokia Beefs Up Apps to Wean Away Market ‘Brainwashed’ By Apple

Olli-Pekka Kallasvuo, chief executive officer of Nokia OYJ
Chief Executive Officer Olli-Pekka Kallasvuo has struggled to deliver on a touchscreen model on a par with the Apple device. Photographer: Daniel Acker/Bloomberg

A Nokia Oyj advertisement in the Paris metro shows a mobile phone packed with applications, from the French yellow pages “Pagesjaunes” to “ Le” and “Scalado Photo Twister.”

The marketing effort to take on Apple Inc. in France, the biggest iPhone market outside the U.S., is among the Finnish company’s steps to reclaim lost momentum by putting apps at the center of its smartphones campaign. The world’s biggest maker of mobile phones also placed ads with apps in free newspapers on the London Tube and is embedding software trainers in its local sales units to attract more developers to its Ovi Store.

“Apps are going to be more central to Nokia’s conversation,” Purnima Kochikar, 42, who heads the Forum Nokia developer-support unit for the Espoo, Finland-based company, said in an interview. “It’s no longer about selling devices.”

Twelve years after it began working with outside developers, Nokia is struggling to claw back ground lost to Apple, whose apps-rich devices are flying off store shelves. Nokia’s catch-up effort is an acknowledgment it has failed to capitalize on its 41 percent share of the smartphone market to become the platform of choice for software writers.

Apple may extend gains after the iPhone 4 sold 600,000 handsets in pre-orders before its debut yesterday, when it was expected to sell a record 1 million units.

IPhone’s first-quarter share of the smartphones market rose to 15.4 percent from 10.5 percent a year ago, while devices that run Google Inc.’s Android software soared to 9.6 percent from 1.6 percent, according to Gartner Inc. Symbian, Nokia’s main operating platform, slid 4.5 percentage points to 44.3 percent.


“Forum Nokia is improving some areas of what they’re doing, but the biggest issues Nokia faces have been elsewhere, in the devices or the software or the discovery mechanism for the apps,” said Martin Garner, a London-based analyst at CCS Insight. “There is much more profile-raising being done. It’s a good idea. Unfortunately Apple has paved the way.”

Kochikar, a former manager at Verizon Communications Inc. and an entrepreneur who joined Nokia in 2003, says the company’s performance in apps shouldn’t be measured by the number of items in its Ovi Store, which Nokia has refused to disclose. Apple claims 225,000 iPhone and iPad applications while Google’s Android Market, which is also winning favor from developers, has about 80,000 according to

“I think the market has been brainwashed to think it’s about counting apps,” Kochikar says, citing Vuclip, a Web-based video service for mobile phones, and mPedigree, a text-message based service for drug authentication in Africa. “If you look at all these apps they’re not in a store.”

Falling Short

Kochikar, who began running Forum Nokia 11 months ago, is part of Nokia’s new front, led by the recently appointed smartphones unit chief Anssi Vanjoki, to show its devices are as cool as iPhones. As Nokia gears up for the third-quarter unveiling of the N8, its first device running the Symbian 3 operating system improved for touchscreen phones, it has its best chance yet to deliver on that promise.

Nokia’s current high-end smartphones have fallen short of the expectations raised by the iPhone, forcing the company to cut its outlook for sales and margin. Nokia this month lowered its full-year margin target for the second time this year.

Nokia shares have fallen to their lowest level since Oct. 1998 at about 6.8 euros. They have tumbled 24 percent this year, giving the company a market value of 25 billion euros ($31 billion), about a tenth of Apple’s $246 billion and slightly less than Research In Motion Ltd., the Canadian maker of Qwerty keyboard BlackBerry phones.

Too Much Effort

“If Nokia continues down its existing path, betting on Symbian, it will always be one or more steps behind Apple and Google as well as a low priority for applications developers,” Adnaan Ahmad, a London-based analyst for Berenberg Bank wrote in a report dated June 24. He would prefer to see Nokia switch to Android, he wrote.

Nokia yesterday said future models of its N series of high-performance devices will be based on MeeGo, an operating system it is developing with Intel Corp. The company said last year that it would use the new software on its most powerful mobile devices while continuing to develop Symbian.

Kochikar’s team is charged with introducing developers, who have long complained about the difficulty of Nokia’s smartphone platforms, to the better tools, including Qt, a cross-platform development environment that could be a “secret weapon” for Nokia, according to Garner.

‘Boredom Buster’

“To develop apps of the same functionality on the iPhone and Nokia, you’d be looking at three, four times as much effort on Nokia,” says Andy Nugent, a director of Manchester-based Ravensoft Ltd., whose Battery Extender app notched up more than a million copies after featuring on Ovi. “We really like the push toward Qt. It’s easier, you get better-looking results.”

The Qt tools for mobile released this week will enable developers to run their new Symbian 3 apps on older devices as well as Nokia’s future Linux-based platform MeeGo, giving them a an easy way to reach the world’s biggest smartphone base. Earlier apps needed to be reworked for different Nokia models.

Nokia has also waived the requirement of forming a company before listing apps on Ovi Store and is helping advertise apps.

Longtime Symbian developer Richard Hazenberg, chief executive officer of Lunaforte, an Amsterdam-based developer of games and other “boredom buster” applications, says he appreciates the publicity boosts Nokia can give.

Crowded Market

“It’s a very crowded market so if you have ways to reach the consumer that’s much more important for us than the tool side of things,” says Hazenberg, who has over 6 million downloads on Ovi. “The ability to do marketing with Nokia has been the biggest step forward.”

Nokia reports the number of downloads on Ovi Store at more than 1.7 million a day, and says 75 percent of them are apps. Many other developers have had millions of downloads on the store, including the Shazam music identifier service and the Nimbuzz social messaging interface, Kochikar said.

Kochikar acknowledges that many of the 4.5 million developers registered with Forum Nokia are “prospects” whom the company hopes to convert to active development on one of its platforms, especially as it starts selling the N8.

“If the N8 is a hit, and its brothers and sisters when they come out, developers will start to take Nokia more seriously,” says CCS Insight’s Garner. “If it isn’t, that won’t be Forum Nokia’s fault. There is so much that they can do and they are working on it but the success rate is not only up to them.”

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