The Real Customer

I enjoyed reading Steve Johnson’s post on who the real customer is over on his Product Marketing blog. I’m not sure if Steve has a Telco background or not, but his comment regarding the person who uses your device being your customer, is spot on for this industry. The  manufacturers who maintain direct contact with their end users tend to be the most successful. There are some who attempt to make their living catering to operator (distributor) wishes like LG and ZTE, but none ever seem to really garner significant mindshare.

Let’s review those that do.

Apple

I think we all know this story already. They are the poster child for making operators look like “dumb pipes”. Having completely flanked operators with their retail stores, music and app business, and line of personal devices, they’ve been able over the years to develop strong ties with their consumers. Globally, they’ve never been market share leaders, but those they served were passionate users. Their message rarely has been distorted by middle-men. What is the result? Operators bending over backwards to access that user base, breaking their internal rules and giving up revenue streams.

RIM/Blackberry

For years has been the de-facto choice for business users, offering services that other manufacturers either avoided or refused to compete on. So while they are struggling now, they built their success around “Crackberry” addicts. Operators couldn’t help but stock their products for fear of user revolts at their enterprise accounts. Even in the midst of their current troubles, the press and consumers still follow them without fail.

Google/Android

Obviously this story has not finished, but they do seem to be gaining traction at a rapid pace. Whether they continue to do that is still up for debate, however, their recent success is built once again on having a dedicated user base dependent on services that were not developed on the operator level. A “semi-open”approach  versus the walled gardens that operators are famous for have served them well recently.

Nokia

I hesitate to put them here due to their recent issues with delivering a compelling smartphone. However, they still command close to 40% of the global market. And in markets with less operator control, Nokia is still the standard. Their broad portfolio, targeted to multiple income levels and consumer segments, still has them as a force to be recognized. While not obvious in the US, there are still Nokia fanatics in plenty of other countries.

Manufacturer success is never guaranteed, but there doesn’t seem to be any reason to believe that devotion to end-users will be any less successful in the future. It’s sad to think how many operators consider themselves the most important person in the value chain. Obviously they have their own roadmaps to manage, but more often than not, it appears as though they forget who they actually while frustrating their manufacturing partners in the process.

God Bless You, Mr. Elop!

This is Stephen Elop.

He’s been appointed as the new CEO of Nokia.

I liked Olli-Pekka, but he seemed to have a vision he couldn’t execute. Whether the failure was his fault or just due to nature of the Nokia beast doesn’t matter anymore. I hope Mr. Elop can bring necessary change to Nokia and renew their promise of Connecting People.

Apple Hello! Nokia Good-Bye!

Wow, two of the world’s most important manufacturer’s of mobile phones and services made their own set of announcements today. It should be interesting to see what each of them had to say.

Let’s start with Apple.

Apple Introduces New iPod touch

Apple today announced the new iPod touch, packed with incredible new features including Apple’s stunning Retina display, FaceTime video calling, HD video recording, Apple’s A4 chip, 3-axis gyro, iOS 4.1, and Game Center — all combined in the thinnest and lightest iPod touch ever. The new iPod touch features up to 40 hours of music playback and seven hours of video playback on a single battery charge.

Apple Reinvents iPod nano with Multi-Touch

iPod nano has been completely redesigned with Multi-Touch, which lets you navigate your music collection by simply tapping or swiping a finger on the display. Nearly half the size and weight of the previous generation, the new iPod nano features a polished aluminum and glass enclosure with a built-in clip, making it instantly wearable.

Apple Unveils New iPod shuffle

The redesigned iPod shuffle features both clickable buttons and Apple’s innovative VoiceOver technology, enabling you to easily navigate your music and playlists without ever looking at your iPod shuffle. The wearable iPod shuffle has an all-aluminum enclosure with a built-in clip and comes in five brilliant colors — silver, blue, green, orange, and pink.

Apple Introduces iTunes 10 with Ping

iTunes 10 features Ping, a new social network for music that lets you follow your favorite artists and friends to discover what music they’re talking about, listening to, and downloading. With Ping you can post your thoughts and opinions, your favorite albums and songs, and the music you’ve downloaded from iTunes — plus view concert listings and tell your friends which concerts you plan to attend.

Apple Premieres New Apple TV

The new Apple TV offers the simplest way to watch your favorite HD movies and TV shows on your HD TV for the breakthrough price of just $99. With Apple TV, you can choose from the largest online selection of HD movies to rent, including first-run movies for just $4.99, and the largest online selection of HD TV show episodes to rent — from ABC, ABC Family, Fox, Disney Channel, and BBC America — for just 99 cents.

Wow, that was pretty impressive. It wasn’t revolutionary in any regard, but they definitely brought a lot of new updates to the table. I can’t wait to see what Nokia had to announce today.

Oh wait, it looks like they sent me an email with an announcement:

Dear Ovi Files user,

Nokia is discontinuing the Ovi Files service, effective October 1, 2010.

We apologize for the inconvenience.

Please make sure to uninstall the Ovi Files Connector installed on your personal computer. To do this, execute the standard Windows or Macintosh uninstall procedure that came with your computer. You will not lose any files as a result of this service discontinuation. Ovi Files simply creates an ‘online mirror’ of the files saved on your Windows PC or Mac, so your original files will remain intact. The files on your computer are always treated as the master version, even if some are selected as ‘Anytime Files.’

You will still be able to share content between your phone and PC using another Nokia product, Nokia Ovi Suite. With Nokia Ovi Suite installed on your PC, you can do the following: sync your contacts and messages; transfer videos, photos, and music; back up your Nokia and update your device software. Please note that this is not a direct substitute for Ovi Files as Nokia Ovi Suite requires a wired connection between your PC and mobile device. For more information visit www.ovi.com/suite.

Again, we are sorry for the inconvenience and hope that you will continue to enjoy our most popular services:

Maps Find your way with free navigation, downloadable maps and easy location sharing.

Store Browse a wide selection of mobile apps, games, ringtones and more.

Music Download albums and individual tracks, share playlists with friends, and much more. »

Thanks Nokia, I will TOTALLY use your existing services knowing that you may discontinue them at any point in the near future. Also, knowing the fact that whatever service I use from you may cause extra work for me (uninstalling) gives me a big, warm fuzzy. I sure am glad I signed up for DropBox instead of Ovi Files, it looks as thought it’s saving me a lot of trouble.

The “Rescuing Nokia” Plan

For those following Nokia, this article from The Register is a must read.

The corporate culture of Nokia is unique. Like any large company, it has an overwhelming number of processes, political battles, and organizational changes. At time it feels like a monstrous robot trudging along, yet there is a super-computer at its core. A “human cloud” for lack of a better explanation. The analysis that’s done within this cloud, not to mention the innovations conceptually developed there, would astound those that only associate Nokia with cheap, plastic phones. Sadly, this intelligent cloud can’t always get successfully navigates its own robot arms and legs.

So when Juhani Risku, the former Nokia employee profiled in the article, gives his assessment of Nokia’s problems, I couldn’t help but think, “yes…Yes…YES!!!” It’s easy to dismiss him as someone pointing out problems who has no power to solve them, but his message is almost spot on. Risku believes Nokia has become a “a risk-averse bureaucracy” that “stifles innovation” and “makes progress slow or non-existent.” To make it worse, he’s revealed that competitors brought to market ideas that were born in Nokia, but had “realis[ed] them better”.  I happen to agree with him on two sources of this problem.

The first is what Risku calls Nokia’s “obsession with data gathering.” Even a few days inside of Nokia will overwhelm anyone with the immensity of research available to the average employee. In some cases, it’s so bad that one could make a compelling argument for either side of an issue by referencing this or that research report. I do believe senior management had sifted through this data and chosen their direction, but from middle-management down, the often contradicting sources of information could easily immobilize a discussion. Not knowing which side to take, many of us stood still waiting for more data, typically waiting until market conditions validated one viewpoint over the other. There was a line out the door of people willing to make a decision, but culturally, the lack of enough market data prevented many from taking the risk. Since the mobile market is constantly in flux, many new markets just wont show up in a research report. As such, Nokia has accepted to be a fast-follower in certain  trends and development.

Second, Risku takes aim at Nokia’s segmentation and consumer-driven approach towards device creation. As a marketing professional I have a firm respect and appreciation for market segmentation and consumer-facing decisions, so don’t misunderstand my points here.  Up until the last six months of my tenure at Nokia, I drank the segmentation and consumer-focus Kool-Aid just as much as the next person. Nokia’s segmentation strategy offered a common understanding across markets and presented us a vocabulary on how to address them. In that way, it was absolutely fantastic. However, it fails similarly around the “data gathering” issue, that being it could not address markets that were not there. I recognize the obviousness of this statement, but I came to the conclusion that much of our segmentation had created pockets of walled-in thinking. Much of what should have been used to attack markets, became used to attack new ideas and innovation that did not fit within the model. I don’t believe any of the originators of our segmentation had this thinking in mind as it was created, it just developed as such.

Worse, it had the debilitating effect of limiting innovation. To clarify, it did not eliminate it, but may have restricted the scope of many to only think within narrowly defined customer segments and experiences. Many of us attempted to match everything in the phone to the desired segment: design, appearance, pricing, promotion, etc. Contrast this with the current Apple/Google approach that provide a strong platform with a broad ecosystem of innovative 3rd parties. Apple specifically has honed its offering around the user experience, but basically has left each user to define himself by mixing and matching applications. To put it another way, Apple/Google offered everyone a blank sheet of paper with the developer ecosystem providing the crayons.  Nokia unfortunately is left writing in the margins of an old over-used piece of paper (Symbian), with nothing to show for it than a black pen and some white-out.

The patriotic side of me may bleed through here, but one issue I did take with Risku is his almost venomous view of the “American business culture” whose “arrogance and aggression” that be believes “paralysed Nokia.” I can agree it would be near impossible for an American outsider to easily walk into Nokia and make changes without destroying value left and right. However, my judgement is not based off the belief that the American way-of-thinking is inherently wrong. It’s more more due to the complexity that Nokia has built around itself that almost requires a sherpa to navigate. Much of this was built on an arrogance of “not invented here” that makes Nokia bulky in places, extremely limiting its agility to respond to changing markets. I wont even get into how European-centric development arrogance has repeatedly cost Nokia the North American market.

Risku misses the point in regard to aggression as well. The first thing I noticed about Nokia, versus my previous employer Intel, was its lack of aggression. My feeling then, and even now to a certain extent, was that Nokia waited for markets to develop while Intel aggressively went out and built them. Sure, Intel has lost a few along the way (WiMax, Network Processors, etc.), but when it wins, it wins big because it builds the market the suit them. Qualcomm, a historical thorn in Nokia’s side, also takes this approach by building markets where Nokia is too bloated to move or too arrogant to think they can be knocked off their block. So while Risku wants to make aggression sound negative, it is also a source for many companies to continually innovate, seek out new markets, and adapt. If you watch Nokia’s attempt at broad ecosystem creation, you’ll quickly see how the lack of directed aggression hinders much of their progress.

So as a former employee, I’d like to say that Nokia is still an extremely powerful competitor in the market. Yes, many newer entrants are getting the press, but none of them yet does as many things as consistently well as Nokia. They all have exploitable weaknesses that Nokia is capable of addressing. If and when Nokia fixes its smartphone problem, you’ll see many customers come back to them. There is a still a strong brand preference out there for them to rebuild upon if done sooner than later. Their reach across markets and relationships with operators and consumers is still there. The giant robot may be slow in its lumbering, but it’s still a giant robot that could still potentially smash its giant hands down.

And finally, the people inside Nokia are still some of the brightest and most talented in the industry, if not the world. Many of them are quiet leaders in their respective fields, and most of them have an intense desire to see Nokia return to its former glory (and values). Obviously some of them are still my friends, so I’m biased. However, I can assure you that if Nokia can put together a vision of the future for its people to truly rally behind, you’ll see a newly rejuvenated company roaring back across all their markets.

I wish them good luck.

Where’s Ovi?

It’s one thing to be lagging behind certain competitors, it’s a completely other thing not to be even mentioned. So when Gizmodo did their Detailed State of the Apps report, one major vendor’s app store was missing. Worse, Palm was listed twice, once under the HP brand.

I love you Nokia, you paid my bills for many years. I can wax nostalgic on your great North American past. I can make an argument that your current state is due to the rise of operator brands. I can even still believe you have the best interests of your consumer in mind.

What I can’t do is justify how you lost so much mindshare…

So I wonder, how does any company, especially one with the marketing resources of Nokia re-build a relationship with its lost consumers?

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