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Spillikins #85. London Turns into Battle Arena for Nokia and HTC. Opponents Are Even
I spent the week flying back and forth. First, there was an announcement of new HTC models in London, and then Nokia World that was more about PR than actual achievements, more about giving new promises than sticking to what had been promised before. Where is my Nokia N8, the one to be available in late August? Awaiting it somewhere in mid October now. In London, I had a chance to talk to a number of Nokia employees, which will be reflected in the forthcoming materials about the company; I have plenty of information to share, both good and bad things. Although the reports are mostly negative, there is some good news there. It isn't much, but I hope that it's just the beginning. Anyway, the contemporary crisis is the most serious the company has had since the late 80s. For dessert, I have a few stories about some models that haven't been shown to other journalists or the general public yet.
Another theme of the week I would like to comment upon is the resignation of one of LG's top managers. According to the official statement, the smartphone business wasn't successful under his guidance. That is an interesting insider assessment of the company's position, and an immensely honest one. I hope that the changes are for the best, it's nice to have more of powerful players around.
It looks like it is not the best time for Nokia to do some staff reshuffling. Anssi Vanjoki, the company's most charismatic top manager announced his resignation literally a day before Nokia World. The decision came as a bolt out of the blue, especially in the light of the recent CEO layoff. Although the actual reason for the resignation is not known, there are several versions available, with two of them being especially popular and quite likely to be true. Let's first talk about the one personally I find less probable.
Well, the first version is as follows. Anssi expected to become the company's next CEO and what followed was his reaction to the board of directors' hiring someone from Microsoft. Certainly, some emotions can be hard to control, but I don't think that the position was that important for Anssi. The other possible explanation is that he does not support the company's official course. And that difference of opinion is not public, as during Nokia World 2010 it was for the second year in a row that Anssi made a promise to advance on all fronts. He also added that the company would have to win back its positions. A year ago, there was no winning back the positions, as Nokia thought that they hadn't lost anything. In the public, Anssi has been saying that Nokia is doing well. However, as the one in charge of mobile devices, he has been putting off the release of the Nokia N8, trying to make it ideal. In his opinion, it is not yet. Hence the launch has been moved from August 25 to the end of September, or according to some rumors, even to the second half of October. Now, add to this the delay of Symbian^3, which was initially slated on the first half of 2010 and not its end, and you get a not-so-gratifying picture of Nokia not being able to meet its own plans all competition and pressure from other companies aside. Unfortunately, Nokia's business processes have gone so wrong that the company is not able to develop and release its products in time. This is a lavish offering to the competitors that are making their best of it.
The Nokia E7, the new business flagship, was showcased at Nokia World. When describing the Nokia N8, I made it clear several times that it is the Nokia E7 that I consider to be the better Symbian^3 product. It is a successful model, albeit a niche one. It is not a mass market device and won't make a difference for Nokia in terms of sales. What is important is the fact that there is no breakthrough there, but only traditional Nokia features, design and technologies. It is a product for those who like Nokia and want to use a quality product. Without any hidden irony, it is a nice and lovely model. But before we continue, let's discuss the release date and price. The company is planning to ship the device in the first quarter of 2011, but as the Nokia N8 experience suggests, that is subject to change, albeit the delay shouldn't be as long if any. That is, by the end of the quarter, somewhere in March, the model should be available for purchase in many countries. The tax free price of EUR 495 will turn into EUR 600 some on most markets. And that is the high-end segment, right where Nokia hasn't been feeling very good; yet the product will be in (mild) demand. There is about half a year between the initial announcement on September 14 and the actual launch.
Now let's take a quick look at the announcement made by HTC. We will discuss it in greater detail in a separate paragraph, but for now just concentrate on the HTC Desire Z unveiled on September 15. The device is slated to be available in the middle of October, which is only a month later. Compare it to Nokia's half a year. The ratio turns out to be one to six. With a similar price tag, the Desire Z won't make it to every single user's pocket in six months but will nevertheless enjoy some decent sales. And each and every Desire Z sold implies a lost potential buyer of the Nokia E7. No need to say about the unpleasant surprises that the beginning of the year will bring with it, when the characteristics of the Nokia E7 will fade away a bit in the light of some new product announcements and launches. Just when the Nokia E7 finally hits the shelves, there will be some young blood waiting for it there. I believe that even the most hardcore Nokia supporters will agree that it takes too long for its products to make it to the market after their respective official announcements.
At Nokia World, there was one more thing, which is a symbol of a new era on the phone market. Unfortunately, it is not a positive and kind era. Nokia decided that, among other things, they are losing the smartphone battle because of weak PR efforts, because the company is not aggressive enough, because it is not judging the competitors. And with the company stepping on the shady side, the ethic code of Nokia goes to hell for the first time in many years. The PR concepts are undergoing significant transformations, and Nokia World turned out to be a testing playground.
It's not a secret that HTC held a presentation in London on September 15, where a lot of journalists were invited. There were about 25 people from Russia alone there. And HTC even offered a free transfer to Nokia World. Stop. Think for a second. HTC wanted to give us a ride to a Nokia event. They sent us invitations and took care of us in every way possible.
Did Nokia try to use that for their benefit? No, they did quite the opposite. All on-site requests for the Nokia World accreditation were rejected. The reason was simple: not enough room; or the accreditation needed to be paid for and was closed anyway. As a result, a few thousand people simply couldn't get to Nokia World. Wait, it is going to get worse. Everyone leaving Nokia World to attend the HTC event was offered a survival kit: a sandwich, eye-mask, energy bar, etc. The note attached to the life-saving wonder contained a few insulting remarks about the HTC conference. You can find it below.
Effectively we can see Nokia change its take on PR. In a blink of an eye, an ethical company that wouldn't dare call its competitors by the names turned into a mean machine. However, the first attempt didn't work out well. Nokia aimed at HTC but hit the journalists who wanted to attend the other press event to see what the Taiwanese company had to offer. Such behavior is that of a weak company, which is trying to hide its feebleness behind aggression. Having seen both presentations, I can say that HTC made a very good show, not an Apple kind of show, but fairly close to that. Nokia's presentation was trivial and dull, although they did try to mimic Apple. As always, they didn't succeed.
There were some girls with balloons promoting OVI Maps walking around the entrance to the HTC conference and along the waterfront. Certainly, they got lost. But it was neat. And nearly everyone wanted to make pictures with them. I couldn't miss the opportunity either.
Was it a clever move by Nokia? I think it wasn't. Nokia expected HTC to react immediately, in a careless and haphazard way. But they didn't. They did their job and were excellent at that. They didn't counteract, didn't notice the insults. One of the most popular jokes was: "if we had known that Nokia wanted to visit our event so much, we would have invited them over; we are not afraid of competitors but support competition."
In my opinion, the situation is clear. You can see the weak side and its attempts to react to the losses, inability to bring products to the market in time or to make them attractive, etc. Sadly enough, it's not the Nokia I knew. That company had the consciousness of the market leader. That is why the number of such PR activities is going to rise, compensating for the lack of new products. Even there they need to do their homework, though.
I remember one large company moaning and complaining that it is impossible to sell anything officially in China because the amount of counterfeit goods is beyond any reasonable limits there. Yet the launch of the Apple iPad shows that you can actually reach your customers. What matters is how that is done and by whom. The pictures are self-explanatory.
To be honest, when I first saw the products to be announced at Nokia World, I was surprised. There was nothing there that could impress me. The Nokia E7 was the highlight of the presentation. It is a top product, both in terms of price and capabilities, but not a Symbian^3 flagship. The Nokia N8 has been assigned to that role. And that is right, since the positioning of the Nokia E7 is typical for its class; it is not a replacement of the Nokia N97 or Nokia N97 Mini but rather a variation of the Nokia E90. Although the form factor is different, the device esthetics is just that. And that is also the main limitation of the model preventing it from becoming truly popular.
For the first time, Nokia uses a new display, which is called ClearBlack and allows for good outdoor performance and a bright picture indoors. Up until now, Nokia didn't pay much attention to displays, but seeing Samsung do it made the Finnish company change its perspective. As far as 4-inch matrices are concerned, the new display is fairly good, better than what Nokia has installed on its other models but in no way better than the Sony Super TFT or Samsung Super AMOLED. The new matrix is at most on par with the latter. Recall now that the latter can already be found in existing products, whereas the new Nokia model will become available significantly later. Some people consider the new display to be some sort of a breakthrough for Nokia but being a realist, I can say that it is none other than an attempt to catch up with the competing solutions that have been around for half a year now. And for the cell phone market, that half a year is a huge amount of time.
To win back the leadership, they shouldn't go after their competitors but rather move the horizon by creating some new technologies that will make the others follow them.
The Nokia C7-00 was covered, including a first look, even before the official announcement at Nokia World, and I don't want to repeat myself twice. The only thing that I want to add is that the price mentioned in the first look turned out to be very precise.
Finally, let's talk about the Nokia C6-01, which is to replace the Nokia 5800 and is expected to have a long product life. What is special about it? A 3.2-inch display, AMOLED, with ClearBlack support. The camera is 8 MP but with no autofocus (it a cheapo camera, not bad in terms of quality, but the lack of autofocus is a concern for many people). The price is about EUR 260, which makes roughly EUR 310-320 in the retail; not bad but not quite cheap either. The popularity will come to the model in the second half of 2011, when its price drops down.
Unfortunately, I was neither impressed nor inspired by the Symbian^3 announcements. The devices are ordinary, average, typical Nokia. That is neither bad nor good. Such products would appeal to those choosing Nokia today. Yet they have nothing to oppose to the growing popularity of Android, which implies that Nokia has chosen the wrong strategy. Moreover, the forthcoming October and November announcements will render some of the models even less attractive.
To save your time, I won't talk about Nokia anymore, although the company also showcased its second Touch and Type phone. Anyway, as the first model is not out yet, there is hardly any sense to discuss the second one.
Everyone is into services these days, and HTC is not an exception, yet its approach is different from what other manufacturers are doing in this respect. For its customers, the company has prepared an update to the HTC Sense shell. The update is due in October and available for the Desire HD and Desire Z. The new shell is different not only from the previous version, but also across the devices. According to some company employees, two versions of the same shell are justified by the hardware difference (the Z is somewhat simpler and hence its version of the shell has fewer features). In my opinion, it is not the hardware characteristics of the devices that are the real reason but rather the fact that not everything is ready in the new Sense yet, that it has been developed for several phones at once. As of this writing, the new Sense hasn't been announced for the older models, and I doubt it will ever be. In the meantime, it doesn't mean that there won't be some unofficial firmware with the latest version of the shell available, just like it usually happens. The company's main objective is to attract consumers to its new models, and Sense has a significant role in that.
The main innovation in the late 2010 version of HTC Sense is that the shell has turned into a service now. If you own a new device from HTC, you can register it at HTCsense.com to synchronize your contacts and SMS/MMS messages. Replacing a phone is not a problem, as all your personal information will be transferred to the new one. Many features are similar to those available for the iPhone – e.g. you can remotely wipe the data if the phone gets lost, or try to locate it by sending a special signal, which makes it ring regardless of the current sound profile. There are also a few changes in the shell that are not immediately related to the website, such as a slightly updated Peep client (now it has a separate applet for Twitter that uses the official color scheme) and some other programs. Altogether, it is another step in the evolutionary development of HTC Sense.
Let's get back to the service. It turns out to be supported not by HTC itself but by some undisclosed partner. The service plays a very important role in the company's strategy, as it enables a painless transition from one device to another for the customers, and it will be available for all future products.
Can one say that the service will change the market? No, one cannot. The service just makes HTC products a little bit more attractive and handier to use than other Android smartphones. It is a clever move that will bring some more customers to the company but not a revolution. Anyway, sales are made by efforts and those are indeed present in what HTC is doing.
A few words about the press conference itself. Everything was done on a fairly good level; in particular, there were some pictures and animations shown on a semicircular background during the presentations, quite simple yet not without a taste, very stylish. The presenters didn't strike my imagination but the final letter grade is A. They were clear, understandable and conveyed the main thoughts.
The newly announced models – i.e. the HD and Z – were covered in Artem's articles, and I only want to say that I like the senior model better and I'm sure that it will find its customers. I am planning to switch from the HTC Desire to the HTC Desire HD somewhere in October or November to have an opportunity to check out the services by myself. Either of the new models will be a reasonable choice till March or April as there is not so much competition from other manufacturers.
Last week, there appeared a video on the Web demoing a customization of the standard Windows Phone 7 interface. It also provides some insights into the actual system, so you may want to take a look at it.
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Published 20 September 2010
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