Eric Become a Complete Fool
Sorry to rain on your parade, and temper your enthusiasm. First, let me say that I like the sense of excitement you're trying to project about Nokia's new line up in this country. Unlike you, I did not sell any more shares since the share price was at just about 20. I thought of selling at 14 but since I have already more than achieved my desired return from my initial investment�just by selling 20% of it�I can afford to hold in the event of a surprise reversal. So I view any hype or buzz people try to create around Nokia phones as good for my investment.
Having said that, I wish I could share your optimism and enthusiasm about the current line up, or about the models you seem to be getting so excited about. I just don't, and this going both on my personal assessment, which has served me rather well when it comes to mobile phone acceptance, and some related facts. My prediction is that the 6620 will do little to reverse Nokia's market share fortunes in this country, just as the 6600, which it essentially updates, has not set the world on fire. Let me share some (more...) personal anecdotes. I have mentioned that last December, when I was in the Middle East, I was looking at replacing my travel-only crusty Nokia 33XX model. The 6600 was the current Nokia flavor du jour; I considered it, but found it to be too awkwardly "fat" in the palm of the hand. It was selling to young rich teenagers�whose parents, say one or two years ago, would have bought it for themselves, but today had more "serious" phones (by the way, PDA-phone combos are all the rage among professional men in Europe and the Middle East�even my Italian colleagues, always game for the sleekest designs, are now buying Treos and such). While there was a certain buzz around that phone, it was rather limited to a certain niche. The main point is that the 6600 has been around for at least 9 to 12 months now, during the very same period that Nokia was losing in the market share battle. By the same token, while the 6620, which updates the 6600, will sell, and will help AT&T in the US slow its eroding position, it is not the kind of mass phenomenon that will make much of a difference in Nokia's global handset market share.
Now the closest Nokia that comes to recreating some of that old sense of cool is the 6230, which is not yet available in the US, and as far as I know is not yet in the cards here. Of all the Nokias I have held in the past three years, this one had something special, not unlike those early-days Nokia that felt like "handsets should be" compared to the competition. I would call it the state-of-the-art soap bar model on the market today. I almost bought one, about a month ago, in the Middle East, but decided it was too expensive for my limited needs, and many of the features it offered would not be supported on pre-paid sim card accounts (which is what I mostly use overseas). I was hoping that by now Nokia would offer WCDMA on such models, and for that I would have paid the price premium. Another factor is that as nice as it felt, it did not quite have that "wow" effect�just "nice", which is more than I could say for some of the other models in Nokia's line-up, which reminded me of the worst days of Detroit, when all GM cars would look and feel the same but sell under different nameplates... Finally, it was not a clamshell, and I increasingly dislike soap bars�but that's being frivolous.
Speaking of clamshells, I was especially pleased initially to see that Nokia had released their 7200, their first clamshell design in that market. It came in three colors, black, brown-red and olive. And the outside cover was made of a felt-like cloth�hmmmm....I was ready to buy that one, until that cloth exterior started to sink in. Instead of getting used to it, every touch would reduce my enthusiasm. Furthermore, it had this spring-wound hinge design that allowed the flip part of the phone to "bend back" beyond its "normal" position�the intent being to endow it with more flexibility so that users can bend it backwards without it breaking. Other that the odd feeling this created, it seemed flimsy, especially to someone who has had Japanese and Korean clamshells for the past three or four years. I liked the inside of the phone, especially the way the buttons were laid out and arrayed, and the general clean lines of the handset when open. However, both the flimsy bending and most important the cloth exterior made me abandon the idea of acquiring one (I was even willing to spring for the higher than justified price). My conclusion was that this model would not set the world on fire either, except that the 18 to 28 set might take a liking to it�especially among women (that cloth again, just not a guy kind of thing...).
So what to buy? Regrettably for Nokia devotees, myself included, I ended up buying a Samsung clamshell design�very compact (more so than the CDMA models I'm used to in the US), with a two-tone navy blue/silver exterior, camera of course, with zoom, large inner screen and small outer display screen, the works. And it got noticed, and elicited many curiosity questions (as in what kind is it, it can't be a Nokia, but it's still so neat...). Some discussion earlier on this board had suggested that most current Nokia owners would upgrade to other Nokias, and that the new features would accelerate the upgrade cycle. If my experience is indicative of just 15 or 20% of current Nokia owners, that would be a significant loss in market share in the upgrade/replacement cycle.
What is different today from the still recent times when Nokia could do no wrong in handset design and features, and was rapidly switching consumers from Motorola and Ericsson to its models? Several things are different, listed in no particular order:
1. The traditional competition of Motorola and now Sony-Ericsson has fought back with competitive models�MOT with clamshells, and Sony-E with clever attractive clean designs that are competitively priced in the soap bar category. The latter have become the distinctive entry model instead of Nokia, in addition to inroads on the high end with the combined PDA-phones that were all the rage last Christmas.
2. The new competitors, mostly Korean, especially Samsung and to a lesser extent LG, have established themselves as credible brands, with competitive products that offered a slight technological edge in terms of screen color and sounds (though Nokia has now caught back up), and a clear dominance in clean clamshell designs preferred by a segment of the market.
3. Lack of differentiation in a narrowly segmented range of offerings�anytime I'd go look at phones, I would be bewildered at the number of Nokia models on offer, sporting widely different price tags, yet looking very similar in size and design�so the distance in looks between the cheap and the high end, or the cheesy and the classy, seemed very close. While Nokia was trying to brand them clearly as Nokias, the down side was that the higher end was no longer visible or salient, and confusion was created in the consumer's mind. I used earlier the GM syndrome of a decade or more ago, when look-alike cars were branded under different name plates at widely different prices, the result being an overall lowering in consumer appreciation of all the models on offer.
4. Partly to deal with the above, Nokia in the past couple of years has introduced handsets in non-conventional shapes, with semi-circular edges and sharper angles... these attempts were not particularly successful, and added to the confusion.
5. The competition had much better differentiated offerings: fewer models, with clear relative positioning, and a clear relationship of price to features.
6. Nokia's notion of cool seemed too heavily dependent on superficial personalization gimmickry (faceplates...) rather than technological features. The fashion angle only worked for a while; it still works for some, but does not seem to be a sustainable approach for gaining market share on a large scale.
7. Much of the huge market share gains were partly driven by selling lower-margin entry-level handsets in mass markets. This strategy may have partly backfired in weakening overall brand positioning in the mid to high end of the spectrum. Low-end desirability is predicated on being viewed as the most popular high end model. Aiming for higher-end models might well mean sacrificing some lower-end market share, or at least walking a very fine line to maintain leading presence at both ends.
The above are of course only highly personal impressions of Nokia models and positioning from a consumer standpoint, exclusively in the GSM market. We have discussed elsewhere Nokia's CDMA presence and strategies, which are very different in terms of positioning from their presence in GSM. This discussion does not bear on technological choices but addresses mostly handset design and features offered relative to the competition. And no, I do not think that Nokia's biggest sin is that it has not bought chipsets for CDMA from Qualcomm. While the latter might have helped its share in CDMA by allowing it to focus on handset design features instead of on mastering the air interface technology and inter-operability with network vendors, the issues that led to the loss of global market share apply to how it has approached the handset market in general, especially in the GSM world.
Dissenting opinions and additional insight are always appreciated.
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