In Nokia World, the future’s bright – or so it seems

The Guardian’s John Naughton gets all grumpy about Nokia and blames their poor street cred on their inability to do software.

This article titled “In Nokia World, the future’s bright – or so it seems” was written by John Naughton, for The Observer on Saturday 18th September 2010 23.02 UTC

It’s not often that a newspaper column can resolve a dispute that has troubled the finest minds of an abstruse academic discipline, but hey, what else is the New Review for? The field is cosmology, and the dispute concerns the issue of whether there exist parallel universes that together include “everything that physically exists: the entirety of space and time, all forms of matter, energy and momentum, and the physical laws and constants that govern them.”

Today we can reveal that at least one such parallel universe exists. It is usually found in Finland, but last week alighted on the ExCel Centre in London, where it was visited by several observers known to this columnist. It is called the Nokiaverse (though some call it Nokia World) and it is populated by people who believe that it is possible to go backwards into the future.

The London manifestation of the Nokiaverse was opened by a stirring speech by an important Nokia person named Niklas Savander in which he declared that Nokia was a Very Big Company. Then there was a presentation by Anssi Vanjoki who explained why Nokia’s new phone, codenamed N8, would blow the opposition out of the water. The hardware was better, he burbled, the software was “superb” and something called “the Ovi services” outshone anything that the likes of Google’s Android could offer. “The message was clear,” reported the BBC’s Rory Cellan-Jones, “the fightback has begun”. Spoilsport that he is, Cellan-Jones then went on the web and discovered that “Mr Vanjoki had made the same claim in a blog back in July”.

One characteristic of the Nokiaverse is that its reality distortion field is even more powerful than the one that dominates the Appleverse, another parallel universe centred on Cupertino, California. An innocent space traveller who had wandered into the London manifestation would not have guessed that this was a company in deep trouble: its market cap is down 75% over the last three years; it is losing senior executives like the government loses personal data; and it’s been forced to make a hurried appointment of a new CEO, Stephen Elop from Microsoft, to replace his expelled predecessor. But if our space traveller really wanted to know what’s wrong, then all s/he needed to know is that this is a company that thinks the N8 will be a world-beater because it has a 12 megapixel camera with a Xenon flash.

Nokia’s problem, you see, is that it’s fundamentally a hardware company. In the early days of the mobile phone industry, that was a good thing to be, because then it was all about handsets, and Nokia was very good at designing and making them. It was also astute in spotting the strategic importance of the GSM standard, and pushing hard for its adoption – which is what enabled Europe to leapfrog the fragmented US mobile phone market. So for a long time, Nokia flourished – as a hardware manufacturer. Of course its phones had software, but in those days it was very much a secondary concern because it wasn’t expected to do very much.

This ethos was brilliantly captured in an email sent by a former Nokia engineer to John Gruber, a well-known tech blogger. “Here’s the problem,” the Nokia guy wrote. “Hardware rules at Nokia. The software is written by the software groups inside of Nokia, and it is then given to the hardware group, which gets to decide what software goes on the device, and the environment in which it runs. All schedules are driven by the hardware timelines. It was not uncommon for us to give them code that ran perfectly by their own test, only to have them do things like reduce the available memory for the software to 25% the specified allocation, and then point the finger back at software when things failed in the field.”

But there came a moment in the evolution of the mobile phone when suddenly the software was more important than the hardware. That moment was the arrival of the iPhone. And Nokia missed its significance for two reasons: its senior people – being hardware-focused – didn’t see it; and the company lacked the software capability to compete. It didn’t, for example, have a mobile operating system that was up to the job. In fact, it still doesn’t, which is why it will eventually be forced to buy one in from outside. The only available options are Windows Phone 7 and Google’s Android. So, in the end, it looks as though Nokia’s future will be as an OEM (original equipment manufacturer) of handsets running someone else’s operating system.

And the moral of the story? Simple: software rules OK.

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