Nokia World Kickoff Shines a Light on Smartphone Future of Embattled Company

Nokia smartphones

It's the opening day of Nokia World, and much as it will attempt to trumpet its successes, the cell phone giant is in trouble. Nokia needs to reinvigorate its smartphone business, but can the first clutch of new phones in this market actually help?

Last week Nokia ousted its long-standing CEO and replaced him with big-name industry figure from Microsoft, Stephen Elop. The company's chairman, Jorma Ollila, said he'd leave, and just yesterday we learned the company's smartphone boss had handed in his notice--but will work the next six months with "100%" effort dedicated to Nokia. These events happened on the eve of the big Nokia World event, which has just kicked off, and no doubt cast a long shadow over the proceedings (despite EVP of Marketing Niklas Savander's keynote speech noting how many units the firm sells, and his optimistic "Nokia is back!").

To boost its chances, Nokia simultaneously announced three new smartphone releases: The E7, C7 and revised C6--all sporting the latest implementation of Nokia's Symbian OS, and due before the end of the year at prices between €260 and €500 ($333 to $640) before taxes and subsidies. Gartner analyst Carolina Milanesi is quoted as saying the phones are a "clear improvement" on Nokia's earlier efforts, but the crucial thing is the pricing of them in a crowded market--Nokia's per-unit sales price has been tumbling for a while, and this is partly behind the company's current woes. The graph below, built from Nokia's own financial stats, shows this problem more clearly than you may have imagined possible. Essentially the firm is boosting its revenues, but its costs aren't falling, and its profit is taking a nose-dive.

Nokia's great white hope is the N8. It's so pivotal to the company's future that market advisers have revised Nokia's stock predictions upwards, assuming the N8 can sell well in a market that Apple and Google are quickly sewing up. The first big reviews of the unit are rolling in, and so far they're positive. But Slashgear contributor Michael Gartenberg, while being impressed by the machine--a slickly designed, all-touchscreen affair which in many ways represents a departure from Nokia's stodgy design past--has voiced the biggest limitation: The Symbian 3 UI. It's "cleaner than prior iterations" but it "shows the Symbian heritage which is both good and bad," implying Nokia's skimped a little on the innovation here. "There are still too many settings buried in too many places for easy configuration," he notes. And most damningly he feels it's nowhere near the leader of the pack in the smartphone war, it lacks apps, and while "current Symbian users will feel right at home, new users might struggle a bit."

And it's new users that Nokia needs desperately to attract: many of its old ones are being stolen away by the lure of the slick UI, thousands of apps and general gadgety chic of the iPhone and high-end Android units.

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