AT&T's iPhone Boom, Nokia's Layoffs: A Tale of Two Mobile Titans

Proof that, despite the hammering Apple got for the flaws on its iPhone 4, it's still the smartphone of choice. AT&T today released figures showing that 5.2 million iPhones were activated on its network in the last quarter: 400,000 units more than analysts had predicted. Translation: despite AT&T's reputation (Disconnecting People?) its iPhone monopoly means it's drawing people away from other carriers.

Now, compare and contrast with Nokia. The Finnish phone giant has just posted its Q3 results and the company is looking better than many analysts expected, with profits of $451 million. Compare that to last year's losses of $1.2 billion, and new chief Stephen Elop can be pleased with his first six weeks in charge. There is, however, a downside, although it's not the investors who should be worried--shares soared by 8%-- but rather Nokia employees. Alongside the profits comes news that 1,800 jobs are to be lost.

Most of the job losses are, it seems, in an attempt to streamline the development process: Elop must be all too aware that the failure of Symbian to offer up a credible OS rival to the vanguardist smartphone OS troika that consists of Android, iOS, and BlackBerry needs addressing--and smartish. My colleague Kit Eaton flagged up Nokia's massive bureaucracy in this area a couple of months ago: would it be too premature to say that Mr Elop is a fan of FC's very own tech nabob?

So what is to be learnt from this? Although it's hard to compare a carrier with a handset manufacturer, I'll have a go.

DO strive to get your hands on the best technology you can. AT&T's three-and-a-half-year stranglehold on iPhone distribution has served it well. In Nokia's case, this means finding the best R&D team it can in order to create a smartphone that everyone else wants. And that means a great OS as well.

DO keep the management to a minimum. Apple's innovative team really have just two people to satisfy: Mr Jobs and Mr Jon (Ive). Products and software don't get lost in a sea of suits over Cupertino way, it seems.

And, despite Nokia's success in the dumbphone arena, DON'T keep on churning out cheap handsets for cellphone users in the developing world. Within the next few years they will be obsolete. This point is illustrated neatly by further analysis of Nokia's results. Its market share across the entire cellphone spectrum has dropped by 4% to 30%. And, although its smartphone share is up year-on-year, it's down from Q2's share of 41%. That's a trend that Nokia needs to put in reverse pretty quickly.

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  • Robert penn warren

    Smartphone are made for apps, and the fact is apple have five twice apps in itunes than Nokia's Ovi, and it's easier to get this list” Top Holiday iPhone Games of 2009" from ifunia iphone column for iphone than to N8. Can Nokia catch up apple in 2011?