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Nokia & The Three-Ecosystem Problem

Is There Really Room for Nokia/Microsoft?

All I know is what I see.

That's the empirical way to solve a problem, ie, basing an opinion of what one observes. And here in the Philippines, I observe a lot of Samsung phones flying off the shelves, with Nokia in decline.

One of the great questions of today is "why has Nokia gone with Microsoft rather than Android?"

Nokia CEO Stephen Elop, the former Microsoft exec, expounded on this question again just a few days ago. He was quoted as saying: today's smartphone market is driven by ecosystems, not devices; there is a potential for a "third ecosystem;" Nokia will work with Microsoft to create that ecosystem.

He seems to be ignoring Blackberry in that statement. To be sure, there is a very thick gloom and doom surrounding Blackberry and its creator, Canada-based RIM. The company seems to have been hit with an innovator's dillemma-focusing on improving its clickity-clack keyboard and being blindsided by the inferior virtual keyboard found on iPhones and Android phones.

The virtual keyboards are insanely easier (ie, cheaper) to produce, and word is that Apple is trying to lock in as much of the market for these screens as it can, thereby keeping Blackberry frozen out even if it tries to change its keyboard.

RIM's co-CEO and guiding light Jim Balsillie also seems to be focusing more on buying hockey teams and doing good deeds now that he's rich, rather than maintaining that laser focus on the business. Nothing inherently wrong with that, but business is brutal, dude. Ask Steve Jobs. Ask Steve Ballmer.

The Three-Ecosystem Problem
Returning to Mr. Elop, if we can assume that Blackberry won't recover its momentum and is destined for history's dustbin, we must therefore ask how valid the "third ecosystem" vision really is.

Certainly in the history of the PC, we saw just two emerge. The old CP/M systems faded away, as did the likes of Tandy TRS-DOS, Commodore, Epson, IBM OS/2, and so many others.

Prior to that, there were always only two valid mainframe ecosystems-IBM's and whomever was in second place at the time. In modern-era servers, it's Linux & whomever is in second.

In the intermediary minicomputer era, it was DEC and HP. In technical workstations, ultimately Sun and HP. All this applies to the US. In other parts of the world, it was always one or two national computer companies owning the market (Siemens and Nixdorf, NEC and Fujitsu, Olivetti, Bull, etc.).

There have always been solid niche players. I was dazzled once as I drove onto Intergraph's campus in Huntsville, Alabama, seeing what about 2% of the market wrought. Silicon Graphics carved out a solid niche until hubris and stupidity took it down.

But it's hard to think of a big IT market (and smartphones are IT) that has had three thriving ecosystems, with everyone just as happy as all get out.

Empiricists, Take Note
Here is what I see in the Philippines:

  • Walk into a major carrier's store, and there are iPhones for the highest end plans, a series of Blackberries on display, and numerous Samsung phones starting to push the Nokia phones off the shelf. Ask for availability, and the Samsung phones are in the shortest supply but pitched the hardest. In my own case, the (Samsung) phone that came with my plan was not available, and I was quickly upgraded to a nicer Samsung rather than to the Nokia phone that also came with my plan.

  • Walk into the innumerable independent stores that sell phones, and one sees a big shift from Nokia to Samsung over the past year. These stores tend to serve the "prepaid" crowd-you pay as little as 30 cents to "load" your a set number of minutes and texts into your phone. But this crowd also wants a nice cam, radio, and memory to store songs in it. So there is an enormous mid market here. And a certain percentage will upgrade to a postpaid plan after staring at the Facebook and Twitter icons for a few weeks and wanting to go online through their phone.

The Philippines may not be the best example, but I think it's a good one. The people here are the most avid mobile-phone users in the world, and there are 90 million of them.

In this widely dispersed archipelago, in a culture that values family communications above all else, one finds mobile phones in the hands of almost every family. About 2 in 5 are smartphones. One way or another in a place where factory workers make as little as $5 a day and teachers take home $400 a month.

There are 500 million others in Southeast Asia with similar geographies and social structures. Ditto the latter for the 2.8 billion in China and Indian sub-continent.

There's a subtlety to emotion and gesture in this part of the world, and embarrassment is equated with death. So it's tough to get someone to tell you why or why not they prefer what they prefer.

But empiricists would note that when you visit a mobile phone store here, one encounters a big smile when looking at the iPhone, a moderately big smile when looking at Android phones, a neutral gaze when turning attention to the Blackberries, and averted eyes when mentioning Nokia.

Twitter: @strukhoff

 

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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