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ARTICLE
By Robert Syputa, Senior Analyst
Nokia is the current world leader in smart phone sales, claiming over 200 million 3G data-enabled phones currently in the hands of subscribers. The combination of Nokia and Siemens Networks is consolidating handset and network capabilities and is now further along the path of providing a well organized approach to universal communications environments—the embracing long-term goal of the entire converging communications, computing/networking, Internet, and entertainment industries. Nokia has strategized well in preparation for this battle for converged markets. Nokia starts out as a large stake holder in incumbent cellular mobile device and system sales. It faces industry consolidation including the matching of players such as Alcatel-Lucent and reorganizations within Motorola and Ericsson to better align toward new realities of IP communications evolution and world convergence. Partly in keen perception of technology and market reality, Nokia has set out a framework of device, software platform, and systems development that makes sense from its incumbent cellular perspective. Nokia’s strategy is partly in reaction to the accelerating momentum of WiMAX and the inevitable shift to increasingly IP-centric broadband. This shift shakes up the wireless industry and casts diverse networking, Internet, content, and software players into collaborative relationships or competition and sometimes “life threatening experiences.” The basic equation of the convergence “sum is greater than the parts” analogy is, after years of speculation, coming together at break-neck speed. Having a clear vision of the most likely direction of technology and markets is crucial to building the foundation for pivotal products and services needed both universally and for discrete segments of the market. Nokia, in our opinion, has a very solid overall concept and foundation to move forward. Nokia, of course, has a huge investment and interest in perpetuating the current themes of wireless development within 3GPP. But the company has adjusted strategies to fit the growing momentum of WiMAX and is countering to rapidly develop 3G-LTE. The incumbent cellular industry is being pushed to become more open, including embracing of more open IP software development and service models. But rather than embrace the fully open vision of WiMAX that gives lesser preference for Nokia’s IPR position, the company is pushing forward with I-HSPA and 3G-LTE. Nokia has presented a new vision for the direction of the company that is organized around the IP environment. The embrace of 3G-LTE and, to a lesser extent, WiMAX is due to the realization that bandwidth demands will explode. “Nokia Siemens Networks believes these trends will spark 100-fold growth in traffic by 2015.[1] “Through its strategy of ‘consolidate, leverage and transform’ Nokia Siemens Networks is already addressing these challenges. At Nokia World, Nokia Siemens Networks will dig deeper into areas where it is now leveraging its broad industry know-how to transform itself and its customers to find and capture value in the industry in transition:
The new Nokia position statements look very similar to those of the WiMAX Forum and advocate WiMAX as the rationale for a shift from CDMA/WCDMA-based communications to the new technology standard. But rather than fully endorse WiMAX, Nokia has preferred to put the majority of effort behind development of 3G-LTE. The company says that LTE is an evolution of 3G and that WiMAX is best suited for broadband access rather than mobile. Nokia’s positioning of LTE relative to WiMAX is fitting with its stake as a leading supplier to incumbent operators and its entrenched position in 3G IPR. Nokia is a major stake holder in WiMAX IPR but faces a much broader and substantial field of essential patent holders. Commercial development of WiMAX is also much broader and wide open to challengers from emerging nations including China and India as well as from North America and Europe. Therefore, Nokia has strong commercial interests to leverage and protect that which, at this point, can be best pursued by pushing the LTE agenda. Nokia had several important announcements in conjunction with laying out its strategy for next generation wireless and converged business and software services; converged development platforms; mobile device, media, and user platforms including OVI web; and mobile portal strategy. The overall strategy is forward looking and very well thought out. However, many elements of the strategy remain to be implemented beyond beta stage and converted into sustained commercial success. This analysis will be continued in Maravedis’ upcoming Worldwide NGMN report.
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