Nokia’s Biggest Problem? Symbian.
It has been almost three years since Apple’s iPhone arrived at market, and Nokia, the world’s largest mobile phone maker, has still failed to develop a worthy rival to it. Will the company ever figure this out or will it continue to play a slow game of catch-up in the smartphone market?
Needham & Company analyst Charlie Wolf thinks the latter is more likely. In a lengthy investor note this week, Wolf writes that while Nokia (NOK) may long hold on to its commanding lead in the feature phone market, its fate in the smartphone market is uncertain at best.
Why is that? The company’s Symbian OS is simply far too dusty to stand up to competing operating systems, and that’s having an ugly effect on its share of the smartphone market (click chart to enlarge).
“Nokia’s problem is that the Symbian operating system, the platform on which Nokia phones run, is a generation behind the iPhone and Android smartphone operating systems,” Wolf writes. “With Nokia’s heritage in low cost, volume manufacturing, not software development, it’s unlikely the company will ever catch up with the companies that are redefining this market.”
A reasonable point, given complaints about Symbian 3 failing to match Apple’s (AAPL) iPhone and Google’s (GOOG) Android operating systems. That said, there’s still a chance that the MeeGo OS Nokia has been developing with Intel (INTC) will succeed where Symbian has stumbled. But will it be enough to reinvent the company’s fading smartphone line? Wolf isn’t so sure.
“In our opinion, it’s an open question whether Nokia’s efforts will be successful in meeting the ‘modern’ operating system challenge,” Wolf writes. “Where the company has fallen behind is in building a compelling third-party applications portfolio presumably because its software development tools are difficult to use. As the iPhone has demonstrated, a diverse and deep catalog of applications is becoming an increasingly important consideration in smartphone purchasing decisions.”