Nokia faces some very significant challenges. The game has changed from a battle of devices to a war of ecosystems, and competitive ecosystems are gaining momentum and share. The emergence of ecosystems represents the broad convergence of the mobility, computing and services industries. In short, our industry changed, it’s time for Nokia to change faster.

–Nokia CEO Stephen Elop

The transition from Symbian to Microsoft’s Windows Phone platform is one of the more challenging parts of Nokia’s new mobile alliance with Microsoft. Implementing a new strategy like this takes time, something that’s in short supply in the fast-moving mobile market. And with Nokia complicating its roll-out with joint product roadmaps and shared responsibilities, some observers are beginning to wonder if the company will suffer more smartphone market share losses before it enjoys any gains–if it enjoys any at all.

Bernstein analyst Pierre Ferragu says he expects Nokia to lose 2 points of market share sequentially in smartphones in the first quarter. And he thinks that trend will likely continue in the quarters that follow, and perhaps even accelerate.

That might seem an overly-pessimistic view of Nokia’s situation, but Ferragu has his reasons, top among them the belief that Nokia’s alliance with Microsoft won’t solve the company’s fundamental problem: the lack of innovation and agility fostered by an overlarge company hamstrung by bureaucracy.

“For a company unarguably overstaffed, with an over-engineered organisation, a lack of reactivity clearly acknowledged by management, a partnership with another heavy giant doesn’t sound like the right remedy,” Ferragu argues, noting that Nokia’s worst enemy going forward is time. “The partnership with Microsoft will first take time to implement. Even if the largest areas of the partnership seem to have been decided, a few more months to agree on the details seem a minimum. Moreover, comments made by management [recently] on how the partnership is likely to work are not reassuring: joint product roadmaps, interactions at all layers of both organizations, interlocked areas of responsibilities. All these elements point at likely slower decision making processes and higher risk on the quality of decision made.”

Not the best spot to be in when your leadership position has been eroded by the likes of Apple and HTC, which earlier this month surpassed Nokia in market cap.

Nokia faces some very significant challenges. The game has changed from a battle of devices to a war of ecosystems and competitive ecosystems are gaining momentum and share. The emergence of ecosystems represents the broad convergence of the mobility, computing and services industries. In short, our industry changed, it’s time for Nokia to change faster.

– Nokia CEO Stephen Elop

As Nokia CEO Stephen Elop said during the company’s Thursday earnings call, Nokia faces significant challenges in competitiveness and execution. And nowhere is that more clear than in its recent performance in the smartphone market. Nokia may be the world’s largest smartphone maker, but it’s also the world’s slowest growing. As Bernstein analyst Pierre Ferragu points out this morning, Nokia has been ceding ground precipitously on the smartphone front, with sequential smartphone growth that pales to that of its rivals.

In the November quarter, Nokia’s smartphone shipments grew 7 percent.

Meanwhile,

• Apple’s grew 15 percent
• Research In Motion’s grew 17 percent
• Motorola’s grew 29 percent
• HTC’s grew 34 percent

In the end, Nokia’s smartphone shipments grew at a slower pace than those of its feature phones. Which wouldn’t be so bad if growth in the feature phone weren’t slowing, but it is. Ferragu expects it to decline from 13 percent growth in 2010 to 5 percent growth in 2011.

If ever there was a time for “Nokia to change faster,” as Elop says, it is now. Otherwise…it has a future of continued weakness to look forward to. Says Ferragu, “For the next 12-18 month, there is only one thing we believe Nokia can do: brace. We believe it is difficult to anticipate how badly Nokia’s market position can deteriorate before a new strategy delivers improving fundamentals.”

Taking first place is highly improbable, because by launching the iPad when it did, Apple claimed the lead not just in the tablet market, but in a handful of other areas on which that market depends–user experience, content acquisition and integration, and supply chain and build cost.

Whitmore figures Apple has a 12-18 month lead versus competitors on content and apps, and a multiyear lead on other media acquisition and integration through iTunes. He suggests that its early investment in capacitive touch technology and prepayments to touchscreen suppliers in order to guarantee supply will give it a meaningful cost advantage for some time.

And then, there’s the obvious: The iPad has been shipping for nearly a year, and its successor is already in the pipeline. “We expect iPad 2 to ship this spring, before most vendors will be introducing their first generation tablet,” said Whitmore. “For instance, Google’s Android 3.0 Honeycomb will ship in late 1Q at the earliest, suggesting meaningful [tablet] volumes won’t ship until 2H-11. We expect HP to announce its Palm Tablet in early February with significant volume shipments ramping in 2H-11. By then, iPad 2 will have been shipping for 3-6 months and its massive developer support lead will have expanded.”

Late Wednesday, its Motorola Mobility subsidiary slapped Microsoft with a lawsuit accusing the company of infringing 16 of its patents in a variety of products– including Windows, Exchange, Messenger, Outlook, Windows Marketplace, Bing Maps and Xbox.

“[We are] bringing this action against Microsoft in order to halt its infringement of key Motorola patents,” Kirk Dailey, corporate VP of intellectual property at Motorola Mobility, said in a statement. “Motorola has invested billions of dollars in R&D to create a deep and broad intellectual property portfolio and we will continue to do what is necessary to protect our proprietary technology.”

Microsoft, for its part, seems largely unfazed by Motorola’s right-back-at-ya maneuver. Indeed, in a statement, Horacio Gutierrez–Microsoft’s deputy general counsel of intellectual property and licensing–essentially said the company was waiting for it. “This move is typical of the litigation process and we are not surprised,” he said. “We remain confident in our position and will continue to move forward with the complaints we initiated against Motorola in the U.S. District Court for the Western District of Washington and with the International Trade Commission (ITC).”

A: The iPhone’s email program doesn’t include a junk-mail filter. It relies on your email service’s junk-mail filtering system, such as the ones built into Gmail, Yahoo Mail or your company’s email system, to clear out the spam before it gets to the phone. Obviously, these server-based filtering systems aren’t perfect, so you’ll still get some spam. But you might experiment to select the email service you feel does the best job. Once you decide, you can make that the main, or the only, service you use on your iPhone, and forward all the email from accounts that receive a lot of spam into an account on that relatively spam-free service.

What model of laptop do you recommend for a student of middle-school age, at the $500 price range?

A: At that price range, you have several broad choices, so it depends on how the student will be using the machine. If it will be mainly staying on a desk or just used around the house, you should be able to find a standard-sized laptop with a 14″ or 15″ or even larger screen, and adequate speed, memory and hard disk capacity, for around $500, or even less, depending on sale prices. If the student wants more mobility, then a high-end netbook, or a low-end “thin and light” or “ultrathin” machine would work, though their screens and hard disks might be smaller and their processors slower.

However, if the student is a hard-core gamer, or does sophisticated video production, the graphics on any $500 laptop might prove inadequate, and you may have to spend more.

I have no particular model to recommend, since the best way to do this is to have the intended user try various models, to be sure she is comfortable with the screen and keyboard, and that the machine has whatever specific features she wants for the price.

I understand that the new Motorola Droid phone has a GPS function. I was considering a Garmin unit but wonder if I would be just as well off with the Droid and Google maps. What do you think?

A: The Droid not only has GPS and maps, which are common on many other phones, but it has a free voice-prompted, turn-by-turn navigation system powered by Google, which isn’t common. This is very similar to what you’d get in a stand-alone unit sold by companies like Garmin and Magellan, or in a paid, add-on app for the iPhone.

However, in my tests of this new feature on the Droid, I ran into two occasions when the Google voice-promoted navigation system gave me completely erroneous directions. On Garmin products, I have often encountered directions I considered too roundabout or time-consuming, but I have personally never received absolutely wrong directions. So you might bear that in mind when deciding if the Google capability in the Droid is a good enough substitute, at least in this stage of its development.

You can find Mossberg’s Mailbox, and my other columns, online free at the All Things Digital web site,http://walt.allthingsd.com.

Not a week after confirming its interest in the netbook market, Nokia leapt into it, uncrating the Booklet 3G–a 2.8-pound “mini-laptop” with 3G, WiFi and A-GPS support, a 10-inch HD-ready display and a claimed 12 hours of battery life. The machine will feature an Intel (INTC) Atom processor and likely run a version of Microsoft’s (MSFT) Windows. Finally, it will support Ovi, Nokia’s (NOK) version of Apple’s (AAPL) App Store.

“A growing number of people want the computing power of a PC with the full benefits of mobility,” Kai Oistamo, Nokia’s executive vice president for devices, said in a statement. “We are in the business of connecting people and the Nokia Booklet 3G is a natural evolution for us. Nokia has a long and rich heritage in mobility and with the outstanding battery life, premium design and all day, always on connectivity, we will create something quite compelling. In doing so we will make the personal computer more social, more helpful and more personal.”
 
Quite a pledge. And one that Nokia must deliver on if it’s to become a full-fledged mobile solution provider.

“Nokia is not trying to move into the extremely competitive market for PCs in general, even though it describes the Booklet 3G as a mini-laptop. What it is doing is moving to protect its key markets,” said Gold Associates analyst Jack E. Gold. “Indeed, netbooks are increasingly being sold as mobile device alternatives (or supplements) to smartphones. Many have 3G radios included, can make voice calls (via VoIP) and are increasingly being sold and subsidized by traditional wireless carriers. Therefore, it is logical to see Nokia make this move.”

Not a week after confirming its interest in the netbook market, Nokia leapt into it, uncrating the Booklet 3G–a 2.8-pound “mini-laptop” with 3G, WiFi and A-GPS support, a 10-inch HD-ready display and a claimed 12 hours of battery life. The machine will feature an Intel (INTC) Atom processor and likely run a version of Microsoft’s (MSFT) Windows. Finally, it will support Ovi, Nokia’s (NOK) version of Apple’s (AAPL) App Store.

“A growing number of people want the computing power of a PC with the full benefits of mobility,” Kai Oistamo, Nokia’s executive vice president for devices, said in a statement. “We are in the business of connecting people and the Nokia Booklet 3G is a natural evolution for us. Nokia has a long and rich heritage in mobility and with the outstanding battery life, premium design and all day, always on connectivity, we will create something quite compelling. In doing so we will make the personal computer more social, more helpful and more personal.”
 
Quite a pledge. And one that Nokia must deliver on if it’s to become a full-fledged mobile solution provider.

“Nokia is not trying to move into the extremely competitive market for PCs in general, even though it describes the Booklet 3G as a mini-laptop. What it is doing is moving to protect its key markets,” said Gold Associates analyst Jack E. Gold. “Indeed, netbooks are increasingly being sold as mobile device alternatives (or supplements) to smartphones. Many have 3G radios included, can make voice calls (via VoIP) and are increasingly being sold and subsidized by traditional wireless carriers. Therefore, it is logical to see Nokia make this move.”

It would seem then that the so-called “fastest-growing segment of the PC market” is also the most misunderstood. For what is a netbook but an underpowered laptop or a giant Gallagher-sized smartphone? Consumers are intrigued by the netbook’s low prices, but they don’t understand its value proposition.

“We need to make sure consumers are buying a PC intended for what they plan to do with it,” said NPD’s Stephen Baker. “There is a serious risk of cannibalization in the notebook market that could cause a real threat to netbooks’ success. Retailers and manufacturers can’t put too much emphasis on PC-like capabilities and general features that could convince consumers that a netbook is a replacement for a notebook. Instead, they should be marketing mobility, portability, and the need for a companion PC to ensure consumers know what they are buying and are more satisfied with their purchases.”

On Thursday, Big Blue said it plans to invest $100 million over the next five years in mobile computing efforts, specifically emerging market mobility, mobile enterprise enablement and enterprise-to-end-user mobile experience. “Mobility and the associated analytics will change virtually every enterprise business process,” said Paul Bloom, chief technologist, IBM Telecom Research. “It will change the relationship between enterprises and their customers, their employees and their partners, enabling them to do business in more intelligent, efficient ways.”

A smart move for IBM, I think. With innovation in the mobile sector so focused on the everyday consumer, there’s certainly room for more corporate computing initiatives. And IBM (IBM) has the market heft and reputation to spur adoption there–particularly if it manages to develop some strong authentication and security measures.

On Thursday, Big Blue said it plans to invest $100 million over the next five years in mobile computing efforts, specifically emerging market mobility, mobile enterprise enablement and enterprise-to-end-user mobile experience. “Mobility and the associated analytics will change virtually every enterprise business process,” said Paul Bloom, chief technologist, IBM Telecom Research. “It will change the relationship between enterprises and their customers, their employees and their partners, enabling them to do business in more intelligent, efficient ways.”

A smart move for IBM, I think. With innovation in the mobile sector so focused on the everyday consumer, there’s certainly room for more corporate computing initiatives. And IBM (IBM) has the market heft and reputation to spur adoption there–particularly if it manages to develop some strong authentication and security measures.