Nokia – Brutal for a bit

Nokia’s new platform does everything right except address the horrors of low end Android.

• Nokia has launched a big update to the Asha platform and the release of a new handset the Asha 501.
• The new platform runs on software proprietary to Nokia and uses Java for applications development.
• To date, Java has been awful in mobile phones but the Asha platform optimises Java to run more efficiently and Nokia has extended functionality to make the applications more appealing.
• At the same time Nokia has made its Software Development Kit (SDK) and web tools available for designing and coding applications to run on these devices.
• Also included in the package will be an in-App payment system to make it easy for developers to earn a return on their investment.
• Developer support for the new Asha platform looks pretty encouraging ensuring that most of the core functions of digital life will be available to users.
• The Asha 501 was also launched which sports a 3” screen, 3.2MP camera, WiFi but no 3G, full touch and a range of bright colours.
• The device will sell for $99 and will ship in June.
• I am a huge fan of Asha as I believe that it delivers fantastic functionality and quality for the price asked.
• It also capitalises on Nokia’s core strengths of scale, logistics and platform.
• Unfortunately smartphone buyers at the moment don’t seem care.
• All they seem to care about at the moment is the largest screen for the lowest possible price.
• Consequently the endless medley of Chinese and Indian smartphone makers are churning out devices to meet that demand.
• A typical device will have almost all of the BOM invested in the display with a little left over to invest in the MediaTek baseband and applications processor.
• During Q1 these devices did Nokia’s Asha series considerable damage in the $35-$100 price range and I can only hope that the Asha 501 and its successors can reverse the trend.
• Nokia has invested in functionality but the majority of the demand in that segment at the moment is hardware only.
• These users are often first time smartphone users and I suspect that as they become more sophisticated they will start to realise the drawbacks of a device where all the investment has gone into the display.
• Until then, life is going to remain tough as Nokia is selling a proposition that the market may not be ready for.
• In the longer term, Nokia has the right characteristics to be a dominant low end handset supplier and as long as it can hang on through the tough times, life should be much sweeter on the other side.
• Asha is right answer for Nokia to address low-end Android, but the users need to realise the realities of the proposition first.