Nokia: It's all about the software

Olli-Pekka Kallasvuo’s exit from Nokia’s corner office is no surprise –and not just because of the leaks about its US talent search.
In his four-year tenure Kallasvuo was unable to adjust to a mobile world now dominated by smartphones and app stores instead of operators and vendors.
Microsoft might seem an unlikely source for his replacement, though.
Like Nokia, it is grappling with precipitous technology shifts and is no longer the industry decider-in-chief.
But Stephen Elop has a good track record and, unlike Kallasvuo, understands software.
He’s going to need that knowledge, because he has not one but three mobile software platforms to think about: Symbian, the troubled incumbent; MeeGo, Nokia’s partnership with Intel; and Android, the open source alternative.
Symbian was conceived a decade ago as a mobile industry OS venture, but since then everyone bar Nokia has jumped off. Belatedly, Nokia turned it into an open source venture; it’s been fully open source for just seven months.
The OS has scale, with 108 million devices sold in the second quarter – or 40% of the market – but its share is down six points from a year ago.
After much rewriting of code, the first Symbian ^3 phone – the N8 – will hit the market in two weeks, and the first Symbian ^4 devices will ship next year.
It’s fair to say that neither OS has garnered much enthusiasm from developers, consumers or observers.
Then there’s MeeGo, which the company says is for tablet devices and not smartphones.
Elop will have to consider whether he wants to go on supporting two operating systems or junk them both and go with Android.
With Nokia’s support, Android will become the dominant mobile platform in the same way that Windows became the 800lb gorilla of PC OSes, and Nokia will ship phones in the gazillions.
That means becoming just a hardware provider and the lower returns that involves.
Given that it has hired Elop, that’s not the choice Nokia wants to take. But its success in the handset business has come from designing user-friendly hardware, not clever software and APIs.
It’s Elop’s job to take Nokia through the transition from hardware kingmaker to software collaborator.