The Nokia N95 paradox

Thomas Husson | May 02, 2007, 01:18 PM

My colleague Ian Fogg has just posted a comment on the mobile phone ideology: N95 vs iPhone. Looking at the portfolio of Nokia handsets, it is difficult not to agree with him. However, when I attended last week the 2nd S60 summit in Madrid, I was told by Nokia executives that they were looking at touchscreen interfaces in a manner that seems on the contrary very pragmatic and not ideological. Given that another phone with a touchscreen interface (the LG Prada) is performing quite well here in the UK, it would anyway be difficult to say anything else that there are contemplating the issue without obviously sharing any confidential roadmap information.

I am currently testing a N95 and to be honest at this stage, it is the best multimedia handset from Nokia I have ever tested. That being said, I let you know more later this month because I am in the process of changing operator and I need to re-configure my Internet settings. In addition, I haven't tested the WiFi and LBS functionalities yet. At least, contrary to the iPhone, this is a phone I can try...

Interestingly, Christian Lindholm, a former VP at Yahoo and a key executive at Nokia for 10 years (referred to as the father of Nokia Series 60 user interface and simply as the "godfather" according to Helsinging Sanomat, Finland's largest daily newspaper) gave a very interesting speech today at the Mobile User Experience conference. In his view, mobile phones inherently differ from multimedia computers...More on his blog here.

Anyway, I think the paradox for Nokia is to be able to sell its products at their fair value. Let me elaborate on this issue first. According to Interbrand, Nokia is the 6th brand worldwide. However, most of its phones are sold by operators at a price point that does not reflect their intrinsic value (49 pounds for the N95 with 45+ pounds 18-month contract on Orange UK for example, which I saw today near Covent Garden). That's precisely why Nokia is launching its Flagship concept stores and will increasingly try to sell directly to consumers. But in the same time, they cannot alienate their main customers: mobile operators. The recent debate about the VoIP functionality of the N95, disabled by Vodafone and Orange, highlights this issue. Why would operators subsidize a phone that could cannibalize their core revenues?

I guess we'll hear more and more of those kind of stories, particularly when the iPhone will launch in the fragmented European market...