This month Fortune cover shows an iPhone and referring to launch of Verizon iPhone as “get ready for the dream phone”. People familiar with the case speculate Verizon will launch iPhone in early 2011. Lots of US mobile phone users were praying for this news for years. As the largest US mobile operator; by number of subscriber, Verizon was always preferred choice for consumers as the ‘more reliable” service provider. Its CDMA based 2G network, better coverage and call quality in general in the first part of this decade made it preferred choice for voice users.
For the past couple of years, smartphones start to challenge data network capacity. While early 2000 was the hype of wireless data networks deployment, there was no real data traffic until couple of years ago. Operator’s huge investment on mobile data upgrade was sitting idle for years before iPhone shows the art of smartphone development to other vendors and flooding the market with its clones. ATT launch of iPhone in 2007 was smooth until the huge amount of data traffic starts to cripple its network in dense markets, including New York and San Francisco. ATT executives claims the dream of a better iPhone experience on Verizon network will shattered as soon as operator stats to sell and distribute iPhone across its networks. Although Driod and other Andriod based phones were very popular, their popularity and traffic load would not be even close to after iPhone launch. This points to another question; if Verizon starts to sell iPhone, does Andriod based phones continue to growth (at least in the US)? Lots of Verizon geeky data users were forced to buy Android phones because they didn’t have other choices. By introducing iPhone, Verizon introduces a real competitor for its Andriod phones.
Olli-Pekka Kallasvuo took over the world’s largest mobile phone manufacturer in the summer of 2006. Six months later Steve Jobs unveiled the iPhone, and it has been downhill ever since. Nokia’s shares have tumbled by nearly two-thirds. Its profit margins have withered from 15% to 7%. And the firm has all but imploded in America, despite Mr Kallasvuo’s pledge to conquer the region. Since 2005, experts in mobile industry started to predict a very gloomy future for the dying giant. While they stick to their legacy phones and are happy with major penetration in the developing countries; read it as high volume low margin domains, other competitors started to target higher margin products including smatphones. Developing countries will be all using smartphones within the next five years anyway.
Although people think Nokia’s most obvious problem is being squeezed out of the smartphone market, its biggest mistake was lack of vision for much higher margin products that come with them; applications! Smartphones are not only lucrative in themselves; they are the gateway to the even juicier market for services and “apps”. Apple’s iPhone and Google’s Android range compete on “cool”. BlackBerry is synonymous with business. But what does Nokia stand for? As usual Nokia still chases the pack. Mr Kallasvuo argues that the forthcoming N8—an all-singing-and-dancing handset that is due to hit the stores in October after several delays—will “mark the beginning of our renewal”; I guess this the fifth or sixth time they are waiting for such a product in the past five years. But previews suggest that the phone is more about catching up than setting the pace. Nokia’s ads tout its “revolutionary” touch-screen technology, built-in camera and GPS. Yet such baubles are already commonplace. It is time for Nokia board to wake up and consider a new direction. GM was once dominating car industry, but lack of innovation forced them to bankruptcy. Nokia should learn its lessons; things are changed!