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Nokia today and tomorrow – interview with Mads Winblad

Today our guest is Mads Winblad from Nokia Multimedia Division, the man is in charge of the N-series devices. We sat down with him to talk about the company’s future early in November, and as of today many things have changed – Google rolled out its Google Android and the N-Gage launch got postponed. However this interview can give you a very good idea of what Nokia currently is and what they are after.

EM: Starting the things off, I would like to ask you about some acquisitions made by Nokia over the past few years – a lot of them actually, like Navteq, Twingo, Gate5 and companies specializing in mobile advertising. There have been some heated debates on Nokia’s foray into carriers’ markets and some UK carriers are not very happy about it, specifically about the N81. Is this a real issue for Nokia, or it’s just a one-off with one particular model?

MW: Let me clarify the issue around the operators first. Generally speaking, we don’t want to have Internet services that are linked only with operators, we would rather prefer open Internet services. Cellular operators have only one channel to deliver these services to end-users – their cellular networks. And obviously some carriers these days have similar services to what we are trying to launch. And if you take music, for instance, nobody has been successful in mobile music so far. Mobile music is currently driven either by PC networks or mobile devices. But we believe today consumers want to have a solution where these two means go together, and that’s why we are creating our own solution. Basically, there are carriers who have own services and all they see in Nokia is another competitor, but real competitors for carriers and ourselves are companies like Apple who are moving into the telecommunications market, where we are playing these days. So our approach is more like “Let’s fight all other competitors who want to come into this market, instead of fighting between each other”. We are already working with many operators and you are right that there are two operators, 3 and Orange, who are a little bit reluctant to this, and of course it is up to them to decide how and what they are going to do. But our approach, and I think this is very important, is that we really want to do all this together with carriers and WiFi operators and ensure that we can keep competitors out of our market, and as you know, this is very natural. And we are talking very openly with all operators and I’m sure within a month we will have an agreement, but it will for the collective good. And mobile music is a particularly good example, because everybody talks about music, music is like a men’s room in a hotel – if you don’t have a men’s room in your hotel, it has literally nothing to it. So we need to have music on offer, but nobody makes money on it these days, because it is so fragmented. And that’s what we are trying to do – we are trying to bring all these things together, and we have the capabilities and we offer this with OVI to carriers.

Now as regards our acquisitions. Making these deals, we are not looking at music, video, navigation or something else as stand-alone parts of the experience. We see them as integral parts of one Internet environment. And when we have all the keys and pieces in place, with our capabilities we can bring all these things together in one bigger concept.

EM: You mentioned that Apple will be a strong competitor to Nokia. But what about other companies, like Google, with its open OS for mobile phones?

MW: Yesterday we saw Skype introducing a Skype device, so there are a lot of other people coming into the mobile space these days and they want to disrupt the business. And Google is one of them, as well as Yahoo. So while we are partners with them, we rival them as well - the same thing we have had with Microsoft for many years. Google will introduce a Google Phone one day, at least that’s what the Internet is talking about, I don’t know how it will look like though, and they will be our competitors, they want to own a part of the telecommunications market. So what we need to do is find out what kind of disruptions these players come into the market with to capture some of the revenue and value here and we need to counter that. Google and others are our competitors and at the same time – partners, because if you don’t have compatibility with Microsoft’s software in our devices, if you don’t have Google onboard, whatever it is, your offering will make no sense to consumers, because they want free and seamless access to all these services. So yes, they are serious competitors.

EM: What do you think about Apple’s business model with their iPhone, when they are receiving some money from data rates from carriers’ side? Is this a good thing? Is it possible for Nokia to do the same trick, or it is just not your way of doing business?

MW: I think it is good in the way that they are bringing new things into this already established market and I think, at Nokia, we are flexible enough, even though we are big, to manoeuvre in case some new business models are invading the market. The difference from the business model that they have and all others have, is that it is very niche-aimed from a volume point of view. They are very unlikely to address the entire market with their portfolio, like we do, or Sony Ericsson or Samsung or Motorola.

EM: You are focusing on music these days. Last year we saw Nokia Recommendation service, but I have seen no active promotion of this service so far. Why?

MW: The reason is that we want to build this service into our whole music story and we have actually been running it in some countries during this year. And we are not heavy on its promotion only because we want it to come in as a part of the whole music experience, so we don’t have a bunch of activities scattered all over the market. We want to put everything together.

EM: Previously, we already discussed how tangled the NSeries menu was. Now that you have come up with the Multimedia Menu in the Nokia N81, I would like to know why the next generation of the ESeries comes with a conventional menu version, while the NSeries boasts an enhanced version in the form of the Multimedia menu. What about the user experience?

MW: Let’s take the NSeries first. If you look into its menu today and all these different kinds of applications you can get in there today, it is can be so messy, that we are obviously in a dire need of a new menu system, which the users will be able to navigate with ease. So what we are trying to do now is to bring all these services and applications available for the Nseries into a structure that is much more logical and easy to go around. That being said, I can also say that we will do the same for our entire portfolio, from S40 to S60 to everything else, but again, we need to do this step by step, we need to see what our target groups for different devices are – we have multimedia-heavy devices, we have enterprise solutions, and low-end offerings, so we still need to fit these together. We need to ensure that the user interface evolves, but we can’t do everything in one sitting. We are aiming to make our devices easy to navigate and very user-friendly no matter what goal our customers have in mind – email, music or something else.

EM: Speaking about OVI and N-Gage, November will see the launch of N-Gage’s first stage and you said that consumers would be able to pay with credit cards for new games or even via SMS. Do you have any arrangements with Russian operators on this?

MW: I’m not sure how far we are with these negotiations, but in general you can say that all operators, of course if they want and they have all required systems in place, they can do this with us, and make it easier for consumers to purchase games, so we are interested in doing this kind of things with all operators, but unfortunately I don’t know the things currently stand in Russia in this sense right now.

EM: The N-Gage launch in November will be full-fledged or there will be some limitations at the first stage?

MW: It will be a full-fledged N-Gage launch.

EM: What about support for older models like the N73 or the N93?

MW: You will be able to download the software onto these devices, as well as the N76, fore example.

EM: One of the most discussed topics lately is the S60 Touch coming with a touch-sensitive display – a breath of fresh air from Nokia. First it was announced some devices would hit the market during the first quarter next year, but … no?

MW: No, we have no specific dates.

EM: What do you think about localization of OVI for different regions? It is a burning issue these days, say, for the Russian market – this process seems to take too much time.

MW: That’s a good point. What we are learning at Nokia today is that the difference between phones and services is in fact tremendous. For services everything starts with one global project and then you implement it locally – with local music, games and other market-dependant things. We are setting our organization in a way to ensure that when we bring services to Russia we will have good localization, we will have local content, and basically we will need to have everything in place, so the services will be off to a good start in Russia. This is very different from what we have experienced with handsets – for example, you may not like some phone’s 2 Mpix camera, but there are so many other good things that make you buy it. And as far as services are concerned, if you don’t like some music store, you just turn to other ones. So we need to ensure that the experience for consumers is really there when we enter the market.

EM: I have noticed that Nokia is concentrating on carrier-driven markets, specifically the US market – you established a very big R&D center there for 400 employees. But you have no big activities on free markets like Russia. What are the reasons for that?

MW: I feel that we are putting loads of efforts into Russia. We really do have Russia as one of our top priorities; it is a great market especially for our multimedia devices. It just takes time for these activities to unfold.

EM: What do you think about premium shops in Russia – how many of these are you going to open next year?

MW: I think we won’t have any more flagship stores. The interesting thing about flagship stores, and there are many examples of this, is that when you open a flagship store, the sales of Nokia-branded devices in all shops around the country increase as well. The next thing we have is Nokia Premium Partner service, what you just saw in here. I can’t remember how many of them we will have next year, but we very serious plans with this. You can’t deliver all that experience selling your devices through retailers – you need to see how all things work etc.

EM: This year Nokia is supposed to ship its billionth mobile phone. Are you trying to incline these all these people around the globe towards using your OVI or some other services? What do you think about media companies, like Google or Yahoo? Will Nokia’s own services be used for all kinds of activities, and third-party services will be available only as add-on apps or via the Internet?

MW: We believe that (especially in terms of services) consumers are the ones who decide what’s good and what’s not and you know the Western countries are driven by operators who make this choice for you. It won’t work out in the long the run. And consumers if they want to go to Napster, iTunes or some other place to buy music, they just do it. You can’t order them to get their music from Nokia Store only – no way! They should be able to make this choice, and if the user wants iTunes or Napster – so be it, and that’s what we do with OVI.

EM: This year has been very successful for Nokia worldwide. But what is your forecast for 2008? What technology will be a breakthrough for the market – could be a service or a handset.

MW: I think the next year is extremely important for Nokia in the sense of implementation these services on the local level. Now we have all the pieces and need to bring them together. We will need to make sure all of them will work as intended. The breakthrough service for the next year will be… actually, I don’t really know, but I think the service that will garner most hype next year is Video and Mobile TV and video streaming. But I don’t think we will see a fantastic video service before the mid 2008.

EM: What is your opinion on Nokia’s reorganization, since it is has much to do with your current activities. Is it easier to pull off all this with the new structure?

MW: It is not easy. I mean in the new structure I actually have two jobs – the extra one is to build the new organizational structure. But what characterizes Nokia in general is that we have a management culture. I think all people working for Nokia are very encouraged knowing that Nokia has the guts to move into this service business with serious intentions. And the thing is, we have a winning team, and have a great chance to succeed in this field as well. I suppose this change was very positive and people in Nokia also think of it as an improvement.

EM: Thank you for the interview!

MW: Thank you.

Eldar Murtazin ([email protected])
Translated by Oleg Kononosov ([email protected])

Published — 20 November 2007

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