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Tet-a-tet. Ukko Lappalainen on the future of NSeries

Our today’s guest is Nokia’s Vice President, Ukko Lappalainen – the man in charge of the entire NSeries. We managed to touch upon many moot points, some of which can give you a better idea of how this line-up will develop in the next year.

E.M. We have heard much about services for the Nseries and how important they are for this line-up’s future, but frankly not many people do understand what a smartphone is, and, more importantly, what the Nseries is really all about. Sometimes it’s not particularly clear why we would be better off going for the N76 rather than the 6290. Is there any chance things will change in the future?

U.L. I think you are right, we are still creating the category that we call “Multimedia computers” – phones that you can use to make calls, but their primary focus is on multimedia. How we’d like to see it is that when you get into a retail store there’d be mobile phones here and here, and on the other shelf – multimedia computers and multimedia devices, not only Nseries at that, we acknowledge there are some other players on this market. I think we are on the right way to a real retail category, as other companies are starting to employ this strategy as well. We are trying to make it more prominent by pushing the Nseries portfolio in every way we can– if you visit one of our flagship stores you’ll see that there are areas with multimedia computers alone where no other phones are showcased. But in fact we are only at the beginning - we need to make further steps to achieve our ultimate goal.

E.M. What is your position on the Eseries vs Nseries dilemma? The Eseries has never been particularly successful to begin with, but these days it’s growing more and more like the Nseries, offering various color schemes that are quite different from traditional all-business and no-nonsense designs.

U.L. Yes, but on some fronts it’s the other way around – Nseries devices borrow from the Eseries. For instance the email functionality and Microsoft Mail for Exchange that started out as an exclusive Eseries project, but ended up on Nseries devices as well. But the real difference between these two line-ups is the consumer type we target. With the Nseries we cater for the needs of technology enthusiasts who buy their phones not only for utility purposes, but also to, say, show off with all this technology; whereas the Eseries sways more towards rational and pragmatic consumers. But you are right, they have gotten a little bit closer and maybe these consumer segments have become closer too.

E.M. What about the Nseries pricing policy – with your previous Nseries devices you descended down the pricing ladder, from the very top bracket to mid-tier and even lower than that. But now you have changed the policy by setting the bottom line at 350 Euros and not going below this level. Why?

U.L. These days we need to ensure that we have three tiers covered – mid tier, higher tier and top tier (with ultimate phones in it). We believe this is the right way to go, because we need to have a full portfolio for other regions, such as China or some developing countries, where consumer preferences sway more towards the mid end. With these new products we are also looking to withdraw some of our older Nseries phones that don’t have that much value anymore, since they have been around for a little bit too long. In order to remain competitive we need to maintain an aggressive portfolio policy.

E.M. Nokia used to deal with only one hardware manufacturer, but lately you have brought in two more. These days you have TI OMAP chipset, Freescale and STM lined up for your Nseries solutions. What were your motifs when you decided to run with three different platforms?

U.L. We changed our strategy regarding hardware platforms about six to eight months ago, what we did was outsource quite a lot of chipset development, so that we could focus more on software. On the bright side, having multiple chip suppliers we are also giving extra opportunities and stimuli to the entire industry. I think that’s one of the reasons. Another reason is that we have a whole family of products – a mobile phone cannot be built like a printer, which is exactly the same product, with some new software. We use different hardware to get the maximum out of every Nseries device – in terms of size, energy consumption, form-factor etc. Having this kind of choice also means whe haven more technology on our hands, and more powerful platforms, with more capabilities.

E.M. Nokia is currently offering phones with 8 or 16 Gb onboard, plus some memory cards for extra storage. Next year will see even more 16 Gb devices from your competition, even these days Samsung offer a phone with 16 Gb of bundled storage. What storage sizes should we expect to see in Nokia’s phones in 2009? What is your strategy in this field?

U.L. The big consumer need, behind all this capacity, is multimedia content, which requires a lot of space. So, unless you have an adequate storage capacity in your solution, it will never be good enough. Some people have around two hundred albums full of music on their PCs, which translates into around 60 DVD disks. And we believe that you should be able to carry the whole library of your media with you on your mobile device. So, this requires a new memory race, which is probably more important than the megapixel race, because as far as camera goes, the megapixel count has little to do with picture quality. It can be a marketing argument, but that’s about it. On the other hand, storage space is less vaporous than the megapixel count, since it’s the basis for any multimedia-ready phone’s functionality. Generally, we believe that storage, along with display size and resolution are three key areas we should be focusing on.

E.M. Speaking of the megapixel count, Samsung are set to release their latest and greatest INNOV8 already in September, and judging from our experience with this phone, its picture quality is astonishing.

U.L. I’d be very interested to compare Nokia’s solutions and this phone now, because lately we have been working solely on lens performance and whole imaging system. Obviously, we cannot stand still in that race either, we’ll have to step in it, just like in all other races out there – be it in storage space, displays. All these races are important.

E.M. The Nseries line-up has never been particularly strong on the North American market – could you comment on Nokia’s plans in this region?

U.L. Recently we have enjoyed great success in Latin America, where we used to be really weak with the Nseries, especially in Brazil. We have had very good crowd. As far as the US goes, we have certain products on offer over there, but compared to our competition in smartphone area, our success there is very modest at best. That remains a big priority for Nokia and me personally – we are trying to turn the situation around, we are looking for ways to address this market’s needs, but, it takes time. There’s some difficult dynamics US, actually this market is one of the most competitive out there.

E.M. Can you foresee any technology or service, maybe not even from your direct rivals, that might pose a threat to the Nseries brand in the near future?

U.L. Of course there are many, many technologies that we are looking at, so, with displays, one area we should focus on is touchscreens, that’s where the Nseries is weak at the moment. But we also have to keep in mind other areas, know how to combine different input mechanisms – this can potentially lead to some cutting edgeform factors that will pose a threat to the Nseries. So, today, let’s say our kind of bread and butter form factor is the Duo Slide. But we are also working on the next generation of form-factors, those that can really make the difference on the market.

E.M. Around a year and a half ago you introduced the concept of Widgets, but it hasn’t seen any sort of commercial implementation ever since – what is the reason?

U.L. So far, on Nokia Nseries devices, we have enabled the user to manage and configure these widgets on his own, we have not really pre-configured them. That’s why it’s pretty hard for non-technically inclined consumers to get to this functionality. But we are working on the ways how we could bring this concept more to the front, and, make it easier use. Widgets have already become one of the key technologies on PC, and we believe they will do just as well on mobile phones.

E.M. What product has the potential to become the next milestone for the Nseries range in 2008/2009?

U.L. Up until this new announcement milestone product was the N95, and, then of course the N95 8GB. Now, essentially, we have very high hopes for those two phones we have announced today. We believe that the N85 is exactly the product that will be able to take over the place of the N95, basically, it has all the same functionality, but comes in a smaller and more attractive package at a more affordable price point. So the N85 is going to be our bread and butter, so to speak. With the N96, we are coming back to the higher end of the market, and we aren’t going to ditch high-end Nseries devices, especially if this one works out. Of course, it is our flagship product, so our biggest immediate hopes lie with product.

And, with N79, we are looking to conquer back the middle end of market, where younger people want the latest technology and a great price tag all in one phone.

E.M. Speaking of Nokia Comes With Music – when will this service become available throughout Europe and Russia in particular – do you have specific dates already?

U.L. I don’t have any specific dates for Russia for Comes With Music … But the thing is, it comes together with our Nokia Music Store – planned for release in the second half of the next year. We are making Comes With Music as a global proposition, so, we have to proceed carefully, making sure we have refined all our propositions, that we have the infrastructure running and get feedback from our users. In other words we are committed to get everything in gear before we launch this service in all European countries. So, it requires a step-by-step approach. Next year, we’ll add many more markets, but for now we are field testing it.

E.M. Any final words for our audience?

U.L. Well, I can say some really exciting times are coming – the idea of multimedia computers has spread around, so that these days we have a lot more competitors than, say, a year ago. This means you will see more innovation coming into the market, more developers, more software and more hardware So, I think consumers will benefit from this situation the most, and so will the technology leader, who will have more choice on his plate. All in all, there are many exciting things to look forward to in 2009.

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

Published — 27 August 2008

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