Can The Has-Been Handset Makers RAZR the iPhone?

We all remember how cool the RAZR was when it came out with its super-thin design and “Back in Black” theme song in the commercials. It was the phone that changed consumer expectations on how small a mobile phone could be.  Since then, things have gone downhill for Motorola, while the new 800-pounders are in Silicon Valley redefining how users interact with the web, play games, and socialize with their friends on their pocket sized iPhones and Android devices.

Now it may soon be Nokia’s turn to be the future "has-been" of dominant handset providers as they are steadily losing share to smart phones.  What will they do to protect their turf?  They still have a big lead worldwide as the graphic below shows, but clearly their growth is flattening as people move to Apple and Android based handsets.

This trend is likely to continue over an 18-24 month time frame, as iPhone and other smart phone prices will become more mass market in developing countries, further eroding Nokia in its dominant markets.  In the U.S., Apple's share of the handset market will only keep increasing once their CDMA capable handsets hit the market and they can tap into the Verizon and Sprint customer bases.

Until now, Nokia has been focused on enhancing their services content (Navteq acquisition, Comes With Music) but what do they have up their sleeve from a device perspective?  While software is starting to become a major criteria for hardware purchase with the mind-boggling success of the iTunes App Store, the hardware still needs to be compelling, especially as Apple and other Android based manufacturers continue to crank the product development engines. 

However, it appears Nokia is continuing to focus on services, with their newly inkedYahoo partnership.  This seems like a better win for Yahoo as they get a better presence internationally, where Nokia is the smart phone leader.  Nokia only get maps/navigation on Yahoo services, which for the most part are losing steam to Google's services so fewer and fewer customers will gain awareness of what Nokia is bringing to the party.

For current incumbents like Nokia to protect their turf against the new smartphone leaders, they need to maintain focus on developing unique handsets that can leverage the investments they are making on the services side.

Comments

[Justin Bieber Supra Shoes]

YES.Abraham Lincoln said its "better to remain silent and be thought a fool than to speak out and remove all doubt."

Monsieur le Prefet keep talking.