In the lead-up to Nokia’s strategy presentation at the end of this week comes a report on what mobile operators are hoping the challenged handset maker decides to do to turn around its business. In an ideal world, Nokia (NYSE: NOK) would take up the reigns on MeeGo and launch devices using that OS. In a slightly less ideal world, it would opt for Microsoft’s Windows Phone 7 platform. And the worst-case scenario: Android.
According to a report in today’s FT, mobile operators in Europe are concerned that if Nokia decides to develop handsets using Android — one of the options that is being floated around — it would further contribute to the Google-Apple (NSDQ: AAPL) duopoly that is fast emerging in the smartphone segment.
This is already happening in some markets. In a report released yesterday from comScore (NSDQ: SCOR), the researchers said that Android and Apple are the only two smartphone platforms in the top-five that gained marketshare in the last quarter in the U.S. RIM (NSDQ: RIMM) is still in the lead, but if you combine the shares of Apple’s iOS and Android, beat it by nearly 10 percent.
From the point of view of operators, it’s all about having more competition. And potentially a platform that engages them better than Apple’s and Google’s platforms. MeeGo — the Linux-based, open-source platform that was developed originally from Nokia’s Maemo and Intel’s Moblin work — has been a year in the works but so far short on actual devices, particularly mobile handsets. Operators, according to the report, hope that Friday will be the day this changes, with Nokia announcing a roadmap for devices using MeeGo.
But competition cannot go too far. An “executive at one large operator” referenced in the story notes that Microsoft’s Windows Phone 7 is a better option than Android because it is less dominant today. But what would be a disaster, and a dilution of Nokia’s energy, would be for the company to hedge its bets and work on devices for two different platforms simultaneously. This would also “undermine confidence” in MeeGo.
In Nokia’s last quarterly earnings, reported at the end of January, net profit for the quarter was down to €743 million ($1 billion) compared to €882 million ($1.2 billion) for the same quarter a year earlier, a drop of nearly 16 percent. And while Q4 overall industry mobile device volumes were up 12 percent to 402 million units year-on-year, Nokia estimates its own device market share went down 4 percent to 31 percent.
In the smartphone segment, Nokia’s Symbian OS is perceived to be outdated and unable to keep up with the likes of Google’s Android and Apple’s iOS. Observers have long been speculating that instead of trying to revive Symbian, Nokia will instead link up with a third-party software player, such as Microsoft (NSDQ: MSFT) or Android. Or, it turns out, MeeGo. We’ll have to wait until Friday to know for sure.