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Nokia Struggles To Execute As Smartphone Competition Increases

It’s no surprise that Nokia’s share of the smartphone market is under attack. For years, the Finnish handset maker didn’t have much in the way of competition, but now of course, there is the iPhone, RIM’s Blackberry devices, the Palm (NSDQ: PALM) Pre, and the countless other smartphone releases that seem to appear almost daily.

Nokia (NYSE: NOK) was supposed to have prepared for this moment. Several years ago, realizing that phones would one day be just another commodity, it announced its future was in software and services, and off it marched making several acquisitions to buttress the strategy. But where has that actually got Nokia, and why when it seems to have been preparing for this moment for so long, does it seem to be struggling just to keep up? The problem, according to Bloomberg, is not in the company’s technology, but in its execution.

Hard to believe, and despite knowing Nokia how important services would one day be, software distribution didn’t actually have top management attention or marketing power, according to former Nokia manager Ari Hakkarainen, who recently wrote a history of the company. For example, while it has been courting developers “for years”, even managing to register some four million of them on its Forum Nokia service, its customer apps, or services as they used to be called, haven’t been greeted with much success. Some could be called downright disasters–N-Gage, for instance, while it’s much-anticipated Ovi Store suffered from early glitches.

Developers say that building apps for Nokia’s many devices is a difficult, time consuming and expensive endeavor, not to mention that the company doesn’t do enough to make it easy for them. Finnish developer Tina Aspiala, behind the iPhone restaurant-finder service told Bloomberg, “Apple (NSDQ: AAPL) has tools for developers that are attractive and make it a pleasure. People go out of their way to think up things they can do to use the tools. With Nokia, it’s like you have an idea and then you have to slog through the snow to implement it.”

Still, its Nokia, and because of its size and the respect for its technology, analysts, though skeptical, are waiting to see if the company can pull off its transformation. Thornburg Investment Management analyst Wendy Trevisani told the newswire, “Nokia’s not the most creative handset company, but they seem to be making a concerted effort. They’re putting some money into it and they’ve got bright and ambitious people and a decent track record of making things work.” There’s a ringing endorsement.