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Nokia's Troubles Deepen: As Devs Flee Platform, Handset Maker Cuts Forecast

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UPDATED: One would think that laying claim to the largest share of the world’s smartphone market would attract the most high-quality mobile software developers, but that doesn’t seem to the case for Nokia (s nok). The Finnish phone giant’s market share stands at 44.3 percent, research firm Gartner’s latest data shows, yet according to a recent Bloomberg piece, programmers appear intent on building apps for smaller, competing platforms.

Update: Nokia Wednesday morning released an amended outlook that further reduces expectations, with anticipated net sales in its Devices and Services division seen “at the lower end of, or slightly below” the prior expected range of 6.7-7.2 billion euros in the second quarter of 2010. Nokia attributes the new forecast to “the competitive environment, particularly at the high-end of the market, and shifts in product mix towards somewhat lower gross margin products.” In other words, Nokia sees its struggle in the thriving market for smartphones and the software they run.

The challenge Nokia has faced and will continue to face can be boiled down to three things:

Negative momentum: Commenters are always quick to remind me of Nokia’s No. 1 position in terms of smartphone market share, and rightly so. But such numbers are a snapshot in time — far more important to developers is momentum. They watch to see how fast or slow a platform is gaining or losing acceptance. In the case of Nokia, there’s been momentum over the past three years, just not the good kind. Our infographic on mobile platform share from 2007-2009 highlights the problem — Nokia’s share of the market has waned (as did Microsoft’s (s msft) and general Linux phones) as those of Research In Motion (s rimm) , Apple (s aapl) and Google (s goog) have grown. In other words, developers see negative momentum with Nokia and are more likely to dedicate limited resources to its platform.

Too much choice: Nokia offers more makes and models of phones than any other company. But while customer choice is important, perhaps Nokia has honed this feature to a fault. On the site for Nokia Europe — a region that the company is very strong in — there are seven N-series devices, eight E-series handsets, the unique N900 and a few more smartphones coming soon. It reminds of the current Google Android fragmentation issues, but far worse. The various Nokia smartphones all run Symbian S60 — except for the N900, which runs on Maemo — in no less than four combinations of various editions and feature packs. And then there’s the upcoming Symbian 3 OS for the Nokia N8, which is already drawing early criticism on the software and experience. What platform version should a developer target and for how long should he or she expect compatibility? Nokia’s saving grace could be the Qt cross-platform framework, but I haven’t heard any chatter about mobile developers moving to Qt in significant numbers just yet.

Poor store usability: Nokia’s Ovi store is slowly improving, but the experience isn’t up to par with that of Apple’s; even Google’s Android Market is better. A poor in-store experience doesn’t lead to sales, even if the software itself is excellent. Indeed, some developers tell Bloomberg that Nokia’s Ovi store is “clunky,” so I can’t blame such developers for leaning towards a more effective alternative storefront such as that of Apple.

The shame of it all is that Nokia makes some of the best hardware in the world when it comes to smartphones. For example, the N900 is a high-powered handset with full QWERTY keyboard and resistive touchscreen that behaves more like a capacitive display. But the Maemo operating system is geekier than Android, to the point that it initially required users to find and connect to software repositories for programs, just like a traditional Linux computer. And Maemo is going away sooner rather than later — the overall platform is now folded into the MeeGo system that Nokia merged with Intel’s Moblin (s intc), although the open source community still adds to it. Like a few other Nokia experiments, the N900 doesn’t have much of a future when compared to mainstream smartphones that are standardized on a single operating system.

Given the above three points, it’s understandable why longtime Nokia developers are moving on to greener pastures. Alan Masarek, CEO of Quickoffice, enjoys the fact that his company’s product ships on all Nokia Symbian phones, but he looked into Android about 18 months ago and is glad he did. Masarek tells Bloomberg: “The numbers on Android are very ascendant right now. We’re on all these devices that just started shipping in meaningful volumes the last two quarters.”

If Nokia can woo developers by honing its product platform and line, it can still reverse that momentum. And maybe then it can stave off a further rise in the smartphone market share of Apple and Google.

Related research report from GigaOM Pro (sub req’d):

The App Developer’s Guide to Choosing a Mobile Platform

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30 Responses to “Nokia's Troubles Deepen: As Devs Flee Platform, Handset Maker Cuts Forecast”

  1. When one thinks of apps, one thinks of iPhone period. That is where the money is and Apple has proven this by making many app developers very rich, so why would anybody go to Nokia for app development.
    Apple elevated the app platform like no one else has so rest of the crowd is playing catch up but too late in my opinion.

  2. Yogesh Pandeya

    To be honest, I enjoyed developing applications on Series 60 platform when Apple and Android were not around because of the sheer power and control it gave to us in developing applications. However, I agree that Apple and Android made the development far easier than what it was a few years back. So point well taken, Nokia will have to improve the development tools dramatically to attract developers.

    But I do not think it is correct to write Nokia off so soon. Nokia makes one of the best mobile phones in the market which can withstand all kinds of beating in consumer’s hands. (try dropping Apple iPhone couple of times) So it is not only about the OS it also about the hardware when it comes to mobile phone which Nokia is very good at to cover an awesome price range mobile phones($20 to $1000) (I know I am not talking about only smartphones here)

    I strongly believe that Nokia can very easily beat Apple in the US smart phone market if it switches to Android. It can slowly migrate to Android in the rest of the markets as well. We have seen the results for Motorola when Sanjay shifted to Android. I wish I could take that call for Nokia as well.

    • “I strongly believe that Nokia can very easily ….”

      I wish fixing the issues at a giant like them was as easy as that. There are many complex, moving parts, strategies, politics, history, markets which cause companies to stay the course for decades before the come to a point of a right hand turn (as Mot did). I’d say, NOK will stay the course for a while longer, will be in more pain, will slash, see more pain and then think of a change in strategy. By then we will have iphone6.0. Just my 3c.

  3. As a mobile developer active in the Symbian space (contract work for research institutions, target hardware: XpressMusic 5800, N97), I’d like to second the sentiment that the Symbian development tools are a large part of Nokia’s problems. On iPhone & Android, downloading the SDK is the largest portion of the install process. On the Symbian platform, putting together all the right pieces (and version of pieces) in the exact right configuration is the largest time sink. The development tools are so finicky that I’ve resorted to to doing ALL of my Symbian development in virtual machines, as it’s really difficult to upgrade to the newer versions and keep things working. Installing from scratch is a more reliable alternative in my experience, but expect to sink several hours getting the toolchain back online. And don’t get me started on the whole GCCE vs. RCVT compiler issue…

    Qt has been a nice addition to the Symbian ecosystem, but due to issues with the Ovi app store, Qt dependencies on the phone, and all the signing shenanigans, it’s not yet a mature platform for consumer-oriented development quite yet. I’ve been able to get around this because the apps I’m building target few enough devices to fall within the testing limits, but I shudder to think about the hoops that I’ll have to jump through with respect to navigating Symbian Signed, the Ovi store process, and getting the proper prerequisites on my consumers’ phones.

    Now, these criticisms really only applies to Symbian devices shipping at the moment. The N8’s inclusion of the Qt runtime (an an upcoming version of the new Nokia Qt SDK) should solve a lot of these issues. However, I won’t be able to verify this until Nokia finally ships the device in the US. And it probably won’t be (commercially) worthwhile for me as a consumer-oriented development platform until Nokia begins working with stateside carriers to sell their higher-end phones subsidized to American users.

  4. Kevin, a few points…

    1) I’d be very careful how you interpret ben Aaron’s articles. They’re not exactly shining examples of objective journalism and there are a number of glaring inaccuracies in that particular release.

    2) The download numbers you mention fail to include GetJar and other third party outlets including direct installs from m.Google, Microsoft, etc. One of the main reasons Apple have the biggest app store is because that’s their only sales channel.

    3) Symbian’s development tools could be a lot better… well actually they are a lot better with Qt. Trouble is it takes time to release models and rebuild apps using the new framework. A lot of developers have held off until it’s clear how it’s going to work.

    4) Fragmentation is only a problem if you don’t have a segmented business models. Nokia service a wide range of countries with a wide range of economies. If your market starategy is to enable your services to be available to as many people as possible – which for Nokia it clearly is – then you need to release a range of handsets that facilitate this because not everyone can afford a £500 smartphone.

    5) Your infographic is interesting but fails to account for the fact that the fastest growing segment of the smartphone market is the US in which Nokia has next to no presence. In absolute terms Nokia’s increase in smartphone shipments was 60% of Apple’s total output and about 120% (I think) of Android’s total output last quarter.

    To put it into context, if you exclude US sales Nokia sold 20 million smartphones. Apple sold 6.5 million.

    I think Nokia have problems they need to resolve and whether they do or not remains to be seen, however hack pieces like ben Aaron’s don’t address what these are.

    • Appreciate the objective discussion, Mark. One thought — since you’ve mentioned it prior, as well — about the smartphone growth in the U.S. and Nokia not a major part of it. You see it as a justification that the situation isn’t so bad for Nokia (I totally get that) but I see it differently, so I’m throwing it out there for thought:

      Apple and Google (and even RIM) are the big growers of late and most of that growth has come from the U.S. — but after that base is built, it appears to be expanding worldwide, albeit slowly. That’s the opposite of Nokia’s growth strategy, and I wonder if that’s hurting them. Again, this is arguable, but wanted to pose it.

      As I said a comment above, I hope that Nokia does execute with Qt and Symbian 3 because competition is good for all in this space.

      • Thanks for the reply, Kevin.

        One of Nokia’s biggest problems is the American market because as well as being the fastest growing it’s also the most affluent. I think Nokia are going to find it incredibly tough to break back into the US, especially at the high end because they’re not coming from a position of strength and the brand association that drives. People who are familiar with Symbian are less likely to be concerned with the quirks of its UI. Naive customers?… different story I think.

        Ex-US growth is a funny thing. You would expect Apple and Android to have high rates because they’re coming from nothing and conversely Nokia less so. The key here is saturation. It seems people have been predicting Nokia’s demise for two to three years now and the reality is that absolute sales have increased substantially.

        Q1 2010 as we know has 21 million units to add. The peak in 2007 was largely due to Nokia’s all canquering (outside the US) N95 and the E71. This illustrates where Nokia are currently weak – high end smartphones. The N8 will help this but I don’t think it’ll challenge the iPhone 4 in sales numbers. It should stop the rot though.

        As a final point, it’s worth pointing out that there’s talk about developers fleeing one platform for newer ones. In general that’s not what happens though – they port the applications that have existed for years on the old platform to the newer ones, tarting them up for newer technologies. It’s simply market expansion.

  5. Roland

    As a commercial contract developer I have Blackberry, iPhone/iPad and Android apps under development for customers but I choose to use an N900. Given spare time, I prefer to hack together apps and code for the N900 using QT and Python because, basically, its a lot more fun. It’s fun because its easy, very quick and very rewarding. There is also no RIM or Apple to get in the way. This is all scheduled to move onto Meego and N8. However, if the commercials persuaded our clients to request us to develop on these platforms then we certainly would. We wait (with fingers crossed that it will be soon) for software publishers to buy into Nokia’s story and send us the contracts.

    IMHO, more developers should give it a go – even if it is just for their entertainment. No, I’m not related to Nokia in anyway.

  6. Nokia needs some fresh ideas, as well as many other OS vendors. Look at Apple — they innovate with high tempo. Every OS vendor, due to time to release pressure, puts some simple stuff (like standard connectors to Facebook and such) on top of a stale OS, but there is not much core innovation happening. Check out for instance the Mobile Community Framework ( — this kind of products can propel Nokia or another vendor past the competition. They need some serious stuff in the core, new ways to discover and connect with people and apps.

  7. Here are a couple of reasons why looking into the future I don’t think Nokia is in such bad shape on the developer front.

    1) They bought Troltech and are switching all app development for smartphone, tablet, pad and anything else they come up with to QT. I know that the old Symbian SDK was difficult to use but QT is far cleaner and should allow with minimal changes building an App that works in both Symbian and Meego.

    2) QT is hugely popular in the Linux community and hundreds of applications should be easy to port. KDE, Skype and Google Earth were all built in QT and crucially it already has developer mind share.

    3) Meego and Symbian are both open sourced and there are signs particularly after Computex that other companies are going to build device using these operating systems. Each time a companay builds a device featureing either of these OSs then it’s a boast to the whole QT ecosystem.

    I’m not supprices that Quickoffice is looking for new ways to make money since Nokia has been including Quickoffice on its phones for years but has recently signed a deal with Microsoft to bring Office to Symbian

  8. 1 correct out of 3

    Cak: Nokia’s share in the smartphone segment is actually larger than its share overall in the mobile business. So that’s not the biggest point.

    Also the momentum explanation is bad. The ones losing to Apple and Android in the smart phone segment are windows mobile and RIM according to latest research.

    Ovi is not perfect but it’s not the explanation either. If the phones are good and apps are good then people will forgive a worse shop.

    Having quite a lot of experience in this area for the past ten years I’d say that the biggest issue are the poor development tools for symbian and the poor application portability from device to device which means that no single Nokia phone probably has a critical mass from the developers’ point of view whereas iPhone has 50 million devices that can use the app you develop. Small screens and the lack of touch screen phones is potentially an issue too as the usability of an app is crucial for its success. Nokia has mostly produced phones with keyboards keeping the screen small.

    It’ll take a year or more for Nokia to address these through launching new phones and offering Qt development tools and of course to sell enough of those new phones to create a critical mass. The means are there already, now it’s a question of execution. Let’s see how long it takes for them to make it happen.

  9. All these points are valid but there is one other factor that needs to be added.

    The revenue split offered to developers is less than half of Google and Apple stores. Developers are receiving less than one third of the total revenue and most wait seven months for payment.

    The primary benefactors to a developers work (and it’s hard work developing for Nokia) are the Finnish Government who receive 22% of the revenue and the network operators who get 50% of revenue. When Nokia takes their 30%, there’s very little left for the developer. Network operators hold developers revenue for 180 days and Nokia then holds the revenue for a further month.

    Ovi is not competitive. Nokia management seem to be oblivious to their competitive problems or worse still they appear too arrogant to rectify the problem.

    Even if they had a phone comparable to the iPhone, and the app sales figures where comparable, the terms offered need to be addressed before developers will return.

  10. I totally agree with the lack of quality in Nokia’s software, but not in all models. Nevertheless it still ranks first in popularity, but…not for a long time I think. If Google presents its own Smartphone, I guess this new device will conquer the world

  11. Good points. In my opinion, another reason could be that a large number of Nokia phones are sold in developing nations which may not have the same appetite for apps as the developed world.

  12. You missed out on the biggest point, while Nokia has the largest phone share, it has a small smartphone share. This is where the money is at for developers.

    • cak, you missed out on the first sentence. ;)

      “One would think that laying claim to the largest share of the world’s smartphone market would attract the most high-quality mobile software developers….”

      • Zigurd

        One of Nokia’s problems is that the definition of “smartphone” has shifted out from under the products Nokia sells.

        The modern smartphone has:

        Finger-touch UI
        Full browser
        Object-oriented managed language runtime for apps
        3rd party apps use the same technology as built-in apps
        Search integration
        Maps and navigation

        If you are missing more than one of the less-important items on this list, you are not really selling a smartphone as customers currently define it.

      • @Zigurd

        It’s the big analysts who define what a smartphone is. You could argue that there is sub-categorisation is required and I would agree to an extent.

        However, stating that a smartphone must be touchscreen isn’t really logical considering RIM’s portfolio is largely non-touchscreen based. If you put that kind of criteria in there then you could equally argue that anything without a QWERTY keyboard isn’t a smartphone either.

  13. I’ve done some development for work purposes on Symbian and will not voluntarily develop for it simply because the development process and tool chain are a pain in the butt to use. I like the company and even some of the phones, but have given up on using it for personal or professional pursuits for now.

  14. From my personal experience, their developers tools are pretty bad too. I tried one day trying to run them properly and then got frustrated and moved to android. Even samsung bada’s tools were better than nokia.