Ecosystem is Key in Mobile Industry and Nokia has the Right Pieces to Play

I spent most of Thursday with product managers and PR agents for Nokia Indonesia as the company locally launched its flagship qwerty+touchscreen phone, the Asha 303. The phone, which I think is going to be a pretty strong contender in a mobile market like Indonesia, carries the S40 operating system but offers capabilities popularly sought from more expensive smartphones. We discussed on a lot of points regarding Nokia’s position in the country as well as among competitors.

Yes, Nokia has fallen on hard times, the once mighty creator of the smartphone product category is down in the dumps. Sales dwindled, market share took a nosedive, profits flew the coop, its shares are no longer traded on many of the world’s largest stock markets.

In my hand was my N9 which was just brought back from a coma. We spoke about Nokia’s music strategy and the mobile market in Indonesia. I had been using Nokia Music in my N9 and figured I could give them some of my thoughts about the service directly.

A foot in the door
Without going into specifics I would say that I think Nokia is in the best position among any other players in the industry to bring about the era of digital music in Indonesia properly. Its devices are beginning to make sense, its music service as well as application store are foundations of a good ecosystem. It just needs to work on the details.

A lot of people say don’t sweat on the details but I think you do need to iron out those kinks. If you’re looking at the big picture, it’s important that you can minimize the small things that can ruin it or turn a great experience into something less amazing, like driving a car and finding out your rear view mirrors are missing.

The company also needs to focus. In the past five or so years, it has had products to fulfill every check mark possible. Instead of focusing on making a few really great products, it had poured energy into releasing everything it could imagine.

Earlier this year it has committed itself into nine product categories, from the Nokia 100 series to the 900 series. It has committed to deliver Windows Phone on the smartphone side of the business, and S40 on the lower end of the scale. Soon, the S40 will give way to something else that it has yet to disclose. At the moment I think it’s focusing too much on all the different options that they think the consumers might want, instead of what the consumers should have.

The local managers obviously have no control over decisions in this regard but as far as its ecosystem goes, it’s something they can actually build and grow. Traditional phone makers are losing out to ecosystem owners as technology companies, namely Apple and Google are eating their lunch with their respective ecosystems. This is where the future of mobile companies are heading. It’s no longer about just the device, it has almost everything to do with what the devices can deliver.

With the Asha 303, I think Nokia is doing something right. It may not be able to deliver BlackBerry Messenger but as long as it can deliver well presented and well executed access to Facebook, Twitter, WhatsApp, music, and even Angry Birds, it has managed to cover the majority of needs of Indonesian mobile consumers. It even has local maps downloaded to the phone’s memory card for driving directions.

Now it’s just a matter of convincing the consumers that for around $160, they can do what people with more expensive smartphones can do.

Brand loyalty
One of the managers asked why iPhone owners seem to be so beholden to their devices, why they are so loyal to the iPhone. To me, the answer lies not just on the iPhone hardware. Apple no doubt makes some of the most desirable gadgets on the planet, but it only makes a handful of models and it makes them well. It also surrounds its products with irresistible content ecosystem.

It also has decades of reputation of making high quality products and the company often over-delivers on its promises. Even though Apple is not without its failings, these have yet to seriously taint the company’s reputation as far as new customers are concerned.

Half of its Macs are being bought by people new to Apple, nearly ¾ of iPads are purchased by non-iPad owners, and the iPhones keep dominating the top selling smartphones sold across the globe and the iPods remain the default portable music players of choice outside of smartphones.

Everybody in the industry knows how Apple operates (if they don’t, they should) and all the major players are trying to emulate this, mostly without success because there are numerous details that need to be smoothened out yet they so far have failed to execute them. This execution of ecosystem is is so important that failure will lead to irrelevance once consumers realize what’s going on.

Back to the question of brand loyalty, as it happens, a GfK report found that 84% of iPhone owners would stick to their phone of choice compared to 60% of Android owners and 48% of BlackBerry owners.

“The scope for brands to lure customers from rivals has diminished and the richest rewards will go to those providers that can create the most harmonious user experience and develop this brand loyalty,” GfK said.

Across wealthy nations and first world countries, iPhone’s dominant ecosystem may be tying up customers, but in third world countries with slow mobile internet connectivity and those in which the iTunes Stores do not include music, there is a huge opportunity for other players to take the lead and establish a strong foundation. Nokia Indonesia has the pieces to take this chance, it just needs to be smart enough to place them strategically and make the right moves. Easier said than done.