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Nokia steers ship with careful app strategy

Mark Milian
Nokia's N8 smartphone has a new version of Symbian and the Ovi Store for apps.
Nokia's N8 smartphone has a new version of Symbian and the Ovi Store for apps.
  • Cell phone maker Nokia is trying to muscle its way back into the U.S. market
  • That strategy includes a focus on apps and on creating a flagship smartphone
  • Nokia says it's trying to solve a flawed app model that rewards just a few developers

San Francisco, California (CNN) -- Nokia is still the Titanic of the cell phone world, but in the past few years the Finnish company is having to steer around a lot more icebergs.

The ocean of competition has transformed dramatically, starting with the emergence of Apple's iPhone and then with the banding together of several gadget manufacturers under the auspices of Google's Android system.

Now, Nokia recognizes what's important to the new breed of smartphone consumers and is looking to execute.

The strategy includes making apps a priority and a push toward building a flagship device next year, rather than a smattering of good ones, George Linardos, Nokia's vice-president of media, told CNN.

Nokia's Symbian operating system is still the dominant smartphone platform worldwide. Symbian has 37 percent of the smartphone market, followed by Android with 26 percent, according to a report from research firm Gartner.

Yet, Nokia, which all but dominated the U.S. cell phone market early on, has barely a presence here these days in the expanding smartphone sector.

"There's a different way of doing business here," Linardos said.

Part of that has to do with the advertising machine. Apple puts all of its marketing might behind one name, the iPhone. Verizon Wireless, too, has a calculated approach that involves putting its ad dollars into one Droid at a time.

Linardos appears to hold some resentment about Nokia innovations he believes have been aped by competitors, who end up getting the credit because they "make a better commercial," he said.

A laundry list of reasons could be given for why Nokia has fallen so far behind in the United States and is ceding market share in other countries.

"They started with a blank whiteboard," Linardos said of Apple and Google. "So it's not really apples to apples in that sense."

Nokia has been in the smartphone game for a while. Microsoft, another early competitor in that space with Windows Mobile, has also struggled to adapt, but it made a big shift this month with Windows Phone 7.

So the team behind Symbian, which looks like a mix of Android and Windows XP, has turned its focus toward third-party developers. That app economy has been a big driver of interest in the iPhone, with Apple even devoting a large ad campaign to that aspect of the system.

Linardos, who oversees Nokia's Ovi app store, is implementing his ideas for fixing what he considers a flawed App Store model pioneered by Apple.

"In other stores like iTunes, you're easily lost in the crowd," he said.

So rather than focusing on the most-downloaded apps, which can create a perpetual roster of home run hitters, the Ovi Store targets other parameters. It looks at a user's region and sometimes more precise location for app recommendations -- all aimed at solving this problem of "discovery," Linardos said.

Nokia also is attempting to smooth transactions by partnering with major carriers. Through these deals, users can charge apps to their phone bill rather than needing a credit card.

Nokia announced Thursday that it's seeing 3 million app downloads per day, and 8.5 downloads a month on average from each active user. Nokia doesn't say how many apps it carries in its store, but estimates put Ovi's number at a fraction of Android's Marketplace.

"Just because something gets made [doesn't mean] it's good," Linardos said of the abundance of obscure apps. "It's like asking a radio station how many garage-band tapes they have."

So, he said, Nokia is working on cultivating more superstars to help users find more unique apps and woo developers looking to make money on a sizable global market.


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