Nokia's VP talks N8, MeeGo 'milestone product,' tablets, Android and more!

By Joanna Stern

posted August 6th 2010 6:27PM

Feature

Interview

Nokia's prepping for a fourth quarter launch of its MeeGo smartphone. The N8 will hit before the end of Q3. The company's absolutely not planning to use Android and a tablet isn't happening anytime soon. And that's just the tip of the iceberg when it comes to the stuff we learned this morning during our captivating chat with Niklas Savander, Espoo's executive vice president and general manager of the Markets unit. With its quarterly profits dropping and losing daily (in mindshare, at least) to the Apples, HTCs and Motorolas of the world, we were certainly not lacking questions when we headed into the meeting, and Savander took on our questions about Nokia's short and long term plans with stride. We've got the key points of the interview bulleted out after the break -- and the full transcript after that.

On the N8: The N8 is more of a high to mid-range smartphone. It will be launched before the end of Q3. It will be available in the US, and carrier partnerships will be announced at a later date.
On MeeGo: The first MeeGo phone will be announced before the end of the year and will be a "milestone product" for the company. Nokia's done a lot of work on the interface and done away with a lot of the "legacy" of Symbian.
On Android: Nokia has no plans to use Android on its smartphones. End of story.
On tablets / larger phones: The company's made "no decisions" on entering the market. Savander seems to think larger screened smartphones are awkward.
On netbooks: The Booklet 3G was priced a bit high, but they are still in the market.
On 4G: Nokia has no plans to produce WiMax devices, but LTE will be a big focus.

We promise there's more where that came from, so sit back and read the full transcript.

Engadget: With the N8 becoming Nokia's new flagship phone – and presumably launching in Q3 -- how do you give it credibility with MeeGo around the corner? Do you see room for both Symbian and MeeGo in the high end?

Niklas Savander: In Q3 what we have coming out is the N8, it's the first in a family of products. It will definitely be a very attractive, high volume, successful product – no doubt about that one. We are pricing and positioning the N8 not at the very high end, but at the high mid-range. I don't think you should view the N8 as an answer to the high end, you should view it as the answer to an extremely well-functioning high-to-mid-range smartphone, which is a very large consumer segment. We have said that conservatively estimating, we're going to ship in excess of 50 million Symbian devices based on this platform. On scale, that's going to be a very meaningful product family for us going forward.

Yes, we are also working on MeeGo products at the same time. MeeGo for us is where we need to address the very high end of the portfolio. As for our first MeeGo product -- we have said that during this year we will have a major product milestone, and so now we are gearing up to have a major MeeGo offering in the high end. Even there, it's not a product, but a portfolio product. We feel very comfortable in saying that in order to address the pushing down smartphones to as broad of a mass as possible -- which is a function of price -- we need to have one team making sure that they are totally focused on that one, and that we plan to do with our Symbian portfolio. On the other hand, experience has told us that in order for us to drive speed and innovation, having MeeGo there as that is a good combination.

Now, the downside that we need to deal with as a consequence of targeting such a broad range of consumer is the developer. There, our acquisition of Trolltech has already given us the tools of Qt. The tools of Qt will be used as the tools of developers -- both our own, and external -- to diminish the difference from a programming standpoint between the two platforms.

That's a question we've had -- with the push for Qt, that cross-platform development is obviously a priority for the company, but are you hoping that the average developer spread his or her efforts effectively across all the platforms, or do you see many (if not most) specializing on one?

This, of course, is something we've put a lot of thought into to make sure we are comfortable with the scope of each of the teams. I think one important step there is that we ourselves use Qt, and somebody said "oh, you eat your own dog food." I say, "no, we drink our own champagne." The tools are not so bad that you should qualify them as dog food. But, on the other hand, one has to be a realist about when you have different form factors and different products, there's work that needs to be done between Product A and a Product B -- even in the same operating system. Take a HTC Android and a Droid from Motorola, you have to do some modifications even though you're working with the same OS.

The question is more, let's build the tools in such a way that it is predictable and known how you can manage your application in such a way that there is a piece that you don't have to change and then there is the rim around it -- the plugins that you need to modify -- and we give you the tools to do so.

Shifting back to the handset part of the business, do you plan to bring the N8 out here in the US and what's the strategy in the US looking like right now?

Yes, we will launch the N8 in the US, but we haven't announced any carriers yet. As for the second part of the question, there's two parts to the answer. First of all, I do think that the US smartphone market in the last two years has come from a very small one to the world's largest. You could argue that, one way or the other, any vendor with the long term ambition of being a leader in the smartphone segment also needs to be successful in the US. You could argue therefore, is there so much difference long term between the US version and the rest of the world version? Or is it even going to flip? Is the US version the global version as well? That being said, the US market shares some characteristics with other markets in terms of channel structure with operators. Korea and Japan are two others where the market is managed and driven through the carrier selections. This means that not only do we need to make products that we feel are right for the US consumer, but we need to make sure that we make products that feed the overall product portfolios of the US carriers.

"More and more, because of the dynamics of the global market, I see product managers saying, 'hey, we gotta reverse this thing. We gotta make sure we're competitive in the US and that will be a recipe for success elsewhere.'"

You also have to take a step back to look at what we've been doing with the US strategy. Specifically, we've settled with Quallcomm, partnered with Intel on MeeGo, Microsoft on Office, and Yahoo on Messaging -- we have four very big and important American tech companies who share a business interest with us. All of that doesn't have a direct day-to-day impact on operations necessarily, but that does contribute to building a position.

More and more, because of the dynamics of the global market, I see product managers saying "hey, we gotta reverse this thing. We gotta make sure we're competitive in the US and that will be a recipe for success elsewhere." Finally, nothing big ever started big. One step at a time. Some small, but important, wins already there – Nuron with T-Mobile is an example. And the Ovi Store billing integrated with AT&T. These aren't huge things, but they are proof points that we have the offering that the consumer would like, and it gives us confidence to plow ahead.

While we are talking about US carriers, what are your plans for WiMAX and LTE here?

Well, you have Verizon, who is very aggressively going to LTE. That is an incredible opportunity for us, both when it comes to the network infrastructure, but also how Verizon will then transition to a period of dual mode CDMA / LTE and eventually be pushing very hard for LTE products. That then brings Verizon into the addressable mainstream technology when it comes to capability.

Would you play in that dual-mode space until LTE is ready?

I think that the dual-mode handset market is going to be very difficult to serve for someone who is not in the CDMA business. I think personally it's going to be a shorter transition than people think. It's a new technology, and it's going to be hard to make it a really smooth product offering. Of course, there's a transitional phase here and depending on who you talk to you, you hear different time predictions. It also depends on the dynamics in the market.

Also on the WiMAX front, you had the N810 Internet Tablet which was WiMAX compatible. Do you see potential there now, both in WiMAX and tablets? We know that's a loaded question...

First of all, on WiMAX, we have no plans. No changes there. Our conclusion has been that we need to focus on a few things and that isn't one of them.

And well, now to tablets. First of all, I think it's going to be a very crowded market. Based on what I hear, everybody is going to put them out. There's going to be Android tablets, MeeGo tablets, Windows tablets... you name it. It's going to be very crowded. The question for any vendor is going to become, "What is the uniqueness that you can provide in that space?"

"It's a square thing, so it's hard to differentiate on design, so brand is, of course, number one...At this point in time, we have made no decisions on tablets."

It's a square thing so it's hard to differentiate on design, so brand is, of course, number one. You have to think really hard on whether you have the capability to make a difference in that market. I personally also think you have to look at the use case, and when you look at the users of tablets it seems to be primarily a home media device which would suggest that the TV players are going to get into it as well, which will very quickly make it a TV-like market. As you know, we used to be in TVs and we have no plans to return. At this point in time, we have made no decisions on tablets. It is a market like any other adjunct market -- we monitor to see if we think entry into that specific area will create enough incremental value for us.

Beyond tablets, we've seen the evolution of smartphones becoming much more powerful and almost tablet like, sort of like the N900 was positioned when you first launched it. Some are calling them superphones, but do you have products that you're coming out with later in the year, maybe this MeeGo product, competing in that space?

I've actually been introduced to this 'super phone' term just this week. I think that as the smartphone market becomes more mainstream, we're going to see a lot of companies trying out' things when it comes to product concepts. The larger phones are interesting because physical things come into play, like how big our hand is. At some point in time, the thing is going to be too wide to be comfortably held in our hand. You know, our pockets are not getting any bigger! With a larger screen, your battery consumption goes exponentially up, and we have been taught as consumers that, "I'm not going to accept thicker phones anymore." This super phone category, I absolutely think it will exist, and it will be kind of a gray area between smartphones and tablets.

We're definitely going to play in that space, but, I think we come from the kind of usage paradigm of on-the-go. I think that once the screen gets above a certain size, it's not all that pocketable anymore, and if we don't have the on-the-go aspect, we lose part of our advantage. So that's why, I think, when you look at our product concepts we can, of course, decide that we want to take the 3G Booklet and expand that one, but from a mobility standpoint I think the size is an area where we will stay limited and make very careful decisions about.

We wanted to ask about the Booklet 3G since you guys really went into a different space in mobility last year. Do you expect to update it and stay in PCs?

That Booklet was, for us, an entry into a new product category that we wanted to kind of get our feet wet in, so to speak. We wanted to understand the dynamics of that. How much is that product category different from ours, etc. Not only in terms of how you make them, but how you sell them, where you sell them and all of that. It's clear the PC industry and the phone industry are really different beasts. We learned a lot about how to sell the Booklet versus the selling and marketing of handsets.

Sure, the pricing in the US was surely very high, especially given the data plan. So, is there plans to update that and the product?

Yeah, absolutely. In hindsight I think that we, from a pricing standpoint, probably went too high with it. But yes, that's a product category that we are now in. You know, once we have more to say about that, we'll tell you.

Back to MeeGo, we've seen some leaked pictures of the UI for smartphones and the different implementations from the Intel side. How important is it to keep a consistent Nokia UI or software look and feel between MeeGo and Symbian?

We're going to put our best foot forward when it comes to the user interaction with MeeGo products, and, of course, it's an evolution. Version two is always going to be better than version one, no question about that one. Then, on the similarities between Symbian and MeeGo, of course, from an iconography and the way it looks standpoint, we can do a lot to make sure that it's visible that it is the same family. I think we have to be very careful in not pulling the legacy with us to MeeGo on certain things. We will make some conscious decisions of things that will not be the same logic. For example, Symbian originally was built as a menu-driven operating system, which is not that practical when you are in a touch environment because the tree hierarchies back and forth. For MeeGo, we have taken a totally different kind of paradigm. So, you will not see this kind of menu-driven [UI]. We are making conscious decisions where we just say, "Okay, that's legacy, that's not going to come with us."

You've been asked this a bunch over the last few days, but I don't think we can ignore the Android question. What's your opinion on using the OS?

"Android is run by Google... we're not prepared to hand over our destiny to a third-party on that one."

The short answer is no, we're not going to do it. But the why to that one is interesting. We fundamentally believe in our capability to add value on top of just producing great hardware. And so, you have to build something different. And so, in a way, then it's just the question of, do we believe that we can be better or more efficient in differentiating by picking up Android versus something like MeeGo. So, it becomes almost a technical question.

Now, of course, the other thing that we factor in is that Android is run by Google, and that just means that potentially it's much more in their hands. We're not prepared to hand over our destiny to a third-party on that one. So, it is, of course, hard to justify whether that's relevant or not, but having 40 percent market share of the smartphones, we think that we need to have a bit of a say in the platform.

This will be our last question and it's a good follow up to the Android answer. Looking at what Apple and Google have taken of the US smartphone market, what do you see Nokia's future – let's say a year from now – looking like? Given all we've discussed – the N8, MeeGo, etc – what's going to make Nokia grab its share?

I would say that a year from now, I'm sure that we will have both MeeGo and Symbian devices in this market. How many, with what carriers, is, of course, up to us to make happen. But, the foundation that we have built gives us the tools and the settings in place so that we can be successful in this market. It's a function of us making great products, it's a function of us convincing the US carriers that we do have great products, and they fit into their overall portfolio and that the economics behind that are the right ones. But I feel confident that we have built the platform for that to happen.

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