Apple’s Steve Jobs is a true player. He has led everyone to believe that what matters most in the telecommunications market is being number one in smartphones. It’s a small segment but the strongest one for Apple. Jobs has done a wonderful job in assuring that reporters and consumers see the market in a way that is profitable for Apple.

If Jobs was a MD at Artek, he would make everyone admire how Artek rolls in contribution margins that are quadruple the amount of Ikea’s. Reporters would rant on about it and praise Artek’s success. They would also completely forget that if Ikea wanted to, it could buy Artek with it’s a single day’s sales profits.

Apple is like a popular but slick politician, who has turned sweet empty promises into a competitive advantage. Steve Jobs makes claims, media repeats them. All this makes Apple look like a creative visionary and Nokia like a gray bureaucrat.

But why Nokia agrees to be the grey bureaucrat?

Nokia is the largest mobile phone manufacturer in the world. A million Nokia phones are sold every day. That equals 10 000 000 euros of profit each day. Nokia has KASSA of ten billion. It’s best phones and their features compete with iPhone.

Nokia’s logistics are effective and its production costs are low. In case Nokia decided to take down Apple, it could sell its smartphones with no contribution margin at all for years and set the market price for the segment. Apple would be in distress.

In February, the world held its breath as it waited Stephen Elop to tell his great big news and restore Nokia’s halo. And as we now know, the big news was that Nokia allied with Microsoft and takes on Microsoft’s Windows Phone operating system. Symbian phones are still sold for now and Meego system will not be entirely deserted.

Perhaps Elop’s decision was wise from the viewpoint of engineering sciences, who knows. But media condemned it not to be. Even economical analysts scorned upon Elop’s decision. They saw Nokia and Microsoft to resemble to two middle-aged who find each other at the end of a bar night as all the young pretty ones have already gone off. Nokia’s stock dove 14 % immediately and has continued to do so for over a month.

If Nokia wanted to create a hype, it could….

Nokia could give people the stars from up above, if it decided to concentrate on creating hype and making impressions. Nokia could set up an innovation group with annually changing members from the cream of global artists and musicians. Perhaps Steven Spielberg could lead the very first team. The team could create its own product line, Illusion, and leave the old smartphone category to rot. The product would be launch inside a glass bubble at the bottom of a sea, with colourful turtles and fish swimming around it. Spielberg would make everyone believe that something really important is about to happen, and reporters would believe every word.

...but maybe Nokia has an even more cunning strategy

A few facts:
- Most phone owners do not know what operating system his phone has
- Most phone owners cannot say what features are caused by the operating system and what by the phone itself
- Most phone owners use only a fraction of the hundreds of features of a smartphone
- Nokia sells more phones with S30 or S40 operating systems, not those with Symbian or Meego

Maybe Nokia is a far more cunning player than everyone thinks. By letting its competitors compete fiercely in the smartphone category, Nokia could intentionally be keeping the limelight away from the cheaper categories – aka those with S30 and S40. Nokia is controlling a segment much larger than smartphones. We’ll let you fight elsewhere; we’ll take India and China.

Jyri Erma
Planner, Copywriter