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To: Nokia CEO Stephen Elop
Re: Your U.S. market strategy
I can barely remember when Nokia was relevant in the U.S., yet that’s exactly where you need to be successful for your company to thrive. It’s always been a tricky market, so let me provide you with a handy road map.
There’s word that you’re in talks with AT&T to get your Windows Phones in the U.S. market. That’s a good start, but to really make an impression here, you’re going to have to bend over backward to cater to those carriers.
Sounds simple, right? Perhaps, but it’s a concept Nokia has failed to grasp over the past few years. The company has long stuck to its strategy of building products it wants to build, resulting in a frayed relationships with the wireless providers here.
Stephen Shankland/CNET
But you have a chance to bring a new perspective to Nokia. I have to commend you for getting the company back in the right direction. You’ve managed to generate a decent bit of buzz for your two Lumia Windows Phone devices, something the company badly needed. The initial impressions of the Lumia 800, in particular, have been fairly positive.
Succeeding in the U.S., however, means a lot more than dangling a few shiny products in front of us. It takes the support of the carriers, and particularly in your case, a higher level of visibility. You’ve only got one shot to make a new impression here, so it’s time to step it up.
Customization key
If you think you’re going to just sell the Lumia 800 in the U.S., think again.
One of the biggest mistakes Nokia made in the past was to stick with its strategy of building one global device and forcing it onto every carrier in the world, with only minor adjustments to the radio and frequency. From a business perspective it made a lot of sense, allowing it to generate massive economies of scale and, accordingly, higher profit margins. Among smaller carriers around the world, that works just fine.
Here in the U.S., not so much. The carriers here aren’t interested in smartphones that can be purchased anywhere. They care about exclusives and customized products. The likes of AT&T and Verizon Wireless work hard to ensure they each have their own unique lineup; they’re not going to give a second look to a phone that’s being offered up to every carrier. Particularly ones that have already hit the market overseas.
The exception to the rule, of course, is Apple and the iPhone, which manages to garner interest and hype wherever it goes. I hate to break it to you, but Nokia is no Apple.
No, you should be aiming more to emulate Samsung Electronics, which has managed to actually dethrone Apple recently as the top smartphone manufacturer. No company wants to admit to following a competitor’s playbook, but in this case, you would be wise to consider it.
Samsung Electronics makes fine products, yes, but the key to its success has been its ability to accommodate the carriers’ wishes. You want a bigger screen? Sure. You need WiMax in there? No problem. Need a slide-out keyboard? Samsung’s on it.
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Take the Galaxy S and its successor, the Galaxy S II. Globally, Samsung already had a hit product on its hands with both phones. But the company knew to approach the U.S. market differently, and made significant tweaks to its phone to ensure each carrier had a significantly different product. Sprint’s version of the Galaxy S smartphone was a WiMax device called the Epic, which featured a slide-down keyboard unlike the other phones. This year, Sprint’s successor Epic Touch 4G has a larger screen than the other Galaxy S II phones.
The strategy isn’t unique to Samsung. LG Electronics made huge inroads during the feature phone days by employing the same strategy, although it has stumbled recently because of its slow move into smartphones. HTC may be even more accommodating than Samsung, moving quickly to produce Sprint’s first WiMax phone, the still popular Evo 4G, and Verizon’s first LTE phone, the Thunderbolt. It’s no coincidence the company has catapulted into the ranks of the top smartphone players.
Bottom line: the U.S. carriers are used to working with the handset manufacturers early on the development of a product. So be ready to hit the drawing boards with them if you want their full support.
Come out with a bang
You’re going to need every bit of that support if you want to make a splash in the U.S.
After years of neglect and only a handful of products in the market, Nokia’s brand has essentially wilted away here. You’ve said you have a massive global marketing campaign in the works; I hope a large slice of that budget is reserved for the U.S. It’s not like Europe, where the Nokia name still resonates with consumers–you’ve essentially dropped off the radar here.
Which is surprising, because a lot of people likely owned a Nokia at one time (my first cell phone was a Nokia handset), though they probably couldn’t tell you when they last owned one.
Which brings me back to the carrier. Despite the rise of third-party merchants such as Best Buy and Amazon, a vast majority of Americans still rely on their wireless service provider for advice on what to buy. Outside of the iPhone and perhaps a few notable Android handsets, most consumers wouldn’t be able to pick a particular smartphone out of a lineup.
The good news is the carriers are open to another option. Telecommunications executives are quick to defend the prospects of Windows Phone, and none of them wants to be in a situation where they’re wholly dependent on Apple and Google.
But you need to give them something to work with. LTE is one key. Every other handset manufacturer has figured that out, and has ramped up the production of 4G devices. If you haven’t already started working on a device, you need to immediately.
Wireless providers have a lot of products to push, and only a limited number of marketing dollars to divide up between its products. For instance, you could tell that the carrier enthusiasm for Windows Phone was halfhearted through its marketing and promotional efforts a year ago. Of course, Verizon was busy with its lineup of Android devices and AT&T was making its final holiday push as the exclusive iPhone provider.
A lot of things have changed over the past year. The iPhone is on three carriers now, and isn’t as special as it used to be. The amount of “flagship” Android products out in the market is dizzying. There’s definitely room for something different.
Are you game?
