Warc, 28 January 2013
HELSINKI: Nokia, the telecoms group, is focusing its
innovation activity on creating devices and product features which are
differentiated from Apple's iPhone and handsets powered by Google Android.
Stephen Elop, Nokia's chief executive, told analysts that
the firm's emphasis over the "longer period of time" is to ensure its
Asha brand and portfolio of devices running on Microsoft's Windows Phone
operating system stand out.
"Clearly our principal investments from an R&D
perspective, as we have transitioned into someone who uses the Windows Phone
platform is focused on differentiation [and] focused on capabilities that are
new or unique on the Windows Phone platform," he said
Driving up gross margins are a major objective informing
such a strategy, and this area will thus form a core metric for measuring the
success of Nokia's research and development output.
"Our R&D productivity ... is now far more focused
on differentiation than historically it was, whether it's a large component or
it focuses on just the underlying plumbing of operating systems," Elop
argued.
Gross margins on "smart devices" rose from –3.5%
to 18% in the last quarter on a sequential basis, aided by a "positive mix
shift" towards its Lumia range.
More specifically, Elop said Windows Phone 8 has attracted
more developers than Windows 7 due to its superior features. Nokia was also an
early adopter of the Windows 8, unlike the seventh iteration.
It thus had opportunity to "add capabilities that gave
us unique points of differentiation, not in the context necessarily the Windows
Phone ecosystem, but even relative to Android or relative to Apple," he
added.
These included handset design, as well as tools like
photography and location-based services, showing mobile operators it is
possible to build a "third ecosystem" challenging Apple and Google.
"Operators today are more engaged, more invested and
more participating in the conversations about how do we take the Windows Phone
ecosystem to create more balance for them from an overall strategic
perspective, and of course always for the consumer, who makes the ultimate
decision about these things," Elop said.
Alongside more high-end lines, the Asha brand and the
planned future development of Windows-based devices will try to serve consumers
at lower price points to rival cheap Android devices.
"We are clearly innovating with Microsoft around
Windows Phone and our focus on taking that to lower and lower price points, you
will see that over time to compete with Android," Elop said.
Data sourced from Seeking Alpha; additional content by Warc
staff
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