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Sliced up: Nokia gets angry

Spooked Nokia broadens offensive against Apple

Posted By Martyn Warwick , 05 January 2010 | 2 Comments | (0)
Tags: mobile Litigation Finance markets

The season of peace on earth and goodwill to all men didn't last long in the mobile comms sector. Nokia of Finland has upped the ante in its ongoing and increasingly bitter patents war with Apple by filing a second lawsuit within a week. But, as Martyn Warwick reports, Nokia is beginning to come across as desperate rather than commandingly powerful.

Last week Nokia filed a complaint against Apple with the US International Trade Commission (ITC). It accompanied the filing with a press release claiming that "virtually all of [Apple's] mobile phones, portable music players, and computers" infringe Nokia patents. A wide-ranging accusation that is notably vague on detail.

Yesterday, Nokia followed up its initial broadside with another one, claiming in a US District Court in the state of Delaware that Apple has stolen patents of such importance that they actually define Nokia's "uniqueness". This, seemingly, includes camera-phone technology and touchscreen displays.

All this began back in October last year when Nokia first filed suit against Apple. In December Apple responded with a countersuit of its own and the tit-for-tat started. So, what's it all about?

Well, it seems to me, and quite a few others, that Nokia, well aware that its market share is being steadily eroded and in the knowledge that its handsets are not as popular, trendy and leading-edge as they used to be is beginning to panic.

The Finnish company openly refers to "the war" that it is fighting and obviously subscribes to the view that attack is the best form of defence. Hence the plethora of lawsuits, complaints and filings - the corporate equivalent of carpet bombing the enemy. However, if Nokia believes its "shock and awe" tactics will have Apple waving the white flag in a couple of days, it's making a big mistake.

Nokia's latest assault on Apple is on a broad front. The first complaint related to what it calls "essential" patents, the second to "implementation" patents. In this respect, yesterday's filing refers to seven different patents ranging from "mobile station with touch input having automatic symbol magnification function," (i.e. a touch-screen) through to "optimized camera sensor architecture for a mobile telephone," (i.e. an inbuilt a digital camera) and last, but by no means least, a "user interface device," (otherwise known as a touchpad).

In the lawsuits Nokia claims the "implementation patents are particularly important to Nokia's success because they permit Nokia to differentiate its products from those of its competitors."

Oh, really? Well just how these patents differentiate Nokia's handsets from those manufactured by the likes of Samsung and Motorola and Apple and RIM and Microsoft and Google and so on is unclear to me but it'll be up to a judge to decide and determine as the case drags on and the lawyers get richer. And the best of luck to him ot her in sorting that one out.

All this smacks of panicky over-reaction on Nokia's part. Rick Simonson , Nokia's ertwhile CFO and current head of mobile devices let the cat out of the bag recently when, in an interview with the Economic Times of India, he tacitly admitted that his company had taken its eye off the ball and is paying the price. He said, "By 2011 we will be at par with Apple and RIM in smartphones. Indeed, not only will we draw level with them, we will also win the war because, in addition to email, we will be adding content, chat, music, entertainment and several other features, which will soon become very critical for success of any company in this space."

And, presumably, Nokia's rivals wont' be doing any of those things - and much more besides?

To adapt a Bill Clinton quote, "It's about the user interface, stupid" and this is what Nokia doesn't seem to get.

That's the real  battle - and it's already been won by Apple and Google. Just think back. The iPhone hit the news in 2007. By February 2008 at the GSM World Congress in Barcelona, Google was demonstrating prototypes of its own smartphone. It was in production 12 months later. Consumers want a powerful intuitive, easy-to-use graphical user interface with a mobile phone built-in beneath it. Not some cumbersome, bug-ridden thing that's about as user friendly as the Large Hadron Collider.

Ease-of-use, that's what Apple and Google understand and provide and once consumers try it, they don't go back. Where's the equivalent from stodgy, slow-moving and frankly arrogant Nokia? There isn't one. Sure Nokia has smartphones but they haven't captured the popular imagination. Have you tried email on a Nokia smartphone? I rest my case.

Does anyone really expect Nokia to come out with a credible Apple or Google rival in 2010? Answers on a postcard please to the usual address: Santa Claus, Third igloo on the right, Espoo, Finland.

Part of Nokia's "war" strategy seems to be sharply to reduce the number of mobile devices it makes and concentrate on marketing an iPhone killer. In their dreams. Nokia user interfaces are a mix of good, fair and not so good at all and many users complain more and more about products being rushed out with far too many bugs.

Nonetheless, Mr. Simonson claims that the Finnish company will sell in excess of half a billion handsets this year - way above what analysts are predicting. He says, "Nokia will ship over 500 million units across three platforms, which will be about 40 per cent of the global market share."  Again, in your dreams. Nokia's market share while still the highest on the planet is in slow but remorseless decline and its competitors aren't going to stand idly by and let it reclaim lost territory.

Rick Simonson's bullish prognostications earned him a rebuke when a headquarters spokesperson told the Reuters news agency that his comments "were not meant to be taken as a new forecast for the coming year." So, what was all that about? Wishful thinking.? It looks like it with head office saying that its market volume will rise by 10 per cent (still an impressively ambitious target) whilst it's market share will remain "fairly unchanged" - whatever that might actually mean.

Meanwhile, Apple says Nokia is in direct and flagrant of several of its key patents and will see the Finnish company in court.

And this is a good point in the story to remind you that when Nokia's Ovi brand was unveiled (and what a damp squib Ovi turned out to be). Anssi Vanjoki, the company's executive vice president and General Manager, Markets was asked by an analyst why a "conceptual" Nokia touchscreen that he was demonstrating looked so very, very similar to an iPhone, Mr. Vanjoki joked, "We copy with pride!" That quip could well come back to haunt him. It's already cited in Apple's countersuit.

The simple fact is that the mobile game has changed, Apple and Google are years ahead of Nokia. All this litigation is prima facie evidence that Nokia is badly rattled and if all the company can do in response isto  become a vexatious litigant it shows a paucity of imagination and a lack of flexibility that ill-behoves a company in the fast-moving world of mobile devices.

I'm afraid, Nokia, it's not us consumers who are the root cause of your troubles, it's you and your apparent inability to meet our needs.


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2 comments (Add Yours) - click here to sign in

(1) 05 January 2010 19:53:33 by Bill Best

Gosh, posted from California I think!

(2) 06 January 2010 10:43:20 by Paul Regis

Consumers still want trendy devices and Nokia had that bit covered for a while but the others soon learnt to make trendy stuff that also works well.
The Nokia user interface presentation, even on new phones, looks about 3 or 4 years behind the market leaders. Combined with menus, usability and setup that is second rate the market has punished them.
I come across many companies. They compete by being excellent, by being cheap or by locking you in and preventing competition. Nokia - definitely not in categories 1 and 2, esepcially with law suits pending.