Sunday, October 18, 2009

Nokia And Sony Ericsson - Can They Return To Prominence?

My initial intention was to try talking about Nokia and Sony Ericsson with the mention of the you-know-what that has a fruit for its corporate symbol.

Nokia just recently posted a loss of nearly $850 million while Sony Ericsson faired a bit better but still doesn't seem to have an answer to get back into the black. The public line is the economy. And while Sony Ericsson did fare a bit better than what analysts were expecting, it was still not the same thing as actually announcing a positive earnings.

I've long ago given up hope of trying to understand corporate reporting as allowed by regulatory agencies but that's now the issue here. Others in the industry have managed to do well despite the depressed global economy. So, how are Nokia and Sony Ericsson different from say RIM and Apple's mobile offerings?

The main difference I see here is the lack of a cohesive mobile plan on the part of Nokia and Sony Ericsson. Just ask Motorola. It's difficult to see how Nokia plan on turning things around but folks like Sony and Motorola are moving away from Windows Mobile to Android to power their devices and hoping that will solve their problems.

Still, it is difficult to ascertain if that will work as planned. The differentiating factor between Android and Windows Mobile (WM) is that both platforms have different backers and that Android is open source and free while WM is Microsoft's offering and isn't free. And as Android devices flood the market, there won't be much in terms of differentiation among themselves.

In essence, many of these companies using Android will not be able to differentiate themselves other than adding their own proprietary skins to run on top of Android. The underlying operating system remains the same. Not only will Android devices in the future have to contend with Palm, WM 7, Blackberry OS, and others, they will have to compete among themselves.

Sony will need to fend off HTC, Samsung, Motorola, and other Android hardware developers.

However, Nokia stands to have a better chance than Sony Ericsson since it offers its own mobile platform. The only thing that's lacking from Nokia is a mobile vision for its users and prospective mobile users.

Obviously, time will tell. We'll know into 2011 where things stand. By then, Android devices will be in their second or third generation hardware and OS improvements. We'll know if Sony Ericsson and others who chose to back Android was the right decision. And even as the smartphone market continue to grow and adoption accelerates in an improving global economy, it will be interesting to see if Nokia is able to hold its fort against the onslaught of smaller innovative mobile players.

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