What Nokia Needs to Do With Smartphones

NEW YORK (TheStreet) -- Nokia (NOK) is doing all it can to stem losses in the fast-growing smartphone market. It is focusing on its Qt development environment as one leg of its strategy, and re-architecting its mobile operating-system strategy as well.

But does it have the right stuff to compete with the Apple ( AAPL) iPhone and Google ( GOOG) Android onslaught?

Nokia has been feeling the heat. Its smartphone market share is dropping dramatically due to pressure primarily from iPhone and Android devices. Even in Europe and emerging markets, where Nokia has an established brand and compelling presence, it is not immune. And its reliance on Symbian, an old-line mobile OS that didn't kept up with the competition, hasn't helped.

Newer versions of Symbian are just now coming to market but still are not really competitive and won't be until the next version is released. And Nokia's newer high-end devices based on MeeGo are not yet to market. Nokia needs to take some drastic measures.

One immediate step is for Nokia to capture more developers so the base of apps in its Ovi Store can grow to compete with Apple's and Google's stores and make its devices more appealing. To do this, Nokia must ease the development chore for ISVs who have often complained that developing on Symbian was too hard. Attempting to ease this burden, Nokia now says all development will move to Qt (Nokia's rapid-application development tools), including its own internal development efforts for future OS releases.

This not only affects independent software vendors (ISVs) targeting the Symbian platform. It means anyone developing on Qt can transparently deploy to Symbian or MeeGo (or other supported platforms). This should ease the process of integrating newer MeeGo platforms into its release cycle, as theoretically at least, any apps developed with Qt for Symbian can easily be ported to MeeGo.

This is a good strategy, given Nokia's need to be more competitive, and a requirement it not take too long to ramp up MeeGo. But can it get developers to move to Qt from their current preferred methodologies? That remains to be seen. But Nokia must aggressively court them if it wants to stand a chance.

The way to do that is to make Qt support development for Android and WP7 as well as Symbian and MeeGo, thus centralizing development to one tool that can deploy to many platforms. Nokia must do this quickly if it wants to have a major impact.

There is a bigger picture. Nokia sees the writing on the wall and knows it must become more competitive in its smartphone platforms. It is the only major backer of Symbian, a mobile OS whose days may be numbered for powering smartphone devices. With increased support and reliance on Qt, Nokia can now put any OS kernel it wants under the covers of its devices without affecting its apps or UI. Its stated support for HTML5 reinforces this move, allowing apps to run in any compatible rendering engine build on any OS. Much Like Research in Motion ( RIMM), which is migrating its OS core to QNX, Nokia now has a path to migrate its core OS to whatever it deems appropriate (potentially MeeGo, but it could be something else, even an Android kernel), while keeping a consistent user interface.

Bottom line: This signals a major strategy shift for Nokia and one that could help it recover lost ground in the smartphone wars if it couples its new Qt strategy with a revived OS capability. Getting popular ISVs to use Qt could even give Nokia a path to apps developed for competing platforms. But Nokia has no time to lose if it wants to recapture both user and ISV mindshare. And its track record of late in making the right strategic moves has been spotty, at best.

Jack Gold is the founder and principal analyst at J. Gold Associates, an information-technology analysis firm in Northborough, Mass., covering the many aspects of business and consumer computing and emerging technologies.

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