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Thursday 28 February 2013

Failing to Beat Apple, Nokia Aims for BlackBerry

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(Bloomberg)
As erstwhile smartphone leader Nokia Oyj (NOK1V) fails to gain much headway on Apple Inc. (AAPL) and Samsung Electronics Co., the Finnish company is setting its sights on a weaker rival: BlackBerry.
Nokia is betting its partnership with corporate-computing giant Microsoft Corp. (MSFT) will help it win business users, targeting BlackBerry’s stronghold. Nokia’s newest Lumia smartphones, including two introduced this week at the Mobile World Congress in Barcelona, run on Microsoft’s operating system and come with Excel, Word and PowerPoint.
Gaining a foothold in the business market is crucial for Nokia as it and BlackBerry fight for third place in smartphones, behind Samsung -- the leader in devices using Google Inc. (GOOG)’s Android -- and Apple. Shares of both Nokia and BlackBerry have lost 90 percent in the past five years as first consumers and then companies have turned to Android and Apple’s iOS, reports Bloomberg.
“The importance of winning the business audience on a scale of 1 to 10 is easily an 11,” said Ramon Llamas, an analyst at research firm IDC in Boston. He expects Windows Phone handsets to surpass BlackBerry this year, with Nokia responsible for most of the gains.
BlackBerry, formerly known as Research In Motion Ltd. (BB), pioneered the corporate mobile-device market in North America and still has a strong following in Washington and on Wall Street. Nokia, the biggest seller of Windows handsets, may appeal to information-technology chiefs seeking easy synchronization between smartphones and company computers, which most often use Microsoft’s operating system.
‘Perfect Moment’
Nokia Chief Executive Officer Stephen Elop, who joined from Microsoft in 2010, started betting on his former employer’s operating system after Nokia’s homegrown Symbian software fell out of favor among consumers.
Lumia unit sales rose to 4.4 million in the fourth quarter, making up almost 75 percent of all Windows Phone sales. BlackBerry (BBRY) sold 7.4 million smartphones, for 3.2 percent of the global market. IPhones and Android devices together account for about 90 percent of smartphone sales.
Elop says he often gets asked whether he’d be interested in buying BlackBerry, even though the company hasn’t said it’s for sale. “When I get asked that question, my answer is ’I’m interested in their customers,’” he said in an interview in Barcelona this week. “It’s a really perfect moment to go after that marketplace.”
Nokia slipped 0.8 percent to 2.70 euros at 1:28 p.m. in Helsinki. BlackBerry fell 1.4 percent to $13.06 yesterday in New York.
Cambodian Coke
Businesses are important to handset manufacturers because they carry a lot of clout when carriers decide which handsets to offer. A single corporate account can include thousands of individual users who tend to favor more expensive devices and have higher phone bills. Nokia says one European carrier it is negotiating with receives about a third of its revenue from companies.
Nokia has been touting its business-customer gains. The company says Coca-Cola (KO) salespeople in Cambodia and Vietnam use Lumia smartphones process orders while on the move. And it says London real-estate broker Foxtons Ltd. equipped more than 900 employees with Lumias, allowing them to synchronize calendars and work on spreadsheets and documents on the road.
Multitasking Whiz
BlackBerry delayed its new operating system, BlackBerry 10, several times. In March it plans to start U.S. sales of the $199 touch-screen Z10, which Bloomberg’s Rich Jaroslovsky called “handsome, intuitive to use and a whiz at multitasking.”
The company, based in Waterloo, Ontario, has more than 250,000 enterprise servers around the world, which help it ensure the security of corporate communications. It says more than 3,500 companies and government agencies in North America are considering its latest devices.
“It’s not surprising that competitors are scrambling to get into the enterprise,” said David J. Smith, BlackBerry’s executive vice president for mobile computing. He said his company still offers the greatest security for corporate data.
With mobile devices evolving rapidly and the market growing, Nokia can win new customers as business users consider changing providers, according to Chris Weber, the company’s global sales chief.
“We need to keep pushing,” Weber said over coffee at Nokia’s headquarters in Espoo, Finland. “It’s a good opportunity now with people and companies trying to decide which way to go.”
Simply defeating BlackBerry may not be enough for Nokia. Apple and Android manufacturers have almost squeezed other operating systems out of the consumer market, and there’s no guarantee they won’t do the same in the business world.
Third Ecosystem
In the five years since their introduction, the iPhone and Android have captured a combined 78 percent of the business- smartphone market, leaving BlackBerry with 16 percent and Nokia with 4 percent in 2012, according to IDC.
Samsung, (005930) the world’s biggest maker of smartphones, bought a stake security software company Fixmo Inc. last month to improve its corporate credentials. Apple this month gained some Home Depot Inc. (HD) managers as customers. And in October, the U.S. Defense Department said it plans to open its network for the first time to Android devices and iPhones.
Nokia sales chief Weber acknowledges that Apple and Android are formidable foes. But he insists there can be what he calls a “third ecosystem” in the smartphone business.
“I am confident that the bet we have on Microsoft gives us the opportunity to be the third,” Weber said. “I do think there’s room and I think there is appetite.”

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