5 Reasons Nokia's N97 Won't Make a Difference

We got excited for a moment about the prospect of Nokia (NOK) waking up and coming to grips with the fact that the Apple (AAPL) and Research in Motion (RIMM) phones were eating their lunch. This week they have a number of announcements coming and the first one we looked at was the new N97 phone. The engadget post is a good place to see it.

To be sure, it’s a very nice smart phone and since it’s the newest it probably has the best collection of high-end features for now. It also a fairly big, expensive, slide-with-a-full-keyboard kind of thing. We’ll let the gadget and phone industry and street analysts have their day of doing a full analysis but this model isn’t enough to stop the secular slide for Nokia in the mobile Internet space (at least in the U.S.)

Here are our five reasons why:

1. It’s not a high unit phone: Of course the pricing will get much lower than the $600 or so list price with carrier plans. But even if it is offered at $149, it’s just too much phone for many users. Nokia has other models, of course, but these haven’t been helping the company versus the other players either.

2. It’s not sexy or business. The iPhone wins in the sexy category. The N97 looks like a brick next to an iPhone. It’s not something a business person is going to be fiddling with either. They will stick to the Blackberry.

3. The "mobile computer" positioning is confusing. The two things that have momentum right now are netbooks (eePC, mini9, Samsung (SSDIF.PK), etc.) and smart phones. Nokia may want this to be a mainstream category, but it’s not.

4. Services are lame and suffer from a lack of integration and elegance. Nokia has a number of refreshed and new services as part of the announcement as well. They include Ovi, Games, Music, Navigation and also a set of development services to build on. But they are nothing like what Apple is offering now. Possibly closer to what the Blackberry offers but again, business users who are into games and music are more likely to push for an iPhone.

5. Beyond the "big three", there are strong new offerings out there from a variety of players. The new Samsung phones are actually pretty impressive. Phones based on Google (GOOG) are getting into the marketplace to reasonably good reviews and it’s just the beginning. The Google phone will undoubtedly improve rapidly. Even the lowly Palm (PALM) is surviving for now and planning something big in 2009 (hope it doesn’t look like an N97!).

In conclusion, we thought this might be a week where Nokia really "woke up" to the reality in the mobile Internet space. So far the evidence suggests that is not the case. We are still rooting for them but only they can help themselves out of this.

Comments

[User 311557:]

Oh Really? That's what you think. Readers... check out Nokia N97 consolidated features @ smartphone-guru.blogsp... and judge for yourself if Nokia N97 will make a difference or not

2008 Dec 03 02:34 AM

[User 311559:]

Having lived both in Europe and in the U.S., I still don't understand why Americans let wireless carriers mandate their choice of phones (and rip consumers off by charging high fees with their inventive pricing models). That being the case, however, I agree that N97 probably won't do well in the U.S. Europe will be a different story, at least compared to Blackberry.

2008 Dec 03 02:36 AM

[Roger Knights:]

I like the idea of a slide-out landscape-mode keyboard. (I wish the Kindle had one, to make it more compact and easier to type on.) And I like the idea of trying, with that sort of layout, to provide a gadget that can function as both a netbook and a phone. (Saving the user from needing two gadgets.) Nokia is pioneering in that space--and it makes sense to do so.

2008 Dec 03 02:50 AM

[Tiffy:]

Yes, Europe will be a different story. Nokia is still considered as the best phone maker here, and many professionals are equipped with high-end Nokias. Sure it is difficult to beat the Iphone in terms of ease of use and the AppStore is far ahead of the competition, but the Nokia N97 can sell well in Europe, for people who want a phone with great multimedia capabilities (photo & video especially), internet, GPS, but don't need a strong integration with enterprise messaging/network (Blackberries & Iphone seem stronger for this).

2008 Dec 03 03:32 AM

[Jon T:]

Nokia has big problems competing in the real smartphone space. Sine the iPhone it has lost over 25% of it's share of that market.

The N97 is just an updated version of what it does, a mobile phone with add-ons.

The iPhone stays way out in front, the first true handheld computer...

And by the time the 97 actually launches it will be even further ahead.

PS Is Nokia really a global company? Why has it pulled out of Japan and why is it nowhere in the US?

2008 Dec 03 08:25 AM

[mollytjm:]

when people have no real argument, they use name calling and slurs, as walid did.
the consumer has voted and Apple products rate at the top of the satisfaction list... but that's not all... Apple service and tech support are unequaled. because of their unique retail stores and constant, great customer support, they beat out a lot of competitors. And, they keep getting better and better at it all. This isn't true of any other company... and they did it without going into debt and while retaining back up cash.
there's room for multiple players in the smartphone game...but there probably won't be many that make it through to 2010.

2008 Dec 03 10:21 AM

[trishpacific:]

I think I speak for the majority of progressive Americans (yes, we do exist) when I say we do NOT enjoy being limited, as you implied in your statement. When huge corporations own 90% of the market and use their power to drown out nearly all small businesses that pop up, it's virtually impossible to get decent products or services from anyone else. Hopefully this will change with the new administration.

I, personally, am in love with the N97 and will jump at the chance to buy it as soon as it hits the states (if at all).

2008 Dec 19 04:50 PM

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