Nokia has had a relatively tough time impacting the enterprise device market for its mobile smartphones and applications. While it does have a large share of the overall marketplace for mobile phones, and makes a staggering array of devices from low end to feature rich smart phones, its direct impact on enterprise deployments of smart devices has been limited. Indeed, despite purchasing Intellisync for a significant sum, it has not had any major impact on the enterprise marketplace leader, RIM’s BlackBerry, nor Palm’s Treo. With over 8M subscribers, RIM has by far the largest installed base of enterprise smartphones and users. Nokia is attempting to capture a piece of this market by launching a new generation of enterprise devices into North America (highlighted by the new E61i smart phone device, a redesign of is previous E60 sold mainly in Europe), and more importantly, trying a new deployment strategy.
As a major component of its new enterprise strategy for the E61i, Nokia has decided on direct distribution of the devices, instead of the traditional method of exclusive distribution through carriers. To make this strategy successful, Nokia is betting on two things. First, carriers can not effectively sell enterprise solutions and high end devices, many of which are being driven as part of a solutions sale by others (SIs, app vendors, etc.). Second, enterprises are willing to forgo the carrier phone subsidies if they can pick their own devices and make them transportable across carriers. We believe both of these points reflect realities in the market. Carriers have been underwhelming in being able to sell enterprise wireless apps, with too much focus on minutes and data plans, and little focus on solutions selling. And many companies are growing increasingly annoyed with carriers who supply phones that can not be used on another carrier’s network. Further many companies believe that the phone subsidies used by carriers to lower initial phone costs and lock a user into a long term plan or face stiff penalties are not attractive. They believe, rightly, that they can probably negotiate the equivalent of the carrier subsidy in reduced monthly charges anyway, without the exposure to penalties or the locked devices.
Bottom Line: While we applaud Nokia for trying to change the game with its new enterprise device deployment and distribution strategy, we think it will take time to make any change in the habits of buying enterprises. They will gain some additional solutions sales through distribution and SIs. However, by handicapping itself (e.g., no CDMA version), it will face a tough time as it has eliminated half its potential market. Nokia will likely not see a dramatic uptake in its North American enterprise sales in the short term from these strategies, as many enterprises may find them not very compelling.
כותב המאמר- Jack Gold