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Nokia tries a new approach to the enterprise

המאמר דן במאמציה של חברת NOKIA להטמיע פתרונות מתקדמים בתחום המכשירים הסלולאריים החכמים. (המאמר בשפה האנגלית)

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.

 Nokia believes the dual mode nature of the E61i device (both cellular and WiFi) will make acceptance of the device more attractive to the enterprise user, and is betting on Fixed-Mobile Convergence (FMC) as a motivation to adopt this device. It has been working on voice over IP (VoIP) technology for some time and has a substantial capability in this space. Further, Nokia has forged alliances with Avaya and Cisco, who are major players in the enterprise FMC/VoIP market, to make the Nokia technology compatible with their installed base of PBXes and VoIP solutions. We believe that FMC is an important capability that many enterprises will deploy in the next 3 years. However, we believe most companies are deploying slowly and carefully, and as such FMC will not have a major positive market impact on E61i volumes in the short term. Moreover, Nokia has severely handicapped itself from selling more devices in the North American market. The E61i is only available in a GSM version, and given the approximately 50% market share of CDMA (e.g., Verizon, Sprint), it will not be able to sell this device into half the enterprise market.

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

jack.gold@jgoldassociates.com

 

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