Tom Farrell, vice president of Nokia Middle East, tells Al Arabiya that almost every big car manufacturer uses its mapping services, and discusses the Finnish mobile company’s recent success with the launch of its new line of smart-phones.
Nokia’s fourth quarter was a turning point, he says, given the release of its breakthrough phone, the Lumia 920, in November last year.
The company has come a long way since the Huffington Post and the International Data Corporation said it had been knocked out of the top five phones worldwide due to stiff competition from the likes of Apple and Samsung’s Android.
Nokia recently laid off 300 workers in its IT sector, and transferred up to 820 employees to strategic partners, the Associated Press reported.
The changes, mostly in Finland, are part of a 10,000-employee downsizing, with plants due to close in June 2013, AP reported Nokia as saying.
Excerpts of Farrell’s interview are as follows:
Q: We all know that high-flyers want the latest phone. How is the Lumia 920 going to impact the Middle East?
A: We had a really good launch in November, and we only launched in eight markets globally. This market is significant because, as you know, people love high-end phones. Here in the Middle East, it is an open distribution market, unlike the United Kingdom where you would probably have to get your phone a contract and end up with the same device for 18 months. The turnover on devices in the Middle East is shorter. This is a fantastic market for Nokia, and we have been here for 17 years. Nokia is innovating again. It is back into smart-phones after a few years in transition.
Q: There has been a lot of talk about the Nokia Asha. Can you expand on this? Is the Asha just a buffer until the Lumia takes off?
A: Not at all. The market has really segmented a lot. There are three parts to it: the full-on high end with all bells and whistles; then there are affordable smart-phones that are witnessing huge growth; and there are the low-end phones, peoples’ first ones which cost about $20. This affordable smart-phone market is really interesting, and the Asha is placed there, while the Lumia is at the top end of the scale. For us, it is about giving people their first smart-phone, and if you look at the stats, less than a billion people have ever accessed the internet. We are offering a device that is about 200 - 300 AED ($54 - $82), and you can take it into Africa and other emerging markets. The Asha only launched last year, and it is doing really well.
Q: There was a report in January that Nokia was downsizing at least 1,000 jobs as part of a wide-ranging cut in costs. Have you been selling certain assets in order to transfer money into marketing and development?
A: This is a company transition, so you have to redistribute your organization, and that is what we are doing. It is very unfortunate. I have had very good friends and colleagues who have lost their jobs, but we do our best with the process. It is just a fact of where we are going as a company. At the end of day, we are securing the stability of the company and creating cash flow.
Q: Has most of the downsizing so far taken place outside the Middle East?
A: Yes, so here locally, there has been less of an impact.
Q: You mentioned that fourth quarter exceeded expectations and it came as a bit of a surprise that Nokia is now doing really well in the market. Is the Lumia going to be Nokia’s saving grace, or is there anything else in the pipeline?
A: We launched in the fourth quarter the 920 and 820, and we have now surprised the market with a 620, which is currently the most affordable Lumia at 899 AED ($245). We are giving people more choice within the Windows 8 family, and we are expanding the range. I look at the numbers every day, and we have been really encouraged by the 620. I go back to my point that not everybody wants to spend a lot of cash on their phones. With the 620, we are starting to scale the Lumia portfolio.
Q: There is this image in people’s heads that Nokia is the phone that grandmothers use, or it takes you back to the days of playing “Snake” on your phone. How are you planning on changing this image?
A: (Laughs) If she is using the Lumia 920, I am extremely impressed. What is very positive and more emotional in a really nice way is that the Nokia brand has a place in people’s hearts, and all we need to do is bring it back and refine it. So maybe it is there and it is dormant, and when you start bringing in a fantastic design, color and cool devices, it is going to be a really good thing. If you look at our products, range and design language, we are starting to appeal to a younger audience as well.
Q: You have started an affiliation with Microsoft Windows. Why?
A: The industry has changed over the last few years. It used to be ‘price, color, feature,’ but now, as things grow and the competition changes, we have moved into computing devices. We now have apps, different channels, and the innovation of the app. The whole ecosystem of the way things were has changed. So now it is about having allies and resources in order to be able to fight and compete. For example, Microsoft’s software and resources, and Nokia’s innovation and design, will form the kind of firepower that you need in order to keep up with the industry and fight. For me, it is no longer company versus company and product versus product. It is now alliances versus alliances.
Q: Nokia has developed maps similar to Google Maps. Why has Nokia done this, and how has it served the company?
A: There is a bigger story on maps in our industry. It is huge. History shows that the first wave of innovation was ‘what’ - you type whatever you want into Google, and you got an answer. Arguably, the second wave of innovation was Facebook with ‘who’ - a person, my friend, and all the stuff that revolves around the social networks. There is no doubt that the next wave will be ‘where.’ You can see this happening with what Facebook and Google are doing. Maps are being used to find out where people are or how to get places. Because of the mapping platform we have created on our devices, you can do amazing things, and when you build a massive database of this real-time data and open up the eyes of developers, they will invest. Our maps are the best in the industry bar none, and I can say this proudly.
Q: Nokia Maps are being used as GPS systems in cars such as Toyota, BMW and Jaguar. Is this another way Nokia is looking to boost its figures?
A: Imagine that you land in a city and you are travelling around the country. With Nokia phones, you can just hold up your device, and it tells you what is around you and the distance, whether you are walking or driving. It is a great example of how Maps are evolving from just a two-dimensional static map. It is starting to open up real innovative opportunities, and “City Lense,” which is unique to Nokia, has been installed in all the phones.