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Nokia's Data Strategy
Strategy VP Niklas Savander shows the mobile giant’s plans for Java, multimedia, and standards.
by James E. Fawcette

Posted July 25, 2002

Read more about Niklas Savander

As the entire mobile phone industry struggles to redefine its business around data and data services, Nokia has surprised many industry observers by licensing proprietary software to direct competitors and pushing for standards initiatives that promise to commoditize some of the company's competitive advantages.

The impact of Nokia's initiatives could define how software will be developed for mobile devices, not simply because Nokia is the clear leader in handset sales with 35% of the worldwide market, nearly double that of number two Motorola, but because Nokia is attempting to establish a platform for all mobile device development, in collaboration with most of its direct competitors, as well as partners.

While the industry's results so far have been extremely disappointing, from the dismal failure of WAP, to the slowly delivered and under-achieving data rates of the first 2.5G/3G networks, the push is just beginning.

Phone use is soaring, but average revenue per user (ARPU) is declining. Voice has become a commodity. The hope for offsetting this, and achieving growth in both revenue and profits, is to shift an increasing percentage of mobile device use to data and data services. Niklas Savander discussed his company's vision of how this data-based future will evolve, and its impact on application development in a free-flowing discussion.

"The idea that we can have two sets of business rules is totally flawed," Savander said, referring to the collision between the computer and telecommunications industries over building mobile infrastructure and business models.

"New paradigms are seldom based on rules that worked in old paradigms," he said. "The IT industry is built in layers. Telecom companies are very vertically integrated businesses. Having seen both (Savander worked at Hewlett Packard for 10 years before joining Nokia), I can't claim one or the other will rule."

"But it is a total cop-out (to say that handheld devices) will simply be like a PC."

Savander is skeptical that the approach to writing software followed by the PC industry will suit mobile devices. "How the layers of software architecture are done and what rules of engagement will be followed will be interesting not only for us but for software makers such as Microsoft and Sun," he said. "The PC model evolved before volume production was underway. The handset is the highest volume consumer electronics device of all time."

Nokia estimates that one billion mobile handsets have been sold, compared to 800 million televisions, and 400 million PCs. The company believes that between 400 and 420 million cell phones will be sold in 2002 alone.