Job losses suck, but it’s about time Nokia took steps to improve mobile services

Nokia has announced that to deal with it’s ailing fortunes in the economic downturn, it is once again changing it’s strategy. We had seen the manufacturer focus far more on becoming a mobile Internet player. But now it’s pulling back the amount of investment in those areas due to it’s pre-tax losses in the first quarter of this year - the first time this has ever happened to the company.

What is Nokia scaling back?

The new direction for Nokia seems to be simplicity. It is cutting back on both the number of services it is investing in, and on making the Ovi portal a more central hub for Nokia services. 360 jobs are being lost from various mobile services divisions within the company. From now on, all mobile games offered through Nokia will be available on Ovi.

Nokia is also offering opportunities for third party developers to create image sharing and social networking services for its devices . The success of the Apple Store seems to have been a major motivator for Nokia, as it proved that offering a wide variety of services from a single source draws a lot of customer attention.

Quotes:

“The planned changes are aimed at improving and simplifying the user experience of Nokia services, increasing opportunities for third party developers and other partners to create compelling services, and accelerating the development of a common platform for Nokia’s different service offerings,” said Niklas Savander, Executive Vice President, Services, Nokia.

Bengt Nordstrom, Chief Executive of telecoms consultant Northstream told Reuters “As much as iPhone and App Store is a success for Apple, it’s a humiliating defeat for the rest of the mobile industry. Twenty years of efforts from operators and vendors to create mobile applications that customers like is overtaken in a heartbeat by someone that never done it before.”

What we think?

The need to save a huge amount of money is spurring mobile companies on to do things they SHOULD have done a long time ago. I find what Bengt Nordstrom says interesting - about the twenty years of efforts to create mobile apps that customers like. It almost sounds like he’s sorry for Nokia - I’ve got to say, that’s not my first reaction. The prevailing attitude in Europe and the US has been for manufacturers and operators to see exactly how much they can screw out of their customers every step of the way. With customers no longer willing to spend money on new handsets and obscenely expensive tariffs, companies have found themselves having to concentrate on actually making their services better in order to make money. The “let’s see what we can get away with” model is beginning to give way to the “we had better create some really good services” model. I really agree with Bengt for saying that the performance of the iPhone has been humiliating for others - it has really shown up what an utter shambles the mobile services market was in before it came along.

I just feel sorry for the 450 people who are going to get sacked in order for this to happen.