Nokia Q2 highlights. S^3 50 mil – great news or fragmentation nightmare? OVI Store growth stalled. U.S.

Staska  By on 23 Jul 10

Now that the results of another quarter for Nokia are in,  it’s time to dive behind the headline numbers and reflect of what they can tell us about the state of Nokia today and in the nearest future.

Overall, Nokia Q2 financial results  and the follow up conference call were pretty boring and predictable this time. All the big revelations were done last quarter, and things turned out more or less as I expected them to.

My overall impression is that, unless they somehow screw up and delay the launch of N8 again,  Q2 2010 should mark the bottom in the decline of Nokia fortunes, and improvement is afoot. At least in the short term. Long term Nokia success or failure are still very much an open question, and will depend a lot of how they are able to execute in the next 12 months.

Apart from the general impression that this is the bottom, there were a few pretty interesting and disturbing things hidden in the Nokia Q2 report.

50 million Symbian^3 devices. Great news or a fragmentation nightmare?

The most interesting bit to come out of Nokia Q2 earnings – was the information, that according to conservative estimates, Nokia expects to ship 50 million Symbian^3 handsets over the life of the platform. At first glance it sounds like really great news. Both for Nokia and developers. Writing an app for a platform of 50 mil devices sounds like a very attractive opportunity. But only at first glance.

At the current pace, it will take at least a year for Nokia to sell 50 million Symbian^3 handsets.  This seems to squash any lingering hopes I had that Nokia will wise up and will start offering OS upgrades (S^3–>S^4, and beyond), so their top of the line phones do not feel obsolete 6-7 months after release. The stuff their biggest smartphone competitors has been doing now for more then a year.

But what’s worse, this 50 million S^3 handset prediction means that at about this time next year, Nokia will be actively promoting 5 different smartphone platforms:

Unless I’m missing something very obvious here.

The thing I might be  missing, is that the older S60.3 and S^1 versions of Symbian may reach the end of their  lifetime, and Nokia won’t be releasing any new smartphones with them. Be it as it may, by the time first S^4  handsets arrive, Nokia  C6 (S^1) and E5 (S60.3) will still be around and actively promoted.

Abandoning S^1 and S60.3 also does not seem in line with the current Nokia strategy of getting Symbian into cheaper and cheaper devices. Symbian^3 has significantly higher hardware requirements then Symbian^1, and that will limit how low Nokia can go with S^3 devices pricewise in the next 12-24 months. And unless Nokia decides to leave a highly popular and growing cheap QWERTY messaging phone category to S40, they don’t have anything to replace S60.3 with.

The massive fragmentation of  Nokia Symbian smartphones, is already a huge problem for Symbian app developers. And instead of working on a solution, Nokia seems to be moving in the opposite direction. Yes QT on S^3,S^4 and Meego might help. But there’s that UI compatibility break between S^3 and S^4 coming. The more software  centric and unified platform approach between different devices on S^3, that OPK mentioned yesterday, is also a good thing. But it does not change the fact that there will be another 4 Nokia platforms  for developer to support next year.

OVI store growth has stalled

And, talking about apps and developers, things do not seem to be progressing very well on that front for Nokia too.

It looks like the growth of the OVI Store has now stalled. Last April  OVI store growth numbers looked very impressive. Over the first 3 months of 2010, OVI Store downloads grew 70% – from 1 million a day, to 1.7 million a day. Three months later, Nokia is reporting the same 1.7 million apps a day download rate. Which isn’t bad per se, but compared to the way things are going on the competing platform app stores, it’s disturbing. As is the number of total “content items, including apps” available on OVI – 13 000…

About the U.S. market

During the earnings CC Nokia gave us their explanation of what went wrong with Nokia smartphones in the U.S during last 5-7 years. They basically blamed it all on Symbian (which was an independent company for the most of that time).

According to Nokia, U.S operator device testing process is much longer and stringent then on any network elsewhere. And from time to market perspective, earlier generations of Symbian OS just weren’t good enough. It took too long to pass through operator testing gauntlet to launch new Symbian smartphones early enough to be successful.

Sounds plausible? Yes. After all, it wasn’t only Nokia who failed to gain U.S. operator acceptance for their Symbian handsets. Motorola and Sony Ericsson haven’t made any big Symbian inroads in U.S. too.

Is it true, or the main reason for Nokia U.S. failure? I have no idea, and would love if some Symbian folks who were there at the time, could weigh in. But I have heard some things about Nokia arrogance, refusal to play ball with operators, etc; quite a few times before too ;)

Anyway, that’s all water under the bridge now. Nokia has taken over the most of the Symbian OS code development, and swallowed most of the folks who actually write Symbian OS code from Symbian Ltd. So it will have nobody else but itself to blame if they fail in U.S. again.

Nokia management says that failure is not an option. U.S. market is their top priority right now. With Symbian^3 they have basically rewritten a huge chunk of the OS code, and now they will be able to get new S^3 and S^4 devices on U.S. networks quickly enough to make a difference.  And OPK also said that he gave an explicit order to Meego team to prioritize the U.S. market.

Hopefully hings will soon turn around. Nokia assurances look promising. The problem is that after a decade of broken promises, I’ll have to start seeing to start believing.

_________________________________________________________________________

Update with a well argued comment, that I don’t have any idea how to respond to from Nokia/Symbian developer  POV:

A QT expert/developer comment from Marcus Christopher McFann:

I’m shocked, Staska, that you’ve written something like this on UnWired View. You have not done your homework, and it shows.

In the software development world, Qt is not a new thing at all. In fact, it is one of the most powerful cross platform application runtimes and graphics frameworks available. It has long been used in desktop development, and has also had support in Windows Mobile/CE.

The results should be evident in seeing VLC Media Player, Skype, Google Earth, and other apps using the same code on Windows, OSX, and Linux. There are also a few shared applications on Symbian and MeeGo as well to show how differing OSes can run the exact same application with no difference in experience.

As a writer, you have to seek the source for information. You may not see product at the moment, but the first device to ship with the Qt libraries preinstalled hasn’t even launched yet. But you could have merely contacted developers (and not just “mobile” developers using proprietary toolkits mired within their ecosystems without cross platform technologies) what they know of Qt from a performance and ease of use perspective. What I’ve seen is they are impressed across the board, and there is no noticeable latency vs. straight native code, just a faster way to get results.

Qt’s graphics heritage means it already autoscales, so the capability to support big display resolutions is already there. And separating the UI layer from the application underpinnings during development will allow developers to address multiple form factors and screen sizes, while updating and possibly offering multiple UI styles easily.

The reason you don’t see much momentum in mobile is Qt is the main toolkit for S^4 and MeeGo, and neither are present yet. The older OSes support Qt, but not out of the box. They benefit when apps hit the Ovi Store or other channels, but developers are waiting to experience the wave of new device sales expected with N8 and subsequent Qt enabled models.

There are many Qt videos showing developers working on apps that are well known, and will be coming as soon as Qt devices are more prevalent:
http://www.youtube.com/watch?v=mS1dwYmKMjs&feature=related
http://www.youtube.com/watch?v=wqRZt01jOr4&feature=related
http://www.youtube.com/watch?v=CsHc53B5PBs&feature=related

The best apps come from commercial developer houses looking for massive reach and installed base. This fills a void they have waited for. It is likely other OSes will look for Qt compatibility, and the Qt ecosystem, not the Nokia/Symbian/MeeGo ecosystems, will become like Java ecosystems of yesterday, just with better latency and API access and permissions.

You have to have an understanding of application development and the software design process to understand the opportunity this presents to developers that Android, iOS, and RIM have failed to deliver, and that is reach into every demographic and corner of the globe (maybe even the US) in devices from $140-800 mobile phones, netbooks, tablets, desktops, and even TVs and in car entertainment in the future

No idea about how to do mobile stuff development. So I respond with big picture bla bla bla:

Well, darn. I said I might be missin somethin. I’m not a developer. I don’t understand any of the things that it takes to make a Symbian app.

So, Marcus, you shouldn’t be so shocked about the things I wrote about as I see them. UV ain’t the site for developer minutea. All of us, the writers here, are just an outsiders trying to figure things out as we see them. No app development experience, no inside handset development knowledge, but we still try to do our best.

And I will easily admit that I haven’t done my homework as far as QT or Symbian or Maemo/Meego development is concerned.  Why should I have? QT may be ” the  most powerful cross platform application runtimes and graphics frameworks available“. On the desktop for now. But in mobile, sorry.  Things might change very soon, but for now QT is, well, it’s some stuff Nokia has been talkin about for 2 years.  In U.S. mobile – Nokia who? QT what?

I was lookin at the big picture, and all the Nokia’s efforts regarding QT, starting with the buyout of Trolltech in early 2008, well, except for uber buggy OVI Suite on PC, sorry, for me as Nokia customer, I haven’t seen anything interesting yet.

And you said it yourself in your comments – real power of QT will show itself only with S^4 and Meego. So please explain to me  how that helps 50 million S^3 devices, S^1 and S60.30 on fragmentation issues I was talking about? Especially having in mind that QT has been available for S60.5thed/S^1 and Maemo/N900 for more then half a year now. Where the F are the apps?

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  • Josep Roura

    Just one misunderstood S60 5th Edition (Symbian^1) , Symbian^3, Symbian^4 and all MeeGo plataform will have QT environment on common reducing the bridge of your supposed fragmentation.
    Symbian^4 leave Avkon and the interface will be in QT but Symbian^3 will be QT compatible out of the box and S60 5th Edition too.

  • http://www.staska.net Staska

    Well, maybe. Maybe QT is that magic thing that will tie all those fragmented
    platforms together nicely. Nokia certainly wasn't too shy to tell us so for
    months now.

    And I know it's still too early for me to decide one way or another.

    But I've been hearing this “Qt will change everything” stuff too long, and
    haven't seen any results yet. Especially since QT port to S60 was announced
    in 2008, QT on Maemo is available since the beginning of this year.

    So I'll believe when I see something

  • Josep Roura

    QT in S60 is already available, since 01/12/2009 http://qt.nokia.com/about/news/nokia-releases-q…

  • http://www.staska.net Staska

    That's exactly my point. QT is around for more then half a year now. But I still have to see any significant impact on developers…

  • Marcus Christopher McFann

    I'm shocked, Staska, that you've written something like this on UnWired View. You have not done your homework, and it shows.

    In the software development world, Qt is not a new thing at all. In fact, it is one of the most powerful cross platform application runtimes and graphics frameworks available. It has long been used in desktop development, and has also had support in Windows Mobile/CE.

    The results should be evident in seeing VLC Media Player, Skype, Google Earth, and other apps using the same code on Windows, OSX, and Linux. There are also a few shared applications on Symbian and MeeGo as well to show how differing OSes can run the exact same application with no difference in experience.

    As a writer, you have to seek the source for information. You may not see product at the moment, but the first device to ship with the Qt libraries preinstalled hasn't even launched yet. But you could have merely contacted developers (and not just “mobile” developers using proprietary toolkits mired within their ecosystems without cross platform technologies) what they know of Qt from a performance and ease of use perspective. What I've seen is they are impressed across the board, and there is no noticeable latency vs. straight native code, just a faster way to get results.

    Qt's graphics heritage means it already autoscales, so the capability to support big display resolutions is already there. And separating the UI layer from the application underpinnings during development will allow developers to address multiple form factors and screen sizes, while updating and possibly offering multiple UI styles easily.

    The reason you don't see much momentum in mobile is Qt is the main toolkit for S^4 and MeeGo, and neither are present yet. The older OSes support Qt, but not out of the box. They benefit when apps hit the Ovi Store or other channels, but developers are waiting to experience the wave of new device sales expected with N8 and subsequent Qt enabled models.

    There are many Qt videos showing developers working on apps that are well known, and will be coming as soon as Qt devices are more prevalent:
    http://www.youtube.com/watch?v=mS1dwYmKMjs&feat…
    http://www.youtube.com/watch?v=wqRZt01jOr4&feat…
    http://www.youtube.com/watch?v=CsHc53B5PBs&feat…

    The best apps come from commercial developer houses looking for massive reach and installed base. This fills a void they have waited for. It is likely other OSes will look for Qt compatibility, and the Qt ecosystem, not the Nokia/Symbian/MeeGo ecosystems, will become like Java ecosystems of yesterday, just with better latency and API access and permissions.

    You have to have an understanding of application development and the software design process to understand the opportunity this presents to developers that Android, iOS, and RIM have failed to deliver, and that is reach into every demographic and corner of the globe (maybe even the US) in devices from $140-800 mobile phones, netbooks, tablets, desktops, and even TVs and in car entertainment in the future.

  • http://www.staska.net Staska

    Ha. Thank's for the effort and comment. We come from very different backgrounds and it show. AnyayI wouldn't start to pretend to understand the stuff you talk about, so I just reposted your comment as part of the main article. With my views at the start, so readers can decide:

    Well, darn. I said I might be missin somethin. I'm not a developer. I don't understand any of the things that it takes to make a Symbian app.

    So, Marcus, you shouldn't be so shocked about the things I wrote about as I see them. UV ain't the site for developer minutea. All of us, the writers here, are just an outsiders trying to figure things out as we see them. No app development experience, no inside handset development knowledge, but we still try to do our best.

    And I will easily admit that I haven't done my homework as far as QT or Symbian or Maemo/Meego development is concerned. Why should I have? QT may be ” the most powerful cross platform application runtimes and graphics frameworks available”. On desktop. But in mobile, sorry. And things might change very soon, but for now QT is, well, it's some stuff Nokia has been talkin about for 2 years. In U.S. mobile – Nokia who? QT what?

    I was lookin at the big picture, and all the Nokia's efforts regarding QT, starting with the buyout of Trolltech in early 2008, well, except for uber buggy OVI Suite on PC, sorry, for me as Nokia customer, I haven't seen anything interesting yet.

    And you said yourself in your comments – real power of QT will show itself only with S^4 and Meego. So please explain me how that helps 50 million S^3 devices, S^1 and S60.30 on fragmentation issues I was talking about?

  • Marcus Christopher McFann

    Glad you replied. I'm actually not a developer at all, just a blogger and self taught analyst. Through my research following the industry, alonside my activities in the Symbian Freak and Maemo Freak communities, has allowed me to learn alot about software and the development process. I have been able to consult with a few projects as a community liason, and stay abreast of the latest tools for making modern applications on multiple device types and architectures.

    UV may not be the venue for developer info, but it may soon become so, since Qt's opportunity will have an effect on software development as a whole. And I'm not the only regular UV reader wanting to know what's up with mobile development. UV is THE source for mobile info, and posts like this can skew the mindshare improperly.

    I'm the type to battle to make sure the proper info is out there, and to dispell all of the myths of this business from all aspects. Even more seasoned writers from the larger sources many times get it wrong. No big deal. At least you're humble enough to admit you have more to learn, and aren't afraid to ask for more knowledge. I'll share some info to make things easier to digest. Layman's terms, if you will.

    To understand how Qt will work, you must understand what it is. Every OS has APIs, or interfaces to access certain functions and hardware, like a location API or camera API. This is the way developers connect to the device via software. While OSes are different, the API list of advanced systems are usually similar and work in similar ways, just without compatibility between each other. To explain it generally in my informed but certainly non-developer way, Qt is like a universal translation layer that can be made to connect to ANY APIs of ANY OS to which it is ported to. It connects to the native code in a way that causes no major loss to system resources.

    So right now, Qt is just on Symbian and MeeGo officially, and has community provided unoffial ports to WebOS as well. So any application written in Qt can be packaged for the OS (as a .deb, .rep, .sisx, exe. or other compatible file type) and work the same as if it were written using native code.

    This is nothing new. Remember, on desktops, we already have Qt, Flash, Adobe AIR, Java, and other types of apps that work on any major OS. We know Windows APIs and OSX APIs aren't alike, but similar. So obviously, these technologies are proven years ahead of today's foray into mobile, and Qt's cross platform is able to translate multiple different “languages”, or code ecosystems, with success. Just as Java works on all desktops and most basic mobiles, so the same for Qt devices, only Qt isn't actually a runtime, but a translation layer to native code. So instead of writing complex Symbian C++ code, just write simple Qt code, and it connects to the native runtimes for you, regardless of OS.

    Now the problem I had with your article was fragmentation. The reason why is because it is a fallacy. S60 5th, S60 3rd, S^1, S^3, S^4, and MeeGo are akin to Windows XP, Vista and Windows 7. There are slight UI differences, but the core of the OS is the same, and most of the APIs are the same. And all Adobe AIR, Flash, Java, and Qt apps work the same, don't they? Skype works the same. Google Earth, same thing. VLC is a mainstay on them all, and the same version. Are those OSes fragmented? Of course not.

    All the Nokia supported OSes support the current implementation of Qt. As long as they do, these OSes remain a UNIFIED ecosystem using the same toolkit to make the apps. Instead of heavily relying on Symbian SDKs and MeeGo SDKs, you use it as a reference mostly, and rely on the Qt SDK. Qt is the centerpiece, not the OSes. Any OS or device supporting Qt will run apps designed with it. That simple.

    Since graphical scaling is at the heart of Qt, there is little worry of aspect ratios and resolutions. And since it can be ported to other OSes, it can also be maintained for those OSes to stay on the latest version, extending the life of the past OSes. This was Nokia's plan all along. Rememer, they went from 2nd Edition to 3rd Edition with a full code break, and abandoned all of theprevious apps, and zero apps for the new version of Symbian at that time.

    In today's App Store crazed market, that could spell doom. By making Qt compatible with all of their OSes while being the main and official toolkit for its future OSes, apps are being made that will work on ALL of the OSes now and going forward. By having Qt in Symbian and MeeGo, consumers of all economic walks of life and geographic areas can have access to the same apps and services. Developers like that opportunity, being able to reach 100% of mobile consumers.

    Apple can only catch 20% max with its high end only strategy. Android can likely address the mid and high end, or maybe 50% (my guess), but have no access to markets where device prices hover near $150-225. But Nokia can, using Symbian from the low to midrange, and MeeGo upwards. Which makes no difference, since they support Qt.

    High end devices usually drive app sales, yet Nokia hasn't made a high end device since 2008. So they have to reenter that market first. Once that happens, the results will be more evident.

  • Marcus Christopher McFann

    A good example of how it'll work is shown in the Java based Limewire Gnutella P2P client, as well as Tweetdeck. When these apps are created, updated, etc., ALL OSes benefit. From Windows 98 onward, all using the same install package, we can see that with proper support of the Java and Adobe AIR systems/frameworks, we eliminate developer fragmentation, not create it.

    The reason applications haven't been as prevalent as we'd like is up until now, the only way to get the Qt support on a device was to load the libraries yourself. If you coded an app, you could include the necessary Qt libraries needed in your install package, but it would create a large install file, something not quite optimal for various reasons.

    Also, Qt was still in beta for the longest, and just recently became hardened. It is now in final form and ready to be part of the OS, not just installable libraries like Python in the past.

    Now that devices are shipping having all of the libraries installed, and those devices are mass market targeted devices, developers can be assured that the Qt commitment is solid. Expect to see other OSes adopt Qt to connect with their native platforms, especially those with paltry runtime support, which is everyone but Symbian and MeeGo.

    The only one I expect WON'T adopt any technologies to make development easier across multiple OSes is iOS. Android likely will support Qt, since they already embrace XCode and other cross platform technologies. RIM's main toolkit is based on outdated and inefficient Java technologies, and may benefit from a native platform for developers based on C++ or another technology, and Qt could accelerate app development should they do so. WebOS' developer community has already done an unofficial port of Qt for its environment. Microsoft supported Qt in WinMo/WinCE, and could add it again down the road in WP7, but that is just speculation on my part.

    With all of these OSes supporting cross platform technologies, and Qt being the only one that crosses mobile and desktop OSes and x86 and ARM platforms, it has to intrigue any developer looking to reach a mass market. 100% of all addressable markets and device architectures is a good start. What can iOS and Android get you? Not there, that's where.

  • Marcus Christopher McFann

    I forgot that Adobe AIR is also a cross platform framework/runtime that crosses mobile and desktops, and both architectures, which is true. But AIR isn't as resource efficient as Qt, nor is it a free open source toolkit, but run entirely by Adobe. But both are good tools. I'm for supporting as many tools as possible, since devs have preferences, and prefer to not have to relearn how to code for a platform. Supporting common tools that all devs know is Nokia's forte.

  • Canfindmurali

    QT will ensure there is no fragmentation, all developers should just use QT. QT is first introduced and release now (though development was ongoing for last 1.5 yrs to make it cross platform in all devices) , QT is released as far as i know.

  • Marcus Christopher McFann

    Sounds like someone gets it. Now that Nokia has hardened Qt for MeeGo and Symbian, expect to see Qt for Blackberries and Android next, maybe WP7 as well. Basically everyone but Apple. And you know what happens to the odd man out.

    Why does Apple alway paint itself into these tight corners, dooming itself from further proliferation? And people still continue to follow and trust them…

  • http://www.staska.net Staska

    Great explanation of QT, and how Nokia plans/wants to make it work. And I
    really hope they do. I'm still a Nokia fanboy in my heart, it's just that I
    have been disappointed by them one too many times to take anything what they
    say as a given until I see any results.

    And for now, after 2 years of empty promises about the bright future with
    QT, and half a year of QT available on S^1, N900 – I'm still waiting for the
    results beyond a few apps that I can count on my hands.

    I'm still waiting for any big interest or enthusiasm towards QT from any
    significant number of developers. And all I see for now is skepticism and
    enthusiastic embrace of other platforms.

    And,even looking at your desktop OS parallels, they only deepen my doubts.
    The cross platform development technologies may have obviously been “proven
    years ahead of today's foray into mobile”… But,despite the unified app
    development Nirvana promised by Qt, Flash, Adobe AIR, Java- for some
    mysterious reasons, most of available software applications today are still
    written natively. Flexibility of development and hardware limitations
    come to mind as possible reasons. And they are much worse in mobile today.

    And, despite a very good explanation on QT, I'm still not sure that you
    dealt with my fragmentation fears. Let's see. By this time next year we will
    have:

    -Nokia S60.3 handsets with no QT. Or at least not easily portable since they
    don't have touchscreen and are keypad optimized
    -S60.5/S^1 devices that have native QT for 6 months now, but only very few
    developers care about that – 6 months after QT introduction there
    -S^3 devices, apps for which will be written in QT, but, given hardware req
    differences, especially on UI/visuals level (e.g S^3 requires hardware
    graphics acceleration) between S^1 and S^3, it is unclear how many of them
    will run on S^1 devices.
    -S^4 devices. Where they are having a clean break between Avkon to Orbit and
    god only knows how that will affect compatibility between S^3 and S^4
    -Meego. Different platform. And OPK himself said that Symbian will be a
    subset of Meego via QT, whatever that means.

    So excuse me if I'm skeptical that Nokia will make it work finally by mid of
    next year, even if it all sounds great in theory and Nokia
    promises/goals. I'll believe it when I see it.

    And it's not all about unified development environment. It's getting people
    interested in apps on your phone too. And so far, Nokia has been doing an
    amazingly crappy job about it.

    As I said in my post – OVI Store growth seems to have stalled at 1.7 million
    downloads, a day and 13K apps/content pieces. This number looks pretty bad
    just in comparison to other main app stores. And if we take into account a
    full Nokia/Symbian installed base into account – it's downright pathetic.

    And don't give me that line I'm hearing about the possibility to sideload
    apps from the source or 3d party stores like GetJar. If 3d party app stores
    are doing any significant numbers to supplement the downloads on a native
    app store on the phone you made yourself… That just underscores what a
    failure your own app store is.

    “High end devices usually drive app sales” is just another excuse invented
    by by mobile incumbients (including Nokia) to justify their failure to see
    and realize an app opportunity until Apple came along. You know what their
    line was before 2008? “Mobile is very different medium and nobody really
    cares about apps here”. They've been telling us this for years. Really? So
    now Apple came along and showed that there's a huge demand for mobile apps
    when done right. So they go and invent another PR line about how apps are
    for high end devices. I guess all those Nokia N91s, N95s, N73s were cheap
    low end devices….

    And you are completely wrong about Android opportunity in low end. They
    started there with crappy and pricey G1, but now with HTC WIldfire and the
    likes they are already near starting Nokia 5800XM pricepoint. And getting
    lower each month. With Mediatek chips on the way, Android is getting to
    ~$100 price point next year.

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