Nokia Makes Designs on a Comeback - Wall Street Journal

HELSINKI—With the release of its first Windows-based smartphone coming soon, Nokia Corp. is making a big bet: that the innovative design of its new phone will help it stand out and draw attention away from software problems the company has faced as it struggles to compete in the lucrative market.

Nokia's falling market share is largely due to its failure to compete with the likes of Apple Inc.'s iPhone and phones operating on Google Inc.'s Android platform, but the Finnish handset maker's ability to produce hardware has never really been in dispute.

Nokia is due to launch its first Nokia handset based on Microsoft Corp.'s Windows Phone operating system—the Mango version of the Windows Phone 7—in the fourth quarter, and the company hopes the phone will mark the start of its comeback and help it to regain market share.

Anyone interested in the look and feel of Nokia's future handset design should examine the N9 launched in June—the first smartphone to replace the traditional home button with a swipe of the hand. It is made from a colorful polycarbonate material and although it appears rectangular, it has a curved glass screen.

The N9 features the MeeGo operating system, in which Nokia has already lost interest. But Marko Ahtisaari, Nokia's head designer, says the design is a sign of where Nokia is headed. "We will drive this trend toward reduction and more natural forms. Compare that to the black, grey and metallic rounded-corner rectangles you are seeing in the market," he says during an interview.

As Nokia adopts Windows Phone, which Microsoft is also developing for handset makers such as HTC Corp., Dell Inc., Samsung Electronics Co. and LG Electronics Inc., it will need to rely on attractive handset designs to help attract customers and stem the drop in market share.

Microsoft's Windows Phone Mango version is a modern graphic user interface that differs from the folder-based iPhone operating system and the Android version, in that its functions are based on people, not applications, and fewer clicks are needed per function.

Mr. Ahtisaari says today's touch-screen phones are inappropriately immersive, and that he would like to design in a way that allows users keep their heads up again. "When you look around at a restaurant in Helsinki, you'll see couples having their heads down instead of having eye contact and being aware of the environment they're in," he says.

"Designing for true mobility...makes it easier for people to have more eye contact and be aware of their environment, and is an example of what people would not explicitly ask for but love when they get it," Mr. Ahtisaari says.

Mr. Ahtisaari, the son of Nobel Peace Prize laureate, former president of Finland and United Nations mediator Martti Ahtisaari, joined Nokia 18 months ago. He is the first head designer to report directly to the company's chief executive, Stephen Elop, in a sign of the increased importance Nokia is attaching to its hardware credentials.

Some of Nokia's biggest handset-design successes include the Nokia 8110 banana-shaped handset, popularized in the first "Matrix" movie; the 9000 Communicator, which was the world's first smartphone; the Nokia 3210, with an internal antenna; and the Nokia 7650, with a built-in camera popularized in the movie "Minority Report."

However, Nokia has also had its fair share of problems, such as when it failed to bring out a clamshell handset when Motorola launched its Razr handset, and its significant delay in launching touch-screen handsets after Apple launched the iPhone in 2007.

Last year, Nokia launched 28 devices and shipped a total of more than 453 million phones. However, Nokia's share of the smartphone market fell to 15.2% in the second quarter, from 38.1% a year earlier, pushing it into third place behind Apple and Samsung, according to research firm Strategy Analytics.

Mr. Ahtisaari describes his design team, which numbers several hundred people in Finland, China, the U.K. and the U.S., as the place where "we validate mass production and do the tooling for the production lines and the selection of partners that make a certain component. This is something in which Nokia is extremely competitive."

Nokia's hardware success stems from distinguishing features that often depend on the types of materials used in handsets. Polycarbonate with inherent color is key to the company's current designs. "The inherent color in the polycarbonate allows us to do color in an interesting way, and that will continue to be important as a simple symbol of choice," Mr. Ahtisaari says.

For him, innovation is about designing better and more natural ways to use a phone through careful observation of users and their environments. Frequent prototypes, from paper sketches to 3D wax models to real phones, are crucial to achieve the simplicity and precision needed.

Mr. Ahtisaari says customers can expect more touch-screen phones with physical keyboards, such as the E6 and C3 handsets. "It's a very rich area for Nokia to innovate in years to come, as many people still want keyboards," he says.

He also plans to add value by "linking the phone experience to maps and information about where you are, mapping the world in a way that we have not even imagined possible."

30 Aug, 2011


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