Strategist Francis McInerney recently posted an item on his “blog of corporate strides and stumbles” on how a showdown between Apple and Nokia might play out now that Apple is releasing its iPhone in Europe.
McInerney is a fan of both companies, and gives both companies’ management teams high marks. But he does seem to think Apple (AAPL) is better positioned than No. 1 cellphone maker Nokia (NOK).
McInerney is pretty a pretty deep dude, so we’re probably oversimplifying his argument, but he seems to be suggesting Apple’s strength is that it has created a digital platform for consumers to manage their content and entertainment; distribution of its devices is a secondary concern.
Nokia, on the other hand, relies on phone operators to distribute its devices. McInerney compares Nokia to auto makers (ouch!) who must rely on dealers to sell vehicles, instead of going direct to consumers. (This certainly is the case in the U.S., but in other markets where Nokia is a dominant player, such as China, customers can buy their devices separately from their phone service.)
To compete with Apple, McInerney says, Nokia must essentially become more Apple-like.To be fair, Nokia has recognized the need to move in this direction, and it has launched Ovi, a suite of Internet services that will include a digital music store it aims to launch later this year.
Also, perhaps we should put this battle into context: This is a battle for the very high end of the market. It is an important market, but it is by no means the only market Nokia serves. There are plenty of potentially profitable customers in emerging markets such as India and China (and not necessarily the low end of the market) not to mention the U.S., who simply want a device for voice and text communications.
Nokia, by McInerney’s own analysis, certainly seems in a good position to serve those markets, especially relative to, say, Motorola. (MOT)
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