Nokia ships roughly a third of the handsets sold on earth, and I keep waiting for somebody to explain to me why that changes soon.
What the market share number hides is how they got there, which was not by building the best phone. It was by building forty of them. There is a Nokia at every price point from a cheap candybar sold on a prepaid tariff in Lagos to the N-series multimedia flagships, and nearly all of them run software Nokia controls. Symbian S60 is not a good operating system. It is a genuinely strange one, with a menu tree that feels designed by somebody who has never had to find a setting in a hurry. But it is everywhere, and developers targeting smartphones write for it because that is where the users actually are. Distribution beats elegance, and it is not close.
Motorola is the counterargument people reach for, and the Razr deserves it. Two years after launch that phone is still moving in volume no fashion-led handset has any right to sustain, and it did something Nokia has never quite managed: it made a phone an object people wanted to be seen holding. The trouble is that Motorola has spent those two years re-releasing it. Slvr, Pebl, thinner Razrs in more colours. When your entire strategy is one silhouette, you are one taste cycle away from a very bad year.
The part I find more interesting is what is happening to the cameras. The K800i pairs a 3.2-megapixel sensor with a real xenon flash, and the N73 puts Carl Zeiss branding on the front. Both are, by any serious standard, mediocre cameras. Small sensors, slow optics, processing that smears anything shot indoors. And it does not matter even slightly, because the camera you have with you beats the one sitting in a drawer at home. Every specification argument in this category is being won by convenience over quality, which should worry Canon and Nikon a great deal more than it currently appears to.
Enterprise is the one place Nokia does not own. RIM has built something close to a moat there, and the Pearl in September was the first sign they understand that moats have expiry dates. It has a camera and a media player, which for a BlackBerry is close to heresy, and it is aimed at somebody who buys their own phone rather than has IT hand them one. That instinct is right. The corporate deployment business is lucrative and it is also finite.
Windows Mobile occupies the awkward middle, and I have very little patience for it. Microsoft licenses the OS, HTC builds most of the hardware, the carrier puts its own name on the result, and the customer ends up with a device where nobody is accountable for the experience. The Kaiser is decent hardware. It is also going to ship in several regional variants with different firmware builds and different update schedules, which is precisely how you train developers to ignore your platform.
The structural story underneath all of this is the subsidy. In the US the carrier buys the phone, hides most of its cost inside a two-year contract, and in exchange decides what gets built and which features get switched off. That is why American handsets ship crippled in ways European ones do not, why Wi-Fi keeps mysteriously vanishing from spec sheets, and why the operator logo sits on the front of the device instead of the manufacturer’s. Handset makers hate the arrangement and go along with it anyway, because the carrier owns the shelf. Anybody who wants to shift the balance of power in this industry has to break that first, and I do not see who currently has the leverage to try.
Asia is where the growth is, which surprises nobody. Samsung and LG are climbing on price and getting less bad at software every year, and there are Chinese vendors nobody in the West has heard of shipping serious domestic volume. The uncomfortable read is that everything which makes a phone expensive to build is getting cheaper to build, and everything which makes a phone genuinely good is software, which almost nobody in this industry is any good at yet.
I am not going to pretend I know what the next disruption looks like. The obvious candidates are the ones everyone lists: a browser that does not humiliate you, music playback that works without a desktop ritual, data priced so people actually use it. My honest suspicion is that this gets won by whoever stops treating the phone as a phone with features bolted onto it, and I do not see that company anywhere in the current league table. Ask me again in two years.