Why the Time is Right for Nokia's Android Love-In

By Gerald Lynch on at

Could Nokia have jumped from its own Symbian smartphone platform straight to Android, skipping Windows Phone altogether? Perhaps, but the company's experience there has made the X phone line, revealed today, uniquely equipped.

From the tile-like design, to heavy integration of Microsoft services (each X phone sold comes with 10GB of free OneDrive storage and a month of free Skype calls), the X phone line is anything but a "me-too" Android offering. Nokia has waited until it has been able to deliver devices that complement its Lumia range, while not cannibalising it in areas where the premium Windows Phone handsets are steadily (but slowly) gaining market share. At first glance, the branding, exterior design and UI could all easily be mistaken as belonging to the Lumia line.

"This is not just an Android phone, make no mistake," said Timo Toikkanen, Nokia's executive vice president of mobile devices. "What we're doing here is building a uniquely Nokia phone, with Nokia experiences and Microsoft cloud services. We're using Android Open Source Project, and using it exactly how I believe it was intended -- as a foundation.

"Keep in mind that many of the first party and Microsoft services weren't, until recently, available outside of Windows. Now they are, and now we can build something truly unique with them, within the AOSP platform."

It's an offering quite unlike any other, and the aim is focussed almost entirely on capturing the increasing interest in smartphones from emerging markets, an area that barely existed when Nokia signed its Windows Phone deal and is now ripe for picking. Despite still selling hundreds of millions of feature phones, that's a stalling market, showing next to no growth in the past year. And with the western, high-end smartphone market saturated, the Finnish company's attentions turn to "connecting the next billion" according to Toikkanen -- that huge amount of people who, in the next few years will use a mobile device to go online for the very first time.

"One thing leads into another. We have coverage [in emerging markets] with Asha, and we have coverage with Lumia, but the competition had even more coverage, and even more devices."

But these are low income customers Nokia is aiming at.  Whereas western consumers are happy to splurge a few pounds or dollars on an app without a care, the same has not been the case in emerging markets around the globe. Nokia has had to ensure its own Android offering will be suitable for the emerging market it is aimed at. The Nokia Store for instance is particularly aimed at helping developers monetise apps in emerging markets. It will allow for "Try and Buy" and "Operator Billing" payment options -- flexibility that has previously been proven to drive app spending among low-income consumer, which will in turn encourage developers to put their wares on the Store, letting Nokia take its cut.

"Nobody needs to develop new apps to be on X", stresses Toikkanen. "They only need to republish their existing ones in order to be part of our monetisation strategy. That's quick and easy to do. But [developers have] really struggled to monetise paid-for apps in the past. Consumers in these low-income areas don't want to download an app and pay for it without trying it first and, perhaps most importantly, many just don't have a credit card required by many app stores to make a purchase. Credit card penetration in emerging markets is very low. Our whole store is try-and-buy, which encourages 5-times the conversion rate."

While you may be personally disappointed that the Nokia X line isn't more exciting, Nokia couldn't care less. Regardless of its apparently-humanitarian goals to connect the next billion people, there's big money there too. These new cheap Android devices are a Trojan Horse, in the classical Greek sense -- they'll be welcomed with open arms by users in emerging markets looking to get hold of a smartphone with specs capable of taking advantage of apps, while Nokia can use the range to get inside not just their pockets, but their wallets too.