DailyTech - Nokia Abandoning the Mid-Market? Operating System Project Scrapped

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Gadgets Nokia Abandoning the Mid-Market? Operating System Project Scrapped
Jason Mick (Blog) - July 26, 2012 12:02 PM

14 comment(s) - last by NellyFromMA.. on Jul 27 at 10:55 AM

Linux OS Meltemi would have replaced rapidly aging S40 OS

Survival for Finnish phonemaker Nokia Oyj. (HEX:NOK1V) may mean picking its battles. Bleeding money, the carrier has reportedly abandoned its next-generation software pitch at the mid-market leaving its future in this segment in flux.

I. Meltemi -- Bright Hopes

Currently, Nokia is vying with Samsung Electronics Comp., Ltd. (KSC:005930) for this segment where phones retail from around $100 to $200 off contract (or typically are free with a contract). Samsung has increasingly moved its mid-range product line away from a proprietary operating system, consolidating it under the Android operating system banner.

To counter Samsung's budget Android devices, Nokia planned a Linux-based operating system of its own, a refresh which would replace it Series 40 (S40) platform, powering Nokia's mid-range Asha lineup.

That refresh was dubbed "Meltemi".

_{Nokia hoped to revitalize its mid-range lineup with a quasi-secret new Linux OS.

[Image Source: Symbian Tweet]}

Named after "the Greek word for dry summer winds that blow across the Aegean Sea from the north", the project was reportedly being led by Nokia EVP of Mobile Phones Mary McDowell.

II. Meltemi Becomes Nokia's Latest OS Casualty

But with Nokia committing to layoffs of 10,000 employees worldwide, many projects have been lost to the chaos -- and that appears to include Meltemi. The project's future appeared in jeopardy with the departure of EVP McDowell, announced in mid-June.

Reuters reports that the unofficial software project has been scrapped. The report's sources indicate that Meltemi phones would have been arriving this quarter -- Q3 2012 -- had the project survived.

This isn't the first operating system software scrapped by Nokia since it shacked up with Microsoft Corp.'s (MSFT) Windows Phone OS. Nokia quickly dismissed Symbian, its former high-end smartphone OS, committing to a complete phase-out. Before long it had also terminated its involvement in Meego -- a Linux-based operating system co-developed by Intel Corp. (INTC) that might have eventually replaced Symbian.

Pete Cunningham an analyst with market research firm Canalys was not shocked by the latest development. In an interview with Reuters, he comments, "With the pressure to make extreme cost-savings it is little surprise that it has been cut."

But all hope for Nokia in the mid-market is not lost he says, "The important factor for Nokia is driving Windows Phones prices low enough to bridge the gap with the feature phones Asha range -- that should happen in 2013."

_{Nokia hopes to replace Meltemi with budget Windows Phones.

[Image Source: Jason Mick/DailyTech]}

The push of Windows Phones to the low-end will be critical to Nokia, which currently serves 2 billion active S40 handsets. That makes S40 the world's most used phone platform. But customers are increasingly ditching the aging platform, as it lacks smartphone-like features, features that even budget handset buyers today demand.

Nokia has said in the past that it makes more money off its feature phones than it does off smartphones.

Source: Reuters

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Two-pronged attack!!!

By BigEdMan on 7/26/2012 12:42:26 PM , Rating: 2

Perhaps Nokia should try *Android for its low-end phones since it's free and Windows phone 7/8 for its high-end phones since it's superior. (*Contractual obligations permitting)

RE: Two-pronged attack!!!

By kleinma on 7/26/2012 12:48:20 PM , Rating: 5

Nokia won't ever embrace android, and android runs like crap on low end hardware anyway. 4.0 and 4.1 need pretty beefy hardware.

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RE: Two-pronged attack!!!

By Reclaimer77 on 7/26/12, Rating: -1

RE: Two-pronged attack!!!

By geddarkstorm on 7/26/2012 1:27:50 PM , Rating: 1

Beefy hardware? I have no problems running Android 4.0.4 with a 800 Mhz processor, usually sitting at 600 Mhz for battery life, and only 512 MB of ram (Nook Color). And that is without the proprietary drivers necessary for hardware acceleration of graphics.

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RE: Two-pronged attack!!!

By retrospooty on 7/26/2012 1:53:27 PM , Rating: 2

Yup, and 4.1 is even faster.

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RE: Two-pronged attack!!!

By B3an on 7/26/2012 4:34:07 PM , Rating: 5

But still don't run as smooth and fast as WP7 on old hardware. Theres no denying it, its not debatable.

Android will obviously run on old hardware, but theres a big difference between running smooth/fast and just running.

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RE: Two-pronged attack!!!

By retrospooty on 7/26/2012 5:00:48 PM , Rating: 2

The nexus itself is fairly old hardware wise. Its only a TI OMAP 1.2ghz. Slow for the previous generation of chips and it runs incredibly fast on it. Depends on how old you are talking.

Android also does a ton of things that Winmobile doesnt, anad it does it at much higher res, so there is a trade-off.

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RE: Two-pronged attack!!!

By Zuul on 7/26/2012 1:12:55 PM , Rating: 2

Android licenses are free, however implementing Android, plus supporting it is not.

Nokia is not in a position where they can afford to pay developers to port Android to their devices, nor can they afford pay to retrain their support teams globally for it. Google doesn't give a dime to it's partners to do that.

The real reason why they went with Microsoft - Microsoft is paying for all of that.

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RE: Two-pronged attack!!!

By Labotomizer on 7/26/2012 1:42:17 PM , Rating: 2

Additionally the source code is free for Android. Google's apps are NOT free. You want maps, search, mail, etc? You either pay for it or you write your own. You want access to Google Play? Oh yes, that costs money per device too.

Let's not forget the license fees you have to pay MS to run Android due to the numerous patent violations. We may not know what they are but if they didn't exist so many people wouldn't be paying for it. You license Windows Phone and MS covers the software. If there is a patent violation MS is the one who has to defend, not the OEM. Google leaves their OEMs to fend for themselves in every possible way.

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RE: Two-pronged attack!!!

By andrewaggb on 7/26/2012 2:42:57 PM , Rating: 3

I think we'll find out when wp8 comes out if nokia made the right choice.

I certainly think wp8 + win8 + xbox has potential to be great. I'm not sure it'll be great at launch, I suspect it'll be more like when sp1 comes out.

I don't agree that android would have saved nokia.

Android has the most market share, but how much of it would have been nokias?

I'm not convinced it would have been much more than their current market share with windows phone.

Look at how long it took them to release the lumina phones. They weren't just waiting on microsoft, plenty of other companies had windows phones long before that. If they had launched android phones at the same time, they'd be competing against the galaxy s2/s3, nexus devices, htc one series etc, facing lawsuits and sales bans left right and center from apple, signing some licensing agreement with microsoft, etc. I fail to see how that's much of an improvement.

The market is totally ruthless right now. Even big companies like Sony and LG have android devices that aren't getting much interest. HTC is struggling and many reviews are giving them the edge over the galaxy s3 as the best android phone.

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RE: Two-pronged attack!!!

By NellyFromMA on 7/27/2012 10:55:49 AM , Rating: 2

Thank you for stating this! It is continually glossed over and is a highly important aspect of how Microsoft is a more attractive software partner overall than Google. No one is better than this than MS especially at the scale MS is used to dealing with (remember, MS effectively powers the world). All the other players are going through growing pains while MS is relatively unphased.

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RE: Two-pronged attack!!!

By superPC on 7/26/2012 8:03:13 PM , Rating: 2

I'm using galaxy mini 2 at the moment. as you can see here http://www.gsmarena.com/samsung_galaxy_mini_2_s650... it uses qualcom 800 mhz CPU with adreno 200 GPU. that's more than enough to run windows phone 7. i bought the phone for 160 $ off contract. i see no problem nokia selling a phone with similar spec with windows phone 7 at a price close to 170$ (more expensive because of WP7 license).

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seems like a good move

By kleinma on 7/26/2012 12:20:15 PM , Rating: 2

As long as they can move quickly, this is probably a good move. Hell Nokia stock is moving upward for the first time since it started its horrible downward spiral to be worth almost nothing.