Beyond 2015

Nokia is the undisputed market leader in mobile handsets and is making serious headway into the Internet services realm. Michelle Mills travelled to Finland where the manufacturer’s Agenda 2015 was revealed, showcasing Nokia’s strategic ambitions in the years to come, which it hopes will keep it at the top of the pile

The Morph is Nokia’s vision for a future personal device that uses nanotechnology to create a stretchable, transparent and adaptable form factor

If we look seven years into the future and try to project what the world of mobility and the Internet will look like, we believe there are at least eight elements that will be pivotal,” declared Nokia’s former chief technology officer Bob Iannucci. “From our vision of the future, which we call Agenda 2015, we ask ourselves what are the key technology problems that have to be solved to make that happen, and then look to how we can accelerate those ideas into the rest of the company.”

These eight elements fall under the themes of: creativity, mixed reality, user and context modelling, physically personal devices, human interfaces, dynamic wireless, scalable service platforms and the ‘Internet of things’.

Speaking at the company headquarters in Espoo, Finland under the theme of ‘The Way we Live Next’, Iannucci explained one of Nokia’s strategies to drive future mobile communications is by investing appropriately to develop and hasten new ideas and concepts, from research into products and services – an area where research labs have traditionally struggled. This builds on the company’s recent strategic shift from purely mobile devices to Internet services and software; part of a broader effort to increase value creation between Nokia and its end-customers.

Nokia’s former CTO Bob Iannucci believes the mobile phone in seven years time will have enormous capabilities to deduce environmental, social and physical context

In Nokia’s view, creativity relates to unleashing the creative and collaborative power of individuals, which has been prevalent in the Web 2.0 environment, and which Nokia asserts will have a direct impact in the future  world of mobility, bringing the power of publishing to users everywhere.

Mixed reality considers merging today’s analogue world with the digital world of the Internet, while user and context modelling looks at the geographic and social context of a user and what the mobile device can do to assist individuals.

Physically personal devices refers to the traditional form factor of devices – whether it be a fold, flip or candy bar shape – giving way to much more organic shapes that are highly tailored to the way people live. Human interface considers the interfaces that are highly intuitive.

“We think the fundamental change will come when there is enough computing power in devices for them to be in control of the spectrum they use. So, if one mobile user calls another, their two devices can negotiate on the fly what is the best spectrum to use based on where they are and what else is going on in the spectrum. We call this ‘cognitive radio’ or ‘dynamic wireless’.”

The concept of scalable service platforms deals with understanding how to deliver compelling services to a billion Nokia users at a time, and the reliable and robust ‘cloud’ infrastructure and software needed to handle such scale. Nokia’s eighth element in its view of the evolution of mobility in the years to come is in the area of ‘Internet of things’, which relates to the sensoring capabilities embedded in mobile devices.

“We believe the phone has moved away from being a terminal at the end of the line, to being a gateway between the digital and analogue world. This gateway will reach into our lives in a way that we can barely imagine,” stated Iannucci.

“The ‘Internet of things’ is about our phones wirelessly sensing our environment and information from sensors that might be planted in the environment, and relaying this information back through the phones to the Internet, which can then be aggregated. These together are enablers for a host of opportunities.”

Some of Nokia’s innovations suggest a business beyond the traditional scope of telecommunications. One key area considers the capacity to aggregate data from billions of devices and their multiple sensors, and to then see how this information can be utilised to improve people’s personal and work lives. Sensors that are already in place in devices include global positioning systems, cameras, accelerometers (mobile speedometers), light sensors, Bluetooth, microphones, Wi-Fi and cell triangulation sensors.

Commercial applications for such information includes traffic monitoring, crowd control, tracking disease outbreaks, monitoring personal health, real-time weather recording, and citizen journalism during major events.

Heikki Norta, senior vice president of corporate strategy, says moving beyond a transactional relationship to an ongoing dialogue with end-users is a key strategic theme

“In some scenarios, if we were to collect the data and start aggregating it, we’re not talking about megabytes, gigabytes or even terabytes, but petabytes. We would need an enormous collection of servers and data stores to hold and process this information,” said Iannucci. “This is not the realm that Nokia has historically played in, but this is one of our new playgrounds.”

Iannucci and his global research team – in collaboration with universities such as the Massachusetts Institute of Technology (MIT), Stanford and the University of Cambridge in the UK – continue to work towards developing highly intuitive and personal applications for a future world, though they may appear to have little practical manifestation at this point in time. However, Nokia’s strategy team is charged with ensuring the company grows its business in the ‘now’, while keeping its promise to connect people in new and better ways, through its three key areas of business strategy – trusted consumer relationships, strength and leadership in devices; and success in contextual services.

Heikki Norta, senior vice president of corporate strategy, emphasised Nokia’s strategic first goal is around trusted consumer relationships, where the manufacturer looks to maximise lifetime value to the customer in order to create loyalty.

“Our main emphasis here is to move from being a transactional company selling a phone once every two years, to being in a situation where we have an ongoing relationship and dynamic dialogue with the customers,” commented Norta. “Secondly, in the devices arena, we plan to continue to invest strongly and maintain our leadership in this area. We have several geography- based and price point-based opportunities. Success in this area is essential because it creates the foundation for us to deliver mobile Internet services,” he added.

Nokia House in Espoo, Finland, accommodates senior management and 1,500 employees split into the units of devices, services and software, markets and corporate development

In the 12 months to end- June 2008, Nokia sold close to 480 million devices and in expanding its product portfolio, it is constantly improving upon its already well-developed segmented consumer view. Nokia’s five broad device segments are: Explore – the latest performance and multimedia capabilities for early adopters; achieve – focussing on personal and company productivity; live – targeting consumers’ senses and introducing materials such as titanium or leather; connect – the mid-point uncompromised offering; and entry – highly costcompetitive products with good resale value suitable for the lower end of the market.

According to Norta, Nokia’s emerging market strategy is based on reducing the total cost of ownership (TCO). Nokia has worked with several local governments in emerging countries in order to reduce customs duties, explaining how an increase in telecoms penetration generally boosts the overall level of economic activity.

Nokia is also working with microfinance companies in order to ascertain how the poorest members of society might be included in the formalised economy.

“We are also looking actively at service concepts that might be unique to emerging markets such as education or agriculture. This is still blue sky thinking, but we think there’s potential in that area. Distribution is also important, making sure we are available and accessible in terms of distribution presence and customer care in the most remote of the rural areas,” Norta commented.

Combined with trusted consumer relationships and a strong product portfolio, the third key strategic area Nokia has devised is in providing context-rich services created exclusively for the mobile environment, rather than imitating what is currently in the desktop domain and simply implementing it on a smaller screen. Contextrich services include enhancing the consumer focus with advertising-based business models and service infrastructure, creating a winwin offering with operators.

“We’re focussed on a win-win offer so we have agreements with companies like Vodafone, Telefonica and Orange to name a few. We are not the first ones delivering mobile Internet services, but we believe we can win because we have ‘context-assets,’ Norta said.

“With your mobile device you carry an identity with you, so it’s not only important where you are, but who you are and who is close to you at that time. It’s possible to build and control that context and we have an understanding of how consumers behave on mobile.”

The Morph: science fiction or fact?

A wearable device that changes shape, can detect toxins on your food or air pollution, draw power from the sun and repel water? This is not a product you can buy tomorrow, but Nokia’s research team believes it is not science fiction either. The Finnish handset manufacturer is collaborating with leading research centres globally to investigate how nanoscience – the study of structures smaller than 100 nanometres or one billionth of a metre – could help create a personal device that intelligently bridges local and global information, senses ambient elements, physical objects and individual context, and which could then adapt its form factor and function accordingly.

Nokia produced a video of its design concept ‘Morph’, giving an insight into its vision, and has already received more than 2.3 million views on YouTube. Examining nanotechnologies and the robust miniature building blocks that could allow for a stretchable, foldable, transparent and all-over touch-sensitive material; the company’s vision for a mobile device of the future is pushing the boundaries and challenging current thinking around the world.