However, the company will continue to use its Symbian operating system for its lower-end smartphones.
The move might be seen as a bid to restore Nokia’s shaky fortunes in the high-end smartphone market — it has revised its Q2 2010 guidance, warning that its share of the mobile device market in value will be lower year over year, partly because of pressures brought about by rival phonemakers.
What’s a MeeGo?
MeeGo was formed in February through the merging of Intel’s (Nasdaq: INTC) Moblin and Nokia’s Maemo mobile operating systems.
It uses the Qt application development environment, which lets developers write apps once and run them across multiple devices. However, Nokia’s attempts to attract developers to write apps for the operating system do not appear to have gained a great deal of attraction at present.
Devices running MeeGo are scheduled to hit the streets later this year.
Symbian Rules, but for How Long?
Nokia still dominates the worldwide mobile terminals market, taking a 36.2 percent share in that field in the first quarter of 2010, according to Gartner’s (NYSE: IT) statistics.
Samsung came second with 19.1 percent, LG third with 9.9 percent, and RIM fourth with 2.7 percent.
In the smartphone sector, Symbian devices accounted for 48.8 percent of smartphone sales to end users worldwide.
RIM came second with 20.6 percent, the iPhone third with 10.5 percent, and Windows Mobile fourth with 10.2 percent.
“Nokia is the number one manufacturer of cellular handsets, but in reality that’s not as good as it sounds,” Allen Nogee, a principal analyst at In-Stat, told LinuxInsider. “Nokia is most popular with low-end, low-cost handsets in developing countries as well as all types throughout Europe.”
That success in the low end has cost the company. In its outlook for the second quarter of 2010, Nokia says multiple factors are causing it pain.
“These factors include the competitive environment, particularly at the high end of the market, and shifts in product mix towards somewhat lower gross margin products,” a Nokia statement reads. The company forecast that sales of devices and services will be at the low end of — or below — initial projections.
The Times They Are A-Changin’
“With Symbian, Nokia has partly enjoyed the benefit that few device vendors had — control of its own operating system,” Chris Hazelton, a research director at the 451 Group, told LinuxInsider.
“Nokia needs to regroup and refocus on hardware tightly integrated with MeeGo,” Hazelton said. “But until it offers a touchscreen smartphone with an easy, intuitive user interface, it will continue to lag the market,” he pointed out.
“Symbian’s market share has fallen over the years,” In-Stat’s Nogee said. “With this announcement about MeeGo, even though Nokia will restrict Symbian to its lower-end smartphones, the long-term viability of that operating system is in question. It’s only a matter of time before Android and iPhone surpass Symbian.”
Will MeeGo Give Nokia a Better Tomorrow?
Focusing on MeeGo could let Nokia become a more active player in the changing mobile market.
“What you’re seeing is the evolution of the next-generation operating system,” Maribel Lopez, founder and principal analyst at Lopez Research, told LinuxInsider. “Apple and Google (Nasdaq: GOOG) are currently battling to replace Windows on all the next-generation non-PC devices. RIM, Windows Mobile and now Nokia with MeeGo are looking to enter the battle with new mobile-oriented computing operating systems,” she said.
“For Nokia to succeed and remain relevant in the high-end smartphone segment, it needs to provide a great device on a great operating system with a great user experience,” the 451 Group’s Hazelton said.
“Symbian has failed to do this, so Nokia is turning to its only alternative, which is MeeGo,” he added.
There’s room in the market for at least two leading mobile operating systems, Lopez contended. Nokia might be one of them simply because of its installed base worldwide.
“We’d be foolish to ignore the size and presence of Nokia in the global landscape,” Lopez said.