Nokia´s Booklet 3G Chief: “We are at the beginning, don´t rule us out”
The first computer from Nokia, the Booklet 3G, is out. Reviews are also out, and they are generally good.
I recently talked to John Hwang, responsible for the connected computers unit at Nokia and in charge of the Booklet 3G Programme. He´ll be the one to praise or blame for the future of this little laptop.
We talked about the Booklet 3G and the evolution of the netbook category for an article published recently in El País. Here´s an almost complete extract from our conversation:
Q. Nokia calls the Booklet 3G a mini-laptop instead of a netbook. Why?
A. We are not particularly worried by terms. We´ll let the consumer decide what the term should be. But, because of the unique combination of new functionalities and Windows 7, the Booklet 3G is in an “in-between” category. That´s why we thought “mini-laptop” was a good name.
Q. How do you define netbooks then?
A. Everyone tends to call it a different product. I think of it as everything with an Atom processor, as promoted by Intel. But it is confusing, it is similar to what´s happening in the mobile phone space now, the line between a mobile phone and a smartphone is blurring.
Q. Is your objective to compete against ultra-thin laptops?
A. We want a product that is desirable for the consumer. As a new entrant, we have more flexibility so our focus is on what the consumer wants rather than where the industry wants to position the netbook concept.
Q. But consumers seem to want cheap laptops. Given the economic crisis, is not the 699€ price a mistake?
A. We have to anchor ourselves somewhere. The price point we chose is very consistent with our pricing strategy in mobile phones. But we understand times are tough and we are constantly reflecting on where we should go. For us this is very much the beginning, not the end.
Q. Some analysts say Nokia doesn´t know how to compete in a low margin industry like the PC, so that´s why you´ve gone with a higher price.
A. Analysts like to speculate, but that wasn´t the driving factor at all. Overall, margins follow differentiation, and I believe we have a differentiated product.
Q. They also say Nokia´s key problem is the lack of an integrated software, services, mobile telephony and now computing offering.
A. Two years ago we entered the services space, clearly the learning continues. Now we are pushing our software platform in our devices. And with respect to the Booklet 3G, we are just at the beginning, I wouldn´t rule us out (laughs).
Q. The PC industry is pushing out more expensive “ultra-thin” notebooks that are slightly bigger and better equipped than netbooks. Is it because margins of netbooks are not sufficient?
A. The reason why the netbook category took off was price, but also portability. And because the way the economy was going, those two got melted, and people assumed there was price and portability together. But I believe this trend will clear up once the industry matures and the economy picks up. People will actually pay for portability.
With regards to price, you mention a fair point, the industry as a whole is more reluctant to support this space because below 500$ you have quite thin margins.
Q. Do you think the industry got surprised with the success of netbooks and now it doesn´t want to support this market long term?
A. There is a bit of anxiety. The industry is certainly grappling with this. When people start accepting the notion that portability can carry a premium, things will change.
Q. Will the netbook category, as we know it today, disappear in a couple of years?
A. Empirically, if you compare the average price of a netbook in 2008 versus 2009, the price is higher. I think it will become a commoditized business. If the big brands want to remain in that space, they´ll need to do some serious thinking.
Q. Will Nokia launch more netbooks next year?
A. We just announced the Booklet 3G, this product will need some runway to take off. We´ll certainly thereafter with more products.
Q. How much do you think operators will subsidize the Booklet 3G?
A. Operators are experimenting in this space. O2 in Germany is asking 249€ for this product, so there´s definitely opportunity for subsidies. We´ll see a lot of variety of price points and subsidies.
Q. Netbooks, ultra-thins laptops, notebooks, smartphones, tablets… are converging. Does it mean that we´ll see a one-in-all type device in the future, or are we going to continue seeing a wide range of devices?
A. I think it´s going to be the latter. The world is acknowledging that consumers are asking for devices with connectivity. What we are seeing is a storm of mixing up different categories. There´ll be a period of calm where it all sorts itself up. I don´t think there´ll be a one-only product. You´ll see redefined PCs, redefined handsets, and redefined consumer electronics categories.
Tags: Booklet 3G, John Hwang, Netbooks, Nokia
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