Nokia's kinder, gentler matrix

Imagine if your cell phone could display maps of the city you’re in, with photo tags of friends, including where they are and what they’re up to at this very moment. Or imagine if you could point your mobile device at an object — a famous building or a movie poster — and immediately, your screen would fill with information about that building, or ask if you want to watch a trailer for the movie or buy tickets.

This is the world we live in, or at least the one Nokia is offering the world, with its latest N-series phone and a forward-thinking bundle of services that may remind some people of living in The Matrix.

Of course, for some people, living in The Matrix doesn’t sound bad at all. Some people are living there already, in fact.

Nokia, the Finnish mobile phone giant, calls them “technological leaders” — the 100,000 or so Nokia users whose phones were imbedded with tracking software a few years back which tells the company (with the users’ permission, of course) about their lifestyles, purchasing habits and friend networks. And, of course, the kind of gadgets they love.

Nokia has since embraced this market, learning from them what kind of new phones to make — especially the N series, which first hinted at the “point and find” function back in its N95 ads a few years ago. It may seem like Star Trek stuff, but being able to scan real-life objects and gather onscreen information through GPS is as real as the latest Nokia device.

Nokia unveiled that device — the N97 — a few weeks back at Nokia World, a two-day technology showcase held in Barcelona, Spain this year. It’s a top-shelf, touch-screen mobile with a sideways 3.5-inch screen and a full QWERTY keypad that managed to draw a few gasps even from seasoned tech journalists at the Centre Convenciones International Barcelona.

And that was just the hardware. What Nokia’s gurus — CEO and president Olli-Pekka Kallasvuo and EVP of Nokia Markets Anssi Vanjoki — have under the hood is even more intriguing.

A few eyebrows were raised at last year’s Nokia World (held in Amsterdam) when the Finnish company announced it was getting into the services end of telecoms. Building durable, innovative cell phones was supposed to be Nokia’s strong suit; not providing platforms for social networks and map services.

Well, a year later, it’s clear that Nokia is serious about services — they started by launching Ovi.com, a platform through which Nokia users could access YouTube, Google, Flickr and popular social network sites through their phone. They also expanded their Nokia Maps division; it’s now a key part of the N series, aiding in what Kallasvuo calls your “so-lo” (social location), a way of telling your friends, through GPS, where you are at any given moment.

“The key differentiator (of so-lo with Nokia) is we are there with you when you’re having the experience,” expounds Tom Furlong, SVP of Consumer Messaging, Service and Software for Nokia. “With other social networking services, you go to your computer and figure out what you’re going to do and who you want to do it with. Then you go do it and then you write about it. It’s a completely different experience to sit there and say, ‘I’m in Barcelona and I want to know if any of my friends are here. I’m going to the fish market and I want to know if anyone wants to join me.’ I think it really revolutionizes the way people live in the Internet as opposed to living on the Internet.”

The idea of your phone tracking you at all times may seem a bit alarming, but not to Nokia’s gurus, who see living in the matrix as an organic, evolutionary experience. As Vanjoki cheerily puts it: “When N97 comes along (in 2009), it will introduce a completely new format for a mobile computer. Not just focused on consumption, the N97 will really allow living in the media and to make our dream come true of combining the living and the virtual worlds.”

Whose dream is this? Why, the dream of 400 million people a year who purchase Nokia phones, of course.

Not everyone at Nokia World was buying into the N97 euphoria, ready to plunge headfirst into the matrix. There were security questions afloat, with some wondering if Nokia was opening the door to “too much information” in the virtual world. Kallasvuo offered a rosier view of the possibilities: “The whole idea of this is we will marry the real world coordinates with the coordinates of the virtual world... This will extend to defining social location in ways that have nothing to do with physical location, but will be defined by who your closest friends are, etc.” The bottom line, Nokia says, is that customers have the final say about who gets to see their personal so-lo information.

Others griped that the N97 was too similar in design to Nokia’s Communicator, an E-series phone that was launched in Barcelona at the 3GSM Show in ’07. That phone with a sideways-opening QWERTY keypad tray had a microphone defect and was largely shelved, though it still has many fans. Others meanwhile grumbled that Nokia launched its previous N-series phone, the N96, only three months ago — though such quick gadget turnaround has become commonplace in the industry.

Mainly, it seems, Nokia offered up this truth: they have a line of high-end phones that can do everything the iPhone can, and more. Plus they now offer services that place the company squarely in the middle of the matrix (that word again) between hardware and content. And, as the Nokia gurus like to point out, they are in a position to put those devices in over 400 million pockets per year. That’s a lot of connecting power.

One small fact struck me at Nokia World: the pricey N-series phones (at 500 euros and up) actually represent only a small fraction of phone units sold by Nokia (maybe six or seven percent out of that 400 million); but such phones make up about 20 percent of the company’s revenue stream, simply because they’re more expensive. So, despite any economic hiccups or panic sweats out there (and Nokia was firmly tight-lipped about the effects of economic doom and gloom on its bottom line, pending Capital Markets Day in New York later that week), the company seems dead-set on courting high-end users. An added bonus is that the “goodies” are expected to reach a wider market with trickle-down technology.

What goodies? We saw a host of them at Nokia World’s Expo, located in a convention hall trimmed in Yoko Ono white and Matrix green. Booths showcased the latest innovations — like Nokia Messaging, which will be included in almost all of Nokia’s cell phones next year. (See sidebar below)

Maps on Ovi, meanwhile, is a free service that allows users to pre-plan trips, routes, while Nokia Maps now offers a dazzling array of high-tech guides — maps that flip from 2D to 3D, satellite and real-time rendered terrain maps, and the innovative “Pedestrian” feature which brings maps down to the street level, with local markers shown in virtual space. It brings to mind Vanjoki’s opening remark: “Living in the media grounds me.”

Nokia has also expanded its commitment to recycling, even launching a phone in 2008 — Remade — that is manufactured from 100-percent recycled materials — aluminum cans, plastic bottles, used car tires for rubber, recycled glass for screens, with refurbished phone parts inside and energy-saving dimmer features. (This is a logical step from earlier phone models that were already 70 percent recycled.)

Nokia also takes pride in its “openness.” Rather than a top-to-bottom proprietary model like some of its competitors, Nokia is open to third-party platforms and applications; but most importantly, it’s open to people creating their own version of the Internet experience with their phones. “Instead of just one Internet, there will be billions of Internets,” was how Kallasvuo put it. “You will be in control. You decide whether your Internet experience will be so-lo or solitary.”

Speaking with Ukko Lappalainen, VP for Nokia N-Series Markets, I got a clearer picture of Nokia’s direction. He confirmed that Nokia continues to look to its “technological leaders” — the front brigade of users who crave the latest high-tech features. “They were first to use cameras, browsing on devices, maps, and these things are eventually included on low-end phones.”

But now, Lappalainen says, it’s time for Nokia to take the next step and get even closer to people. “What has changed is the Internet has become so pervasive, social networks have become so important. So now we think it’s time to take the next leap and start the new era of mobile computing with the touch and QWERTY device. We see it as the beginning of the future for us.”

The future, as I learned a week later reading about Capital Markets Day, involves a general slowdown of the mobile phone market worldwide. Specifically, Nokia reported in New York that sales are expected to drop five percent in 2009 due to the credit crunch and less spending (i.e., emerging markets will buy fewer cell phones). On the other hand, Nokia expects an increased share in the lucrative smart phone market, which remains undaunted by such money concerns.

The N series, Lappalainen notes, has been quite popular in Asia, which remains a key (and growing) market. “Clearly we have had great success in SEA and Pacific, but also India and Middle East. The fact that we have good support for local languages has been important in that success.” Also important is Nokia being available to support input of different characters, such as Chinese or Arabic. “What’s been key is not only to bring products to the market but to bring capabilities in local languages.”

Lappalainen shows off the N97, demonstrating its slide-open QWERTY keypad. The touch-screen capability displays little boxes of personal info, like Widgets, that can be cleared away with the swipe of a finger. The tray nearly opens with a press of the thumb, and naturally, it’s one of the smoothest, coolest personal computers out there.

You just know that, economic crunch or not, there’s going to be hundreds of millions lining up to dive straight into the matrix.