What Newkia's Chairman Thinks About Nokia's Android Phones, Xiaomi & Stephen Elop

Thomas Zilliacus made waves late last year when he announced Newkia, a Singapore-based company founded to build Android phones with the fit and finish Nokia is known for. Zilliacus knows what he's talking about, he spent over 15 years at Nokia, seven of those as Nokia's Asia-Pacific CEO. We sat down with him for a frank chat about the new Nokia X Android phones, when we can expect to see a Newkia phone, the coming of Xiaomi and Stephen Elop.

Newkia was founded with the goal of building Android phones with Nokia quality. Now that Nokia has actually built Android phones, what do you think of them?

“I haven’t seen it yet; I’ve only read the news as we all have. And it seems to me that it’s not really an Android phone, in the sense that it seems to be more of an attempt to tweak it into something that’s more like Windows/Microsoft than Google/Android. I am not too sure about what it really is, while it is officially running Android but there are several components that seem to be missing there.

“So I’m not so sure about its success. But even if it is successful, the thing is that Nokia has agreed now the mobile phone business will be sold to Microsoft. I would be very surprised if Microsoft would stick to the Nokia brand for very long. So I think there will still be a void in the market for a phone that is built on what made Nokia great.

“And even if the brand were to be there, it’s not about the brand, it’s about what the brand stood for; it’s about the things the user liked in the Nokia phones. And those things, I think, are missing in today’s Nokia phones.”

So what’s happening with Newkia right now?

“Right now we are at a stage where we have the core management team in place, so the CEO has been named, he’s Urpo Karjalainen, who ran Nokia’s Asian business for a good part of this century, he came to Asia in the late 90s and after Nokia he was running BlackBerry until up to about a year ago.

“What we have done over the last few months after we announced this is that we have been in talks with various parties that we need in order to come out with the phone. We’re now in the process of selecting the partners we’ll be working with, and the target is to have a phone in the market by the end of the year.”

With so many Android phones already on the market, what can Newkia offer that’s unique?

“One of the problems with the market today is that there is very little differentiation between the various phones. It has become a commodity business. It is so easy nowadays to launch a new phone because you have chipsets that enable you to launch a new phone with no differentiation whatsoever. And that’s where I think today’s consumers are starting to feel a little unhappy. They do not see phones that are designed with the user in mind, I think a lot of these phones are designed in a way where they try to beat each other by having tons of components and functions that the user doesn’t always need.

“So we are in a stage where I think ‘less is more’, meaning consumers want to have devices which are built to help them with what they need from the device, not to give them a thousand different things that they are never going to use.

“And that is where I think the old Nokia phones were quite outstanding. They were easy to use, they were designed with the user in mind and they had a user interface that people enjoyed. That’s really where we’re focusing: Design, user interface, ease of use. While our initial focus will be on the Asian markets, the design will be done by the same people who designed the most successful Nokia phones. You could say it’s a European design for Asian markets.”

So you’re working with your old colleagues from Nokia?

“We are indeed. We have been spending quite a lot of time in Europe, and specifically in Finland, talking to people who played key roles in designing the Nokia phones.”

The market is so competitive and now Xiaomi has come to Singapore. What are your thoughts about that?

“I think that it is for us a very encouraging story, because that is a brand that came from nowhere, and in a very short time built a huge success story, obviously in China, but which also seems to be able to build on that success in other markets. So that to me just shows the fact that consumers are very open to new ideas and are looking for new choices. Xiaomi has succeeded in offering consumers something that they clearly wanted.”

So you don’t see Xiaomi as a threat?

“Of course all other brands are competitors but I wouldn’t call any one of them a threat. Again, it’s all about creating products that meet what the consumers want. I think we have shown during our Nokia days that we are pretty good in doing that, and I think we will be able to show that again with Newkia.”

You’ve said that Nokia’s problems started long before Stephen Elop came on board. Can you give us some insight into that?

“With success, Nokia became so dominant and so strong in the market that they felt they knew better than the consumers what the consumers wanted. So Nokia thought that they knew what the market wanted and they didn’t, and as a result of that they failed to develop the products the way they should have done. And when they realised that, it was too late.

“That’s really when Stephen Elop came in. We all know his famous email that he sent to his employees about standing on a burning oil platform in the middle of the sea, I think the way he described the situation was pretty close to the truth. Because Nokia was indeed in huge trouble when he came.

“I think he made the wrong decisions. I think to go for the Windows operating system was the wrong choice. But it’s very easy always to say, after something has failed, that you did the wrong thing. Whether going for Android would have been the better choice, again, people can debate about that and say Nokia was just too late, Nokia was on its way down already, it wouldn’t have made any difference if it had launched an Android phone.

“I think it would have made a difference. I think Nokia would have, if not kept its market position, Nokia would have still have had a much stronger position if it had gone with an Android phone, because I think the thing that was sorely lacking in the Windows ecosystem was the applications, they just didn’t exist. With Android that wouldn’t have been an issue.

“But like I said, it’s always easy to say you should have done this, you should have done that.”

Wouldn’t have going with Android made Nokia just another commodity player?

“You have to remember that when Nokia made its decision, Nokia was still the world market leader when Stephen Elop decided to go for Windows. So, if Nokia at that stage would have decided to go for Android, I think Nokia could have built a very strong position in the Android space.

“There are people who have said Nokia would have been just one out of many on Android. But if you are the market leader you are the market leader, and you can use that position to your advantage. Of course, Nokia was the market leader in Windows automatically, but basically there was nobody else. So not only was Nokia the market leader, Nokia still had huge resources, Nokia was still making tons of money. Nokia could have channelled that resources and that money into developing really good solutions on the Android platform. And that opportunity Nokia wasted.”

That would have been an interesting alternate future.

“It would have been and we will never know. It’s an interesting discussion point because nobody will be able to prove anything. But like I said, I think Nokia’s position today would have been a lot stronger and of course Nokia would have continued as an independent brand, because obviously Microsoft would never have bought Nokia’s phone business if Nokia was running on Android.”

Check out the April issue of HWM for more of our interview with Newkia Chairman Thomas Zilliacus.