Nokia: a product or a service company?

The gadget business is at an inflection point - some companies have figured out that service design is the route to competitive advtange, but some still obsess over products. Where does Nokia sit?

The transition from Summer to early Autumn seems to be as marked by a flurry of new devices as it is by the leaves changing colour on the trees these days. Martin wrote about the new launches from Amazon on Friday, and, in particular, about Jeff Bezo’s explicit statement that the Kindle line is about services not gadgets.

That’s something the digital industry seems to really struggle to understand. I’d be fascinated to see some psychometric analysis down on leading executives in tech companies to see why so many of them haven’t yet twigged that success in the gadget space is no longer defined by products, but by the products combined with the service ecosystem around them – by service design, in fact. Instead, they continue to obsess about tech specs and big numbers, rather than the actual experience customers are buying into. And much of the surrounding cloud of tech press reporters continues to parrot those same figures and specs out.

Meanwhile, the dialogue between company and customer is changing. It’s very noticeable that Apple have moved their discussion away from hardware specs in their product launches these days. Try finding out how much RAM the new iPad has – or the clock speed of its processor. They are carefully controlling the conversation to emphasise what the user does with the device, not what the device is made from. Look at their advertising, for example.

Nokia is clearly trying to do this with the launch of its new Lumia phones. Much of the marketing, and the launch announcement, focuses on user-interaction issues like the allegedly great camera (somewhat undermined by some dumb marketing decisions), but things rapidly lean back towards product design issues – like the bright, distinctive colours (although we haven’t yet heard if matching nail varnish is coming…)

Of course, Nokia’s destiny is not entirely in its own hands. Its phones are based on Microsoft’s software, and Microsoft will bear as much responsibility for building an ecosystem of services around the device as Nokia does – if not more. The success or failure of the collaboration between the two will be defined as much by that as anything else.

Nokia’s head of design, Marko Ahtisaari, was interviewed by WIRED, and made a good case for his interesting-looking designs.

“Our products are human,” he says. “They’re natural. They’re never cold. That’s partly driven by color, but also partly how they feel in the hand. This looks less like a product coming off a production line in a factory — though it does—than a product that might have grown on a tree. The grandest way I could put it, is post-industrial.”

There’s little in the piece that gives me faith that the company has spotted the move from product design in isolation, to product design as part of an ecosystem of service design – and that’s the space that both Apple and now Amazon are inhabiting with great success.

Jeff Bezos had plenty to say on the subject in an interview with AllThingsD:

In my view, you set up the business in a way that is aligned with the customer, or you can set it up in odds with the customer. When you have the option, you should figure out a way to be in alignment. Sometimes that requires you to be more patient, so it’s part and parcel with long-term thinking.

And then on how to differentiate your business from others:

What we try to do is find things that customers would want. You can always be differentiated, but it’s hard to find differentiation that customers care about. So, we are always looking for things that customers would love[…]

It’s views like that that ensured that last week was an Amazon week, not a Nokia one.

This will be an Apple week. On Wednesday, Apple will announce something new to the world, and the smart money in on a new iteration of its phone. The tech press, and many of its competitors, will obsess over stats like screen size and processor speed. You’d be far better served by paying attention to what new services Apple enables with their new device…