Here are some additional thoughts following on from my 26th January 2012 BBC television interview on Nokia’s Devices business.

Nokia is better understood as two organisations. One (termed ‘smartphones’ in Nokia’s financial results) is a mid- and high-end business going through full scale re-invention, transitioning from the older, in-house Symbian platform to new devices based on Microsoft’s Windows Phone. The other is a legacy operation selling low-cost products based on the Series 40 platform, primarily to consumers in India, China and Latin America.

Both face falling margins caused by competition and shifts in consumer behaviour. Overall, doubts remain as to the viability of this segregated approach.

In the mid- to high-tier, sales of Nokia’s old Symbian devices are falling much faster than sales of the new Windows Phone products are rising. Nokia reported 19.6m smartphone sales in Q4 2011, 9m less than it sold a year earlier. About 1m of the 19.6m may have been the new Windows Phone-based Lumia products. It is impossible to tell precisely as Nokia did not state how many Lumia’s were sold during Q4, but instead quoted a figure of ‘well over 1 million’ for the 4 month period ending January 2011. It is also worth noting this is the number of handsets sold into the channel, not necessarily bought by consumers. Some of these devices may be sitting on store shelves unsold.

The decline is further evidenced by rapidly falling sales at component suppliers Texas Instruments and ST Microelectronics, both of which have traditionally counted Nokia among their biggest customers. It is born out by numbers direct from users, where a Kantar survey recorded large falls in customers buying Symbian handsets at retail in the last 3 months of 2011.

The new Windows Phone products – the 710, 800 and 900 – have received broadly positive trade reviews, but it is too early to gauge their long-term prospects with users. The 710 and 800 have only been available in a few countries and only for a few weeks. This is not enough time to ascertain whether the devices being shipped from the factory are actually selling through to consumers. The 900 is not scheduled to release for another few weeks.

Nokia’s other devices business, selling lower cost products based on Series 40, has been more resilient than the smartphones segment. However, it must now contend with the large number of Android-powered ‘smartphone’ products becoming available for less than USD 100, blurring the traditional line between the low- and mid-range. Consumer expectations could change rapidly in this area, with ‘reliable voice and text’ quickly becoming a much more complex set of customer requirements. It is an evolving situation which will highlight the irrelevance of the term ‘smartphone’.

Both of Nokia’s businesses are challenging in themselves, but developing a combined strategy for both is particularly difficult. It is currently supporting 3 software platforms, only one of which it exercises full in-house control over. Windows Phone is developed by Microsoft and both companies are still adapting to the relationship. Symbian has been outsourced to Accenture (albeit staffed primarily by employees transferred from Nokia). Only Series 40 is still built within Nokia.

Nokia has spent many years investing in winning first-time customers in emerging markets on the Series 40 platform. This is potentially a major strategic asset, providing a pool of future users which could be easily convinced to upgrade to more expensive Nokia devices. However, this is reliant on Nokia providing a coherent structure of products which low-end customers will aspire to own. The current product development approach, which effectively silos the expertise of its Windows Phone, Symbian and Series 40 portfolios, seems an ineffective way to achieve this.

I believe it will be Q4 2012, after the introduction of Nokia’s second generation of Windows Phone products, before we see any year-on-year growth in smartphones, albeit with the soft Q4 2011 for comparison. I fear we may also see stagnation in the low-end business throughout 2012 and that Nokia will need more capable devices to compete in this segment.

Long-term success will come through restructuring the organisation to more effectively translate Nokia’s extensive ethnography and customer insight activities into real product requirements. Currently there’s too big a gap between user trends observed in the field and actual product specifications.

Nokia must also envisage an original and distinct design language, throughout its range. There are signs of this in the N9, Lumia 800, 900 and Asha products. The recent appointment of Nokia’s design head, Marko Ahtisaari, to the management leadership team is also a positive move.

Perhaps most importantly of all, Nokia must think beyond mobility manifest as an individual device. Users are already interconnecting multiple digital touchpoints to weave together an overall user experience. They want to connect with even more. Nokia’s story in this area seems weak and technology-led. Showing customers how a Nokia experience seamlessly combines mobile devices, large screen displays, small screen accessories, speakers, in-car environments and more is the most important step it could take to the future.

These same techniques are equally applicable to creating experiences in the virtual sphere.

Semantics make pedants of us all, but it is intriguing to see the term ‘digital craftsperson’ on the cusp of acceptance. ‘Craft’ is a term ripe with connotations of tradition and leisurely beauty, grounded in local customs. It would seem contradictory to group together practitioners of a novel, immediate and globalising art with those whose work may be built on centuries of accumulated wisdom, but pioneers of digital design are poised to make their own contributions to the library of crafted experience.

Walking around the exhibition at the V&A, I was reminded again of the prescience of Franco Papeschi’s session at the May 2011 MEX, in which he called upon the MEX community to equip themselves with the same detailed knowledge of ‘digital materials’ as carpenters possess of wood and masons possess of stone.

Where these physical craftspeople rely on familiarity with grains, knots, fractures and faults, their digital equals must become intimate with the varied interactions, connectivity and behaviours which define virtual experience. By understanding the technical composition of these elements, by embracing a willingness to subvert them and by constantly refining the experience, the resulting designer is more capable of the alchemy of memorable digital craft.

The range of exhibits reminded visitors that craft is not a single category of objects but rather an approach and, indeed, a way of life, espoused by its practitioners. David Mach’s enormous gorilla fashioned from coat hangers sat alongside a section of dry stone walling. Woven coffins were placed next to MakerBot 3D printers. Each showed a different, but no less valid, manifestation of craft principles.

It was delightful to see Sugru, a physical hacking material used for a creative exercise at a previous MEX, representing the concept of user-driven refinements. There was also a dress where a QR code was woven into the fabric and linked to the wearer’s social networking profile, prompting questions about fashion, identity and digital presence – all issues raised by Ramona Liberoff in her previous MEX session. Perhaps identity, limited today to an impersonal username and password combination, is a characteristic of the virtual sphere most in need of a more crafted experience?

The book accompanying the exhibition, sub-titled ‘The importance of being skilled‘, contained several essays, including Ele Carpenter’s on ‘Social Making’. Carpenter correctly identifies the roots of today’s open source movement in the age old sharing of craft skills in families, local communities and guilds. She makes a persuasive argument for the enhancement of all forms of craft through the ability to digitally share knowledge with the widest possible constituency. Instead of crushing traditional craft, the web has the power to enhance it, as well as encouraging new outlets for craft principles in the virtual sphere.

Carpenter also finds an interesting comparison between ’round robbin’ quilting communities and open source collaboration. Makers have been creating quilts in individual sections for generations, with the overall product enhanced by the individuality of the respective squares. It is tempting to think open source software could achieve a result similarly greater than the sum of its parts, but experience would suggest otherwise.

The difference is that the construction of a quilt is inherently a defined framework, where the final utility is a known quantity and one which is unlikely to be damaged by giving participants free choice over the construction of their individual components. In contrast, the lack of a defined framework for achieving a utility adapted to the target user is the most common cause of open source software failing to gain mainstream acceptance.

However, Carpenter’s most useful message is an encouragement to continue blurring the line between users and makers, particularly in areas – such as digital – where this has traditionally been difficult.

She cites the example of Dorkbot, ‘an international community of people doing strange things with electricity’, as a place where electronics and software are seen as ‘materials to be re-worked’ rather than simply end user products. For those who’ve traditionally shouldered the maker’s responsibility, there are clear benefits in getting closer to users and building designs open to user refinement. For those who’ve traditionally consumed, the opportunity is to influence designs so they become better suited to their needs and, eventually, to become elevated to the status of makers themselves.

Sadly the exhibition is now closed, but there are videos and useful background here. Dezeen also has some photographs here.

Colossal published this fascinating set of photographs showing what happens when you give a group of children an unlimited number of sticks and a white-painted room to use as a blank canvas. I couldn’t help but think about how this might help designers understand user motivations in a world of touchscreen interactions.

Every industry likes to measure its performance but the choice of metrics can cause business strategy to become disconnected from user reality.

Case in point: last week a debate emerged on Twitter as to whether Apple is now the world’s largest personal computer manufacturer, measured by volume. As the above summary from Asymco shows, the outcome is very different depending on whether the iPad is classified as a personal computer.

The briefest real world observations of user behaviour provide a definite answer to this question much more quickly than any amount of Twitter banter. In almost every household I’ve observed, the iPad rapidly becomes the family’s ‘go to’ personal computing device, superseding phones and supplanting the machines formerly known as PCs.

While it may be inconvenient for the neat, outdated models built by industry analysts where PCs are familiar boxes with keyboards or laptops, the personal computing reality for users is evolving swiftly. The direction is inexorably towards light, thin, wireless, touchscreen slates of varying sizes, which are faster and more convenient for the majority of digital interactions.

If, as a business, your strategy is still built around competing on today’s metrics – defined by analysts who rarely spend any time observing users – you’re almost guaranteed to miss the next major shift in customer behaviour. That, of course, also means missing out on the high profit margins which come with pioneering a new category.

Something to think about when evaluating whether your annual research budgets are better spent on tracking your competitors or getting closer to end users?

This poster, found in the student quarter around Ipswich Docks in the UK, highlights how knowledge of your target audience can refine mobile usability. It is designed specifically for the significant number of students equipped with Blackberries. The QR code links directly to Blackberry Messenger, the student messaging platform of choice, adding the event organiser as a BBM contact. It is convenient for the users and helps the promoter add subscribers to their list.

It is the first example I’ve seen of a QR code linking direct to BBM.

One feature of the exhibit is a set of photographs contributed by readers of the Londonist, which show the relationship between citizens, devices and their cities. It provides some intriguing snapshots of just how pervasive digital interactions have become, quite often at the expense of admiring the beauty of the physical world.

My favourites are this one juxtaposing London’s archaic temples to telecommunications with modern tourist behaviours and this close-up portrait of a user’s intimacy with his digital device.

Food for thought in MEX Pathway #13: ‘Use quiet design principles to reduce the visual noise of mobile interface design‘.

Julius Tarng, a designer at Smart Design in New York, shared details of his personal project exploring the human relationship with mobile devices. Tarng’s extensive sketches and prototype photographs highlight two key elements of his Modai concept design:

1. Sustainability. Enabling users to keep the same device for longer than the typical 18 month lifecycle, upgrading the modular architecture with new batteries, cameras, memory and sound systems as they become available.
2. Emotional engagement. The Modai features an interface design which uses avatars and an integrated approach to balancing personal life and work. It also proposes the use of muscle wires, which allow elements of the device to transform dynamically, so that the product can raise itself off a surface or physically prod the user to get their attention.

The design touches on several MEX Pathways, including #7 (‘Express sustainable values in user experience‘) and #9 (‘Expand mobile interactions with the neglected dimensions of sound and tactility‘).

Tarng also produced an animated comic strip showing how Modai might be used.

(Thanks to Yanko Design for the tip.)

Reading this story in Daniel Yergin’s fascinating ‘The Prize’, an 800 page treatise on the history of oil, I couldn’t help but consider where it might be analogous to digital industry. In particular, it is a reminder of the importance of really getting to know your customers. While your company might consider its core business to be X, your customers may actually perceive your core business to be Y. The longer you continue to develop your strategy unaware of what you mean to your customers, the further your strategy drifts from being of relevance and value.

Digital experiences expanded across multiple touchpoints. Witness the commercial launch of Sifteo, the growth of Apple TV and the introduction of the iPod Nano and Motorola ACTV.

Some experiences transcended visual interaction and omitted a screen altogether. UP by Jawbone and the Papa Sangre game are examples of this.

Those who relish visual clarity were rewarded by Samsung, whose 1280 x 720 pixel screen on the Nexus Prime astounded users.

Parents realised they could outsource significant parts of their child’s upbringing to the iPad and iPhone from an early age. Manufacturers responded by providing fluffy toy cases to ensure the dream didn’t end in cracked screens.

It became easier than ever to connect the world to the web and the web to the world. Concepts like Twine are exciting and will cause significant change.

Users lost their first digital hero. RIP Steve Jobs.

Customers sensibly ignored glassless 3D screens, realising what manufacturers should have seen for themselves: without a corresponding 3D input method, 3D output is a poor experience.

Industry insiders tired of hearing about Angry Birds, arguably the first blockbuster brand to emerge from mobile content, but end users continued to show enthusiasm not seen since the nice folks in Espoo made a line move around the screen and called it ‘Snake‘.

E-books finally struck a chord with users, such that by May 2011 Amazon was selling 105 e-books for every 100 physical books.

The clouds gathered – namely Apple’s iCloud, Spotify, Amazon Fire and Netflix – casting a welcome shadow over the nonsense of individual users having to marshall bits on their own hard drives.

Apple’s Siri reminded everyone its good to talk. At least, it is if you live in the US and have network coverage. The rest of the world will continue to be misunderstood for a while longer.

HP spent many billions of dollars to buy and kill Palm, resurrect it as WebOS, launch only the TouchPad as half of its integrated tablet and phone offering, discontinue the product after 8 weeks, sell out the remaining stock in a 2 day ‘bargain of the year’ 99 dollar promotion and finally release the code to wander the web as a lonely open source project. Oh, and then continue to quietly issue WebOS software updates when no one is looking. Fact is stranger than fiction.

Square did what years of industry consortia and hefty corporate marketing budgets could not: improved the payment experience. A combination of location sensing and face-to-face customer relations made it possible to buy a coffee without taking out your wallet or your phone. The darling of the buzz words – NFC – meanwhile made it possible for users to touch their phones to a speaker and hear music. Nokia’s Play 360 was particularly elegant.

That would be the same Nokia which, after years of trying, finally finessed the Symbian OS into usable form: Belle, only to tell customers to forget her in favour of its new Windows Phone products. A similar tease was enacted with the Meego-powered N9, which showed glimpses of design genius and commercial madness in equal measure.

Meanwhile, customers continued to vote with their feet: Apple’s 2.5 year old iPhone 3GS outsold Nokia’s new Lumia 800 Windows Phone 18 to 1 in the UK during the month of November.

We held the 10th edition of MEX in London, talked to lots of people and left a little bit of time to dream up plans for an exceptional 2012.

Thank you to all those who’ve made such wonderful contributions to the MEX community this year as sponsors, speakers and friends.

Merry Christmas, see you next year!

Luke comments: “Firstly, it is fascinating to see what someone can do with information, how they communicate it and explain it. Secondly, I think it highlights the importance of knowing what has happened in the past and how that should affect our attitudes and outlooks. And lastly, I am very keen to see more focus on poverty when it comes to sharing information.”

The MEX blog is featuring ideas, images and videos selected by the designers at Brunel University in the build-up to the next MEX event on 30th November/1st December 2011.

The Brunel designers were asked to share a single item which has been inspirational to them, with no limitation on the industry it was sourced from or its subject matter.