A rare look inside Nokia China's test center

Nokia China opened its doors and factory in Beijing early this month to a group of journalists from Southeast Asia.

For the first time in its decade of operations, the company gave its guests a chance to have a close look at and interact with its testing center, design studio and manufacturing process.

That Nokia is a leading company producing quality mobile phones is something just about everybody already knows. But knowledge of the details of just how each Nokia device is made and tested is possibly less widespread.

A brief visit to the company, following a rare invitation to journalists, gave a chance to see a series of its processes, from its stringent testing and creative design to seamless manufacturing.

On arrival at the building compound, the journalists were greeted by Louise Ingram, Nokia's regional head for corporate communications, and David Tang, Nokia China's vice president. Tang eagerly discussed the great achievements his company has made in China.

"Over 180 million Chinese people use Nokia devices every day," Tang said, disclosing the importance of China's position, as it constitutes the largest single country market for Nokia in the world.

Nokia's sales in China last year, for example, reached a value of 6.42 billion euros, accounting for 13 percent of Nokia's global net sales, he said.

In line with Nokia's ever-growing presence in China, Tan described the Finnish mobile phone producer's vision of bringing the Internet to rural areas where the Web is not currently accessible.

Even though made-in-China products still tend to be perceived as being of inferior quality, Tang assured the journalists that this is not true of Nokia China, as the company has adopted the same high-quality standards practiced by Nokia factories all over the world.

The first impression on entering the Nokia China Campus, which is located in Xingwang Industrial Park in the Beijing Economic and Technology Zone, is that it places a strong emphasis on providing a pleasant working environment for its employees.

Designed with large open spaces and bright interiors encircled by glass windows, the building is equipped with various facilities, including a business center, modern gym, massage parlor, ATMs, cafeteria and restaurants.

Combined with a wide range of entertainment areas, the pleasant and functional working environment is expected to enable employees to work to full capacity, thereby making them productive and able to create products of excellent quality.

As well as holding the testing center, design studio and factory, the campus also houses the company's China headquarters.

The highlight of the visit was to the tightly guarded test center, where the journalists were guided through several rooms where key tests are carried out on the phones.

The test center in China constitutes one of 10 test centers operated by Nokia around the world.

All claim to be operated under the same rigorous quality control standards.

This is where you discover answers to those things you're curious about when it comes to how the company considers any mishaps befalling their mobile phones.

For example, what happens if a handset is kept in the pocket of a pair of jeans for a long time? How about if you drop it onto the pavement? What if it is exposed to moisture? Or comes into contact with a chemical substance?

As Kenneth Hans, manager of the test center, said, "A Nokia phone is put through over 200 rigorous tests before it goes to the market."

The range of tests involves testing responses to being dropped, scratched or exposed to extreme temperatures.

Tests are developed and conducted to resemble real-life situations. Durability tests, for example, include measuring the device's resilience when dropped from a certain height - a shirt pocket - onto a concrete surface.

It even has a machine that simulates what happens to a handset carried in pockets to clothes: When the device is carried in a back pocket, it may bend when the user sits down. One machine is used to simulate the effects of the bend and twist that the device experiences. Another uses real denim to simulate turbulence inside the pockets.

Other tests involve assessing the durability of a handset's keypad by pressing the keypad repeatedly to ensure it keeps working; another tests the flipping mechanism for phones with hinges to ensure that the handset maintains its mechanical and electrical functionality.

To help protect handsets against the elements, weather conditions are also simulated to test the device's resistance to extreme temperatures and high humidity.

The design studio revealed fewer secrets, not offering much in the way of visuals or data, except to show the place where creative minds gather to think up devices that can be both aesthetically and functionally pleasing to users.

The team of 25 designers tap their creativity in comfortable, neatly arranged compartments, each with a set of desks and computers.

Also in the studio is a library holding design books along with a glass case displaying nearly every product Nokia has ever released, even those bricks in the old 3210 and 5110 series.

The designers use an acrylic wall to illustrate any ideas derived through brainstorming activities.

The last stop on the visit was to the manufacturing center and assembly lines, which took up at least two floors. As it adopts the same standards applied in Finland and other parts of the world, the factory is clearly clean and well maintained.

The factory operation is made possible through the support of Nokia's partners, most of which are big-name industry players such as DHL of the US, which deals with supply logistics, Sanyo of Japan, which supplies batteries, and Friwo of Germany, with its chargers. They are among the 20 partners of Nokia China housed in the Xingwang Industrial Park.

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Nokia Buys Assets of Social Startup Cellity

Nokia has agreed to acquire certain assets of Cellity, a 14-person German startup with a mobile social-networking service that will now be shut down at the end of September.Cellity's service, which has only been available in beta testing, gives users a place to store all their contacts and then access them on their mobile phones or the Web. The service can also display contacts' latest updates to social-networking sites such as Twitter, according to the company's Web site.

But Nokia said it won't operate the Cellity service after the acquisition, which it expects to complete in the third quarter. Instead, it is acquiring the Cellity team in order to strengthen its social-networking capabilities and will discontinue the company's current offering. In an entry on Cellity's corporate blog, the company said its service will not be available after Sept. 30.

Nokia, the world's largest cell-phone maker, recently has been bolstering its services and software offerings to differentiate its devices and compete with Apple's iPhone. Its Ovi Share service lets Nokia users share content on their phones and the Web, and Nokia has also introduced an Ovi Store that sells mobile applications.

The company said it hopes to accelerate its services development through the acquisition. The Cellity team will become part of Nokia's services unit. The companies did not disclose terms of the deal.

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Nokia Surge (AT&T)

The world's number-one mobile phone maker, Nokia, mostly sells low-end phones here in the U.S. That could change with smartphones like the excellent Nokia E71x and the new Nokia Surge, two subsidized handsets for AT&T that bring Symbian smartphone power to the masses at a low price. Unfortunately, the Surge suffers from an identity crisis in AT&T's lineup—it's tough to see whom exactly this phone is for. The Surge is targeted at a younger demographic, with its slide-out QWERTY keyboard and emphasis on messaging. So it's a bit like a texting phone. But AT&T requires an expensive smartphone service plan for the Surge, and underneath the youthful design lies a full-fledged document editing, GPS, and e-mail powerhouse.

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Nokia Calling

Cast your mind back for a second to 2005, when the forecast for Nokia was as sunny and clear as an endless Finnish summer day. The world's biggest cell-phone maker had just launched the Nseries, a clever new range which packed a Web browser, video, music and pictures into a single phone. The devices moved Nokia a generation ahead in the race to build the first real smart phone, and were selling out from Dubai to Denmark. Then came a product called the iPhone. With its clever touchscreen and snazzy software and services, Apple's phone — launched in 2007 and dismissed privately by Nokia execs unimpressed with its engineering — won rave reviews, millions of customers and, crucially, a rep for cool. Today, Nokia still sells at least a dozen times more phones than upstarts like Apple or Ontario-based Research In Motion (RIM), which makes the BlackBerry. But the firm remains lengths behind in the image stakes, and has struggled to get its smart phones to stand out. "You know who are the winners when you have huge innovation," says Pierre Ferragu, a London-based analyst at investment research firm Sanford C. Bernstein. "It's anybody but Nokia. [The company] is just unable to do it."

That's a reputation Nokia has battled of late. The company, based in Espoo, Finland's second city, began life 144 years ago making paper and now ships roughly four in every 10 cell phones sold globally. But despite its huge size, and an image that 15 years ago was the epitome of a clever sort of Scando-hip, Nokia products have in the past decade seemed off the pace. The company trailed in the scramble to produce clamshell phones earlier this decade; when the market moved on to razor-thin handsets, it lagged again. With smart phones, Nokia actually offered a touchscreen well ahead of the iPhone, only to watch as Apple enhanced the feature and packaged and marketed it more smartly. (See iPhone Apps for New Moms.)

Nokia's momentum has stalled. According to Boston-based tech consultants Strategy Analytics, its share of the global smart-phone segment has dropped from 49% in 2007 to 37% in the first quarter of 2009. RIM, meantime, has boosted its share from 10% to 20% over the same period, while Apple's share has more than tripled to 10%. Throw in the global recession, which has users holding on to their handsets for longer than usual, and it's little wonder that Nokia's second-quarter results, announced last week, showed profits down 66% to $536 million. With investors spooked, and Nokia itself warning that global cell-phone sales will drop by 10% this year, the firm's shares are down by a fifth in 2009. (Read "Nokia's Application Store Faces Apple Dominance.")

Nokia's answer to all this bad reception is to concentrate on what it's best at. The company remains confident it can sell high-end smart phones. But competition from the iPhone, BlackBerry and rival handsets from the likes of Taiwan's HTC could limit Nokia's slice of the high-end market to 15%, according to analysts at Sanford C. Bernstein. With 40 million potential users for those devices, that's no small loss.

But even if Nokia does miss out on the high-end market, it has a huge opportunity in taking smart phones to the hundreds of millions of middle-income consumers who want a fancy device but don't want to pay too much. At the moment, smart phones account for just one in every seven mobile devices sold. But the segment has doubled its share of the global cell-phone business over the past three years, and with users craving the added features they offer, smart-phone revenues should roughly double to half the industry total by 2014, according to Kulbinder Garcha, an analyst at Credit Suisse in London.

To grow the number of smart-phone users, manufacturers will have to squeeze the price of each unit they sell. Doing that, especially in key emerging markets such as Asia and Latin America, will require both scale and extensive distribution networks — and on both measures nobody beats the Finns. There's "a major opportunity for Nokia to … deliver mid-range smart phones to the masses," analysts at HSBC wrote in a recent advisory. The middle-income market, they said, was right in Nokia's "sweet spot."

The rewards are likely to be considerable. For devices with many of the features of more expensive products but priced from around $300, the potential market grows to some 400 million users. As many as two-thirds of those consumers are likely to be in emerging markets.

Which is exactly why Nokia is releasing phones like the 5800 XpressMusic and the E63. Designed with both developed and emerging markets in mind, the 5800 looks a bit like an iPhone. It's not as clever as Apple's gadget, but it has a neat touchscreen, plays music and videos, and — at under $400 — retails for roughly 25% less than a 3G Apple. For $280, meanwhile, the sleek E63 messenger phone packs all the basic features of a BlackBerry Bold at just 50% of the price, according to Bernstein's Ferragu. Nokia has shipped almost 7 million of the 5800 devices since they were launched last November. The firm won't reveal figures for the E63 but Shiv Shivakumar, managing director of Nokia in India, says the device "is our way of democratizing the QWERTY keypad and the whole concept of messaging to the Indian market." In the West "people have gone from the PC to the converged device," he says. "In India, people will skip the PC and go straight for the converged device."

Much of Nokia's emerging market dominance boils down to cost management — a crucial advantage when it comes to selling smart phones to price-sensitive consumers in India and elsewhere. Nokia will likely ship more devices worldwide this year than the next three biggest cell-phone makers — Korean rivals Samsung and LG, and London-based Sony Ericsson — combined. Manufacturing on that scale brings enormous purchasing power, making it possible to squeeze the cost of everything from memory chips to plastic casings.

Nokia is also typically more efficient when it comes to how it builds a phone. While an iPhone requires around 1,000 components, Garcha says Nokia's 5800 needs only half that number. "Having an extra 10 or 20 dollars on your bill of materials doesn't matter when you're selling your phone at $600," he says. "Think about making it a smart phone at $100 a few years from now: $20 of cost is 20 percentage points of margin. It actually becomes very important."

But Nokia's real genius is simply in selling phones in more places than any of its competitors. From Indian mountain villages to towns on the dry plains of northern Nigeria, Nokia is everywhere. Supplying the end user with a smart phone in Western Europe and America is typically the job of cell-phone operators who will even subsidize the cost of a device in return for tying a buyer to a monthly plan. Not so in emerging markets, where users typically buy their phone independently. That means manufacturers need their own "very efficient distribution," says Sanford C. Bernstein's Ferragu. "And on distribution, nobody comes close to the strength of Nokia."

Consider India. Years of building its business in the country — the first ever cell-phone call in India in 1995 was carried over a Nokia phone and Nokia-deployed network — has established the company as India's biggest supplier by a huge margin. Nokia devices are sold in 162,000 retailers in India, more than three times the number for rivals Samsung or LG. Although Samsung is investing heavily to catch up, Nokia claims roughly 60% of the Indian market. So ubiquitous are the firm's products that many locals refer to their mobile phone as a "Nokia" even when it isn't. In China, Nokia supplies around 30,000 retailers, far more than its rivals. Across the Middle East and Africa, it has another 120,000 outlets and enjoys a 52% share. (Nokia's slice of the North American market is approximately 10%; in Europe it's more than 40%.)

That kind of presence in emerging markets helps explain why Nokia is blurring the boundary between smart phones and cheaper handsets, and trying to entice customers to trade up. In recent months, the firm has unveiled a slew of devices aimed at developing markets, some costing as little as $60. That might seem a lot to pay for someone earning a few hundred dollars a month, but for many people in places where access to electricity is hit-and-miss at best, a good phone can double as a computer, an MP3 device or even a video player.

Take, for example, Nokia's new 2730 model, which will be available later this year for just over $110. The 3G device might not have a touchscreen or a swish keyboard, but with access to Ovi Mail, Nokia's free e-mail service, it's designed to give thousands of consumers in emerging markets their "first Internet experience," says Credit Suisse's Garcha. Ovi Mail was conceived specifically for consumers with limited PC access, and almost all the 350,000 accounts registered since the service's launch last December have been created on Nokia phones, not on computers. To the company, that bodes well for the future. "We believe giving [consumers] this first digital identity will be a way of getting [them] later on into all sorts of other Internet services," says Alex Lambeek, Nokia's vice president for entry devices. "There's a longer-term thinking behind this."

That outlook no doubt includes extending smart-phone services beyond major urban areas. In rural India, where Nokia controls around four-fifths of the mobile-phone market, according to Bernstein research, locals may not be quite ready for smart phones yet — but they will be. At the Mobile and More outlet in the city of Gwalior in central India, co-owner Gaurav Kukreja's best seller is a no-frills 2G Nokia. But, Kukreja says, "younger people from villages often go to cities to study. They come back well-versed with new technology, and with aspirations. They want the latest ... Its time will come." Nokia execs must hope the same applies to them.

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Nokia packs a full smartphone into a compact, unusual-looking QWERTY slider. Is this AT&T's surprise messaging hit? Find out in our Nokia Surge review.

The Nokia Surge is something of an ugly duckling among the inexpensive, full-QWERTY messaging phone set. Actually, it's not even that ugly, and with its Symbian S60 smartphone OS, it's definitely more swan than duck. If you skip the junk that AT&T has piled onto this phone, you're left with a powerful device with business-class e-mail, contacts and calendar sync, a respectable, full-HTML Web browser and suite of multimedia options that were capable of handling our basic music and video needs. We loved the keyboard. It's our new favorite among compact messaging phones, and even though the aging Symbian interface doesn't compare to new-fangled, top-of-the-line smartphones, it still outclasses other, simpler messaging devices by a mile. We wish the phone had more built-in options for our favorite messaging addictions, like Facebook, MySpace and Twitter, but that Symbian S60 OS means an intrepid user will find third-party options available. In the end, some messaging fans might prefer a friendlier QWERTY feature phone like the LG enV3 on Verizon Wireless or the LG Lotus on Sprint, but the Nokia Surge is the best compact messaging phone on AT&T's lineup, and a solid choice all around. Release: July 2009. Price: $80.

Pros: Great keyboard. Full smartphone OS in a small package. Nice Web browser, especially for a compact device.

Cons: Aging Symbian OS not as friendly as other smartphones, or simpler feature phones. Lacks advanced IM and SMS options

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Nokia Phones to Aid Against Malaria Deaths

This weekend millions of North American children diligently completed their homework, did their chores and stayed on their best behavior in the hopes that they'd attend Harry Potter and the Halfblood Prince in theaters. Meanwhile, half way around the world, thousands of children work for the magical protections of mosquito nets and running water. Their Voldemort is malaria. Between 1-3 million malaria deaths happen every year with the majority of the victims being young children in Sub-Saharan Africa. Nevertheless, thanks to the work of a Berkeley research team, help may be on its way.

In so many malaria-endemic countries, the lack of health personnel, equipment and accessible hospitals are a major barrier in ensuring timely diagnosis. But Daniel Fletcher and his team at the University of California in Berkeley have modified a Nokia N73 phone in the hopes that it will alleviate resource issues and aid in early detection of malaria.
With the N73 as the kernel, the team added a battery-powered LED lamp and a series of filters. The result is an extremely inexpensive portable microscope with the potential to detect malaria, sickle-cell anemia and tuberculosis from fluid smears.
Microscopy-based detection of malaria is possible by taking a pinprick from a patient, smearing their blood onto a treated glass slide, and examining it under a microscope. Malaria parasites are detectable when they react to the treatment on the glass (Giemsa stain). According to a New Scientist article published this morning, the modified phone or "CellScope" makes it possible for field doctors to test for the disease as well as send their images to labs via a wireless network.

cell images are coupled with patient details and locations, the CellScope can help reduce disease-based death rates by guiding grassroots health workers in deploying resources, treating those affected and stopping the spread of disease across townships.


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Nokia N97, iPhone, and Modu Go Head to Head

A lot going on in the mobile industry in the last few days and Israel is in the hot spot (no pun intended). Let’s start with the fact that all 3 cellular providers; Orange, Cellcom, and Pelephone recently announced that they will be launching the iPhone 3Gs over the next few months. The word on the street, and when I say street, I mean Twittersphere of course, is that at least two of the three providers bought 100 thousand iPhones from Apple. Now you have to understand that fact in the context that these providers max out at 150 thousand mobile devices sold annually! So out of the 150 thousand phones they will sell in 2009, 100 thousand will be iPhones?! I think it is safe to say we are going to be seeing some serious hard selling of the iPhone, not to mention Capitalism at its best!

Another scoop I learned from Twitter is that supposedly Apple gave many conditions before agreeing to sell the iPhone in Israel. To just name a few, the iPhone ads need to be iPhone ads, no Cellcom ads or Orange ads, but ads made by Apple. This is good news for the average Israeli since most commercials here needs improvement to say the least! Another prerequisite was that the iPhone cannot exceed a certain price! From what I have heard, Apple put a cap on the price of the iPhone, another fact that will of course make a lot of Israelis happy. If you look at the markup of other phones, you will understand why. The bottom line is that the iPhone will be available on every street corner, will be advertised using every form of media, and will be offered at a minimal price.
If all the above conditions are in fact true, Apple’s competition has a challenging few months ahead of them, which brings me to my next point. Nokia is launching the N97 in Israel over the next few weeks. Now, putting all the initial and generally negative reviews aside, the N97 is an impressive device. A 3.5″ touch screen, full QWERTY physical keyboard, a whopping 32GB of storage with the ability to add 16 more GBs with a Micro SD card, HSDPA, Wifi, GPS, and a 5 mp Auto Focus camera. What else can one ask for in a phone?
The thing is, in this industry, it is all about timing, and Nokia Israel does NOT have timing on their side. With the iPhone launching, there will be many consumers that will refuse to pay such a premium price for the N97, when they know that the iPhone, which has a screen that actually responds (Sorry, I just could not help myself), almost all the features of the N97, and Apple’s revolutionary interface, will be available for significantly less, even if the camera is not 5 mp.
Nokia has to be creative here if they want the N97 to become the next E71, which was extremely successful around here. I have to say that, putting my personal feelings aside (keep reading, you will understand), Nokia is on the right track. They just started a very smart and innovative campaign for the N97. Basically, they have a list of bloggers and they go from one to another with a package, while streaming it live on the Web. Each one opens the package with the hope that it will contain a brand new N97. If it does, the blogger gets to keep it, if not, he/she gets to decide who gets the package next. Of course, every blogger along the way blogs/tweets about this interesting contest and creates more hype surrounding the N97. Now, although I was not on the list (hence the personal feeling comment earlier), there is no denying that Nokia did a brilliant thing here. They targeted their ideal audience, the exact people who would even consider purchasing an N97, and they did it without writing one press release or launching one expensive TV campaign.
So far we got two major players competing for the same people, Apple and Nokia. As if that was not enough to cause complete chaos in the cellular scene here, add another variable to that equation. Remember that company that once claimed they are the next big thing in the mobile world? They were designing modular devices? Sound familiar? Well Modu is launching! They are launching this week and they are doing it in…you guessed it, Israel.
Now, I really do hope they succeed as a company, but I have to say, when I heard about it, what feels like a lifetime ago, I thought it was a cool idea with potential, but now, I have to admit, I do not see what need there is in the market for such a device. The basic principle is that the Modu is a tiny and basic mobile device, which can be inserted in different “jackets” that take on various forms and functions. So if you are at work and need a QWERTY, put the QWERTY jacket on. If you are going out with the guys and want a cool looking touch screen, simply put the touch screen jacket on (I am pretty sure they have not released the touch screen jackets yet). It is a cool idea but in today’s market, the people that want a QWERTY have a Blackberry, the people that want a touch screen have an iPhone. Not sure this idea will fly anymore. Even if it does have potential to take off, with buzz words like iPhone and N97 in the air, I am pretty sure now is NOT the ideal time for Modu to launch and Israel might not be the ideal place.
I don’t think there is any doubt who will prevail in this upcoming battle. Apple has successfully created so much hype surrounding its iPhone ecosystem, that when the iPhone finally does launch here, Israelis of all ages will be running to buy them. If the amount of Facebook groups appealing to Apple to bring their device to Israel or the amount of Israelis who already have iPhones they bought, jailbroke, and unlocked are any indication, the iPhone is on its way to a major success in Israel.
I am pretty sure the N97 will also see a relative success, after all if the providers reach their goal and sell 100 thousand iPhones, they still need to sell 50 thousand more devices, the N97 can comfortably fit into that category.
As for Modu, as much as I personally wish them success, I am very skeptical. As Dov Moran, the name behind Modu said, they had so many obstacles along the way, whether it be the developer of the Modu interface going bankrupt or the worldwide recession, someone apparently does not want them to succeed. In my opinion, their initial statements about how amazing their product is and how it will revolutionize the mobile world did them no good either.
However, given all the obstacles Modu met  along the way, there is no doubt that a failed launch can be a very detrimental thing for a company and as much as all the above factors might have damaged Modu, the two words that will pose the most serious threat to Modu’s success are Apple and Nokia.
-Hillel

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