2012 was the year when Samsung Electronics Co. overtook Nokia Corp. in overall handset sales and Apple Inc. in smartphones. But 2013 is shaping up to be a much more competitive landscape. Not only are low-cost smartphone makers in China jostling in to take away market share, but there will also be newcomers in the market, like Finland-based Jolla, a company formed by ex-Nokia engineers. The start-up, which opened its Asia headquarters in Hong Kong in December, is looking to launch a high-end smartphone in the first quarter of 2013. The Wall Street Journal spoke with Jolla’s co-founder Sami Pienimaki about the start-up’s expansion plans.
The following interview has been edited.
WSJ: Where does the name Jolla come from?
Mr. Pienimaki: It means a one-man sailor boat in Finnish. The idea is that there is this big sea with great opportunity. You start to sail yourself there alone – it’s a bit of an adventure and a bit dangerous, but you still want to take this adventure because you see that there is this great opportunity. Nokia was going through a massive transition in 2011 with lots of layoffs and we were able to recruit key talent including engineers that had worked on the MeeGo project. (MeeGo is a mobile operating system that Nokia was developing with Intel Corp. until the project was abandoned in early 2011.)
WSJ: How big is the company now and what are your expansion plans?
Mr. Pienimaki: We have a bit more than 50 people, mostly in Finland and two RD sites. And we are now ramping up other locations. We have a data center in Cyberport, in Hong Kong. In China, we have a sales and marketing agreement with a retail chain called D-Phone. The deal was signed in July.
Jolla’s smartphone user interface
WSJ: In addition to developing a smartphone, Jolla is also working on a mobile operating system that could become a competitor to Android and Apple’s iOS. Tell us about your platform called Sailfish.
Mr. Pienimaki: It’s an open source platform but we have proprietary elements in it. The core operating system components are very much open source. It has a full operating system and a user interface. It allows for multi-tasking.
WSJ: How do you plan to generate revenue?
Mr. Pienimaki: We want to sell Jolla-brand phones and license our Sailfish operating system so that OEMs can use the operating system. We are a challenger in the marketplace and it will take time. But there is a good opportunity with the operating system. It’s one of the few independent options available in the market.
WSJ: Longer term, do you want to be seen as a company that makes smartphones or do you want to be like Google, offering software?
Mr. Pienimaki: We understand the needs and the challenges of the marketplace and we know how to make a competitive combination of hardware and software. It’s a very challenging engineering environment and we truly understand that. By introducing a new user interface, applications and innovation through the platform, we’d be showing the way.
WSJ: When can consumers see Jolla phones?
Mr. Pienimaki: Hopefully in the first quarter of next year.
WSJ: How will you price your smartphone?
Mr. Pienimaki: It makes no sense to go to the low-end. We will kill ourselves going there. For the Sailfish operating system, it also doesn’t make sense for us. It’s a much more feasible and sustainable model that we position this as a something that is different, unique and offers scale for the users. So it makes sense to focus on the premium segment of the market. Sailfish can also be used on set-top boxes, smart TVs and in the automotive industry.
WSJ: Can you give us an update on your fundraising? Would you look at an initial public offering?
Mr. Pienimaki: We are looking at an IPO in 2013 but that’s something we’ll communicate more next year. It’s definitely an option for us.
WSJ: Where would you list?
Mr. Pienimaki: Hong Kong would be a possibility, but it’s likely that we’ll look first at Scandinavia. But it’s something that’s still under planning.