For most of the past few years, Yves Maitre has lead the effort to ensure its Orange cellphone customers in places like Britain and France have the right selection of phones.
And when it comes to the company’s major markets in Western Europe, Maitre said things are in pretty good shape. Windows Phone, Android and iOS have paved the way for a solid set of options for both high-end devices and even midrange ones, often sold prepaid and, in some cases, under the Orange brand name.
But when it comes to serving the next 6 billion potential smartphone customers, Maitre said that none of the major operating systems is really lightweight enough from either a cost perspective or from the amount of bandwidth consumed.
In an interview Thursday, Maitre likened it to when he was growing up in France and his family had a two-cylinder Citroen. He idolized the huge eight-cylinder cars coming out of Detroit in the 1970s. And while those cars did enjoy a moment in the sun, the world realized that with more cars out there, gas wasn’t unlimited.
In the end, the car makers like Toyota that created fuel-efficient vehicles fared better.
While conventional wisdom is that low-cost Android devices will bring smartphones to the developing world, Maitre says even Google’s OS is too resource intensive. It may have started out as a four-cylinder or six-cylinder car, he says, but with the latest Ice Cream Sandwich release it is every bit the gas guzzler that iOS and Windows Phone are.
Maitre said that Orange is committed to building 3G networks in all of its markets, but that it needs more energy efficient vehicles, if you will.
“I cannot run an eight-cylinder car because it is too expensive,” said Maitre, a senior vice president at France Telecom’s Orange unit. The average selling price of phones in Orange’s developing markets is $54. And while customers might be willing to spend an extra $30 to get a smartphone, they can’t spend another $100.
“If we are not in a position to give them a smartphone at $80, we will miss the six billion,” Maitre said, adding that Orange is committed to having smartphones that hit that price. “If I cannot have Microsoft on it, if I cannot have Android, if I cannot have iOS, then I will look somewhere else, mostly likely in China,” Maitre said.
Phones also must become more bandwidth-efficient, Maitre said, because, like gas for cars, bandwidth is a limited commodity.
Today, he said, there are about a billion people crowding the airwaves, most of whom use less than one gigabyte of data per month.
“Tomorrow, seven billion people will use bandwidth and all use [in the range of] five or six gigabits,” he said. “The bandwidth will start to become a very valuable resource.”
Microsoft and Nokia can’t be too pleased about the news from Europe, where big telecoms say that the combination of Nokia hardware and Windows Phone software has been a bust. Given that the phones have been on sale since December, that could spell bad news for the Nokia-Microsoft Windows Phone push into the U.S.
Reuters reports that European telecoms say that Nokia phones running Windows Phone have been a bust. An executive from one European operator, which has been selling the Windows Phone-powered Lumia 800 and 710 from Nokia since December said, “No one comes into the store and asks for a Windows phone.”
“If the Lumia with the same hardware came with Android in it and not Windows, it would be much easier to sell.”
Executives cited a number of problems with the Nokia-Windows Phone combination. People are far more familiar with Android and the iPhone than with Windows Phone, and they look to buy what they are familiar with. In addition, salespeople are far more familiar with Android and the iPhone as well, and that’s what they push.
The article noted that at a France Telecom store in Paris:
Lumia models were not prominently displayed and a sales clerk was quick to offer one shopper an iPhone first. She then presented a range of Android smartphones made by Samsung and HTC.
Operators say that if Nokia would cut the prices on phones, and if Microsoft and Nokia would spend considerable marketing dollars, they might be able to sell more Lumia phones. But so far, the price cuts and marketing haven’t arrived the way the operators want.
A spokesperson for one operator told Reuters:
“If they could lower the price we think they could sell more. It might be worth making it a bit of a loss leader to get it out of the door. It’s not rocket science.”
And perhaps worse of all for Microsoft and Nokia was this judgment from a device chief at a European operator:
“Ultimately, Nokia and Windows are challengers and they either need to come to market with a really disruptive, innovative product or a huge marketing budget to create client demand. So far they have done neither.”
None of that bodes well for Nokia and Microsoft in the U.S. The problems cited by European operators are not new, and Nokia and Microsoft are well aware of them. Windows Phone market share is so small in the U.S. that that the well-known research firm Nielsen didn’t even bother to break out its usage in a recent report.
Microsoft and Nokia are trying to do something about that. Apps sell phones, and there are far fewer Windows Phone apps than for the iPhone and Android, so Microsoft is spending $24 million to spur new app development, as well as punishing app makers who won’t create apps for Windows Phone. A Windows Phone marketing campaign is underway as well.
The just-released Lumia 900 from Nokia may also help. I’ve reviewed it, and it’s an excellent phone, beautifully designed and at the right price point. In some ways it’s superior to the iPhone.
But the news coming out of Europe has to be disturbing for Microsoft and Nokia. Lack of consumer demand and low visibility in retail outlets have long been problems in the U.S. for Windows Phone. The fact that they haven’t been solved in Europe, where Nokia is a larger player, and where Windows Phone devices from Nokia have been available longer, could be a sign of things to come on this side of the Atlantic as well.