E7 Handset Delay Shows Nokia Becoming a Follower, Not a Leader

Nokia (s nok) isn’t ending its year of smartphone reinvention the way it had hoped, instead reports today indicate that its E7 handheld won’t ship on time. Instead of delivering the new Symbian device  in 2010, Nokia has pushed the date into early 2011, says Reuters. This marks the second issue with Nokia’s new flagship line: N8 deliveries slipped into October for many consumers who expected to receive them the month prior. With each miscue, Nokia opens the door for competitors to usurp leadership in the smartphone market — in actual sales and in peoples’ hearts and minds.

What the E7 Delay Says About the N8

The delay of Nokia’s E7 isn’t likely to have any direct financial impact on sales revenues because the E7 was always slated for the end of the year. Of course, that means Nokia won’t gain benefit in terms of boosting the ASP, or average selling price, of its handset portfolio, which last quarter was €65 (US $91). The real potential issue here is one of Nokia’s execution as the leader of the smartphone market. According to a Nokia spokesperson statement given to Reuters, the delay is “to ensure the best possible user experience,” which is admirable. Considering the recently released Nokia N8 is the basically the same phone, what does the E7 delay say about the user experience of the N8?

Indeed, the differences between the currently available N8 and delayed E7 are minimal, with the biggest variances being a lower resolution camera, a hardware keyboard and a larger display on the E7. Both offer penta-band 3G radios, the same refreshed Symbian operating system, and share most other hardware features. This chart below from FoneArena illustrates the many similarities:

Given that the devices are far more similar than they are different, and Nokia is delaying the E7 to improve the user experience, it’s not unreasonable to think that Nokia knows it’s flagship line is lacking. My own hands on with the N8 shows an amazing bit of hardware: a beautiful touchscreen combined with arguably the best imaging found in any smartphone today. But the user experience is still muddled and the web browser — a central application that should excel given the importance of the mobile Internet — is essentially the same as it was on prior Symbian S60 devices. That is to say: many will find the browsing experience in Symbian to be sub-par when compared to other smartphone platforms.

Great Hardware Requires Great Software

Nokia has plans to make improve the browser and Symbian as a whole, however: today at the 2010 International Mobile Internet Conference in Beijing, Nokia senior manager Gunther Kottzieper reiterated a software update in the first quarter of 2011 to address issues. Kottzieper also outlined plans for Symbian phones to gain faster CPUs and improved graphics in the first or second quarter of 2011, to later be followed by dual-core processors.

But Nokia’s challenges don’t lie within its hardware, and even if they did, such new dual-core chips aren’t expected in devices until 2012. No, Nokia understands that its mobile platform still needs help: it basically admitted that with the reason for the E7 delay, unless of course, there are production problems, in which case, that’s what the company should have said.

Regardless, Nokia may still be the smartphone leader in terms of sales, but the latest admission of user experience issues shows that it’s fast becoming a follower when it comes to smartphone software. And in today’s world it’s the software that counts. The best hardware in the world won’t fly off shelves nor attract developers if consumers don’t want to use the device’s software.

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