Jolla established its Asia headquarters in Hong Kong in December 2012. It has signed a sales and distribution agreement with D.Phone Group, the largest mobile phone retail chain in the mainland with 2,000 stores, targeting 150 million-strong domestic smartphone market that Jolla hopes to penetrate. Jolla is looking to launch its first high-end smartphone in the first quarter of 2013.
Jolla chairman Antti Saarnio called the mainland the “largest and most rapidly expanding smartphone market in the world.” By targeting the mainland, Jolla can afford to keep out of the highly saturated and ultracompetitive US and European markets where wireless carriers are likely to be far less inclined to support another mobile ecosystem. The Finnish upstart does not have any business legacy or a cost base to defend. So it can play around in the mainland’s vast smartphone market with its flexible model.
But two things are fundamental to its success in the China domain. First, it needs to get China's mobile phone makers on its side. Second, it is imperative that Jolla captures China’s software developers for creating an app-rich mobile ecosystem.
If Jolla can pull this off, it could become a successful alternative to Google’s Android software platform. China’s mobile phone makers have already got their hands clean by producing cheap Android handsets that do all the usual smartphone tricks. Now Jolla will have to convince these handset makers that Sailfish offers them a value proposition that is bigger than Android at no additional cost.
But with the Android platform so widely adopted by China's low-cost smartphone makers, this is no easy feat.
2012 saw a coup de grace from China’s handset makers when they started to flood the market with low-cost smartphones. Their secret recipe: they were able to effectively combine Android’s free mobile software with cheap hardware options from the likes of MediaTek Inc. In 2008, MediaTek began supplying reference designs for mobile phone chipsets that enabled China makers to produce handsets at an unbelievable pace.
Google's free Android platform quickly moved in to fill the vacuum on the software side of the equation and soon this unique hardware-software combination was producing roughly one-third of smartphones sold across the globe. A Nokia manager acknowledged half jokingly that electronics manufacturers in China are cranking out mobile phones faster than Nokia executives take time to polish their PowerPoint presentations.
The MeeGo connection
Jolla has its roots in Nokia's defunct MeeGo OS and its well-reviewed N9 smartphone. The company was spun off from Nokia when it was going through a massive transition and downsizing in 2011. Nokia helped create Jolla through its Bridge Program to transform MeeGo software into a fully-featured mobile OS. The set of circumstances allowed Jolla to recruit key talent, including engineers that had worked on the MeeGo project. Now this group of fewer than 100 Finns is set to challenge the Coke and Pepsi of the smartphone world: Apple’s iOS and Google’s Android.
Jolla decided to go beyond merely recycling the MeeGo OS and broadened the industry participation around an open-source alliance: Sailfish. The Sailfish platform is looking to create an app-friendly ecosystem by relying on an open-source movement to build a critical mass of apps and therefore attract smartphone users. But unlike Android, which is free but uses heavy-handed tactics to keep handset manufacturers in line, Sailfish is encouraging phone makers to tweak the software for local markets. An added advantage of Sailfish software, in comparison to Android, is freedom from the dreaded patent wars. Both Nokia and Intel had made massive investment to keep Sailfish’s predecessor MeeGo clear from intellectual property issues
The company has demonstrated Sailfish on the Nokia N9. Sailfish can also be used on set-top boxes, smart TVs and in the automotive industry. Moreover, Android apps will run on Sailfish handsets without modification, though a simple port will be required for seamless operation. The app menu in Sailfish software is quite similar to the menu in the Android platform. Sailfish also adopts some Windows Phone features. It seems to have borrowed the live tile concept from Microsoft’s new mobile OS, although it is being used in quite a different fashion. Speed and multitasking are the key tenets of the Sailfish OS platform, according to Jolla.
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