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Why Nokia is Losing Ground to Apple and Android

Nokia (NOK), the global leader in mobile phones, has lost its mojo. The company's new head of Mobile Solutions, Anssi Vanjoki, admitted as much in a fiery blog post he wrote about getting Nokia back to #1. But what Vanjoki's post revealed, besides fighting spirit, was that his company is still clueless about how to succeed in the modern smartphone market.

Vanjoki focused on Nokia's beleaguered Symbian operating system. "Symbian has taken a lot of criticism lately -â€" some of it fair, some not. But what is consistently overlooked is that Symbian still accounts for more than two-fifths of the global smartphone market." Vanjoki shot down the idea that the company might replace Symbian with the increasingly popular Android OS from Google (GOOG).

But Symbian's size is a relic of past success, not a formula for future gains. A new study by Vision Mobile surveyed 400 developers from around the world working on the eight most popular mobile operating systems. What they found was a paradox: developers overwhelmingly said the most important factor in choosing an operating system was market penetration, but largely created apps for the two smallest platforms in terms of global market share, Android and iPhone OS.

The key here is perception. Because the iPhone and Android have the best marketplace for their apps, developers feel they have the biggest market, even if the numbers say otherwise. The Vision Mobile study found that there was little use or availability of app stores outside these two platforms and that this kind of high functioning marketplace cut developers time to payment in half.

Vanjoki does little to address this issue. He mentions Symbian^3, the latest version of Nokia's OS, but then notes that the N8 will be the only phone to get the new OS. "The sad thing is that I was all fired up to buy my wife an N8," wrote one commentator on his post. "But now you've cursed it by saying it will be the only Symbian^3 device before it's even out."

Just one day before Vanjoki's post, Ricky Cadden, the long time author of, announced that he would be closing the site and switching to an Android powered device. It was the kind of message that should have rattled Nokia's cage. Instead the company plans to soldier on with an operating system that appears increasingly outdated to consumers, developers and even long time fans.

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