Nokia's NoTA approach could transform cellphone economics

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Nokia's NoTA approach could transform cellphone economics

By CAROLINE GABRIEL

Published: 17 December, 2008

READ MORE: Nokia

With device makers under unprecedented pressure to cut the cost of developing their products, Nokia and several Japanese consumer electronics vendors are looking to adopt a modular process for building cellphones, called network on terminal architecture (NoTA). Created by Nokia itself earlier in the decade, the time now seems right to push it into the mainstream, changing the economics of mobile devices as they become commoditized and margins collapse. Nokia claims the process could development time by up to 65%, and overall costs by as much as 99%.

Rather like approaches taken in other product areas in the PC and even base station markets, NoTA splits the phone's architecture into a series of separate mix-and-match modules, each representing one function and each easily based on standards. These can then be assembled in various combinations according to the functions required from the particular device, with most of the differentiation coming from software. The phone would no longer be based around a single, powerful engine but would use a set of modules, each performing a specific task such as media functions. These modules would communicate via service nodes based on industry standards like OpenMax and OpenVg.

Nokia says it can cost up to $220m to create a single handset, with even a fairly basic webphone costing over $100m, and this could be slashed by using the 'Lego' approach of NoTA. Although the concept is at least seven years old, Nokia has previously seen too much of its differentiation coming from hardware design to adopt it on a wide scale, and has also failed to get the necessary support from the cellphone components supply chain, in order to support the process and provide the standardized modules.

Now, with the economics and competitive edges of the handset sector changing, and Nokia itself looking for margins growth in web services, it has aroused more interest in the industry, especially Japan. The Japanese handset makers have little presence outside their own country and so rarely achieve the volumes that would justify development budgets of $100m-plus. Yet they have close ties with the massive Japanese CE sector's supply chains, and should prove valuable allies for Nokia in NoTA.

Its first key partner is NXP Semiconductors of The Netherlands, which will work with Nokia to push NoTA into the mainstream. NXP said, in announcing its support: "It's easy to swap in new hardware and software functions, so developers can upgrade their designs quickly and can introduce a variety of systems that build on the same basic design. Each subsystem can be optimized for peak performance and can be developed separately, without impacting other portions of the design."