Can Nokia Recapture Its Glory Days? This is the question that Nelson Schwartz, the European economics correspondent of The New York Times asked today on the front page of the business section. He acknowledges that Nokia ”still commands 37 percent of the world’s handset market”, but quotes “Francois Meunier, an analyst with Cazenove in London” who said at an analysts meeting, “I don’t think anyone in this room is expecting an improvement in earnings next year”. Everyone is too busy thinking about iPhones and Blackberries. Even the Google Android platform doesn’t get mentioned until much later in the article.

This is, after all, an article in the business section not the technology section, and Mr. Schwartz goes on to talk about the corporate heads and the relationship between Nokia, its competitors and the carriers.

“The market in the U.S. has always been dominated by the carriers, so they call the shots,” says Carolina Milanesi of Gartner. “And Nokia has had a difficult relationship with the carriers.”

This has hurt Nokia in the short term, with their smartphones accounting for less than 4% of the smartphone market in the United States, even though they have nearly 40% of the global smartphone market. This illustrates, I believe, how the U.S. phone carriers have inhibited competition and innovation in the U.S. market. While I hope that the U.S. Government will step in to force phone carriers to allow more competition, I don’t expect to see this any time soon. Nonetheless, while Nokia’s distancing itself from U.S. phone carriers might be hurting in the short term, I am hopeful that it will pay off in the longer term.

Near the end of the article, Mr. Schwartz observes, “Nokia has been written off before” and finally gets around to talking about Nokia’s new handsets. Nokia’s executive vice president for markets, Anssi Vanjoki is quoted as saying, “we’ve always had points where technology hit a plateau and had to be reconfigured”. It seems as if the cell phone market and especially Nokia is at a place like that right now. He goes on to observe that Nokia has been “aiming at too geeky a community”.

The article finally gets to talking about the N900. This does seem to be the coveted device of the uber-geeks. One blog has a poll up about the Best Mobile phone of 2009. Currently, 85% of the votes are for the Nokia N900. People have accused Nokia N900 supporters of cheating by voting many times from a signal IP address, which the polling software doesn’t allow, or by all being from Finland. In reality, the Nokia Phone owners have talked on their bulletin boards and votes are coming in from around the world supporting the N900.

Another interesting data point about the N900 is that it is significantly back ordered. Last month, when I started writing about the N900 my wife ordered me one for Christmas. For quite a while, it looked like the biggest surprise would be whether or not it actually ships by Christmas. I’ve read various discussions about people ordering their N900s, waiting, and then waiting some more, and eventually breathlessly announcing that their new phone had arrived. It doesn’t generate the same mass media market frenzy that the new iPhones did when they came out, but it is something the geeks are paying attention to.

This leads me to my final observation. Mr. Schwartz noted that Nokia offered the first touch screen technology for cellphones back in 2004, three years before the introduction of the iPhone. Like many innovators, they have not capitalized on their innovations as effectively as other companies that have come along since then.

The Nokia N900 may not have substantial innovations in and of itself, yet its application development and distribution platform invites innovation from the geeks that will carry them, and these innovations could end up being the real story and what helps Nokia recapture its glory days.