Hi, please take this answer as a personal opinion and please don't limit it to Nokia since I believe it's mostly the same for any other company in the same position.

Sure but if you look at the trend, "materials" are decreasing the % of relevance while software increases it.

"fail to imitate" fails to reflect the reality at least in two angles. One: cheap copycats are only one part of the story when a considerable % of the production of "western companies" actually happens in "easter soil". Two: companies actually protect such "innovative features with hardware" through patents since "western companies" are so willing to imitate than anybody else - if they only could.

And you mention China. Have you noticed that they are moving fast from subcontracts and imitation to genuine know how and innovation, filing own patents at EU / US levels?

Sounds like Qt. Nokia WebRuntime and Ovi SDK point to that direction as well.

If you look at Maemo you have the % of closed source mainly in two layers: hardware adapation and applications/services.

For the hardware adaptation you actually need to start convincing the chipset vendors since most of the closed software is licensed by them. If you answer "choose open hardware!" then you probably will compromise the previous points of "material of incomparable quality" or "innovative features with hardware (...) fail to imitate". So you need to have an alternative business model to chipset vendors in addition to the alternative business model to device manufacturers.

At the applications/services level... it's really complicated to make sustainable and competing innovation with open source (as much as I would like to see it). Commoditization sure, but pure innovation... It's possible, but complicated. It's like playing against Deep Blue: every time you win your competitor can immediately assimilate the lesson and use it against you with less investment and effort.

Yes, you can also copy closed source but the difference is time to market. If you release your closed apps only when the device is launched and in its way to the shops it's really different than developing them openly all the time. Specially the competitors caring less about "incomparable quality" might be able to ship a product with your new software even before yourself, while your "incomparable quality" standards keep you bugfixing (providing the bugfixes for free to the customers of your competitors).

All this might be worth if there is a critical mass of users and oss contribution around certain application. Maemo made a bet with Modest, and the contributions were also modest (yes, you can blame our mixed-open development but still). We are making another bet with Mozilla and the equation results better since the Mozilla engine is used by millions, tested by thousands and heavily contributed by hundreds.

The browser is a good example of open source innovation, but note that is an area where all relevant players seem to be moving towards OSS models on top of the Mozilla or the Webkit engines. It is much easier to compete with open source when your competitors are also doing the same.

Nice sentence, but easy to rebate in a business plan for Nokia. RIM and Apple are doing good profits this year. They seem to be scoring well in quality and customer engagement looking at the levels of satisfaction of their users. Yet they achieve that not through freedom but quite explicit control. Software freedom doesn't seem to be a cry of the millions of customers of Series40 and S60, the platforms that are bringing the big profits to Nokia.

You are missing the first step "Get millions of fans through the traditional multinational labels business". That was the case also for Hole, Robbie Williams, Gilberto Gil, Radiohead and many other great artists I love and have an attitude pro-CreativeCommons, file sharing, etc. Or do you know a professional band that hit the charts creating open music since Day 1?

They might come in the future, but not today. And this is similar to what Nokia could say about Maemo. Maybe one day it will be 100% free, but not today.

For all these reasons I think you would have a hard time convincing the Nokia shareholders (and even most Nokia customers, current and potential) with your business plan.

Good that in Nokia we have a good bunch of people thinking in open source innovation together with beautiful products and profitable business, all of them contributing to actually quite innovative business models around free software. This is why Qt was relicensed, this is why Symbian is moving to open source, and this is why Maemo will keep being a very interesting platform for freedom lovers.