NOKIA, the European rubber boots maker that transformed itself into a mobile phone powerhouse in the 1990s is in trouble. So much so that it hired a non-Finn to run the global giant – something unheard of in 145 years.
September 16, 2010
Street Strategies | Tags: Android, Apple, Nokia, smartphone |
Flash back to the 1990s when Nokia was seen the company to work for, the mobile phone to covet,and the darling of European politicians who used the Finnish phone maker as the benchmark of what a European company can achieve in the global stage.
So what went wrong? Simple! NOKIA forgot to innovate. It sat too long on it’s winning streak perhaps hoping that it would last forever. It banked on it’s marketshare and brand to keep it going. Wrong mistake!
If history is ever to teach us anything is that early success doesn’t guarantee the future. Several forces disrupted this winning streak. NOKIA should have seen it coming with the success of Research In Motion with it’s BlackBerry phones and proprietary mail service that won over the corporate world. NOKIA tried to emulate BlackBerry’s success but it’s failure to deliver a similar compelling service brought limited success to the company’s E Series phones.
Next came Apple with the iPhone. The iconic computer vendor delivered a two punch blow with an innovative new service delivery model in it’s twin strategy of iTunes and AppStore. A series of strategic moves on the part of Apple – from securing the cooperation of the American music industry (some might call it differently) to cajoling the software developer community to write applications built for the iPhone, and all delivered/sold via AppStore on iTunes created instant success for the burgeoning consumer electronics giant (yes, I would think by now people should stop thinking of Apple as a computer maker but as a consumer electronics manufacturer.
For sure Nokia wasn’t blind to the winning streak of Apple. It tried to create a music (LOUDEYE and TWANGO) and gaming (SEGA.COM) distribution platform. It also tried it’s hand at enterprise services via a JV with Siemens to form Nokia Siemens Network. Taking it’s queue from Microsoft Windows Mobile, it sought to create an ecosystem of handset makers loyal to Symbian by acquiring the operating system and to give it back to the developer community as a platform from which to develop mobile applications. But this strategy was less than successful partly due to the arrival of Google Android – a new mobile operating platform many perceived as the true competitor to Apple’s growing dominance in the mobile OS platform. NOKIA stayed way too long on the ‘phones are for calling only’ concept producing phones that ‘connected’ people the way POTS did it and added a music player to amuse the musically inclined.
It failed to notice a crop of Asian brands like Samsung and LG inching their way aggressively at the low end of the spectrum while Windows Mobile and Android phones were coming in from Asia. Unlike Sony Ericsson and Motorola which now offer at least two mobile OS as part of their portfolio of handsets, Nokia has stood it’s ground on Symbian even as the Finnish giant tries to update it’s smartphone strategy with an upgraded OS and a new line of handset products.
On the management front the departure of NOKIA board member Anssi Vanjoki on news of the appointment of Canadian Stephen Elop, former president of Microsoft’s Business Division to the top post. Elop faces a tough challenge ahead of him, changing a culture rooted in consensus, a development cycle that appears to slow to react to market forces, and an organization likely not thrilled at the prospect of working for a foreigner.
The new line of NOKIA phones announced in London will not turn heads at Apple or the Android community. They represent more of the same old, same old with some improvements in functionality and features. But they do not represent any significant shift in the company’s strategy.
Of course we have to give Elop a break since he’s only been in the job for less than 30 days and he still has to get a handle on the company’s assets. To be honest there is no honeymoon period in this job. If he even pauses to think too long, he will find the climb out of the hole NOKIA has rugged for itself even harder than when he first entered the hallowed halls of NOKIA land.
Is there hope for NOKIA? Will we finally see NOKIA delivering a multi-OS product strategy much like Sony Ericsson, Motorola, HTC, Samsung and LG? Will it try to replicate the success of Apple by creating a new OS that is on par with what Apple has done? (good luck on that). At the moment, we have to just wait and see. In the meantime, I will keep using my BlackBerry even as my swoons over the possibility of owning her first non-Nokia phone – the iPhone.