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Why Nokia Is Toast
CWmike writes "It's hard to remember now, but there was a time when Finland was at the center of the cell phone universe. No more. Nokia is being killed by complexity. Along comes Microsoft with Windows Phone 7, delivering more complexity. My view is that Microsoft doesn't matter, writes Mike Elgan. Although Windows Phone 7 is a way better operating system than Symbian, Nokia's problem isn't Symbian, and the solution isn't Windows Phone 7. Nokia's problem is that it follows the losing strategies of the other losers in the market, and rejects the only two known winning strategies. There are way too many Nokia phones. This causes either choice paralysis, sending buyers screaming to Apple for relief, or buyer's remorse. Nokia should take the advice Steve Jobs gave to Nike CEO Mark Parker: 'Just get rid of the crappy stuff and focus on the good stuff.'" And maybe Nokia isn't toast at all:
reader high_rolla points out an interesting bit of speculation that the Nokia-Microsoft pact is part of a grand plan "to become the exclusive manufacturer of hardware for MS phones and tablets."
He loves it when a plan comes together
I'd be shocked if Nokia were "toast". They're still one of the biggest handset makers in the world, and their name recognition alone is worth billions in the market. And while guys like Steve Jobs are going "simplify!", there are millions of customers going "Really? This is all you've got? Where are all the choices?". Just because Apple's strategy is good for Apple doesn't mean it'll be good for Nokia, just like Mercedes isn't going to pursue the same strategy as Ford. They're both still going to make a lot of money.
Life is hard, and the world is cruel
Nokia isn't leading, Apple and Android are doing very well, RIM still has solid market share and MS is going to fight like hell for WP7. There isn't room for 5 players and even 4 is a stretch. It doesn't matter what happened in the past, Nokia was in a weak position and needed to do something. Bottom line is that the stage is set for the phone OS players and Nokia is not one of them, so they have to change where they fit into the eco-system.
In memoriam : Microsoft's previous strategic mobile partners. lol
Nokia has been amazing at undercutting all other phone manufactures's prices on the low end, yielding amazing sales in poor countries. Yet, now we're seeing Chinese companies who'll basically just copy all Nokia's products, and produce phone even more cheaply using almost slave labor, which'll obliterate into Nokia razor thin margins.
We're entering a time when Nokia's western low-end phones will run Symbian while other low-end phone remain simply feature phones because Symbian requires less resources than Android, iOS, Blackberry, WP7, etc. I donno how long that bright period will last of course, well maybe it'll depend most upon the marketing for Android, iPhone, Blackberry, etc.
In smart phones, Nokia could've easily run with MeeGo plus Andoird apps, giving themselves the largest app selection plus differentiation. It's dubious however that WP7 will deliver either the developers given that Apple and Android own the market currently, or the users, given that Android delivers all the choices you mentioned.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
To become the one and only maker of MS hardware? That is a position NOBODY wants, EVEN Foxconn is NOT that stupid. Because that is exactly what Nokia would become, a mere factory stamping out goods at FINNISH prices. Look at how nice it is to become the sole supplier for a certain Redmond based company when it comes to graphic chips... Nvidia, oh oops ATI. Loyaltie? MS knows none.
Have people really forgotten WHY Symbian came into existence? Do they not know WHY no other phone makers WANTS to be a MS only shop? Because the phone makers like most in IT KNOW what it means to be a MS lapdog and sought to escape it.
What kind of deranged mind thinks that ANY company would of its own choice consider becoming the next Dell to be desirable? Oh and that is NOT the Dell of the desktops where MS software is the near absolute ruler but the Dell of Windows ME, Bob, Vista! Dell by the way that is outsold by Apple which does NOT sell MS Windows.
It would be as if HP be loosing out in desktop sales and go all for the massive Linux desktop market to save its fortunes... might work... but not bloody likely.
Windows Mobile 7 is not some price that is hard to get either. Everyone phone maker out there can make a WM7 phone. MS is going to chance this when it has so much trouble getting any of its phones to markets already? It is a bottom feeder. The consumers have said countless times they simple do not want MS software on their phone. This is after all their Xth attempt at it, people have made their choice.
To be clear, Nokia used to have a higher market share then MS ever had. So it is trading what made it unique for a smaller market share?
Oh but maybe with WM7 it will create some great phones? Unlikely because it has failed to do so before. Nothing stopped Nokia from making the next or indeed the first iPhone itself. What both Apple and Google have shown is just how silly easy it is to create a new phone + OS and make it in the market. For that matter, so has Rim. Nokia didn't fail because it didn't have access to MS software, its competitors didn't and did very well despite OR because of it?
And here is the real irony: PC makers believe that unless their hardware comes with MS software it just don't sell. Apple doesn't count in this bit of logic. See the swift end of linux on the netbooks.
But on the mobile phone, this just ain't true. The OS makes VERY little difference in peoples choice. Even if it did, the sales figures clearly show that putting Windows on it will just chase people away.
Nokia had to either re-invent itself, possible with Linux as a base OR become one of the many hardware makers using an existing OS... and it did the latter with the least selling OS.
A brilliant move? Maybe for some MS stock owning CEO, but I think Nokia's slide to the bottom will only be hastened by this move. We shall see within the year.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Despite all the evil MS may represent, I'm sure MS don't want to kill Nokia.
Like most companies, MS is only really interested in how the Nokia deal serves them. They really don't have Nokia's best interests in mind. When they get all they can out of the deal, they'll screw over Nokia like so many of their former "partners". I'm guessing that is what the investors are reacting to at the moment. Nokia could have done other things: (1)Push Meego. (2)Push Symbian. (3)Adopt Android. (4)Develop their own OS. But instead they went the choice with the fewest benefits.
There are many that would argue that going with Android would have made Nokia another "me too" phone manufacturer and less distinctive. I would argue how is going with MS any better. MS has already put some massive restrictions on WP7 so that one phone model really isn't very distinctive from another model in terms of UI. With Android, Nokia would have more the ability to customize it to their own purposes.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Or MS can drain Nokia of any and all exotic hardware information they need, then dump them. Remember Sendo? MS was supposed to deliver an OS by June 2001 and Sendo would supply the hardware. By December 2002, MS had not delivered the OS and Sendo alleges that MS purposefully sabotaged the partnership to force Sendo into bankruptcy. Part of the agreements stipulated the MS would get all of Sendo's technology should they go into bankruptcy.
Well, there's spam egg sausage and spam, that's not got much spam in it.