Nokia Insider On Why It Failed and Why Apple Could Be Next

An anonymous reader writes "The former chief designer of Nokia explains how the company's success and its corporate culture stopped it from taking risks and left it open to being beaten by Apple. He now sees the same warning signs emerging at Apple. Quoting: 'I look back and I think Nokia was just a very big company that started to maintain its position more than innovate for new opportunities. All of the opportunities were in front of them and Nokia was working on them, but the key word is a sense of urgency. While things were in play there was a real sense of saying "we will get to that eventually."' He worries Apple is now in a similar place: 'Nokia became more of a maintainer, more of an iterator, whereas innovation only comes in re-invention and Nokia waited too long to make the next big bold move ... that is now Apple’s challenge. Apple has arrived at a very safe place, it is responsible for something everybody loves, so it feels it has to keep it going.'" Oddly enough, this comes alongside news that a different former insider, Thomas Zilliacus (who was Nokia’s former Asia-Pacific CEO), has founded a company called "Newkia" in the wake of Microsoft's acquisition of Nokia. His goal is to take on former Nokia engineers and set them to building phones again — this time, running Android.

Comments

Fail

[Anonymous Coward]

Nope, Nokia wasn't defeated from the outside, it committed suicide.

Re:Fail

[jellomizer]

Well like a lot of failures in the tech industry they get stuck on the idea.
We are #1 at this so lets keep it up, Getting into something new will end up taking market share on what #1 makes.
They play it safe and then they will slowly die.

Nokia was the #1 phone maker, because they made good phones for a decent price.
Apple Came along with the iPhone and said. Hey you non-Business users, Check this out, a Smart Phone for you! and look at all these cool features you guys can get for a few hundred dollars more.

Apple took the risk, they could have failed, but they ended up making people to want to pay more for a smarter phone. This gave Apple a 2 year head start. The other phone makers who were trying to compete with Nokia, stopped that plan and started to compete with Apple. So in a few years Samsung, Motorola, etc... Caught up with help of Google's Android OS, which while was originally made for something else, but could quickly be modified to do what Apple does. During this Time Nokia was Happy to be #1 Phone maker, and even some growth as their competitors seem to stop competing with them. Then public opinion fully switched, normal phones seemed very outdated. So Nokia started loosing.

To try to catch up, they figured giving Microsoft OS a try might be enough to make them different enough to stand out. But Microsoft has its own image problem, and lack of apps, didn't work out right.

There are a lot of companies who make similar mistakes they are #1 so they are afraid of not being #1 anymore so they don't change to match demand.

Other examples (And yes there are other factors such as not getting good support from MS for the changes.):
Staying as a DOS application for too long:
Word Perfect, Lotus 123, DBase, FoxPro, Boreland Compilers

Staying stuck on a platform:
Many OS's such as different Unix systems, VMS...
 

Re:Fail

[DuckDodgers]

Symbian hemorrhaged marketshare for Nokia in 2009 and 2010 before Elop took over the company. Nokia had four options:

1. Keep trying to update Symbian to be competitive. They were already working hard on that, and it wasn't stopping their decline.

2. Put Maemo into production, or later Meego. This would have been a late new entry to the mobile market, and like the other late new entries it would have been fighting an uphill battle against iOS, Android, and their respective app stores. Windows Phone, for all that it's attached to Microsoft, was guaranteed to get tons of applications because Microsoft would build them in-house even if no other company would. Nokia didn't have that kind of developer resources available. WebOS went nowhere. Blackberry 10 couldn't save them. I'd love to see Firefox OS and Ubuntu Touch take the world by storm, but I'll be shocked if most of us even remember they existed in five years.

3. Switch to Android, and become yet another Android also-ran with Huawei, HTC, LG, ZTE, and Motorola all fighting for sunlight behind Samsung's shadow. Nokia had some of the best designers in the business, but they would have been late to the game fighting other vendors for consumer attention. And they wouldn't even save much money, because Microsoft would have hit them with the same lawsuit it's used to extort patent fees from all of the other Android manufacturers.

4. Switch to Windows Phone, get a big cash infusion from Microsoft, come along for the ride for free any time Microsoft advertises Windows Phone, and differentiate yourself in the market while getting a genuinely well done mobile operating system. ( Even if you dislike and distrust Microsoft - and I do - the reviews of Windows Phone, unlike Windows 8, have been uniformly positive. )

As far as I can tell that's four different paths into oblivion. The one they took might have been faster than the others, but I don't see any way they could have survived much longer regardless. Anything Nokia was going to do in order to save itself needed to be started at least three years before Elop took over the company. He took the captain's chair on a sinking ship.

Re:Fail

[Anonymous Coward]

Unless Apple starts producing Windows clones, they're dead already. It's just a matter of time.
Unless BMW starts producing Toyota clones, they're dead already. It's just a matter of time.
Unless Teuscher starts producing Hershey milk chocolate clones, they're dead already. It's just a matter of time.
Unless Guinness starts producing Bud Light clones, they're dead already. It's just a matter of time.
Unless Cristal starts producing 2 Buck Chuck clones, they're dead already. It's just a matter of time.
Unless Starbucks starts producing Folgers Instant clones, they're dead already. It's just a matter of time.
Unless Krispy Kreme starts producing Twinkies clones, they're dead already. It's just a matter of time.

Oh wait, none of those are true at all.

Why is it that you retards cannot understand that "selling to a small, but highly profitable segment of the market" is a perfectly viable business model?

YOU may not want to buy their hardware. That doesn't mean millions of other people feel the same way.

Re:Fail

[gaiageek]

3. Switch to Android, and become yet another Android also-ran with Huawei, HTC, LG, ZTE, and Motorola all fighting for sunlight behind Samsung's shadow. Nokia had some of the best designers in the business, but they would have been late to the game fighting other vendors for consumer attention. And they wouldn't even save much money, because Microsoft would have hit them with the same lawsuit it's used to extort patent fees from all of the other Android manufacturers.

- Even just two years ago, Samsung was not the massively dominant Android manufacturer it is today, and back then, most people had never heard of ZTE or Huawei, and HTC and LG didn't have anywhere near the brand recognition that Nokia has.

- While I think Samsung phones are good, they are often criticized for their unoriginal design and sub-par (plastic) build quality. Nokia, on the other hand, has long had a reputation for making phones of great build quality AND original (even "crazy") designs. They could have easily distinguished themselves in the Android marketplace.

- They would have been late to the game, but with their loyal brand following and great reputation, they could have easily pulled it off as being fashionably late.

- All the other Android manufacturers are not Nokia, which I think it's safe to say, has a massive war chest when it comes to mobile device patents, putting them in a great position had Microsoft gone after them for patents -- and this is assuming Google wouldn't have helped them out.

I think a previous comment nailed it: Nokia could have been the Samsung of Europe. I'm not even a staunch Nokia fan and I think it's sad to see what's become of them. It does give me hope to hear the news mentioned above about Newkia (though I'm guessing they won't be able to keep that name).

Re:Fail

[Anonymous Coward]

So basically every phone needs to run Android. Riiiight. I think someone's suffering from Android Delusion Syndrome, which lately has been worse than what everyone accuses Apple fanboys of suffering from.

Failure is relative

[alphatel]

Getting Balmer to cough up 7B for this iterator didn't seem like failure if you ask me. Not to mention they still keep some IP to themselves.

Re:Failure is relative

[fuzzyfuzzyfungus]

There may or may not be some upset investors(if they managed to get in during some peak value period they may have managed to lose some money even at Microsoft's fairly sweetheart valuation); but I suspect that the real difference is that there are people who judge 'success' and 'failure' by "how much can I offload it on the next chump for?" and those who judge success and failure by "What were we doing and creating?".

Microsoft's willingness to buy them out of what appeared to be a pretty hairy situation saved the day for team bean-counter; but I suspect that team engineer is wondering 'How did we go from being fucking Nokia to being eaten by a software company?'

Re:Link Baiting This?

[Impy the Impiuos Imp]

It happened to Apple once already -- the founders forced out, and bean counters making cuts and skipping investment in new stuff. It works, for awhile, and profits even increase, but eventually they start lagging behind. By that time, the first few bean counter CEOs have ridden off into the sunset with millions in reward for doing a "good job" on the profits.

Re:Link Baiting This?

[iserlohn]

Nokia came out with an internet tablet back in 2005. I have one sitting on my desk right now. The problem with Nokia wasn't innovation, nor is innovation Apple's strength. What (the consumer part of) Nokia lacked was a understanding of how to market products other than normal phones. Add to that, it was *too* engineering focused - case in point, Symbian was difficult to code for, but battery life was excellent due to the design of the OS. Add to that Symbian was too entrenched.

Nokia had a good plan - they wanted to develop the OS from their tablets into a modern smartphone OS (Maemo/Meego), while at the same time, develop Qt so that developers have a good API and dev environment to code in. This code could then be portable across Symbian, Meego and desktop OSes.

If Nokia was able to fully execute this plan, I doubt that they would be in a worse position than they would be now. Microsoft saw this as a threat (and opportunity to find a reliable HW partner as WP7 was driving the major manufactures away) and nipped it in the bud.

Everybody loves? Not quite.

[__aaltlg1547]

"Apple has arrived at a very safe place, it is responsible for something everybody loves, so it feels it has to keep it going."

Not quite. Apple is responsible for something many people love. Not me. I much prefer the features of Android to the point that I wouldn't consider an iPhone. iOS is an inferior product for functionality (specifically, customizability of the user interface) and it doesn't play well with non-Apple software and has excessively restrictive controls on what the user can do with their device. I have other issues with Google (their data use policies). There's room in my mind and wallet for a new player with better for the customer data use policies and an Android-like feature set.

Nokia's fall stems from their 'bold' move

[Rob Y.]

As often happens in businesses that have 'missed the boat' on a marketplace change, a new leader comes in an decides to shake things up. By definition, they know little about the company's history and relative strengths - they just see the weaknesses and feel that change is what they were hired for. And naturally, lacking some vital info, the tendency is to 'go with the Microsoft playbook' and reap the glory when Microsoft is proven right. And with Elop's past history with Microsoft, that approach was a given.

Except that Microsoft's playbook itself is in 'missed the boat' territory, and those 'bold and brilliant' managers that play that game don't seem to have figured that out. And of course, the money guys on the boards are completely clueless, so the game goes on.

There was no reason Nokia couldn't have succeeded with Android. Their strengths are in hardware, industrial design and a large, relatively loyal customer base. That customer base is currently providing what little success Nokia's having with their Lumia line - and it took the low end versions of that line to do it. I.e., those customers didn't want Windows Phone - they wanted a cheap, attractive Nokia phone. They could have had that two years earlier with Android, and they could've done it without fighting the battle of the missing apps. In short, they could've been the Samsung of Europe. They could've even done it while testing the waters with Windows Phones.

But you don't get to be touted in the business press as 'bold and brilliant' by hedging your bets. And you don't get to be rehired by Microsoft and short-listed for the CEO slot without that 'bet the shop on MS' attitude.