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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.
Nokia did not need to innovate. They needed to apply their hardware engineers to creating an Android phone, and their software engineers to making a nice Android release for it. Who wouldn't like a hot-shit Android phone with the indestructability of a Nokia?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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?'
No doubt. Or you could be team engineer at Blackberry wondering "How the fuck did we put ourselves up for sale with no buyers?"
When the foot seeks the place of the head, the line is crossed. Know your place. Keep your place. Be a shoe.
Apple, under Jobs, definitely didn't suffer from a risk-averse willingness to uncreative iteration (How many more incremental generations of the bestselling-product-ever iPod Mini could they have squeezed out when Jobs basically said 'Hard drives make me sick, fuck the Mini and go build me a Nano, I don't care if it actually reduces storage capacity until you get to the higher-end model a generation later."? However, Apple also (mostly, the 'why not make the shuffle a featureless rectangle for no reason, even though we had a version that was only slightly larger and incorporated the iconic control-wheel design?' was not a clever move) had the virtue of having a good idea waiting in the wings when they exercised their willingness to take an already-successful product out and shoot it.
That's possibly the even trickier part: there are very strong incentives to be a conservative, risk-averse, iterator when you are on top, so people tend to do so; but there's also a well-developed literature on 'just sitting around and milking your cash cow is how you get eaten by hungry upstarts'. Trouble is, unless you actually have lots of good ideas, like those hungry upstarts just outside the gates, staring at you, doing some cargo-cult management and killing random cash cows won't actually save you, just reduce the amount of delicious cash-milk you get to collect before you die.
You don't want conservatism to crib-death the upstart ideas that could genuinely save you from succumbing to old age and laziness; but you also want to be careful to recognize that, if you are in fact ossified and uncreative, that milking the situation for all it's worth and then cashing out gracefully beats the hell out of increasingly desperate flailing as you bleed out.
I'm due for a phone upgrade soon, and I'm currently looking at whatever mid-range Android phone is the best value for money.
I have a good job, but I'm simply not willing to spend 40GBP a month on an iPhone (plus 200 upfront costs) when a 20 a month Android phone will let me make calls and check Facebook just as well.
If the iPhone 5C exists and is competitively priced, then maybe Apple will get back in the game, but at the moment, they're stumbling in the smartphone market.
Summation 2
The beginning of the end for Nokia happened around 2004, when UMTS arrived in Europe, and Nokia made an intentional business decision to not support EDGE, and to basically walk away from CDMA as well (even though at that point, probably half the phones sold by Verizon and Sprint were Nokia, as well as the majority of high-end phones sold by AT&T and T-Mobile).
As a result, their phones became useless paperweights in the US as far as anybody who ever used data was concerned. EDGE wasn't exactly "high speed", but compared to GPRS, EDGE is just "annoyingly slow" compared to "uselessly slow". Circa 2005-2008, EDGE was the best that existed in most of the US anyway... T-Mobile hadn't even started deploying HSPA yet, and AT&T's HSPA data existed in maybe two dozen cities.
Nokia presumably wrote off the US market because, in terms of total unit sales, it was roughly equal to Portugal or Switzerland. What they overlooked was the importance of mindshare... half the world's tech blogs and web sites are American, and as far as anyone in America was concerned, by ~2007 Nokia had effectively ceased to exist. At best, they were a company that used to be popular, and now just made throw-away low-end phones sold to people in remote African villages.
Other companies learned their lesson. Today, companies like Sony-Ericsson are working as hard as they can to break their Qualcomm addiction(*), and make a point of getting their phones into the hands of American reviewers who live in cities where T-Mobile has good HSPA+ coverage.
(*) Qualcomm insists on licensing LTE radio firmware to carriers rather than manufacturers, which means it's basically impossible for a manufacturer to sell phones capable of using LTE on AT&T or T-Mobile without the active involvement of AT&T or T-Mobile, and de-facto impossible to sell a phone built with a Qualcomm LTE chipset that's carrier-agnostic and capable of doing LTE on both AT&T and T-Mobile.
It's technically possible to use a separate non-Qualcomm chipset (like Beceem's) for LTE, but the price premium is fairly stiff (about $100, by the time the phone gets to retail stores). That's why companies like Sony-Ericsson (who desperately want to break the stranglehold American carriers have over the American phone market as gatekeepers with economic -- or in the case of Verizon & Sprint, real -- veto power) have eagerly embraced chipsets like the Renesas MP5232 and MP6530, which will enable them to make phones capable of doing LTE on AT&T and T-Mobile, and break the "LTE Lock-In" AT&T in particular has been working overtime to exploit as a way of making their nominally-GSM network into one that's as de-facto proprietary as Verizon's.
Nokia's decline began over a decade ago. It started when they got focused on phones as a fashion accessory you're supposed to replace every 6 months. The wanted to be the Swatch Watch of phones, a comparison I recall hearing at the time. While others were envisioning of smartphones Nokia was banking on phones turning into a disposable commodity. This was less evident in the US because they were already losing a foothold here. But I was overseas and Nokia was releasing some truly wacky designs; one of the more ridiculous implementations being the Nokia 7380.
So when they finally realized they were losing ground they finally jumped into the smartphone space. Except that they embraced technological dead ends in Symbian and Meego. I'm not suggesting that they're bad OS's at all, but Nokia simply didn't have the resources to make them a viable competitor to Android or iOS. And honestly, I don't think Nokia has ever really had the capability to create a proper OS experience anyway. Their mobile software interfaces have always been incredibly clunky, something that wasn't evident back when all they offered was a keypad and calculator-style display.
Now here comes this guy who's big idea is to create an Android also-ran. There's already a massive amount of competition for Android, what makes this guy think he's implementation is going to make any sort of impact. You've got the market leader in Samsung. Second to them is HTC, who's continued success seems largely dependent on whether they're able to produce a popular phone but generally continue losing money. Then you've got the multitude of other companies, the more prominent of those being LG, Sony and Xiaomi. But here comes this guy offering what many others already offer in the form of a company that's Nokia, but not really. It's ironic that he's talking about risks given his business model.
Okay, listen. I know it's popular to bang the 'Apple is failing to Innovate' drum, but it's STILL NOT TRUE.
The problem is that people are compressing the last decade of work into a much smaller space than it deserves. Apple doesn't release huge, blockbuster game-changing products every year. Not even every couple of years. It's MANY years between cycles. The time between the iPod and the iPhone was a long time. The iTunes music store was its own special story. Yeah, the iPhone has sort of settled into a pattern, but it's still a very good phone.
People are looking to Apple to change the PHONE industry again, and they probably won't. They changed the music player industry ONCE, and iterated on that until it wasn't relevant anymore. Apple will continue to make a good phone--even a GREAT phone--but they probably won't ever really be the industry leader again.
Apple will find a new market to disrupt. It's easier than trying to disrupt the market you're entrenched in. Is the next thing a watch? Maybe iWatch refers to a TV (that would be a big surprise, wouldn't it--it's the sort of misdirection that I would expect from them). In all likelihood, it's something that people won't be able to predict, just like the iPhone was.
Stop asking Apple to a) really, truly innovate faster than they have before; and b) ask them to innovate in a space that they're already making money in. That's not the way they've ever worked.
Maemo was not really a late entry, it was actually available a full 2 years before android, and if marketed and pushed correctly could have been where android is today...
Instead, they restricted it to their niche "internet tablet" devices, and then stalled development by trying to transition to meego.
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Not true.
Apple became profitable on the back of iMacs, Powermacs and Powerbooks. The iPod and then the iPhone and iPad just took them to another level.
Apple without iPod would probably still exist as the purveyor of cool computers.
Flag, bullshit on the field. Do you REALLY think having Nokia put out an Android, which has become a sharktank of cutthroat razor thins margins and which already had 3 major phone builders, Samsung,HTC, and LG, ALL of whom had MUCH more experience and frankly much better hardware (all Nokia had at the time was the TI OMAP chip which was long in the tooth even then) would have been a BETTER choice than taking a billions bucks and hoping MSFT could offer them a better deal?
I'm sorry but if Nokia would have built an Android the only difference would have been how much faster they died, that's it. You do NOT go into a market that the competition has a huge lead in with nothing but a "me too" and that was all Nokia had, their offerings would have been a bad joke compared to Samsung and HTC which would have drank their milkshake. The majority of Android manufacturers are counting their profits in pennies, something that Nokia couldn't do with the factories they had. Maybe if they closed the doors and went to China maybe, but trying to compete in the vicious Android market on nothing but outdated hardware? Recipe for failure. Samsung and HTC have the better name recognition, bigger advertising budgets, and frankly they put out really solid products, and LG pretty much has the low end sales locked up. Nokia simply waited too long to get into the game and they didn't have the time to play catch up, and certainly not with Android.
ACs don't waste your time replying, your posts are never seen by me.