Nokia as we know has been an incredible player and pioneer in the mobile industry for years. It is surprising to note that the company's R&D spend was 40 billion USD over the past 10 years compared to the innovators such as Apple and Google who spent less than 10billion USD over the same period. Nokia had the foresight of touchscreen, smart display, location-based services, mobile commerce and what not, several years before Apple rooted itself as the one and only God of smartphone services. However, why none of these wonderful Nokia products never reached the market? How did Apple take over the throne of mobile phone? How did Samsung who has been a laggard all these years take over the world market share of Nokia?
Firstly, Nokia failed to bring the market to product that they so greatly found in their R&D lab. The online resources (http://online.wsj.com/article/SB10001424052702304388004577531002591315494.html?mod=WSJ_Tech_LEFTTopNews) say it is the internal rivalry between businesses that caused this. However, being in product management, I can do an educated guess that Nokia probably had holes in its product management. For product companies, especially for a huge company such as Nokia, a corporate strategy and a vision is key in bringing the right products to the right market. I see this as the responsibility of the company's product in making the vision a reality, which Nokia seem to have clearly missed.
Secondly, Nokia has been a leader in the mass market especially in emerging countries. At the time when Apple introduced iPhone in the US, Nokia was a monarch in countries such as China, India and few pockets in Europe. Most of these markets wouldn't pay a fortune for smartphones. However, if Nokia had to make it big in smartphone, they should have considered targeting niche segments just like Apple did in 2007 when it introduced its first iPhone. Nokia's mistake was that it was trying to sell a 500 USD phone in the same way that it was selling 30USD phones. A well-known way of how successful companies handle this strategy well is creating a new brand name for luxury and expensive products example Lexus of Toyota, Acura of Honda, Infinity of Nissan etc. It is not surprising the company lost its focus on both the mass and the niche markets and lost its throne to Samsung.(I am planning on writing another blog on how great Samsung is).
Thirdly, Lumia could have been a better product. Though for years Nokia had been making great product, it lost its last and final chance of "making" it. There had been several glitches reported on Nokia right from basis SMS function to form factor, music, camera etc which as are bare minimal qualities for a smartphone these days. It is not exactly clear however if it is entirely Nokia's hardware or if Microsoft's Windows Phone has got to do with the poor performance of Lumia.
But I do feel bad for Nokia because it has been a pioneer and a constant innovator for so many year. Not sure if there is any ray of hope left for Nokia. Moral of the story here is - it is not sufficient to be just an innovator in one's own lab, but go-to-market strategy i.e bringing products to market is equaly or more important that just the innovation itself!
Firstly, Nokia failed to bring the market to product that they so greatly found in their R&D lab. The online resources (http://online.wsj.com/article/SB10001424052702304388004577531002591315494.html?mod=WSJ_Tech_LEFTTopNews) say it is the internal rivalry between businesses that caused this. However, being in product management, I can do an educated guess that Nokia probably had holes in its product management. For product companies, especially for a huge company such as Nokia, a corporate strategy and a vision is key in bringing the right products to the right market. I see this as the responsibility of the company's product in making the vision a reality, which Nokia seem to have clearly missed.
Secondly, Nokia has been a leader in the mass market especially in emerging countries. At the time when Apple introduced iPhone in the US, Nokia was a monarch in countries such as China, India and few pockets in Europe. Most of these markets wouldn't pay a fortune for smartphones. However, if Nokia had to make it big in smartphone, they should have considered targeting niche segments just like Apple did in 2007 when it introduced its first iPhone. Nokia's mistake was that it was trying to sell a 500 USD phone in the same way that it was selling 30USD phones. A well-known way of how successful companies handle this strategy well is creating a new brand name for luxury and expensive products example Lexus of Toyota, Acura of Honda, Infinity of Nissan etc. It is not surprising the company lost its focus on both the mass and the niche markets and lost its throne to Samsung.(I am planning on writing another blog on how great Samsung is).
Thirdly, Lumia could have been a better product. Though for years Nokia had been making great product, it lost its last and final chance of "making" it. There had been several glitches reported on Nokia right from basis SMS function to form factor, music, camera etc which as are bare minimal qualities for a smartphone these days. It is not exactly clear however if it is entirely Nokia's hardware or if Microsoft's Windows Phone has got to do with the poor performance of Lumia.
But I do feel bad for Nokia because it has been a pioneer and a constant innovator for so many year. Not sure if there is any ray of hope left for Nokia. Moral of the story here is - it is not sufficient to be just an innovator in one's own lab, but go-to-market strategy i.e bringing products to market is equaly or more important that just the innovation itself!
It does have a couple of years left in it, and more if the collab with microsoft goes well.
ReplyDeleteIt is relevant to note here that Apple actually happened to approach the phone market from a completely different angle - the tablet. http://bit.ly/Pz5oFC
Its perhaps the reason that no one doing RnD on 'phone' could come up with something so brilliant, although in hindsight, the next step in phone software.
But nokia's problems are more than just RnD. I believe even Samsung has lesser RnD than nokia. But given the success of iPhone, the understanding of this being indeed the next-gen and investing in it was done very early by Samsung. Its Omnia phone was more expensive than the iphone itself, but at least it paved the way for many more phones in full-touchscreen variety, coinciding wonderfully with Android.
Nokia's problem was the slow management decisions on leaving Symbian, an outdated, bloated and developer-unfriendly OS. 90% of the company can't do anything irrespective of its brilliance if 10% of "upper management" don't like to go outside their comfort zone
This comment has been removed by the author.
DeleteHi Swapnil,
DeleteThanks for reading my blog! Yes, indeed the go-to-market strategy (the push from upper mangement) has gone wrong for Nokia. It is a great company however, and I do hope the collaboration with Microsoft goes well for them. Their best bet is in the developing countries I think, will be interesting to see how it goes. On the contrary Samsung is doing great with its Samsung galaxy III too, they are pretty good at pricing competitively too. Nokia soon may have to RIP ;)