The rise and fall

Nokia's appointed its first ever non-Finnish CEO to correct what it perceives to be flaws in its business strategy - a strategy that seems too little, too late.

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The rise and fall Nokia CEO Kallasvuo has been ousted in favour of Canadian Stephen Elop. (Getty Images)
By  Imthishan Giado Published  September 22, 2010

How can a company sell a billion products and still be considered to be in serious trouble?

That's the question that mobile giant Nokia must be asking itself. The company shipped over a hundred million smartphones (a category which it virtually invented all by itself), still claims more than a third of all mobile phone sales and for many of the developing markets, as a brand name is virtually synonymous with the mobile phone itself.

And yet these achievements need to be put into perspective, because it wasn't so long ago that Nokia owned a much larger chunk of the market. The most oft-quoted statistic about the Finnish firm is that since the introduction of the iPhone in 2007, its share price has plummeted by more than two-thirds. It's a situation so serious that the company is looking outside the fold, ditching Finnish CEO Olli-Pekka Kallasvuo for distinctly non-Finnish Microsoft enterprise boss Stephen Elop, the first such move in its history.

Such a delicate move - explicitly that Nokia's famously free-wheeling corporate culture could no longer produce a boss capable of dealing with the threat of its California-based rivals - required a certain measure of tact and deft to pull off successfully. Evidently, Nokia's board didn't get that memo because smartphone chief Anssi Vanjoki,  member of its former executive "dream team" and long considered the successor to Mr Kallasvuo, handed in his notice as well.

Perhaps, though, it's all for the best. The fall of Nokia has not been a dramatic tumble, but largely a slow burn affair. Many in the enterprise community have some time wondered how the wunderkind of the mobile industry lost its way, but truth be told, it's not a mystery that requires the Scooby gang to figure out. Quite simply, Nokia forgot about the platform.

That's almost bizarre, coming from the firm that created the first smartphone application ecosystem with the popular Symbian platform and was once heralded for the ease of use of its interface. But in the interim years since it purchased Symbian, the firm focused its efforts on hypersegmentation, turning out device after device with cutting edge hardware, but at-best indifferently written software to exploit it. It Meanwhile, few would argue Apple's devices were top of the tech tree, but users flocked to both its focused marketing - hey, most people find having one phone in the lineup easier to remember - and the walled garden app approach which ensured a consistent user experience.

Not everyone needs to do this to survive. For example, RIM's interface have always been criticised, but like Apple, it focused on doing one thing which has been around for ages, but doing it very, very well. For RIM, it was e-mail. For Apple, it was the user experience. For Nokia - ah, now you understand.

Maybe that's what the pundits decrying Nokia's lack of innovation have missed. Nokia has been trying to compete at every level - high- end consumer, enterprise and value. There's simply no way to cover every end of the value chain and still be class leading - a Ford customer is very different to a Mercedes customer, from the user experience to the aftermarket. A lack of focus isn't an accusation you can level at Nokia's competitors: Apple carved out the high-end, RIM took the corporate roll call and Android is rapidly snapping everything in the middle. That leaves developing markets in the future for Nokia; hardly an ideal state of affairs.

In a way, the decline of Nokia also bodes badly for all the big enterprise firms that are currently engaged in a frenzy of acquisition. Whether, it's Intel, HP or Juniper, they're all busy trying to plug "gaps" in their portfolio - but just perhaps, they'd all be better off leaving well enough alone. As Nokia's learning, the company that tries to do everything well, ends up excelling at nothing.

2553 days ago
Aslam Vakkayil

I was a nokia fanboy till i bought nokia 5800 and n97 there after. really speaking N97 was one of the worst gadget anybody can have.and priced very high.i bought it thinking nokia can never go wrong.they must have recalled it at the beginning itself.

2553 days ago
Tryion

Excellent article. As a former Nokia executive, you've hit the nail on the head. One thing you've missed is that this problem was identified in 2007. The company restructured in 2008 and the intent was to end the problem. Part of the restructuring was an employee survey to insure change was happening. In the first survey one of the biggest concerns was that Nokia does not have the leadership to execute the change. Now 2 years later at least there is a change in the leadership.

Let's see what happens in 2 years...

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