Despite clinging on far too long to Symbian — and not having the
quicksilver thinking of a native web company — you can’t accuse Nokia of
lacking ideas. Nokia has a history of coming up with new stuff. The
company started life as a paper mill in 1865 but it didn’t stick with
pulp forever, turning its hand to cranking out rubber boots, tyres and
cables, among other things, before moving on to electronics and finally
mobile phones.
In
mobile too Nokia has not been short of new ideas. The company pioneered
various key mobile concepts that are now absolutely mainstream — from
cameraphones and music mobiles to apps and tablets. But despite getting
its futuregazing right in one sense – by coming up with the ideas in the
first place, often years before others got there — Nokia the company
was still stuck in the past, mired in its phone-first mindset, which
meant it failed to recognise and deliver on the true potential of its
creations.
Nokia’s R&D held the key to unlocking the future success of its
business – but the corporate culture of the company failed to turn
futuregazing into an agile strategy to advance its business by breaking
with the lucrative present. Without visionary leadership and exceptional
execution good ideas are just a series of disconnected dreams. There’s
no doubt Nokia had plenty of dreamers within its walls but it
desperately needed a visionary CEO capable of turning its ideas into the
future of the business. Nokia had done it with paper and boots and even
mobile phones, but the leap to mobile data proved a leap too far.
“The ‘phone first’ mindset ran through everything they did,” says
Leach. “And although the R&D guys came up with some great innovative
things they were slow to get those to market. So they were very good at
coming up with concepts – ‘this is what the future’s going to look
like; in the meantime what’s selling in the market is these feature
phones with additional Internet capabilities,’ and they were kind of
caught between the two. And I think they never really got that leap
right to R&D working to breed products to market as opposed to just
being all the blue sky activity.”
“It’s difficult to comment on Nokia’s internal management structures, as all I have to go on is speculative and the
complaints of disgruntled ex-employees but
it is likely that issues [such as underestimating the importance of
apps and ecosystems] would be symptoms of a management with no clear
long-term vision and the resulting in-fighting between product teams,”
adds Gleeson.
Leach points to the example of the Nokia Communicator – a pioneering
forerunner of today’s smartphones, which launched way back in 1996 — as
an example of how Nokia failed to deliver on its own great potential.
While the device included the ability to download apps, Nokia missed the
opportunity to capitalise on them long before anyone else could have.
“Nokia felt that downloading apps and all of that was only something a
minority of people would do,” he says. “It wasn’t really the main point,
no one would get that concept. And then a couple of years later you
have
Apple doing a mainstream TV commercial about downloading apps to your phone.
“Now the tragedy really is that Nokia had that capability. If they
had been a bit more confident with it – confident that this is where the
future was, they could have had that market, they could have been
there. But looking at that
TV ad of downloading apps to your phone
there’s no way anyone in Nokia would have ever believed that it was
mainstream enough to get to do that sort of advertising around it.”
Nokia had
the scale, the connections with manufacturers, the relationships with
operators and the brand strength to ‘out iPhone the iPhone’ — if it had
reacted fast enough.
“Nokia’s cardinal sin was not as many would suspect lack of foresight
about the development of the market such as touchscreens, large
displays and tablets,” adds Gleeson. “Nokia had the scale, the
connections with manufacturers, the relationships with operators and the
brand strength to ‘out iPhone the iPhone’ — if it had reacted fast
enough. Samsung’s success has shown that being a ‘fast follower’ is a
viable strategy for a market leader to avoid being usurped by early
movers.”
The key line there is
if it had reacted fast enough. Nokia
was simply not capable of matching the speed of innovation of a Google
or an Apple – hardware was in its blood, not software. So, as Gartner’s
Milanesi points out, Nokia got bogged down in the alien detail of the
task facing it — platform transition and building a sustainable software
ecosystem — and therefore wasted time. Time that could have been spent
on developing MeeGo from, in her words, a “good platform (N9
demonstrated that),” to a competitive ecosystem.
IHS screen digest analyst Ian Fogg describes Nokia’s fatal flaw as a
failure of execution. “Historically Nokia repeatedly saw the future and
adopted a strategy to seize the opportunity but failed to execute,” he
says. “For example: they saw the importance of smartphones and secured a
smartphone OS when they invested in Psion’s software division to create
Symbian way back in 1998. But their Symbian smartphones were a pale
shadow of what they had bought: they took a touch screen UI and
converted it to a keyboard-only OS.”
As another example of forward thinking but flawed delivery, Fogg points to
Nokia’s prescience around mobile gaming.
“Nokia realised mobile games was a massive opportunity. Twice they
tried to become the dominant mobile games player with Ngage and twice
their execution let them down,” he notes. And when Nokia began pouring
even more effort into mobile services – with the Ovi app store and
initiatives such as Comes with Music – its plans were still “full of
holes in execution.”
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