Well, Nokia as we knew it is no longer. After selling off the feature phone part of the business, Microsoft is shutting what remains down. It is a sad demise after having once been the biggest mobile phone provider in the world, and one of the first to sell what we would recognize as a “smartphone”. But it shouldn’t come as a surprise, given the missteps along the way.
Nokia used to be the biggest manufacturer of feature phones. Remember those? A device that made phone calls and not much else? A lot of people still use them, particularly in developing nations, but their numbers have been in decline for a while now. But at one point, Nokia dominated the business.
They were also the first to sell, in volume, a smartphone (yes, yes, IBM’s Simon was first, but it never sold in enough numbers to matter other than as a statistic). The Nokia Communicator was the first commercially successful merging of a mobile phone and a portable computer. In the early days of the smartphone, Nokia owned the market outside North America. In Canada and the US, we first saw the Palm Treo, then Windows Mobile, and finally Blackberry take control of the market for a while.
Then the iPhone and Android showed up, and the game changed. Where Nokia, Blackberry and others were squarely aimed at the enterprise market, Apple and Google took on the consumer. Nokia, like others, dismissed these new entrants. They felt secure in their 65%+ global market share (as did Blackberry with their 85%+ share in Canada and the US).
It didn’t happen overnight, but quarter after quarter, the iPhone and Android gained ground. By 2010, Nokia and Blackberry were no longer the biggest in their markets. By 2014, the iOS overtook Blackberry in the enterprise space. Symbian became an also-ran in the global smartphone market.
Desperate Times, Desperate Measures
With iOS and Android consuming most of the mobile computing space, Nokia needed an answer. Coincidentally, so did Microsoft. And a former senior Microsoft employee, Stephen Elop, had just taken over as CEO of Nokia. The decision? Move away from Symbian and adopt Windows Phone. Surely two giants in their respective industries would make a winning combination?
It wasn’t a win. It was a disaster in the making. Developers had enough on their hands keeping up with iOS and Android. Adding a third platform into the mix, with its own store and its own processes, would be just enough of a barrier to keep most developers away. Customers either wanted cheap (which was Android in various forms) or popular/stylish/”quality”, which was iOS. Nokia’s name, formerly synonymous with mobile phones and smartphones, no longer had the draw it once had.
In 2014, Microsoft bought up a troubled Nokia, or at least the handset/mobile device business (there is a Nokia that still makes mobile infrastructure like radios, towers and switches). It appeared to be a feeble attempt mimic Apple: they make their own hardware, and so should we. Like the cargo cult tribes of various Pacific islands, it was a feeble attempt to imitate the form, but it lacked the substance.
One year later, Microsoft took a $7+ billion hit when they wrote down a big chunk of the acquisition. It was an abject failure, one of the last costly mistakes that came from the Steve Ballmer era.
This Should Not Be A Surprise
The events of the past week should come as no surprise. In fact, many people could have seen it coming. The biggest nails in the coffin actually came 3 years ago (and before Microsoft bought Nokia), when Office was released for iOS and Android. That was the beginning of the end for Nokia and Windows Phone. Why? Because the last potentially compelling reason for buying a Microsoft mobile device went away. Now, people could get the leader in office productivity software on the two most-used mobile platforms in the world. Why deal with a weird platform no one else uses, and an app store with a paltry selection of software (even though 99% of the Play and iTunes App Store apps will never see sales that matter)?
Nokia basically exists in name only. At some point, Microsoft may finally kill off Windows Phone, but I suspect they will stubbornly hang on to it just to say they still have a mobile OS. Pride and ego can get in the way, even in a large public company. That they didn’t use it for their tablet platform, and completely fumbled the ARM platform, says that Microsoft’s role in computing is going to change. Yes, there will be Windows PC’s around for a long time. But for Microsoft to survive the long haul, they need to learn from the failure that was Nokia.
So Nokia is effectively gone, or will be shortly. It will only truly exist as a brand on cheap feature phones. It’s a logo, and not much more. For me, it will only live on as the ring tone on my iPhone (a bit of irony on my part, the idea of an iPhone using the Nokia ring tone. But that’s because that’s the sound that says “your mobile phone is ringing” to me). Nokia goes to join all those other once-great companies that were pioneers, innovators or leaders in their field, but that exist no more.