What exactly is Nokia’s problem?

What the hell is happening at Nokia?

They have been in a real decline with no sign of change which is just ridiculous considering their global share of mobile. I’m glad I’m not a shareholder, but if I was I would be freaking out and calling for change … Instead i will just use my iPad.

When Nokia forced the N97 out of the gate early it was, in my opinion, a move made of ignorance. While it is typical for them to release a hardware product that requires firmware to smooth things out, consumer experience had substantially changed since that proactive started. The initial N95 was the same actually. It took a big software update to deliver on the multitasking promise as it shipped without the ability to page memory and therefore needed to close apps constantly as you moved through the device. The N97 continued that tradition and actually shipped with crappy hardware hardware as well. It was barely tolerable with the N97 but people were far more aware of their options (iPhone, Android etc) when the N97 arrived. As a result sales suffered and consumer demand is low … Outside of course of the carrier based low cost phone channel. A place all flagship devices seek …

Now the N8, next flagship is due to arrive and according to aEldar’s review at Mobile Review is yet another disappointment. I’m sure Nokia will make it up by only charging $600 instead of $700 as with the N97.

Nokia’s device strategy is allegedly based on solutions, but their goal of integrating software through Ovi remains another empty promise. The lack of a core suite of reliable services is ridiculous given the amount of time that has passed. I’m not saying this is easy to do, but the company line has been “it’s coming” for far too long … As in years.

Perhaps you think Maemo, oh I mean Meego is the solution? Let’s just look at the stellar track record there. The N900 is the 4th device on the 4th version of the maemo platform. Maemo 6 is DOA and instead Meego will replace. Let’s see how that goes … I won’t be holding my breath. Even if Nokia and Intel pull off a reasonable UX, the services won’t be in place, nor will the apps. Maemo haas been the red headed stepchild within Nokia through each phase it has existed. Instead of creating a dual OS strategy and giving Maemo some real resources, Nokia instead has played it coy and left a lot of the work on the community, which while enthusiastic, remains more hobbyist than anything else. Instead the “effort” has gone towards S60 and Symbian.

I’ve used countless Nokia devices since the launch of Nseries back in 2005. I have loved and actively promoted the brand. I’ve even worked for Nokia in that time through the digital agency I still work for today. Through all that time Nokia has made many broken promises but because they have also stuck to the old game no one else is playing they are losing and badly. It’s great that manufacturing excellence leads to global efficiencies and reduced costs for emerging markets, but where’s the innovation?? Where’s the passion for mobile?

It’s time for a real change.

11 comments for “What exactly is Nokia’s problem?

  1. 4/26/2010 at 1:01 pm

    Perhaps they would argue that their 'innovation' is pushing smartphone solutions further down the price scale than anyone else. Or perhaps they might suggest that giving away global mapping is innovative, or how about the Ovi Store, free push email, etc.? And they would be right.

    But clearly Nokia do have a problem in the high end. Personally, I think it comes down to this one fact: Nokia are not a computing company.

    Nokia have little problem outselling Samsung, LG and SE. But trying to compete with the likes of Apple, Google (and perhaps Microsoft in 2011) is proving to be too big a challenge for them. They're running out of momentum and soon they'll run out of independent options.

  2. bill
    4/26/2010 at 1:24 pm

    It seems that they are moving away from the higher end, and going for mid and lower end. This includes familiar candybar phones and now what are basically iphone knockoffs with lower requirement operating systems.

    Rarely is Nokia mentioned on tech podcasts anymore. Their innovation is lead by creating cheaper phones.

  3. 4/26/2010 at 2:15 pm

    Great post! Really.

    Nokia is simply not able to compete at the high-end anymore and the time that it's taken the company to even try to catch-up is simply laughable.

    I think James has correctly identified the reason for this: Nokia is not a computing company. He's right.

  4. 4/26/2010 at 2:56 pm

    In terms of sales the N97 was actually a success, the problem is though, having bought one many users have become disgruntled with Nokia and Symbian and switched to rival platforms with more modern UI's

    Symbian is still the best mobile OS but sadly the S60 UI has changed little over the years and still has similarities with the 7650 from 2002.

    Instead of refining it further with Symbian^3 &4, Symbian should have reinvented itself with an entirly new UI.

    Amazingly I think for once Microsoft have got that right with their re-invented Mobile 7.

    But back to Nokia, they have always made great hardware, prehaps it's time they integrated this with a different OS like Android

  5. 4/27/2010 at 3:23 am

    I wonder how successful the N97 really is in terms of user adoption. My bet is that most sales occurred through the discounted / subsidized channel and that the average person who took one away for under a hundred bucks (quid perhaps) has no idea what they even have.

    Symbian is not the best mobile OS. It's old and while it certainly handles multitasking better than most it's got a very particular way of doing things and the learning curve is higher than anything else I've certainly encountered.

    Microsoft is definitely onto something with mobile 7 … I hear they have lots of devices coming and lots of deals struck so they will definitely be fighting back hard. Where will Nokia be? Exactly.

  6. 4/27/2010 at 3:25 am

    I don't really consider the low price game innovative. It's good business based on their massive scale and manufacturing efficiencies (like Intel), but it doesn't mean they are delivering what people really want – particularly on the higher end.

    I fully agree that Nokia is not a computing company. They can't do software or services very well and those who are doing it well within Nokia can't figure out how to pass that along within the org to define an executable plan.

  7. 5/4/2010 at 8:00 pm

    Nokia should which over to Android before they are to late. Their market share of Symbian has dropped from 60% in late 2008 to 20% now. The phones they make are of good quality, but they really should keep up with companies like HTC and Apple.

  8. 5/6/2010 at 12:19 pm

    Nokia’s trajectory has been going downhill from the peak reached when Motorola nearly self destructed. Now it looks that Nokia is following the same path as the other old mobile handset makers like Siemens,Sony Ericsson,Motorola and others.Though it still commands an impressive 36% marketshare of the world mobile market,that has been steadily coming down.More importantly its share in the lucrative high end smartphone market is falling faster . It looks with the hypercompetition in the smartphone market , Nokia has an extremely low chance of regaining its lost profits and margins.It is concentrating on the other segments of the mobile market to defends its units where it is also getting hammered by competition from Samsung,LG in the middle segment and local players at the lowest segment.Can’t see Nokia being a Buy anytime in the future.The main problem in its current problems lies in its very unsuccessful R&D which despite its long history in the mobile market and huge amount of dollars has failed to compete against much smaller rivals like HTC.Nokia forms a classic cases study of a Technology Company which failed due to failure of its R&D though Marketing also played a Role.Read more at http://www.greenworldinvestor.com

  9. 6/28/2010 at 4:43 pm

    great insight in ya article

  10. 9/9/2010 at 10:42 am

    I agree with this, in comparison samsung is doing well these days…

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