Nokia Insider On Why It Failed and Why Apple Could Be Next 420
An anonymous reader writes "The former chief designer of Nokia explains how the company's success and its corporate culture stopped it from taking risks and left it open to being beaten by Apple. He now sees the same warning signs emerging at Apple. Quoting: 'I look back and I think Nokia was just a very big company that started to maintain its position more than innovate for new opportunities. All of the opportunities were in front of them and Nokia was working on them, but the key word is a sense of urgency. While things were in play there was a real sense of saying "we will get to that eventually."' He worries Apple is now in a similar place: 'Nokia became more of a maintainer, more of an iterator, whereas innovation only comes in re-invention and Nokia waited too long to make the next big bold move ... that is now Apple’s challenge. Apple has arrived at a very safe place, it is responsible for something everybody loves, so it feels it has to keep it going.'"
Oddly enough, this comes alongside news that a different former insider, Thomas Zilliacus (who was Nokia’s former Asia-Pacific CEO), has founded a company called "Newkia" in the wake of Microsoft's acquisition of Nokia. His goal is to take on former Nokia engineers and set them to building phones again — this time, running Android.
Fail (Score:5, Insightful)
Nope, Nokia wasn't defeated from the outside, it committed suicide.
Failure is relative (Score:5, Insightful)
Link Baiting This? (Score:3, Insightful)
A guy discusses how Nokia totally drops the ball and then link baits it by adding Apple? And, let's be very serious here - there is no similarity between Apple now and Nokia before their fall - Apple is still releasing innovative products with several new innovations obviously on the very immediate horizon). While they may not reinvent an entire market every year, they are most certainly not sitting on their hands doing nothing. Nokia, by contrast, fell from grace because they didn't change at all when the market around them underwent a massive shift in direction. Anyone who thinks Apple would succumb to a similar failure is either INCREDIBLY anti-Apple and wants to hate on them any chance they get or they are completely out of touch with reality.
Or they are adding "Apple" to a blog post to link bait.
It's natural (Score:5, Insightful)
Imagine a game where you can choose between two options:
A - Try to move up: 1/5 you move up. 4/5 times you go down.
B - Try to stay: 3/5 you stay. 2/5 you move down.
In such a game, to place yourself in front, a good strategy is to try to move up until you reach a certain point where you're the first and then stay there, forcing everyone else to risk moving up.
There's a limited amount of people with a limited amount of money. It's not important how far ahead you are but whether you're the first one.
Assume the strategy is good and accept the times you move down as natural and only push when you're behind. Don't judge the strategy for the times where you move down.
Innovation? (Score:5, Insightful)
"take on former Nokia engineers and set them to building phones again — this time, running Android"
Nokia needed to innovate, and an example of this is to build the same phone everyone else is? Good luck with that.
Re:Failure is relative (Score:5, Insightful)
Microsoft's willingness to buy them out of what appeared to be a pretty hairy situation saved the day for team bean-counter; but I suspect that team engineer is wondering 'How did we go from being fucking Nokia to being eaten by a software company?'
Re:Innovation? (Score:4, Insightful)
Better to make something you can sell than something that there is no market for.
What Nokia should have done was stayed the course with the N900 and beyond. They could have made that work, it should not have been hard to even support Android apks and its third party markets like the Amazon app store. Instead they got in bed with MS and ended up with a fatal disease.
Re:Innovation? (Score:5, Insightful)
Android isn't a phone - it's an Operating System. You can innovate (blergh, I hate that word) at the hardware level, while using the industry standard to stay competitive in software. Especially if, as with Nokia, your strength has historically been with hardware rather than software.
$245 Billion becoming $7 Billion (Score:5, Insightful)
Getting Balmer to cough up 7B for this iterator didn't seem like failure if you ask me.
When Nokia's market cap was $245 Billion circa 10 years ago and as high as $150 Billion as recently as 2007 then that counts as a HUGE failure.
Re:Link Baiting This? (Score:5, Insightful)
It happened to Apple once already -- the founders forced out, and bean counters making cuts and skipping investment in new stuff. It works, for awhile, and profits even increase, but eventually they start lagging behind. By that time, the first few bean counter CEOs have ridden off into the sunset with millions in reward for doing a "good job" on the profits.
Re:Link Baiting This? (Score:5, Insightful)
Nokia came out with an internet tablet back in 2005. I have one sitting on my desk right now. The problem with Nokia wasn't innovation, nor is innovation Apple's strength. What (the consumer part of) Nokia lacked was a understanding of how to market products other than normal phones. Add to that, it was *too* engineering focused - case in point, Symbian was difficult to code for, but battery life was excellent due to the design of the OS. Add to that Symbian was too entrenched.
Nokia had a good plan - they wanted to develop the OS from their tablets into a modern smartphone OS (Maemo/Meego), while at the same time, develop Qt so that developers have a good API and dev environment to code in. This code could then be portable across Symbian, Meego and desktop OSes.
If Nokia was able to fully execute this plan, I doubt that they would be in a worse position than they would be now. Microsoft saw this as a threat (and opportunity to find a reliable HW partner as WP7 was driving the major manufactures away) and nipped it in the bud.
Everybody loves? Not quite. (Score:5, Insightful)
"Apple has arrived at a very safe place, it is responsible for something everybody loves, so it feels it has to keep it going."
Not quite. Apple is responsible for something many people love. Not me. I much prefer the features of Android to the point that I wouldn't consider an iPhone. iOS is an inferior product for functionality (specifically, customizability of the user interface) and it doesn't play well with non-Apple software and has excessively restrictive controls on what the user can do with their device. I have other issues with Google (their data use policies). There's room in my mind and wallet for a new player with better for the customer data use policies and an Android-like feature set.
Re:Fail (Score:3, Insightful)
Wrong, it didn't commit suicide it was just stubborn until it suffered unto its last. Nokia was defeated just like cart and horse industry was defeated by the car industry, the times changed and Nokia didn't.
I see this argument is all relative. If Apple doesn't fill the next innovation gap after some unsuspecting company brings out the next "big thing" it could very well suffer as a result but that doesn't mean it will happen today, tomorrow or even for within the next decade.
So the question can it happen to Apple? yeah why not. It's hardly a prediction, it has happened before to them in the past. However, in present day it's Microsoft turn to suffer this time around.
Re:Fail (Score:5, Insightful)
Well like a lot of failures in the tech industry they get stuck on the idea.
We are #1 at this so lets keep it up, Getting into something new will end up taking market share on what #1 makes.
They play it safe and then they will slowly die.
Nokia was the #1 phone maker, because they made good phones for a decent price.
Apple Came along with the iPhone and said. Hey you non-Business users, Check this out, a Smart Phone for you! and look at all these cool features you guys can get for a few hundred dollars more.
Apple took the risk, they could have failed, but they ended up making people to want to pay more for a smarter phone. This gave Apple a 2 year head start. The other phone makers who were trying to compete with Nokia, stopped that plan and started to compete with Apple. So in a few years Samsung, Motorola, etc... Caught up with help of Google's Android OS, which while was originally made for something else, but could quickly be modified to do what Apple does. During this Time Nokia was Happy to be #1 Phone maker, and even some growth as their competitors seem to stop competing with them. Then public opinion fully switched, normal phones seemed very outdated. So Nokia started loosing.
To try to catch up, they figured giving Microsoft OS a try might be enough to make them different enough to stand out. But Microsoft has its own image problem, and lack of apps, didn't work out right.
There are a lot of companies who make similar mistakes they are #1 so they are afraid of not being #1 anymore so they don't change to match demand.
Other examples (And yes there are other factors such as not getting good support from MS for the changes.):
Staying as a DOS application for too long:
Word Perfect, Lotus 123, DBase, FoxPro, Boreland Compilers
Staying stuck on a platform:
Many OS's such as different Unix systems, VMS...
Re:Link Baiting This? (Score:4, Insightful)
What Nokia lacked was a understanding of how to market products other than normal phones.
Nokia lacked an understanding of products other than normal phones, period. To them, a smart phone was a regular phone with PDA functions bolted on, and it showed in the design of their products. The reverse is more accurate: a smart phone is a PDA that happens to have the ability to make calls. Their mobile OS looked interesting but I think their strength is in hardware; and I would have loved to see a Nokia Android phone.
Re:$245 Billion becoming $7 Billion (Score:3, Insightful)
trololol market cap. not remotely a measure of value
Re:Innovation? (Score:5, Insightful)
No, people want Nokia hardware, with Android software.
Even Lumia's with Android would've been a hot seller compared to how they did with Windows 8.
Samsung demonstrated what a complete and utter fallacy it was to for companies like Nokia and RIM not to use Android with the argument "you can't differentiate in the Android ecosystem", quite obviously Samsung proved you can very much differentiate pretty much on hardware alone.
Well maybe that's not entirely accurate, I suppose yes you can't differentiate in the Android market if your CEO is a complete and utter incompetent muppet like Elop, but the point is you can easily differentiate in the Android market.
Nokia didn't even have an excuse, there was precedent, Symbian was on a lot of non-Nokia devices also but Nokia was the top phone manufacturer precisely because it's devices stood out amongst the rest.
Personally right now I find the Android hardware market very underwhelming, it's all dull and very similar - wide, tall, thin, and some form of grey, white, or blue. There's so much scope for a new provider to produce something that stands out amongst the crowd and takes Samsung's crown and again, as Samsung has proven, there's plenty of profit to be made too.
You can perfectly well use Android and still innovate.
Re:Everybody loves? Not quite. (Score:4, Insightful)
Fair enough statement.... but oddly enough, as long as I've been into computers and I.T.? I still vastly prefer my iPhone to any of the Android devices I've tried using in its place.
To address your points specifically?
Customization of the UI is something I don't necessarily consider "inferior", simply because what's provided doesn't allow as much modification. The REAL question is how much you like what they give you initially. (To use the way popular "car analogy" on Slashdot once again? With very FEW exceptions, vehicle dashboards are not user-configurable at all. Many accepted standards have been kept to, such as placing a speedometer someplace more or less directly above the steering column, and placing a fuel gauge just to the left of it. Several items like a tachometer are absent or present, depending on the particular vehicle's design, but you'll always find an odometer in about the same place, turn signal indicator arrows done a similar way, etc. etc. This arrangement works quite well, and most people don't feel a pressing need to rearrange it. If you asked most drivers about preferences for the dash, they'd talk mainly about the styling details ... whether they preferred chrome rings around the gauges, or if they liked the gauge needles to be white instead of red.) That's how I view the iPhone. You can still pick custom "wallpapers" to change up the look a bit, and you have control over arrangement of the icons on multiple screens. Without jailbreaking and using unsupported hacks, no ... you can't "go crazy" with it, radically changing the UI. But that also means businesses writing instructions for configuring the phones can safely write them ONE time, based on a single sample iPhone, and the instructions will make sense for pretty much all iPhone users. It means someone who mastered his/her iPhone can easily share knowledge with any other iPhone user. So the ONLY valid benefit I see to all the customizing possible on Android is if you really dislike what Apple has done with iOS and find the UI unworkable/frustrating enough that you need a totally different design. Again, fine if that's you. But iOS works great for many millions of satisfied users every day.
Not quite sure what "non Apple software" you're upset the iPhone "won't play well" with? It supports the latest Bluetooth connectivity standards, so in that regard, links up with all manner of non-Apple branded devices just fine. Yes, it's designed around Apple's iTunes as the preferred "central management hub" for placing media on it. But 3rd. party alternatives exist too, including programs that will let you download music FROM your iPhone to save onto a computer, instead of Apple's default "one way" setup where content only syncs TO the phone. Overall, I find I use smartphones as essentially "stand alone" devices anyway, once I have them initially configured. There's only so much outside software it needs to work with?
Nokia's fall stems from their 'bold' move (Score:5, Insightful)
As often happens in businesses that have 'missed the boat' on a marketplace change, a new leader comes in an decides to shake things up. By definition, they know little about the company's history and relative strengths - they just see the weaknesses and feel that change is what they were hired for. And naturally, lacking some vital info, the tendency is to 'go with the Microsoft playbook' and reap the glory when Microsoft is proven right. And with Elop's past history with Microsoft, that approach was a given.
Except that Microsoft's playbook itself is in 'missed the boat' territory, and those 'bold and brilliant' managers that play that game don't seem to have figured that out. And of course, the money guys on the boards are completely clueless, so the game goes on.
There was no reason Nokia couldn't have succeeded with Android. Their strengths are in hardware, industrial design and a large, relatively loyal customer base. That customer base is currently providing what little success Nokia's having with their Lumia line - and it took the low end versions of that line to do it. I.e., those customers didn't want Windows Phone - they wanted a cheap, attractive Nokia phone. They could have had that two years earlier with Android, and they could've done it without fighting the battle of the missing apps. In short, they could've been the Samsung of Europe. They could've even done it while testing the waters with Windows Phones.
But you don't get to be touted in the business press as 'bold and brilliant' by hedging your bets. And you don't get to be rehired by Microsoft and short-listed for the CEO slot without that 'bet the shop on MS' attitude.
Re:Fail (Score:5, Insightful)
1. Keep trying to update Symbian to be competitive. They were already working hard on that, and it wasn't stopping their decline.
2. Put Maemo into production, or later Meego. This would have been a late new entry to the mobile market, and like the other late new entries it would have been fighting an uphill battle against iOS, Android, and their respective app stores. Windows Phone, for all that it's attached to Microsoft, was guaranteed to get tons of applications because Microsoft would build them in-house even if no other company would. Nokia didn't have that kind of developer resources available. WebOS went nowhere. Blackberry 10 couldn't save them. I'd love to see Firefox OS and Ubuntu Touch take the world by storm, but I'll be shocked if most of us even remember they existed in five years.
3. Switch to Android, and become yet another Android also-ran with Huawei, HTC, LG, ZTE, and Motorola all fighting for sunlight behind Samsung's shadow. Nokia had some of the best designers in the business, but they would have been late to the game fighting other vendors for consumer attention. And they wouldn't even save much money, because Microsoft would have hit them with the same lawsuit it's used to extort patent fees from all of the other Android manufacturers.
4. Switch to Windows Phone, get a big cash infusion from Microsoft, come along for the ride for free any time Microsoft advertises Windows Phone, and differentiate yourself in the market while getting a genuinely well done mobile operating system. ( Even if you dislike and distrust Microsoft - and I do - the reviews of Windows Phone, unlike Windows 8, have been uniformly positive. )
As far as I can tell that's four different paths into oblivion. The one they took might have been faster than the others, but I don't see any way they could have survived much longer regardless. Anything Nokia was going to do in order to save itself needed to be started at least three years before Elop took over the company. He took the captain's chair on a sinking ship.
Re:Fail (Score:4, Insightful)
Yeah, because a Microsoft guy was not sent in to destroy it from the inside so they could buy it later at a drastically reduced value.
Everyone knew what they guy was up to, and the Board at Nokia had a lot to profit from it's demise.
Re:Fail (Score:5, Insightful)
What this guy figured out has been taught over and over to MBAs all over the world.
Basically the market leader is afraid to take risks because he doesn't want to risk his #1 position. Meanwhile the small players take risks and, sometimes, go all-in on whatever they think can be the next big thing - after all, they don't have that much to lose. Eventually one of the small players hits the sweet spot and becomes #1, displacing the incumbent. He then fights to defend his position, and eventually becomes risk adverse. Rinse, repeat.
Re:We'll see... (Score:5, Insightful)
Everyone needs to look at numbers instead of lies by the guy that talked down the share price to prepare Nokia for a corporate raid. When something cut off at the knees by the CEO is outselling his pet project five to one you know that the CEO is not working for the company that he's supposed to be running.
Re:Fail (Score:5, Insightful)
Unless Apple starts producing Windows clones, they're dead already. It's just a matter of time.
Unless BMW starts producing Toyota clones, they're dead already. It's just a matter of time.
Unless Teuscher starts producing Hershey milk chocolate clones, they're dead already. It's just a matter of time.
Unless Guinness starts producing Bud Light clones, they're dead already. It's just a matter of time.
Unless Cristal starts producing 2 Buck Chuck clones, they're dead already. It's just a matter of time.
Unless Starbucks starts producing Folgers Instant clones, they're dead already. It's just a matter of time.
Unless Krispy Kreme starts producing Twinkies clones, they're dead already. It's just a matter of time.
Oh wait, none of those are true at all.
Why is it that you retards cannot understand that "selling to a small, but highly profitable segment of the market" is a perfectly viable business model?
YOU may not want to buy their hardware. That doesn't mean millions of other people feel the same way.
Re:Fail (Score:5, Insightful)
3. Switch to Android, and become yet another Android also-ran with Huawei, HTC, LG, ZTE, and Motorola all fighting for sunlight behind Samsung's shadow. Nokia had some of the best designers in the business, but they would have been late to the game fighting other vendors for consumer attention. And they wouldn't even save much money, because Microsoft would have hit them with the same lawsuit it's used to extort patent fees from all of the other Android manufacturers.
- Even just two years ago, Samsung was not the massively dominant Android manufacturer it is today, and back then, most people had never heard of ZTE or Huawei, and HTC and LG didn't have anywhere near the brand recognition that Nokia has.
- While I think Samsung phones are good, they are often criticized for their unoriginal design and sub-par (plastic) build quality. Nokia, on the other hand, has long had a reputation for making phones of great build quality AND original (even "crazy") designs. They could have easily distinguished themselves in the Android marketplace.
- They would have been late to the game, but with their loyal brand following and great reputation, they could have easily pulled it off as being fashionably late.
- All the other Android manufacturers are not Nokia, which I think it's safe to say, has a massive war chest when it comes to mobile device patents, putting them in a great position had Microsoft gone after them for patents -- and this is assuming Google wouldn't have helped them out.
I think a previous comment nailed it: Nokia could have been the Samsung of Europe. I'm not even a staunch Nokia fan and I think it's sad to see what's become of them. It does give me hope to hear the news mentioned above about Newkia [zdnet.com] (though I'm guessing they won't be able to keep that name).
Re:Link Baiting This? (Score:2, Insightful)
Just saying. Every one of those things you listed, my mother thinks is an advantage, not a drawback.
proprietary interface - she knows that to get something that really works, she just goes to the Apple store. There's never any "driver" or compatibility issues. She gets a straight answer from someone she trusts.
designed to sync through itunes only. Yep. She loves that. Nice and simple, and again, one easy path to getting what she wants.
she doesn't use Outlook or Google apps (whe wouldn't know a google app if it came up and introduced itself). She doesn't want complexity layered on top of her nice simple interface just to make someone else's life easier.
excessive control over apps - well "excessive" is a judgemental term, but she's happy there's next-to-no malicious apps for the iPhone compared to other vendors offerings. She knows she's not that technical, and she likes that the people who do know techy stuff are helping her against these malicious apps.
clumsy UI - well, simple anyway. Simple is good. Simple is easy to understand, and she likes easy to understand.
I'd be willing to bet there are more people in this world who are on a technical level with my mother, than with you or I; which is why Apple have maintained these "drawbacks" - because they're advantages.
Simon.
Re:Link Baiting This? (Score:2, Insightful)
And if you forget the "iPhone charging cable" on the go, you can't borrow a standard USB cable which are pretty ubiquitous to recharge your phone, you need to find someone that has the proprietary cable.
Can the iPhone now play Flac and OGG files and other open source formats without transcoding? If not, do you need to go through iTunes and spend hours transcoding your collection? That's obviously not an issue for people who get everything from the iTMS, but there is little excuse not to support these formats given that the code is widely available. But Apple prefers to force their users to use their proprietary formats. For a company that prides itself on providing a good user experience, this behavior is clearly putting Apple's desires ahead of their users.
How well does that work on Windows? From what I've heard, that experience is significantly degraded.
This is subject to change as more apps come out for Android phones that are barred from the Apple store due to "offensive content" where "offensive content" is defined solely by Apple. Think "adult apps" as well as apps with a twisted sense of humor. Apple may still have that aura of "the cool company" now, but all it takes is one popular app available on Android phones that Apple prohibits on iPhones and Apple will look like a bunch of dictators trying to prevent adults from enjoying products with a mature nature or sense of humor.
I agree, I wouldn't call the iOS interface clumsy, but it is restrictive as hell. On my Android phone, I have the top news stories, my stocks, the weather, and my calendar all on home screens that I scroll through with a simple swipe that lets me put my finger on the pulse of all that I care about with a few quick swipes. In addition to that, I have shortcuts to only my favorite apps on the home screen rather than shortcuts to all my apps cluttering up my home screen with icons I rarely use. But interface preference is always subjective - to each their own.
Re:Fail (Score:5, Insightful)
So basically every phone needs to run Android. Riiiight. I think someone's suffering from Android Delusion Syndrome, which lately has been worse than what everyone accuses Apple fanboys of suffering from.
Re:Fail (Score:5, Insightful)
No, it did commit suicide (Score:5, Insightful)
There's a long recent history of Nokia management monkeying around with things, and infighting between the departments (for example, the Symbian folks successfully grabbed projects away from the Maemo folks and otherwise inhibited Nokia's attempts at developing any more future-proof alternatives). And it seems pretty obvious (was fairly obvious at the time, and is blindingly obvious now) that the Board hired Elop to prep for a Microsoft sale. At every level of management, it was just politics and a complete lack of faith in the engineering abilities down below.
I'm not guaranteeing that it would've all worked out fine without management interference, but both the scope and malignancy of the bureaucracy within Nokia is fairly well known at this point. And, in the rare cases when individual engineers would actually get a chance to directly contribute to something, it very often turned out quite well. Felipe Contreras, for example, a device adaptation engineer, thought that the N9 would benefit from a gesture where swiping down from the top would close an app. This fit really well with the N9/Harmattan swipe motif, but he couldn't convince the project management to assign it to be programmed in, so he just went and learned the language the UI/UX bits were written in, wrote it himself, and managed to get it silently included in the version that shipped with the N9. You had to know to add a config file in the right place with the right text in it. With the first update released, however, that gesture was enabled by default. With the UI/UX the way it is, swiping down to close something just makes intuitive sense and feels right, and it was just one engineer not even working directly on that part of the device that made it happen, and only really in that weird moment of Nokia's history when people found themselves working on a flagship device that management was now saying was no longer their flagship.
How many other ideas and features were strangled in their cribs by management? How many useless and misguided goals were set by that same management, monopolizing the time that entire departments had for things that any engineer on the ground could have told management was pointless? Certainly, I think, it was a primary reason for Nokia's inability to keep up.
Re:Fail (Score:2, Insightful)
...they also can't let their market share slip to Blackberry levels, lest they lose developers.
Be careful of buying into the Android hype so fully. Android's market share has grown, but it's not an even growth. They've almost completely monopolized the low-end of the market and had much less growth in the high-end. Apple won't lose developers as long as they maintain their market share of people willing to pay for software. iOS is still the most popular platform for developers because it's still the best one for allowing business models beyond ad-supported.
Re:We'll see... (Score:2, Insightful)
A classic case of innovator's dilemma I'm afraid.
When something cut off at the knees by the CEO is outselling his pet project five to one you know that the CEO is not working for the company that he's supposed to be running.
Which is very close to what Apple did [techcrunch.com] with the iPad and Mac. Sometimes you have to be able to move past a dead end by drastic measures.
PS: Symbian (or to be precise, S60) was crap. Crap to use, crap to develop, and crap to develop for (I did all three). Good riddance.