Skip to comments.Mike Elgan: Why Nokia is toast
Posted on 02/13/2011 3:52:29 AM PST by Swordmaker
Nokia is being killed by complexity. The company's solution? More complexity.
It's hard to remember now, but there was a time when Finland was at the center of the cell phone universe. As cell phones overtook pagers, then smartphones overtook cell phones, Nokia was the hottest company in the industry.
No more. Nokia now finds itself standing on a "burning platform," according to CEO Stephen Elop. Other clichés might apply. "Sinking ship" comes to mind.
The new center of the cell phone industry is Silicon Valley, where Apple and Google are headquartered. (Silicon Valley is also the home of HP, which finds itself a sudden player again with its new Pre3 and Veer phones.)
Apple and Google are winning because they have winning strategies. Nokia is losing because it has a losing strategy. It's as simple as that.
(Excerpt) Read more at computerworld.com ...
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First, if you review Mike Elgan’s articles, he is Apple-biased....which is fine, but he does not admit it. For example, he calls Google “arrogant” in an article!
Nokia was riding a dead horse. Symbian sucked and always sucked, in my opinion. I think HP is fooling itself if it thinks people will flock back to Palm OS when it has been out of the game for so long.
Nokia’s hardware is not “junk” like the author claims. Nokia is known for some very compelling handsets, especially for the European market.
I agree that Nokia should bring a minimalist handset to market, a mid-range and a top-of-the-line smartphone. Perhaps, even getting to slates over time.
I do not agree that teaming with Microsoft is following a flawed strategy. I see it as splitting the difference between Apple and Google.
Think about it. Apple is one handset-—take it or leave it.
Google has multiple handsets, of all flavors, but running different variants of their OS, and few getting upgraded at all.
Microsoft could split the difference by offering multiple handsets with the same OS, all being updated at the same time since WP7 sets the internal hardware specs only, not the external.
This is still a market in flux, time will tell.
Why is Nokia/Microsoft a loser while Palm/HP is “a sudden player again”.
I completely agree.
I think HP/Palm has a far bigger hill to climb. At least Microsoft has a large number of enterprise users behind it.
Page 3 gets down to brass tacks:
“There is huge, unmet demand in the world for a phone that does nothing but make calls. Nokia can and should design and build the ultimate minimalist, tiny, super-reliable cell phone that does not connect to the Internet. It should have the best-possible call quality, have the best antenna possible and should measure battery life in days or even weeks. Nobody cares what the OS is.”
Very true That’s the one I would buy. When I want internet (which is not, for example, while I’m sitting in a restaurant enjoying a meal — hint hint iPhone aficionadoes) I prefer to use my laptop.
“Second, Nokia should design and build the ultimate smartphone based on Windows Phone 7. It should provide a much better call quality than the iPhone (not hard to do), have a better camera, better screen, better everything than existing smartphones.”
Also good advice for those who, unlike me, *do* prefer a smartphone.
I believe that the days of handheld phones are numbers, not just cell phones but the wired phones in homes and businesses as well.
We are quickly moving to "hands-free" communications. Already, my automobile has phone capability built into it and when somebody calls my house, their name and number flashes on our TV or computer screen.
My address book is maintained in the cloud and is constantly downloaded to any device I own (with any updates instantly uploaded to be synchronized elsewhere).
The end result is that all individuals will have a single phone number assigned to them and they can make/receive calls from virtually anywhere on the planet without even carrying what we think of today as a phone device.
Over on the OSNews.org (I think that’s the right suffix) website there was a quick article (basically a blog entry) about a Nokia memo that leaked out, the word from the top was, we’re going down in flames. So they eschewed the Android milieu and headed for W7 — but with flexibility other handset makers don’t have. That’s a good hookup for MS also, Nokia’s hardware so they don’t have to try to Zune their way into the market. OTOH, the other makers who use W7 for their mobiles may not like it too well and dump them.
I’ve been using webOS for six months now. I honestly can’t see myself moving to any other OS in a touchscreen setting. It’s just too easy to use. I appreciate the way it’s not the “walled garden” of Apple , without being as loosey-goosey as Android. The homebrew community is fantastic. I wouldn’t trade multitasking for anything.
>> Nobody wants to carry around multiple single-purpose devices.
Many of us don’t need multiple devices. We don’t require constant connectivity and constant internet access and “apps”. ALL we need when we’re out and about is voice.
On one hand he says, “In a nutshell, Nokia fails on design, branding and simplicity. Microsoft’s Windows Phone 7 will solve none of these problems.”
On the other. “Nokia should design and build the ultimate smartphone based on Windows Phone 7.”
I think somewhere the author lost his train of thought.
>> I think somewhere the author lost his train of thought.
Not really. He isn’t saying Windows 7 isn’t part of the solution, only that Windows 7 *alone* isn’t the solution to the REAL problems, which are design, branding, and simplicity.
The “take away” for me is that Nokia’s problems are more strategic blunders than anything else and unless they adopt a winning strategy it matters not what OS they employ.
I want it!!!
Fantastic article. It’s great for strategy buffs. You might disagree with his recommendation, but his article about Apple’s and Google’s strategies is spot on, and his strategy recommendation for Nokia is at least defensible.
I have mixed feelings on this, but you could be right. My mom is pushing 80. She gets confused with complicated things, so I got her a relatively simple phone. I didn't figure she'd ever use the text messaging, but she and her sister have started text messaging pictures of the great grandchildren to each other. The thing that's tough to find is a simple phone, outside of the iPhone (can't speak to Android.) The reason I didn't get her an iPhone is that she doesn't have a computer for updates and also doesn't have any need for the additional expense of the data plan.
What older people could really use is a phone with big letters and numbers that are easier to read.
I'm not impugning your honesty, but I have doubts; would you really buy that phone if your cell provider was giving one with close-enough specs away for free with contract? If you don't have a contract or use pre-paid, how much would you pay, given that basic pre-paid phones are plentiful in the $10-$30 range?
First, I'd take issue with the notion that it's an unmet demand. It's a pretty decent description of the Motorola Razr, which ruled the roost before smartphones became mainstream.
Second, while there might be a huge market today, it's a shrinking one. It's commodity last-generation technology where it's difficult to differentiate based on quality, and where profit margins are minuscule. Nokia would have to compete with the cheapest handsets to come out of Shenzhen.
Second, Nokia should design and build the ultimate smartphone based on Windows Phone 7. It should provide a much better call quality than the iPhone (not hard to do), have a better camera, better screen, better everything than existing smartphones.
That doesn't take a rocket scientist to figure out, but what the author omits is that it has to be so much better that it makes up for the lack of software and accessories relative to other smartphones; and it has to be less expensive.
My wife is in her 70s and carries such a phone. It's called a Jitterbug and while it drops signals it's all she needs. I use a 2 year old LG with gadgets that I have never mastered...
That's something that defines the low-end market for pre-paid phone service, where competition is on price only. The Chinese will dominate that.
I think the next big thing is an affordable phone that is a combination cell phone and satellite phone, something that will give you cheap minutes as long as you are near a cell tower, but will also allow you to make calls when you are far from cell towers (broken down in the middle of Death Valley, on a sailboat far out at sea, in the middle of a disaster area where cell service is disrupted).
Current satellite phones are around $1500, with service at a buck per minute, but there are times and circumstances when you REALLY want the peace of mind of being able to communicate from anywhere under any circumstance. And when more people start using satellite phone, economies of scale will bring the price down.
A nice wish list. Unfortunately, for those trying to provide it, there are the laws of physics to deal with. Current technology has yet to overcome them. Tiny device+great antenna+long battery life. At the moment those are mutually exclusive.
But they'd better get on it.
If you can't appreciate the pure beauty of the violin after hearing this, something's wrong with your ears.
I don't know if teaming with Microsoft is a flawed strategy or not. I do know that it means laying off a lot of people at Nokia, and stopping the development of their own operating system. Those programmers at Nokia will not be happy. And what about the general morale of the rest of the company employees who are not fired?
As for splitting between Apple and Google, I'm not sure about that. Nokia did have the choice to use Google. They never had the choice of using Apple. Nokia has now put all their wood behind one arrow. It will depend on how well they can execute this major change of direction for the company.
This is still a market in flux, time will tell.
There we are in full agreement.
That is because you are Humanzee Version 1.0. You are quickly becoming obsolete like Nokia.
Sam, you are missing the point. There are a multitude of people who do NOT want a multiple of single-purpose devices... they want ONE single phone, if that. No computer, no MP3 player, no GPS device, no Internet access device, no eMail device, nothing but a phone that makes and receives calls. That would sell to these people. They probably don't even want an answering machine recording device on it... too complex.
No, he says they need TWO phones... the ultimate simple phone, and the ultimate smartphone. TWO phones only, not the plethora of phones they have now.
“Those who still believe there is a huge market for cell phones that do nothing but make phone calls are whistling past the graveyard in my opinion. Nobody wants to carry around multiple single-purpose devices.”
I have an iPad. It goes with me almost everywhere. It does everything I want out of a portable device, including make phone calls. But I don’t want to make phone calls with it, I want to make phone calls with a single, devoted, tiny, slick device - I don’t want it to do anything else because everything else is handled by the tablet.
The only solution to this “dumb phone dilemma” is a next gen platform which separates the user’s experience space from the physical device.
“would you really buy that phone if your cell provider was giving one with close-enough specs away for free with contract?”
Close-enough isn’t there.
There is a reason why the most popular music player isn’t the cheapest by a long shot.
>> That is because you are Humanzee Version 1.0.
heh... fortunately for you later “versions”, we 1.0’s will eventually die off and you’ll inherit what’s left
...but at the rate we’re going there won’t be much left for you; sorry about that. :-)
>> I think the next big thing is an affordable phone that is a combination cell phone and satellite phone
Sign me up!
I stopped buying their phones when the President of the company showed what a devour liberal he was.
What an appropriate malapropism.