Nokia’s fall from king of the mobile market to bargain buyout is a tale of hubris
It is baffling that Nokia could have got it so wrong when it came to the smartphone revolution
There were a few exceptions along the way. The N-gage gaming phone, which hit the market in 2003, failed to satisfy both phone users and games fans, and never lived up to Nokia’s sales plans.
There were some experimental devices that had varying degrees of success, such as dispensing with keypads or trying out different formats for the traditional phone interface. But it all pointed to a company that didn’t seem to be afraid to take risks with design, even if they didn’t always work out quite as it hoped.
That made it all the more baffling that Nokia could have got it so wrong when it came to the smartphone revolution. A lack of ability to keep up with the market saw it gradually slip from consumers’ list of must-have brands, and it has struggled to get back.
Microsoft’s decision to buy Nokia’s handset business probably didn’t come as much of a shock to many in the industry. Former Microsoft executive Stephen Elop was behind the decision to ditch Symbian as Nokia’s operating system for its smartphones, moving to Windows Phone in a much-publicised deal in 2011.
Since then, Windows Phone has edged up to a 9.2 per cent share of smartphone sales – an improvement but still behind iOS and Android. Despite that, Elop, now head of Microsoft’s expanded devices unit, seemed confident that the platform could become a third player in the market.
“Achieving our goal of becoming the third ecosystem is becoming very real,” he said, but added that the company would have to accelerate.
The announcement that Microsoft was buying the devices and services divisions was viewed by varying analysts as a bargain for Microsoft and a good move for both firms.
But just because Nokia is exiting the mobile phone business, it doesn’t intend to disappear completely. The company is hanging on to its mapping and networks business for now.
Nokia’s heritage goes back further than the mobile phone era. The company has almost 150 years of history, spanning everything from paper mills and rubber boots to car tyres. Reinvention is in its blood.
That was the key message the two companies tried to project, both in an open letter and at the press conference held yesterday.
“Today marks a moment of reinvention,” the letter said.
Just how successful Nokia will be in reinventing itself once more remains to be seen.