Nokia had a 14-year run as the world's top handset maker. The world’s No. 1 mobile maker and the first brand of phone everyone owned. The word ‘Nokia’ became a generic term for ‘mobile phone.’
NOKIA IN 2007
Nokia was number 5 among the worlds 100 global brands in 2007.
It had a 40% share of the global mobile phone. In the fourth quarter alone, Nokia sold 133.5 million handsets compared to Samsung selling 46.5 million units (14%), Motorola sold 40.9 million (12.3%), Sony Ericsson 30.9 Million (9.3%), LG 23.6M (7.1%). Apple sold only 2.3 million iPhones (0.69%), during the same period.
A pioneer in the smartphone industry, when the world moved from regular phones to smart phones, literally introducing consumers to the smartphone with its initial Symbian series and had over 70% market share as at 2007.
NOKIA IN 2017
Over 80% of all smartphones are on Android OS! Nokia had dumped its Symbian OS (which had 0.1% market share in 2015) and shifted to Windows.
By first quarter of 2017, Nokia had less than 0.3% of the market share with Samsung Dominating with 22.8% (79 million units) and Apple 15% (52 million units).
Nokia is now out of the 100 global brands!
WHAT WENT WRONG?
INNOVATION: Nokia failed to match the innovation that was needed to retain its dominance of the Smartphone Market. More and more consumers opted for pocket-sized mini-computers instead of "feature" phones with tedious WAP browsers.
In 2007, apple introduced its iPhone with its full touchscreen and app-based operating system, and it changed the very definition of what a smartphone should be. Nokia failed to respond to the iPhone and the shifting consumer demand that came with it.
Samsung, on the other hand, responded swiftly. Not only was Samsung speedy, it also bet on multiple platforms, including android and windows phone – and it even had its own homegrown OS, Bada, just in case none of the others worked out. The Android paid off handsomely.
OVERCONFIDENCE: Nokia’s business was going on well in the mid-2000s, with massive profits keeping their shareholders happy and clamouring for more of the same. But this made it harder for them to change their business to react to the looming threats from internet-focused companies.
The new entrants Apple and Google were seen as low threat because of their inexperience in the phone business. Nokia’s biased assessment of the competition makes its products always seemed better than the competition so nothing to learn from them
TECHNOLOGY: Nokia’s was ill prepared for the dramatic change in required hardware and software competence. The Nokia core competence was in radio technology hardware, while smartphones needed computer and software competence, competence in touch screen interfaces – and user experience design skills.
VOICE OF THE CUSTOMER: Nokia was comfortable with the Status quo and was not willing to make the needed disruptive changes to respond to the yearnings of its existing customers and win future customers
WHAT ABOUT BLACKBERRY?
BlackBerry’s failure to keep up with Apple and Android was a consequence of errors in its strategy and vision.
First, after growing to dominate the corporate market, BlackBerry failed to anticipate that consumers — not business customers — would drive the smartphone revolution.
Second, BlackBerry was blindsided by the emergence of the “app economy,” which drove massive adoption of iPhone and Android-based devices.
Third, BlackBerry failed to realize that smartphones would evolve beyond mere communication devices to become full-fledged mobile entertainment hubs.
Blackberry now account for only 0.048% of the smartphone market share selling 207,900 units.
ALL HOPE IS NOT LOST FOR NOKIA
Well, unlike Blackberry, all hope is not lost for Nokia as they have launched a comeback!
Last year, HMD Global, which is made of ex-Nokia execs, partnered with Foxconn to introduce Nokia 6, Nokia 5, Nokia 3 and the revamped 3310. It is hoped that these new products will give them the needed boost for the comeback!
Even a company that was on top and dominating its market was surprisingly vulnerable and fell from the top to bottom in a period of less than 7 years.
Businesses can learn from the Nokia story and prevent same by strategically focusing on the Voice of the Customer and innovation coming from competitors within and outside the industry and respond with rigorous Continuous Improvement in their processes and products!