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Fall of the Giant

Ever since the iPhone was launched, things haven’t been the same in the cellphone industry. There has been a major reshuffle of top players in the cellphone arena, Apple and Samsung have taken the lead and all other cellphone makers are struggling to find a spot. Before iPhone, using cellphones for anything other than calling was a painfully strenuous activity which involved using uncomfortable physical keys number of times to perform even basic functions but iPhone changed all that with their first attempt in making a cellphone. iPhone revolutionized the cellphone industry, the good people at Apple showed the world how easy and practical a cellphone can be not only for it’s basic purpose of calling and messaging but for connecting to the internet, social networking, listening to music, watching videos, using maps, etc.

Unfortunately iPhone’s success led to the fall of another great company Nokia. Nokia once used to be rightly the most successful cellphone maker but sadly now they are in crisis. Nokia wasn’t really in trouble after the launch of the iPhone because iPhone with it’s high price tag in especially Asian market wasn’t a big competition to Nokia handsets. Also iPhone wasn’t launched simultaneously worldwide, it reached Asian countries almost a year later after it’s original launch which gave Nokia enough time to come up with handsets to compete with the iPhone. Nokia tried to enter the touchscreen market with products like the Nokia 5800 Express Music. Nokia’s touchscreen mobiles running on their Symbian OS was well received at least in the Indian market but obviously it couldn’t hold up against the iPhone at a global level. But Nokia hadn’t given up they had one more card up their sleeve which was supposed to change their fortunes for the better, the handset was N9. Nokia’s N9 was a genuinely innovative handset, some of it’s key features was that it had a refreshing handset design, it didn’t work on Nokia’s Symbian OS but used the MeeGo OS which is a Linux based operating system developed by Nokia in collaboration with Intel, another unique feature was that it implemented button-less navigation, basically it was one of a kind cellphone.

But Nokia’s N9 wasn’t destined to be a success not because it lacked in design, features or functionality but because the company which created the product didn’t believe in the product. A company which doesn’t appreciate and understand the potential of one of it’s best innovation is headed towards failure. Nokia’s self-destructive phase started with replacing it’s CEO Olli-Pekka Kallasvuo with the current CEO Stephen Elop. Stephen Elop’s first action after becoming CEO of Nokia was to announce Symbian and Meego OS as outdated mobile operating systems and announcing that Nokia will be focusing on Microsoft’s Windows Phone OS. Stephen Elop worked at Microsoft before becoming CEO of Nokia so this decision to partner with Microsoft wasn’t a surprise.

Nokia’s Biggest Mistake

The biggest mistake Nokia did was obviously appointing Stephen Elop as CEO. Mr.Elop’s loyalty lied with Microsoft and not with Nokia. Nokia had a winning strategy with the N9 and MeeGo OS but they abandoned it for Windows Phone OS. Windows Phone OS which was launched in 2010 had a miniscule market share, people showed little interest in the Windows Phone OS and so did the cellphone manufacturers. Companies like HTC and Samsung launched only 1 or 2 WP Phones in a year whereas these same companies launched dozens of Android phones each year. It was after the announcement of Nokia and Microsoft partnership that WP(Windows Phone) started to garner some interest. Adopting WP wasn’t the mistake Nokia did, companies like HTC and Samsung also have launched cellphones running on WP but they played it safe by not betting entirely on WP instead they gave priority to Google’s Android OS, so Nokia’s decision to abandon Symbian and MeeGo OS and completely rely on Microsoft’s WP operating system was a big mistake. Symbian didn’t have any future but MeeGo was a promising operating system from the start and had Nokia focused on it Nokia would still be the top cellphone maker in the world.

Adopting WP hasn’t benefited Nokia in anyway, their shares are at an all time low, they had to layoff workers, shutdown factories and sell their luxury mobile division Vertu. I’m sure the decision to adopt WP as their primary operating system wasn’t taken by Stephen Elop with Nokia’s best interest in mind. As I mentioned before, people showed little interest in WP, Apple’s iPhone running on iOS and cellphones running on Google’s Android OS were capturing mobile market share steadily, every other cellphone maker including RIM’s Blackberry mobiles were falling behind. So Microsoft had enough competition with iPhones and Android mobiles and if Nokia continued it’s development on Symbian and MeeGo then WP didn’t have any chance, so Elop’s first decision was to cut off internal competition by announcing the Symbian and MeeGo OS as a dead platform.

Why Nokia shouldn’t have adopted WP?

  1. A Work In Progress OS:- WP is a work-in-progress OS even now, so it’s state when it was launched 2 years ago is anybody’s guess. WP wasn’t well received after it’s launch, no one thought of it as a competitor to iOS and Android or even Blackberry OS, Nokia went with WP even before it was fully matured and as Nokia’s current financial state shows they are paying a price for their decision to go with a evolving OS.
  2. No Exlculisivity:- WP operating system isn’t exclusive to Nokia ‐ Samsung, HTC and other manufacturers have also launched WP handsets. So even if WP becomes popular there is no guarantee that Nokia will benefit from it. With Symbian OS Nokia distinguished itself from other cellphone makers not only in terms of hardware design & quality but also in terms of software but with WP there is no distinction between using a Nokia Mobile running on WP and Samsung Mobile running on WP except for the hardware quality. WP doesn’t allow customization like Android so basically all mobiles running WP have the same interface.
  3. MeeGo:- Why Nokia ditched MeeGo OS is a question many Nokia fans ask. The only reason I can come up with is that MeeGo is a Open Source software like Android, so if it succeeded other manufacturers like Samsung and HTC will also adopt this OS and Nokia wouldn’t have a unique OS to distinguish themselves from other manufacturers but then why go with WP, what have they achieved with WP that they couldn’t have achieved with MeeGo?
  4. Competition:- When Nokia adopted WP, in terms of mobile operating system, Nokia had only 2 major competitors ‐ Apple’s iOS and Google’s Android. But now there is Blackberry 10 OS which is going to be launched soon, then there is Sailfish OS which is a operating system based on MeeGo OS created by Nokia’s ex-employees who were in charge of developing the Nokia N9. The sailfish OS is also going to be launched very soon probably in early 2013. Web Browser maker Mozilla is also coming up with a mobile OS called Firefox OS. So in mobile operating systems Nokia is going to face more competition, if this wasn’t bad enough Nokia doesn’t have any exclusive deal with Microsoft, so even with WP operating system Nokia has to compete with other manufacturers like Samsung, HTC, Huawei, etc.

All in all Nokia’s chances of succeeding with WP is really slim, if Nokia decides to stick with Microsoft’s WP os as their primary operating system then their only chance of surviving is if Microsoft does something really revolutionary with WP9, if Microsoft keeps working on WP at their current pace Nokia’s demise is certain.