So where did Nokia go wrong?

A few weeks ago Nokia did some blood-letting at the top when its CEO (Olli-Pekka Kallasvuo) was ousted, along with close colleague Anssi Vanjoki, and in came Microsoft’s Stephen Elop.  We get quite used to changes at the top when an organisation is not performing, and to be honest I thought that Nokia had changed CEO a few times in recent years.  I was quite surprised when I realised that Kallasvuo had been at the helm for four years, and his predecessor (Jorma Ollila) even longer having been made CEO in 1992, a staggeringly long time in the fickle world of handset manufacturers.  

Ollila had ridden the crest of the GSM wave during its meteoric rise to become the dominant standard for mobile communications across the planet.  It’s worth remembering just how important Nokia was in that development.  

The solid Nokia 2110

Nokia had been at the very centre of GSM standards production in the late 1980′s and early 1990′s and was itself ideally placed to capitalise on its position. It had already built a great track record with its first/second generation cellular handsets (NMT, TACS) and went on to produce what was arguably the first real GSM handset, the Nokia 2110. I used one for several years. It was well built, the UI was easy to understand, the radio and speech performance were excellent, and it had a good car kit (when we still needed and used such things).  

Motorola Timeport

Nokia went on to produce a steady flow of excellent handsets, generally conservative in nature, not always first with innovation, but always executed well. Nokia was not first with a tri-band handset, nor a WAP handset, nor a GPRS handset (from memory, Motorola were first with most of these), but when Nokia did bring these products to market they worked better than their competitors, and through it all they kept their well thought out and consistent UI. My, how we struggled to understand how to use the incomprehensible Motorola handsets, cutting edge though they were. And how we peered with squinting eyes at their tiny displays trying to make out the microscopic characters. And how we giggled at the Ericsson devotees with the labours of their love clutched to their bosoms, frantically trying to learn a new UI with every new handset.  

Nokia cleverly segmented the market and produced ranges of handsets to match. Hence the Series 30 basic and cheap devices, the Series 40 feature phones, and the Series 60 smartphones. With a small number of high quality and well designed handset platforms they churned out model after model, all working exactly the same way and at low incremental cost for each new model. With their consistent designs and familiar UI they never alienated or confused their customers when they changed handsets every year or so. Meanwhile their competitors kept making brand new models with new features and new UI, apparently aimed at confusing their users at every turn and destroying any attempt at brand loyalty. I kept looking at Nokia handsets, and at their competition, and wondering how it was that Nokia could so consistently keep getting it right, and that the rest could equally consistently keep getting it wrong. And the fortunes of Nokia products were reflected in the company’s results as its market share grew and its profits did likewise.  

And then something went wrong. As with all such things going wrong it’s not easy to say just what or why it happened. But a large part of it must be due to Nokia’s dependence on Symbian  and the Series 60 platform for its smartphones at a time when everyone’s attention focussed on the fast-emerging smartphone market, driven by Apple and Android.  

Nokia N-Gage. Try using it as a phone

Nokia had become complacent as often happens when a company is well ahead in the market.  Encouraged by the success of their standard platforms they ventured out into some exploratory niche devices such as the N-Gage gaming device, the N92 video phone, the 7710 mobile TV (DVB-H) handset, and bizarre form factors such as the 3650, or the 7700.  They presumably thought that extra functionality would sell handsets, and forgot that excellence is just as important.  Whilst their Series 40 platform continued to make them loads of money to bankroll the rest of their operations they spent too long dabbling and took their eye off the smartphone market.  

N95 - a classic

That’s not to say they didn’t also produce some good devices along the way.  The N80 was a really well made and well-featured Series 60 device, albeit with a screen that was just too small.  They improved on that with the N95, a device which justifiably flew off the shelves.  They proved they could still make good devices if they tried, but what had not changed was their dependence on the same Symbian / Series 60 platform.  The UI still worked but started to feel dated.  Crucially it was bogged down with a scroll-and-click model.  

So when touch screens became good enough and large enough to fit on a practical mobile phone, they were stuck.  They had most likely been blinded to the touch screen model that demanded accurate use of a stylus, as adopted by Ericsson (and Sony Ericsson), by Windows CE devices and by Palm.  Happily they had not followed that dead-end route, but nor had they forged a touch screen strategy of their own.  

It was Apple’s inability to stick to the norm that rocked Nokia’s world.  Nokia had painted itself into a UI corner with its dependence on the limited nature of the Series 60 platform so were quite incapable of responding quickly with a touch screen product of their own.  The very thing that had propelled them to early success had led to their being left behind when the real smartphone emerged.

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