Thursday, April 12, 2012

Nokia's Big Mistakes

Nokia is in trouble, so the media has been telling us. Well, we all know that. In fact many of us knew that things will only get much worse before it gets better. Cue shock faces.

Nokia is in trouble because they failed to adapt and continued to make mistakes. They believe they were a software company when they were only ever good as a hardware one. People bought Nokia phones because of the great design, not the silly OS it runs on. But behind the large pile of money and rose-tinted glasses, Nokia failed to see that and that is why they are in this pickle. Mistakes were made by all, from the old deposed regime to the new, from the management down to the grass roots.

The Symbian touch phone that led to Nokia's downfall
More than a year ago, Nokia announced that they were ditching Symbian and Meego, and will instead be adopting Windows Phone. This was welcomed by those who has already recognised that Nokia can never develop an OS that is competitive enough, and also by those who were open minded enough to have already tried Windows Phone 7 and had a glimpse of its massive potential. It was a risky move that was guaranteed to piss off hordes of Symbian Nokia fans (and it did), but it had to be done. Even the current iteration of Symbian Belle is not fit for purpose. I know, I had a Nokia 700 briefly.

On that very day when they made that bold and correct decision, they also made the first mistake. Nokia, by moving towards Windows Phone, was not planning on killing Symbian and Meego immediately. Instead Nokia outlined a transitional period, where they intent on selling both Symbian and WP7 devices before gradually withdrawing their Symbian devices from the market. Any kid could see what a dumb idea that was. The writing was already on the wall: Symbian was dead years ago, deal with it and move on.
Its successor wasn't any better either...
The second mistake was Nokia's belief that developing countries wanted cheap phones. As a person who grew up in a developing country, I found this an insult. I know of friends in China who felt insulted that Nokia is pushing their low-cost Tango devices towards them, when all they wanted was a real Windows Phone device. Yes, the next billion is a nice charitable idea, one that I am sure the people at OLPC would be proud off. But last I heard Nokia isn't a charity - they are a corporation. I am not saying abandon cheap phones, but it the low-margin, low-cost market isn't your core market any longer. If I was a poor person, I do not want to choose from a $10, $20, $30, $40, $50, $60, $70, $80, $90 or $100 phone. I just want to buy the cheapest one I can find, be it Nokia or some other brand. When you are poor, brand loyalty counts for nothing.

The next billion sounds like a catchy slogan, but what is the point if Nokia can't even get the next million much less the next billion? I have always maintained that if Nokia wanted to kill Symbian as their main smartphone platform, they should instead position Symbian to the low end, kill off S40 and concentrate on Windows Phone. Instead they spent tens, perhaps even hundreds of millions of dollars developing S40 into a touchscreen OS, just like they did with Symbain S60 a few years ago. Why spend all that money when S60 was already perfectly positioned for low end devices? Is it worth bleeding hundreds of millions in R&D, so you can get a device cost down from $50 to $40, so it can use 128MB RAM components instead of 256MB? No.
Ditto with the E7...
When Nokia revealed the four 'Asha' devices at Nokia World 2011, I literally face palmed. What should have been the Windows Phone reveal event was instead used for promoting not very cheap phones to people who didn't want them in the first place! For what felt like an hour, we were shown a number of silly montages and clips demonstrating the importance of low cost Asha phones to entrepreneurs in developing country XYZ. But you know what? We did not care. The media did not care. And judging by Nokia's continue drop in marketshare, the entrepreneurs in developing country XYZ did not care.

The third mistake was the Nokia N9. This was the Nokia phone that if released in 2009, would have saved the company. Instead we got a half baked Symbian^3 and an unusable Maemo phone catered for geeks and hackers. But the N9 featured a design like no other, a design deservedly should make massive headlines. So what did Nokia do? Release it as a limited edition phone with a dead Meego OS. Imagine for one minute if the N9 was never revealed in June 2011 and Nokia World (October 2011) was the first we ever saw of that gorgeous looking phone? The world's tech press would be buzzing with excitement. Instead, we already knew what the Lumia 800 would look like months before it was even announced...
It may be an imaging success, but it still ran on Symbian^3
The fourth mistake was PureView. Don't get me wrong, PureView was a neat technology. But Nokia shot themselves in the foot by revealing PureView at this year's MWC. When the world's tech press could have been singing praises for the international Lumia 900, they were instead writing about a device that will be dead on arrival. The PureView will not kill pocket cameras, and it will certainty not kill DSLRs. The N95, N86 and N8 did not, why do you think this will? People want apps, not a cameraphones the size of France. Yes, it created a buzz for Nokia among Nokia bloggers, that Espoo was still capable of creating a new imaging flagship - but the buzz were not shared by the majority of the press and more importantly, the consumers. And in doing so, Nokia once again sidelined what was supposed to be their new Windows Phone flagship, the Lumia 900. A deliberate self-inflicted sabotage against the Lumia 900? You decide.

So what should Nokia do? Well my experience with the mobile phone industry is limited so do take my suggestions with a pinch of salt. I have never worked for a device manufacturer and my only experience is actually the moans you see on this blog. Still I write this as a consumer and a mobile tech enthusiasts, keen to see Nokia survive - not because I love them, but because a mobile industry world without Nokia is like an automobile industry without Ferrari, or a tech industry without IBM. It would be a world where Google and Apple dominates our lives, which is my idea of hell. Besides if the moaning former Nokia executives and employees were never able to turn Nokia around during the crucial 2008-2010 period, then what harm would it be if Nokia actually read this?
The first Nokia touchscreen smartphone that is actually usable
These four mistakes makes me believe that there are old guards at Nokia, both outside and inside conspiring to see that the Windows Phone strategy ends in failure. These people were the reason their old strategy failed and if Nokia is serious of their Windows Phone future, are needed to be weeded out. With Symbian and S40 development killed, Nokia can concentrate on developing new and competitive sexy Windows Phone and Windows devices whilst developing future disruptive technology for such time when the Nokia-Microsoft alliance no longer makes sense.

The following are some of my suggestions:

1. Kill off all Symbian and S40 developments
2. Weed out the old guards
3. Diversify beyond phones
4. Spin off mobile phone operations (none-smartphone)
5. Move operations to Asia

I thought hard about the final suggestion. Job losses are inevitable whether Nokia survives or not. This is the sad fact. We demand cheap high end phones. Anything more than £400 and we moan and complain bitterly. Us consumers are fickle and we are to be blamed for job losses when Nokia and other European manufacturers does the inevitable. It's a sad fact and it is one reason why European manufacturers can't compete with Asia. If we do not want to pay for our phones, then Nokia will have to cut their losses and move their entire operation to Asia. In fact I can already see that happening with the majority of R&D and design moving to Asian regions within the next ten years - assuming Nokia survives to see the decade out.

With the release of Windows 8 and Windows Phone 8 Apollo later this year, I believe Nokia are in better position than most Windows OEMs to win on this battlefront. Whether or not the public accepts the new Windows is another matter, but I believe that they will. It won't be an easy ride, and as I mentioned before, Nokia will experience plenty more bad news before it gets its cake. Hopefully by this time next year, we will have a slimmer more nimble and successful Nokia.


Anonymous said...

People writing off Nokia and WP7 once wrote off Nintendo after the Gamecube. Then the DS happened.

Anonymous said...

N9 unusable? Try using one for a week and then see how long you can tolerate a Windows Phone.