How Nokia lost control to Apple

16 years ago

“Just as Nokia’s rise held lessons about how Europe could succeed, its downfall tells us much about why European enterprises—and large companies worldwide—so often stumble,” Matthew Lynn reports for Bloomberg Businessweek. “In the past three years, the news out of Nokia has only been bad. Since Apple introduced its iPhone in January 2007, Nokia shares have fallen 49 percent. In a ranking of global brands by Millward Brown Optimor this year, Nokia was No. 43, having dropped 30 places in 12 months. Its profit margins have been shrinking, along with its market share and the average price of its phones.”

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“True, it still has more than one-third of global mobile-phone sales. But it’s stranded in the middle of the market,” Lynn reports. “Korean manufacturers such as Samsung Electronics are leading the main consumer market. Apple’s iPhone and Research In Motion’s BlackBerry dominate the upscale smartphone industry. Recognizing the scale of its challenges, Nokia hired Stephen Elop, the Canadian head of Microsoft’s business unit, to turn the company around. Everyone will wish him well… But if the guy knows so much about phones, he’s kept it a secret. Microsoft has never made any progress in that industry.”

MacDailyNews Take: If BlackBerry is upscale, so are typewriters and bowler hats. They’re as behind as Nokia. Antiquated and hopelessly behind are not the characteristics that most upscale buyers covet.

Lynn continues, “The cruel truth is that for all its residual market share, Nokia looks like a has-been. The company misread the way the mobile-phone industry was merging with computing and social networking. And it’s probably too late to turn that around.”