TechnologyTell

Nokia’s fall from glory

Sections: Business News, Cellphones, Communications, Mobile, Smartphones

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I lusted after a N3650 in 2005. credit: nlitement

I remember my high school days.  The iPhone was still a couple of years away and Blackberry was, by far, the most popular phone.  If you took a survey of which phones people actually used, I’d be willing to bet that Finnish manufacturer Nokia would be at the top of the heap.

Nokia was the world’s top selling phone maker.  They sold a variety of phones for every income bracket.  Their phones and Symbian OS were highly praised at a time of bad carrier-branded OS’s.

Then something changed.  Apple released the iPhone and turned the phone industry on its head.  Users were clamoring for this new “multi-touch” experience.  Nokia responded with hubris.  They didn’t feel the need to make dramatic changes.  They were on top of the world and didn’t see the market making a dramatic shift towards Apple.

They were right in some respects.  The iPhone did not sell at the volume (or price) to unseat Nokia, but it didn’t have to.  Android’s rise allowed cellular manufacturers to offer many users a low cost experience that rivaled the iPhone.  Nokia’s phones and OS were starting to look dated and users began to turn away from them in the US.  Europe and India, their last stronghold, followed shortly thereafter.

Nokia needed a change.  Fans were clamoring for Nokia to turn to Android. Detractors were telling them to close up shop. Nokia surprised most when they began a partnership with Windows Phone at Microsoft. The young, unproven OS seemed to be a risky bet for the established giant. Symbian engineers left in droves, betrayed by a company that they dedicated their lives to.

The current phones, while good devices, are not selling well.  Maybe it’s the unpopular OS or maybe it’s the brands tarnished reputation.  Nokia is taking another controversial step to keep itself afloat. According to the Associated Press, Nokia is selling its main office in an effort to cut costs.  They will continue to work out of another office in their native Finland.

Nokia’s fall from glory should be a cautionary tale for all companies in the tech industry or not.  Do not underestimate your competition.  Your position as a market leader is only as strong as your ability to give customers what they want.  Here’s hoping that Nokia can get back on its feet and continue to make great devices.

Read [Associated Press]

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  • David Brown

    What information do you have to back up the assertion that the current range of Nokia Windows 8 phones are not selling well? Let’s have some facts, please!

    All the news reports I’ve seen show that Lumias are selling out in many markets, and the pre-orders for the Lumia 920T to go on sale with China Mobile are already in the millions. Granted that we do not know the actual sales numbers yet, but we are clearly witnessing the introduction of a popular, full-featured, solid set of devices from Nokia in multiple markets and with multiple carriers. I wouldn’t be so quick to write Nokia’s obituary quite yet. There is MUCH more to write about this story in the months ahead.

    I don’t expect iPhone fans to abandon their favorite device. But they should be disappointed that the iPhone 5 did not advance the technology curve in any measurable way. That device is only playing catch-up by incorporating technologies we have already seen from other manufacturers on earlier devices. It is NOT better than other devices from Samsung and Nokia, but rather only trying to be their equal.

    I believe Android users do not have the loyalty to that platform shown by the Apple crowd. I was an Android user myself, but switched to a Lumia 920 because I believe Microsoft has a much bigger stake in developing secure platforms than Google or Apple because of Microsoft’s huge commitment to corporate IT departments. And I know my WIndows phone will integrate better with the Windows PC’s I use at work and at home. I’ve own mine for three weeks now and I love it.

    Whatever happens to Nokia, let it be in their hands to make their future. Trying to make everyone think Nokia is spiraling down to destruction with unsupported assertions of poor sales is not only unprofessional, it’s just wrong on the facts. And trying to characterize every Nokia corporate action as a last ditch effort is also wrong. If you cannot see that Nokia is trying bold moves to re-invent itself, you are missing a much better story to report than the one you’re spinning.

  • Jeffrey Jones

    I appreciate your enthusiastic support of the company, David. I’m glad my post was able to start a conversation. Truth is, Nokia has been losing sales globally since 2007. As a result they have been cutting costs and have lobster position as the world’s top smartphone maker. I think the reasons for that are clear.

    I hope Nokia experiences the turnaround that you are speaking of. I have no ill will towards the company. You better believe that we will beside to post the complete story if we see a positive change in the months ahead! I don’t believe the iPhone is a better device but it is certainly a more popular device. Lumina sales are a mixed bag and, based on the numbers, I certainly wouldn’t share they are selling well. Not compared to its competition or pre-2007 Nokia (in terms of market share).

    Nokia is no longer the world smartphone leader it was. I believe the story is appropriate based on that fact alone. As I said at the end of my piece, I hope Nokia is able to regain its footing.

    Thanks again, David.

    Jeff

  • http://TechTell Jeffrey Jones

    Excuse the auto correct. Instead of lobster position, which would undoubtedbly be delicious, I meant lost their position. I’m sure there are others!

  • Robert Miller

    Just visited three AT&T stores and a Microsoft store in Manhattan. Only one had any Nokia 920’s in stock and only in white. They all said that they were selling out as soon as stock came in. This seems to be true in Dubai, Australia, Germany and other places.

    This suggest that Nokia is selling as many as they are making and whether that is as good as some time in the mythical past I don’t know.

    Do know that the 920 is the best smartphone on the market and IMO the first true smartphone that has been offered. Till now smartphones have been toys and trinkets in comparison.

  • Frank

    Hi Jeff,

    Don’t know from where you gather your information, but your article is far from resonating the current actuality. The Nokia Lumia is doing very well and Nokia has a hard time to fulfill the consumer demands with sufficient amounts of smartphones. I’m living in The Netherlands which is one of the countries that has to wait until Nokia is rolling out the Lumia 920. We have to wait until January. Waiting lists are impressive. Same story in countries like France, Italy, China and Germany, where this smartphone is officially available but sold out within days. See how the Nokia Lumia is hyping on the internet, isn’t that also a criterion for the popularity of the device? After experiencing this, reading your article feels as if I opened an old magazine that reminds me on how quick things can change in the industry.

    I’m finished with the iPhone, the device that for almost five years was my most precious tool and gadget. The iPhone 5 is very disappointing to me. The same as the 4 only longer (what is the advantage of that?). Like many I want to discover the Lumia. It’s solid, bright, well shaped and stylish with brilliant specs.

  • Jeff is an apple stooge

    probably another long-apple tool trying to shut down any competition. no surprise there.

    look JEFF, you remember apple’s “downfall” from glory? when everyone said apple was done and beat? and when everyone and their mother sold off their stock!?

    Nokia is less than 4 dollars a share. it has experienced a major rebound. it was less than 1.7 a share a few months ago. i brought in at 2.8. with lumia taking off, maps, asha, etc..it wouldnt surprise me if nokia hit 7 or 8. it’s already doubled once.

    now, you think apple will ever get 1,200 a share in the near future? NO. nokia is a steal and only n idiot would pass up on investing. it’s portfolio alone is worth 4.50 a share, and the recent victory against RIMM further shows its clout in spite of not making a profit.

    • Jeffrey Jones

      Quite the contrary :)

  • Jeffrey Jones

    David,

    I do want to concede a point that you’ve noted earlier. The Lumia 920 model is exceeding expectations based on reports out later today. Some are saying that supplies are short, others are saying publicity stunts. Speculations aside it looks like the phone is doing better than any of their recent devices. Certainly a bright spot in a fading picture. I didn’t want to let that point unnoticed. As you implied this an a stronger portfolio overall will help Nokia greatly. I appreciate you reading this piece. We will be sure to follow the story closely. Hope to hear from you again.

    Jeff

    • David Brown

      Jeff,

      I’ve seen the speculation that Nokia is manipulating the supply of phones to create the impression that the phone is selling so well it is sold out everywhere.

      While this is certainly possible, I discount these rumors on two points:

      1. If you give a store 100 Lumias and they have 500 customers who want one, you are sold out. If you give a store 499 Lumias and they have 500 customers who want one, you are ALSO sold out (but you’ve sold 5 times as many devices). So why restrict supply when you can sell virtually every device you make? Nokia *may* have miscalculated how popular their new Lumias would be, but I don’t think it was intentional.

      2. Nokia has to know that the best way to re-establish their brand in the United States (and elsewhere) is to get Lumias into the hands of customers, so their word-of-mouth advertising will generate the “buzz” Nokia needs. Artificially limiting supply does not accomplish that goal. Nokia has a solid device that deserves to be seen and used, and I have a hard time believing Nokia would want to stunt the growth of their brand in any way.

  • Ash

    Never take things for granted especially your customers. I was a Nokia fan for years. I would argue with anyone who disliked Nokia. But things changed when iPhone came out. When i saw an iphone and associated a price tag to it, i realized that for that price tag i am getting a phone like iPhone was incredible. None of the Nokias high priced phones were not even 10% of iPhone. and guess what Nokia rubbished the iPhone. They were adamant. In reality they could not accept a phone with that price being that good. For almost 3 years they never came up anything close to an iPhone. I appreciate that at least blackberry tried. The new windows phone from Nokia are good but i guess too late. The bus has left. There are going to be other MSFT partners that are going to make better phones than the Nokia will do (HTC 8X) and they will be lost.

    Lessons learnt.

    1. Never take things for granted
    2. Keep innovating. If you dont, someone else will.
    3. React fast. Dont miss the bus. The next bus will get you late.
    4. Dont underestimate your competition.
    5. Dont underestimate the concept of Value for Money.

  • Dsjanc

    LOL, MS and Nokia hire a lot of part-timers to post how greathe MS window phones are. So manipulative and unethical. I know that David Janc Brown is employed by MS and Stephen Elop.

    • chanko

      LOL back,
      Here is one happy dude with a Lumia 920 and no body pay’d me to say that.
      Ok I can accept IPhone 5 is an amazing device (I played around with it) but that doesn’t mean there are not OTHER great devices out there.
      Apple fun stop thinking the sun shines out of you axx…

    • David Brown

      @dsjanc

      EEEHHHHH! Wrong answer!!!

      I am David Brown, but I work as a system analyst in North Carolina. I am not an employee of Microsoft or Nokia, and the views I expressed are my own.

      Also, if you have real verifiable proof that Nokia and/or Microsoft have paid shills whose job it is to post supportive comments on blogs, you need to put that information on the table. Just spouting wild claims without proof does not magically turn them into facts.

      If you read my comments closely, you’ll see that I clearly stated some of those comments as my beliefs, not as facts. Some of them were predictive, and we will see whether they turn out to be true over time.

      Am I passionate about Nokia? Absolutely. I dislike seeing all the negative comments about a corporation that is attempting to re-make itself, only to be buffeted by the headwinds of sarcasm, excessive discussions about the mistakes Nokia made in the past that they are now trying to remedy, and the persistent gloom that many bloggers have tried to place on Nokia to suggest that there is zero chance they will every complete a turnaround and become a respected player in the smartphone market. I think Nokia will recover. It will take time, but the Nokia Lumia 920 I am using now is one indication that Nokia is on the right track, and worthy of our praise for their efforts.

  • dan

    Nokia claim they soled over 2.5 million units in 20 days, if that’s true the they are back in business.
    I have the lumia 920 and I must say I am impressed, so it might be true they sold so many.

  • Frank

    @Jeffrey Jones
    @dsjanc

    Why should Nokia spin on numbers and putting me and many others on a waiting list? Selling phones, that is what Nokia needs to survive instead of cheating the press or keep their phones on a hold. And why suggesting without any proof that positive replies are from hired part-timers? Talking about ethics, I think that’s unethical.

    One remark about the iPhone5 and the Nokia Lumia 920. One of the most mentioned disadvantages of the 920 is heaviness and size. But who’s defining what costumers prefer? Many people I spoke about the iPhone criticize the lightness of the iPhone 5. I don’t like it either. They should have exploit the saved space for a larger battery. That’s what costumers really appreciate. I love to feel some substance like a solid and well designed smartphone as the Lumia 920. Although quit arbitrary, the argument of less weight is uncritically followed by any who writes a review.

    I really hope that my spin will be payed off with a free Nokia Lumia 920 ;)

  • Jeffrey Jones

    This is a robust discussion and I’m glad to hear views from both sides. Most importantly, I appreciate the individuals who wrote about their experiences with the new Lumia. I hope it and future phones have a large impact.