The Innovation Problem: Nokia’s Fall From Grace

January 7, 2013

The Innovation Problem: Nokia’s Fall From Grace

4 mistakes behind Nokia's innovation problem
During the late 1990s and early 2000s, Nokia was the world leader in mobile technology. Today, they have been eclipsed by the likes of Samsung and Google. Once a pioneer, they’ve put their chips on the Windows Phone bandwagon, the future of which is equally uncertain.
So what happened? Like many companies, they missed sight of key innovations that would prove disruptive to their business later.
Here are some highlights (or should I say “lowlights”) of some Nokia’s key mistakes:

What Went Wrong?

1) Misreading the Market and Failing to Understand the Future of Mobile Devices was in Data, Not Voice

Nokia’s initial dominance was due in part to well designed mobile phones. They emphasized top quality hardware powered by their in house OS Symbian. The OS was slated more towards providing phone functionality than Apps or other features that have become commonplace on smartphones today. Nokia had been content with providing phones with some minimal features dubbed “Feature phones.”

2) Riding Their Existing Operating System Too Long

The Symbian Operating System became a staple on Nokia phones. But it provided a limiting factor when trying to extend the platform to compete with smartphones. The key sticking point was App development. Each Symbian UI required its own custom build which limited the ability to support any third party apps. Eventually, in 2008 Nokia decided to open-source Symbian, but it was too late. The OS was dated, still focusing on phone functions in an era where smartphones were beginning to disrupt PCs.

3) A Confused Product Roadmap

Nokia had been developing a series of potential successors to the Symbian OS. However, there was no clear roadmap dictating when it would supersede Symbian. They had settled on a solution called Mee-Go, but it released in 2011. By then the ship had sailed, and Nokia’s CEO made the decision to go with Windows Phone 8, so it essentially was an orphaned platform.

4) Missing the App Ecosystem Train

Nokia historically had not prioritized building an app ecosystem. This was demonstrated in their apathetic attitude towards providing backwards compatibility between versions of Symbian. As a result, third party developers were not willing to create Apps for the Symbian operating system. This in turn made their devices less appealing when Android and Apple arrived on the scene.

What Can We Learn From Nokia’s Fall From Grace?

What Nokia’s downfall came down to was an inability to to anticipate where the market was going. They failed to grasp their buyer’s habits — how they were really using the product and the things that determined what phone they purchased.
Additionally, they did not have a clear vision internally about their future product roadmap. Without a set of clearly established goals and timelines, Symbian was left on the market too long without a replacement. The disconnect with understanding the market created the circumstances for being eclipsed by Samsung and Apple.

Corporate Strategy, Sales Operations

Sudip is in charge of Corporate Strategy, Sales Operations at <a href="">Alegeus Technologies</a>. Previously, he worked at OpenView from 2012 until 2014 with portfolio companies to provide insights on the markets they operate in, their customers, and drive development of business strategies.