The Story of Nokia’s Demise and the Lessons We Can Learn from That

If you were born on ’90s or early 2000’s I am sure you are familiar with the era of Nokia.

That was the time when the mobile phone and Nokia were almost synonyms. Nokia was like a symbol of excellence for mobile phones.

In fact, we used to tell people whenever their phone slipped or fall out from their hand ‘c’ mon, if it’s a Nokia phone then nothing will happen’. The hardware of Nokia was that good.

Look at the above phones. Aren’t they making you nostalgic?

I am sure you have used these phones at least once in your life. These were used to be an integral part of our family.

But then our world is a remarkable place. There is a famous phrase in Bengali which states- ‘Aajker raja, kalker fokir (Today’s king can be tomorrow’s beggar).’

See, today no one talking or interested in Nokia. As if Nokia never existed.

But the question is what made Nokia’s(the king) which once had 80% of the global market, suddenly just vanished?

Wait! did I just say suddenly vanished?

Maybe it was not suddenly, maybe there was a process which made Nokia bankrupt. When a giant like Nokia can disappear like this then anything can happen right.

So let’s get some insight about the rise and fall of Nokia.

Nokia’s history dates back to 1865 when it was founded by Fredrik Idestam as a ground wood pulp mill near the town of Tampere, Finland. This company was acquired by Finnish Rubber Works Ltd. and merged with Finnish Cable Works Ltd in the period 1918-1922.

The companies officially merged in 1967, laying the foundation for the Nokia Corporation. In the late 1950s and 1960s, Nokia became active in the computer industry, already having considerable experience in electronic engineering and telecommunication since the 1900s. Nokia acquired many companies like Salora (a television maker) and became 3rd largest television manufacturer during 1979-1985.

Nokia also acquired Mobira, a mobile telephony company. In 1984 Mobira was fully integrated into Nokia. In 1988 Nokia-Mobira’s market share on the global analogue technology phone market was 13.8% whereas Motorola Inc., being the second largest had a market share of 13.4%.

What’s interesting is, initially Nokia was not interested in producing mobile phones. But then in 1990, Jorma Ollila was appointed CEO for Nokia.  Ollila decided to turn Nokia into a ‘telecom-oriented’ company. That decision proved out to be a turning point for Nokia.

In November 1992, the Nokia 1011 launched, making it the first commercially available GSM mobile phone. In fact, Finnish prime minister Harry Holkeri on June 1, 1991, became the first person on earth to make a GSM call, using Nokia equipment on the 900 MHz band network built by Nokia.

In October 1998, Nokia overtook Motorola to become the best-selling mobile phone brand in the world. Between 1996 and 2001, Nokia’s turnover increased fivefold, from €6.5 billion to €31 billion. Nokia was operating almost in 140 countries with more than 55000 employees. It was the golden time of Nokia.

Later it launched camera phones which became very popular among people. Of course, we can’t forget the Nokia 1100 phone, which sold 250 million times. It’s still the best selling mobile phone of all time.

Nokia 1100 Phone

But then what happened to this blockbuster company? How Nokia faded away?

The answer is not straightforward. It was not a sudden incident. Of course, a company like Nokia cannot disappear overnight. It was a series of incidents and decisions which led to Nokia’s downfall.

If I have to tell in simple words, I would say Nokia failed to recognize the need of hour during 2007-2010. When Steve Jobs launched the first iPhone in 2007, the whole equation of mobile phones changed. People became interested in having a better user interface and using different apps in mobile phones.

Google was able to identify that and created Android. Unfortunately, Nokia was ignorant and was too confident about its hardware. Undoubtedly, Nokia’s hardware was best in the world but hardware only was not enough then. People wanted more from mobile phones. Nokia’s Symbian operating system was not good enough to cope up with Apple’s iOS or Google’s Android.

By the time people in Nokia realized, it was too late.

Some people blame Stephen Elop, CEO of Nokia appointed by Microsoft after merging of Nokia and Microsoft in the year 2013. It is believed that Elop postponed the release of Nokia’s brilliant N9 phone for 2 years. N9 was believed to showcase the cutting edge and extremely user-friendly OS, MeeGo, which was solely based on gestures, that their engineers had been developing for the past years. Even Apple and Google were just started to catch up with a gesture based operating system.

Nokia N9 Phone

It was a mistake by Stephen Elop. Had Nokia N9 been released in the market at the right time, the situation for Nokia could have been better. Microsoft-Nokia merging didn’t turn out to be a fruitful decision for Nokia. Microsoft never seemed to have any intention of partnering with Nokia on equal terms. It just wanted to use the Nokia like a goose which lays golden eggs to popularize their own windows phones.

This is all we know as an outsider. But inside the company, a lot of things were going on during the crisis period of 2007-2013.

Some people believed that Nokia was simply an inferior company with less talent and innovation than Apple.

But as two researcher Timo Vuori and Quy Huy investigated Nokia’s demise, they found that this was not true. Nokia’s engineers were among the best in the world and they were well aware of the risks ahead (Apple’s and Google’s rise in mobile phone software).

One of the biggest challenges for Nokia was to improve its operating system Symbian, which was inferior to Apple’s iOS or Google’s Android at that time. But overhauling the existing software would take years of development. But the management wanted to launch their new products quickly, which needed greater planning.

Unfortunately, employees were not allowed to express any doubts about the way the company was proceeding. Senior managers often shout at the juniors if they told them something they didn’t want to hear. All they wanted were puppets not people with brains who can think about the company’s good and bad.

Nokia’s previous success was perhaps the reason for Nokia’s senior executive’s dogmatism. They were less open to suggestions, especially from juniors of the company or even from experts outside the company.

As a result, employees of Nokia lost their interest to actively participate in discussions. They didn’t care about the company’s progress. In short, Nokia lost the loyalty and faith of its employees.

As a result, The company consistently failed to upgrade its operating system to a suitable standard. Finally, the company shut down completely.

This is not just Nokia’s story. It’s the same story of many organizations like Motorola, Kodak, etc. All of them were best in the market once but disappears after a certain time due to their arrogance and ignorance.

As an individual what can we learn from Nokia?

You must keep in mind-

“If you fail to update, you will soon be lost”

When we become good at at something or achieve something as an individual or as an organization, we tend to take pride in that. But often this sense of pride becomes our main obstacle to upgrade ourselves.

Humility, therefore, is essential for your growth. As long as we are humble and open to suggestions from others (irrespective of whether we apply that in life or not) we make space for our growth.

“If you are not humble enough, you can not learn anything new”

Think about your own life. Are you the same person what you used to be 5 years back?

If yes, then something is going wrong in your life. You are supposed to upgrade yourself with time. You are supposed to acquire new skills, knowledge, and experiences as time is passing. You are supposed to be like flowing water, not frozen water.

If one thing you need to remember from this article, that’s the picture below which shows, once Nokia’s CEO Steve Balmer’s resentment.

I am sure you don’t want to feel like that. So don’t forget to upgrade yourself.

Have an amazing week. Until next week.

Joy

Source:

  1. Wikipedia-Nokia
  2. South China morning post on Nokia
  3. Nokia’s history

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