Who killed Nokia, or Apple did not make any mistakes phone giant




Technology companies can not succeed by trying to please only their board of directors or even Multimillion Dollar with partners believe in Project Syndicate. No matter it will be respected multinational corporation or a dynamic start-up, to win the one who will make their customers happy. Companies that lose sight of that doomed.


In the technology industry, it seems there’s a new law: the leading company eventually losing their positions, often quickly and brutally. Champion of the mobile communication company Nokia, once served as a shining example of the success of Europe in the field of technology is no exception: it has lost its market share in just a few years. Can the industry champion Apple avoid the fate of Nokia?

In 2007, the share of Nokia accounted for more than 40% of all mobile phone sales in the world. But just as consumers began to prefer a smartphone with a touchscreen. In mid-2007, Apple began selling the iPhone, and Nokia’s market share began to decline rapidly, and the company’s revenues to fall. By the end of 2013, Nokia sold a division of the American mobile phone Microsoft.

Nokia fate predetermined series of decisions taken by Stephen Elop, who in October 2010, took over as CEO of the company. Judging by the numbers, this is the worst CEO in history during his reign the market capitalization of Nokia, in terms of daily decreased by 18 million euros ($ 23 million).

The main mistake Elop was the choice of the operating system Windows Phone from Microsoft as the only platform for smartphones Nokia. Nokia Elop once compared to a person who is on the sunburnt offshore drilling platforms, and must choose between death in the fire and jump into the icy sea. He was right in saying that doing business the old fashioned way meant certain death for Nokia, but was mistaken by Microsoft as a lifeline.

Elop not only to blame for what happened. Variable resisted and the board Nokia, which made it impossible to adapt to the rapid changes of the industry. Jorma Ollila, Nokia led the transformation of the industrial conglomerate in the technology giant, was so fascinated by previous successes that did not see the need for change to remain competitive.

The company also started a desperate cost reduction program, in particular by eliminating thousands of jobs. This contributed to the disappearance of high corporate culture Nokia, which previously motivated workers to take risks and work miracles. Good leaders have left the company, taking with them the inherent ability of previously Nokia guess the correct direction of development. Not surprisingly, many of the most valuable and talented designers and programmers Nokia also dismissed.

However, the main obstacle to the creation of intuitive and user-friendly interface of smartphones, such as iOS, was the reluctance to leave ahead of the technological solutions that bring success sooner. For example, Nokia initially claimed that he could not use his phone operating system Android, because it requires a mandatory installation of applications from Google. But just before the deal with Microsoft was a whole line of phones based on Android – NokiaX, in which the application was not Google, but had Nokia maps and search from Microsoft.

Why Nokia did not choose Android before? Short answer – money. Microsoft has promised to pay billions of dollars if Nokia will only use Windows Phone. Google such a proposal could not kill because it distributes Android for free. But the money could not save Microsoft Nokia: you can not build an industrial ecosystem of money alone.

Previous experience in Microsoft Elop also undoubtedly played a role. In difficult situations, people often turn to something that is familiar to them. If Elop friend happened to be sinking another company. “Of the two turkeys do not get the eagle” – wrote in his Twitter Vic Gundotra, one of the leaders of Google, when I learned that Nokia chose Microsoft.


Apple should not relax. It may someday lose the leading position, as well as Nokia has lost them in the manufacture of mobile phones, not to mention Microsoft and IBM – in the computer industry. But there are steps you can take to prolong success.

First, companies must constantly innovate to improve the chance of the invention of breakthrough technologies within the firm. If the market leaders are implementing a system that facilitates the emergence of new ideas, create a corporate culture in which people are not afraid to make mistakes, then they will be able to maintain its position at the forefront of the industry.

Second, large firms have to monitor what is happening in the world of innovators. Instead of forming partnerships with small companies that are well suited to the current business model, large firms should work with innovative start-ups, having breakthrough potential.

Finally, although successful companies must constantly innovate, they should not be afraid to imitate. If Nokia immediately began development of smartphones, similar to iPhone, simultaneously solving the problems with patents, the global business of mobile devices today would look very different.

What is the most important lesson of the collapse of Nokia? Technology companies can not succeed by trying to please only their board of directors or even Multimillion Dollar partners. No matter it will be respected multinational corporation or a dynamic start-up, to win the one who will make their customers happy. Companies that lose sight of that doomed.

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