The Real Reason why Nokia Failed

10 years ago, Nokia had 1 Billion mobile phone users and Apple had none. A decade later, the numbers have almost altered.

So where did Nokia go wrong? It lacked the sense of urgency.

Frank Nuovo, Ex Vice President of Nokia said, “I look back and I think that Nokia was just a very big company that started to maintain its position more than innovate for new opportunities. All of the opportunities were in front of Nokia and they were working on them but the key word was a sense of urgency. There was a real sense of just saying we’ll get to that eventually.”

For example, Nokia had a prototype of 8-inch tablet computers years before iPad even emerged.

Chief Executive of chip manufacturer Qualcomm, Paul Jacobs, who was working with Nokia in 2008 said that his main complain was that Nokia took too much time when working on strategies. Qualcomm would present Nokia a new technology that would seem as a big opportunity. But instead of diving into the opportunity right away, Nokia would spend a long six-nine months assessing the opportunity and by this time, the opportunity often went away.

Nokia was a huge cash rich company who kept throwing money at the problem instead of innovating through it with wisdom. Nokia was spending 5 Bn dollars on R&D, which is roughly 30% of the entire mobile industry’s total. Yet they remain far from launching a legitimate competitor to the iPhone.

10 years since its launch, Apple has now sold over 1.1 bn iPhones, 400 million of which were sold in last two years alone.

This post is not to criticise Nokia, but it is to share with you, how lack of urgency will swipe you off the kingdom, which one day you ruled. That’s my take away from the fall of Nokia and the rise of Apple.

Anyway, Nokia will always be my first memory of seeing a mobile phone. A device which looked no less than a miracle. A device which went on to become our extended organ.

Yours truly,
Sangram Kakad