Do you know why Nokia failed? If you don’t, then you are in the right place. Let’s see Why the biggest mobile giant Nokia failed. Before going in detail, put in your mind that Nokia never failed. It’s a common-sense that, the company who made the first mobile phone, how can it be abandoned? Then what happened?
Nokia Never Failed. Stephen Elope assassinated Nokia.
The History of Nokia Phones
Growing up, we all had one thing common in our childhood, and that is the presence of Nokia phones around us. There they were, being used with satisfaction no matter where or how we grow up. In the late twenties, it was the most popular brand with the highest number of consumers from all around the world.
White, blue, gold, or even pink-collar workers did not matter which one; everyone had Nokia phones in their grasp.
It indeed was an excellent example of brand loyalty (customer loyalty) and preference.
Nokia – Connecting People
Since its inception back in 1865, Nokia had never limited itself on its roots, Finland. Just like its tagline “connecting people,” Nokia had kept on connecting people from all over the world while connecting itself to people’s hearts in the process.
Very soon after its birth, it became the most popular brand specializing in terms of communication, information technology, and consumer electronics. Nokia achieved its first acquisition with Mobira. From 1892 to 1987, Nokia had introduced so many firsts in the world of technology.
Nokia- The First Mobile Phone
The first car phone ever was brought by Nokia in 1892, followed by the first transportable phone back in 1984. These phones could be used while being inside or outside of cars. In 1987, Nokia introduced wireless phones which could be carried and used anywhere. When the Nokia Mobira product line was introduced initially, the phones were pretty heavy; starting from 10kg.
Later on, they were evolved with years, and people got the chance to use phones weighing down from 10kg to 5kg to 800 gms. Of course, this was a significant achievement, but Nokia did not stop there. In the late twenties, Nokia launched its 1011 series handsets, which led them to become popular in the European and US markets as well.
While Nokia was expanding in the international market (International Marketing– How to Expand Business), they brought another series, the most popular one, the 2011 series of feature phones in 1994. The company did not have high sales expectations from this series, but it crossed every record. Starting with sales of more than the estimated ones, Nokia became the number one.
It seems like their popularity was automatically getting piled up, and the feature phones were getting sold more and more. Everyone loved them; they were trendy for their offerings like being user-friendly, light, and the ability to be carried, used anywhere. Nokia was gaining more and more fame in the international market; it seemed like they did not need to do any marketing at all! As if the phones were selling themselves!
Soon Nokia beat Motorola by gaining a market share of 25%. From 1997 to 1998, there were very few countries in the world who had not heard of Nokia by then. It gained a competitive advantage in so many markets like Asia, China, America, Russia, and Europe, and so on.
It unlocked one of the greatest achievements every telecom company wants- secured 20 phones as theirs among the top 50 phones sold all around the world. No other company could even come near their records back then! From 2003 to 2005, Nokia topped again and again among all companies with a market share of 70% while 30%. The other companies were about to shut down because they were unable to compete with Nokia.
It kept expanding around the world. It built up offices, stores, and for a while, people did not look at any other brand while purchasing phones. They just gained a more significant global presence with every step they took.
What Happened to This Emerging Company, Then?
Well, the European and American markets started producing Android and introducing them to the market. People started to lean towards them quickly. Such began Nokia’s fall in European and American markets while it was still leading the Asian market.
Nokia had not offered smartphones with Android versions to people then. As people started to learn more and more towards smartphones with google apps which provide so much more new services, also Apple introducing its unique design and features, Nokia began to going down.
There came Samsung (Latest Surface Duo by Samsung), Motorola, with their smartphones and flips phones with new and fresh features that attracted a lot of people. American European consumers started to prefer Apple and Google products while the Asian market was consumed by the new flip phones. The Chinese market pinned another nail on Nokia’s already going down the wall when they entered the market.
Once they started, there were more than ever phones being produced and offered every day. Phones with cooler and smarter features suddenly became so readily available to consumers as days went by; why would they think of Nokia again?
There they were, being introduced to Chinese phones with efficient features at a low price range each day while Apple products had their uniqueness to offer and smartphones with their coolest, newest features at a mid-price range.
Nokia did not stop going, it kept going, and bringing new models of its unique feature phones, but it was just not fast enough. By the time Nokia had introduced a new phone, other companies would have already introduced phones with the same and even better features.
Nokia Could Use Their Unique Identity
Nokia was well known for manufacturing Phones with vibrant Hardware, which would last a long time. But people did not care about that. Now the industry was running based on innovation on software. Consumers were being exposed to phones which had useful, fun apps with high-end cameras and processors. People cared about getting the features smartphones or products offered, not for how long they would be providing the services.
Thus, Nokia went drowning in the mobile industry with its Symbian operating system. On the other hand, at that time, Symbian was being used by them only.
The world had moved on to Google products, apple store, and the Android operating system. But Nokia failed to grasp this truth, and they did not want to move from the Symbian.
They failed to adapt to the new, changing world. Every mobile company, literally every single one of them: lava, Samsung, Oppo, Vivo, Xiaomi, etc. who understood the market demand went to Android.
They knew that the Android world was thriving and there was nothing to do but to enter that world to survive. Nokia did not, and it paid the price. The once expanding every day, Nokia had to suspend a lot of employees, shut down many offices and stores, along with the former CEO Olli-Pekka Kallasvuo.
Stephen Elope- The Assasinator of Nokia
Nokia was sold to Microsoft for $7 billion, and Stephen Elop replaced the former CEO. The new CEO who took Nokia to another phase of darkness.
Mr. Elop stared with a great decision; to enter the android market. Everything was planned; even the meeting had been fixed with Google. Suddenly he took a step back from his decision and decided otherwise. He chose not to give Symbian up and declined to work with Google. Instead, he decided to work with Microsoft. He thought it would be better if Nokia merged with Microsoft and introduced a new type of phone where there would be a different operating system developed by Microsoft.
But that failed as well. Microsoft’s operating system is not designed to be compatible with the mobile version, and as a result, the new Microsoft phones were not very user-friendly. People found them challenging to use, and the name was a problem as well. People knew Nokia as a mobile manufacturer, but they hardly knew Microsoft as one.
Microsoft, using its name instead of Nokia’s, brought about a negative vibe in the industry. Those phones were not accepted by enough people, and those who bought them initially got rid of the phones after using it for a short while. Mobile services based on location, preference, entertained, etc. and the operating system, camera everything had already moved toward Google and Google products, apple store, and the Android operating system.
But Nokia failed to grasp this truth, and they did not want what to move from the Symbian. They were unable to adapt to the new, changing world. Every mobile company, literally every single one of them: lava, Samsung, Oppo, Vivo, Xiaomi, etc. who understood the market demand went to Android.
There was no way for Microsoft phones to enter and penetrate the market. Maybe they could still enjoy the last mover advantages had they not been so slow with their progress. But they could not. Stephen Elop is the one who took this step and carried on with it.
Nokia’s Poor Business Strategy
He knew it was time for Nokia to leave Symbian and start working with MeeGo. MeeGo operating system was famous and appreciated back then. The world had already
moved on from Symbian, and Nokia needed to as well for its survival. But he failed to take that step. It’s assumed that Stephen Elop wanted to take over the position of CEO in Microsoft, which belonged to Steve Ballmer at that time. He entered Nokia with the wrong intention, for which Nokia drastically paid the price. Elop was a resourceful leader with lots of skills, sure. But he had the crazy plan, which led to the improper acquisition of Microsoft.
Later on, Microsoft brought about feature phones with high quality in the Asian market. But they were too late. By then, people could buy smartphones made by Chinese companies such as Huawei, Xiaomi with the same price as Microsoft phones cost. Chinese companies were already dominating as the monopoly of the Asian market by then.
The Entry of Satya Nadella
When those failed, Microsoft replaced the CEO Steve Ballmer by his successor Satya Nadella. He publicly declared he never wanted Microsoft to take over Nokia and voted against it. The world had already had Android and ios, which were leading the industry.
Another system could not come and succeed in this all too modern technology world unless it was unique. Satya Nadella realized this as soon as he came into the position, and then he gave up on Nokia. But there were some people who still couldn’t give up on Nokia.
Birth of HMD Global
The former Nokia employees from Finland, who had formed their company HMD. Global, repurchased the brand name from Microsoft back in 2016. Being the ones who had once taken Nokia up to sky limit, they could not give up on their brand. They thought Nokia could be formed again to be successful with the proper people and leadership.
So HMD. Global, the home of Nokia phones, bought back Nokia along with all rights reserved. The employees formed a new system, made efficient plans, and now that they were experienced with Nokia more than ever, they were determined not to make the same mistakes Nokia once made.
They took the feedback from the market and used them to standardize the overall system. To rebuild the brand name Nokia in mind, they implemented the no-risk model; which implied them to make a better connection with the retailers and the distributors of Nokia, giving them a high-profit margin as an incentive to provide
Nokia Did Not Care About Its Distributors
Previously, when Nokia was going on top, the phones were selling at a boom, Nokia provided the retailers and distributors with a low-profit-margin. Now that Nokia needed them more than ever, HMD Global did not follow the same path.
HMD Global, along with its manufacturer Foxconn had made sure Nokia had moved on from its Symbian os and finally joined the Android world. Now all they needed was the right marketing to let the world know Nokia was bouncing back.
They targeted the consumer segments where they had the maximum opportunity market. The phones were in between the price range which can be afforded easily by people with mid-range income and more. They built a better connection with retailers, suppliers, distributors, and customers.
The after-sale service center was formed in over 300 cities around the globe with the goal to provide assistance and answer any queries of the users. They took the customer’s opinions pretty seriously and worked to build better goodwill in the market. All these are working as well!
Nokia Bounced Back
In 2017, HMD Global sold over 21 million flagship feature phones and Android phones all over the world. It’s growing more and more as we speak and all because of the efficient steps taken by the right management.
Nokia was already famous and well-known to people. It was the brand that touched millions of people’s hearts and makes memories for them throughout their lives. People did not leave Nokia, it seems like Nokia left the world people were comfortable in for a while. It fell off track and bounced back.
All it needed was what HMD Global did. Together the employees brought back the old brand equity Nokia had lost, its reliability and its loyalty to people. Being the first one to be used by customers and sold by retailers, it certainly did not take long for people to move towards Nokia again once it entered the android industry.
People did not totally forget about Nokia, they just wanted Nokia to meet up with their expectations. Nokia is not just a brand, it’s the name of emotion to so many. And now that HMD Global is doing such a great job at maintaining Nokia, we can certainly hope not losing Nokia again.