Looking into the Crystal Ball – Will Nokia be able to Survive?
Todays Wireless Industry headlines read “Nokia shocks market, posts $834M loss” and why am I not surprised. I have predicted this eventuality for a while now. This is the first time that Nokia has posted a loss. Nokia may play it down by saying that it is one time write off of the Siemens deal that they did recently. However I think the writing is on the wall. Nokia is just failing to make an impact on the Smartphone market with their lost cause of Symbian OS based phones. Their smartphone market share has fallen from 41% to 35% while Apple has climbed into a comfortable 3rd spot with 15% market share after only 2 years of launching the iPhone. RIM is number 2 with 18% but my guess is RIM is going to kiss the bottom along with Nokia in the next 2 years while Apple and Google Android will lead the smartphone market. A lot of Nokia fan boys may say hmmm… but the traditional phone market is huge compared to the smartphone business and Nokia kicks butt there. My thesis is that the traditional handset market will die eventually as Moore’s law will drive the smartphones into the lower price band of the market and once someone experiences the integration of a music player and a nice Internet browser with touch integration, they are not going to go back to a traditional phone. So, that brings us to why I feel that Nokia is eventually going to die while Silicon Valley companies are going to shine in the Mobile Device business:
1. Nokia has announced work on the Maemo OS for their tablets and Smartphones based on Debian Linux. This is a clear departure from their Symbian strategy. I would have jumped with joy if Nokia had started working on this 4 years ago. It is way too late now to catch up with Apple and Google Android in the race for world dominance. It is to be seen if Nokia will be successful. My bet is on Nokia failing miserably. Check out the slick Nokia campaign for Maemo
I have heard from my sources that Nokia has working prototypes of Google Android in their labs on their devices which is great news. But can you imagine the PR disaster when Nokia announces that it has conceded defeat in the OS realm and is going to adopt Android. This also means that now they have to compete with Samsung, HTC and other Asian OEMs/ODMs who have a big headstart in the market with Android.
2. Nokia is failing to launch compelling services for the connected mobile lifestyle such as Email, Social Networking, Photos, Music etc while Google and Apple are slam dunking these with ease.
3. Nokia’s Ovi Store was and is a disaster.
- Nokia Ovi Store Launch Is A Complete Disaster
- Nokia’s Ovi Store launch met with disaster
- Nokia’s Ovi to Compete with iPhone App Store?
- Nokia Opens Ovi App Store: Backfires Hideously
- Ovi Store labelled ‘FAIL’ after launch disaster
4. Nokia unable to convince developers worldwide that they should build on their platform. What platfrom Series 40, Series 60, Maemo 5. Ya, right. Try porting your app to 3 very different phone platforms. What were the empty suits from Finland thinking?
5. Apple’s strategy to work with Google for Mapping and TomTom for GPS integration is brilliant. When I had my lame Nokia phone, they wanted to charge me a fortune to use the GPS capability of the phone as an annual subscription while I could download Google maps for free and it worked better than the crap Nokia was peddling.
6. Apple and GOOG provide awesome email capability in their devices for FREE. Last I heard Nokia had built a decent RIM like email service for its E-Series handsets but was planning to charge RIM like Email Tax( a monthly subscription to use the service). Lame - The Nokia suits in Finland must truly believe in their ability to make money from monetizing email by taxing users. Still born idea.
7. Nokia enters the Netbook race with a US$800 netbook running Windoz. WTF? I thought Netbooks were supposed to sell between US$200-300. I believe the Nokia Booklet will be a total disaster and the suit that decided to enter this heavily crowded market is going to get fired after this disaster. This just shows the desperation of a dying company. Complete lack of focus on its core business and starting new business where there is no competence and very little defensibility.
More interesting Reading: