Thoughts on Why Nokia Collapsed

When the smartphone arrived, why did Nokia fade away? Why could it not, unlike say Samsung, shift from feature phones to smartphones? The answer is obviously complex and involves many reasons, so I’ll just focus on a few points from Jayadevan PK’s book on Xiaomi.

 

Nokia, he says, had two choices – switch to Android, or try and create its own OS for smartphones. To be fair, at that point, Android hadn’t succeeded, so this was not an obvious choice to make. In addition, since Nokia had its own feature phone OS named Symbian (and engineers who worked on it), there would have been push from within the company to either convert Symbian or to create a new OS of their own to compete with iOS and Android.

 

As Nokia’s feature phone sales collapsed, they got bought over by Microsoft. The new bosses were hoping their own smartphone OS, Windows Phone, would succeed. And they wanted to use Nokia phones as the vehicle for that OS. That decision by its new owners sunk Nokia for good, since Windows Phone never caught on, and that meant nobody wrote apps for it.

 

I was surprised by something else Jayadevan wrote. Much before the iPhone was launched and touchscreens became the norm, Nokia had made a conscious choice to stick to the stylus (pen like device) instead of going for finger-based interaction. Why? Because they were based out of a very cold country, Finland. The thinking was that using fingers to interact with the phone would require people to take off their gloves, and who’d do that in Finland? That earlier decision meant Nokia chose resistive touchscreens (instead of capacitive touchscreens). In turn, that choice meant Nokia couldn’t support multi-touch capabilities.

 

It is easy to criticize with hindsight, and that is not what this blog is trying to do. Sometimes, the world changes suddenly, and an existing company can find that the very same mindset and thought process that worked so well is unsuited for the brave, new world. Like Nokia’s thinking that most phone buyers would be in cold countries, and removing gloves would be a pain. Whereas Apple took a chance with touchscreens and it worked out spectacularly because Steve Jobs was obsessed with ease and intuitiveness of user experience, technological and supply chain challenges be damned! And it turned out that the maximum number of phone users were just round the corner and they were from China and India, much warmer countries…