The story needs no introduction about Nokia as a consumer brand. However when I saw the latest quarterly financial report of Nokia I was not at all surprised. The point is the market share is declining as well as the profit. One would assume it all happening because of Apple and Android OEMs. I feel there is more to it.
The story goes back in 2007 when Nokia had the highest market share in Mobile phone segment. It had a variety of devices to offer.
- clam shell (flip phones)
- sliding
- phone with many degrees of freedom (N93 remember?)
- candy bar phones
- Symbian phones with multitasking ability
- S40 phones with low cost
It was a large company. It had to manage multiple platforms with many form factors. It used to license Symbian OS from Symbian Ltd. which was owned by multiple handset vendors [Nokia (>50%), Samsung, sony ericsson etc (<50%)].
Backward Integration
Nokia wanted to strengthen its focus on Smartphone and acquired Symbian. Nokia also acquired QT (Trolltech) which was doing UI development in a platform agnostic way. Nokia wanted to integrate Maps and navigation into the devices and acquired Navteq.
Nokia made a strategy to build devices with multiple platforms but with a common UI (QT).
However Nokia was not sure that it was dealing with too much complexity. Due to multi platform strategy and supporting a large type of devices Symbian software code became terribly complex. Making a product out of Symbian OS + S60 UI layer of Nokia was arduous.
QT Apps
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QT
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S60 UI
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Symbian OS
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Hardware Variation
A comparison internally made revealed that Symbian had almost 10 times code size as compared to Android! Lots of developers complained about the API inconsistency and Usage style. (Blame it on different CPU speed and screen size of Nokia phones!)
I was very much a part of Nokia then and witnessed humongous effort spent on sanitizing the bugs and also interfacing with the 3rd party Applications.
Every developer can understand what happens when you have too many layers and the processing power is low.
Decision making and execution was slow due to complex organisation structure leading to accountability vacuum. Making a phone was a great pain.
Meego
Nokia also was doing Maemo (Linux variant) development to offer PC like computing on mobile devices. Plan was also there to put QT on top of it. Nokia also partnered with Intel's Moblin platform and created Meego!
However the execution was slow. Even if the products were well appreciated (N800, N9) they could not compete with the Apples and Androids due to small no. of 3rd party applications availability and more precisely a small ecosystem.
Nokia event tried to make NetBook. Not sure if anybody remembers Nokia's Booklet.
The solution strategy
Nokia also came up with OVI store for the developers to launch Applications. Nokia tried to venture into other products like Ovi Music, Ovi Share etc. However they were badly managed. It took a long time to get Single Sign on working seamlessly. Mostly they didn't work.
People were used to Google products then and telling them a different story was too naive to convince them to use OVI products.
Recently Nokia has announced to discontinue OVI branding. You can read it here.
Playing with APIs
API (Application Programming Interface) is very important to develop Applications. Nokia had a large set to varying APIs to attract developers.
- Java
- Symbian C++
- QT
- Posix
- flash
- java script
Maintaining each API adds to new set of complexity. What really developers wanted is a simple API which could work with all set of phones. Note that even Android can suffer from this issue due to large form factor variation of hardware. For instance HTC wildfire is too slow to run and can't run many Android Apps which run smoothly in HTC One S.
However Apple doesn't suffer from this due to one platform strategy.
The point here is due to simplicity nature of APIs a lots of developers migrated to Apple and Android resulting a smaller Symbian - Nokia ecosystem and larger Apple/ Android ecosystem.
Less Apps means Less Handset future usage. Customers didn't like this.
Nokia continually lost market share from 2008 till date.
People liked N8 but
they liked Samsung galaxy more and iPhone even more.
Hardware Story
After 2007 several hardware vendors evolved and came up with great platforms. viz. Qualcomm and Nvidia. Nokia didn't make any single device with them even if they were having power packed performances. However Nokia wanted to launch multi-core platform on Symbian partnering with ST-Ericsson. Nokia invested a large chunk developing SMP enabled Symbian OS and UI layers however failed to launch any products in time. When every other player launched muti-core products Nokia had none to offer. Customers were disappointed.
The Comeback Strategy
Nokia hired a new CEO Stephen Elop in 2010 and decided to cut down the fat. Since then the company is under major restructuring including selling Symbian Unit to Accenture. It Partnered with Microsoft to use Windows Phone OS for the future smart phone devices. S40 is still alive catering to low cost devices and is getting better browser updates to penetrate mass consumers.
The recent launches N800, N900 are quite appreciated in the market. The struggle continues to regain the lost market share.
The struggle story teaches a lot of lesson on Product making. Watch for my forthcoming post on Apple.
A nice capture of Nokia + Symbian's history over the past 5 years. People almost forgot why Symbian was created in the first place. The mission lost and things are back to the PC world's way. That said, I somehow feel Nokia might come back in a big way. "Hope is a good thing" after all.
ReplyDeleteWell Said, Bhaskar! As it is said, "Nothing is for permanent" and "one who fits survives". The game is changing constantly. Nokia needs to adapt and so are the others.
ReplyDeleteIn the end the consumer must be won by offering a great product.
Nokia's Strategy is not that inspiring. I remember vividly the talks we had about developers. Developers need their programs to run in various versions of the OS. Symbian Struggled and I am guessing that Android also will struggle (http://developer.android.com/resources/dashboard/platform-versions.html), You can see the latest version has less than 5% user share. If this happens in long run. People will forget Android and OEMs will start embracing ...
ReplyDeleteAs long as OEMs think that Customer is King, everything should go fine.
As we see the Apples and Androids are getting launched every quarter/ year, there is nothing new in terms of features except the processing power. On the other hand the Applications are increasing every day as we speak. I don't except a quantum leap in Mobile in a year or two. What we could look for in future is more of digital convergence of devices.
ReplyDelete