How the mighty fall….. A deck of slides leaked this week seem to suggest that Microsoft are going to drop any mention of ‘Nokia’ during the Christmas 2015 campaigns for Lumia devices.
This made me wonder how the world’s dominant phone handset maker a relatively short time ago became such an irrelevance and even (albeit a little harshly) a joke. How can market share drop from 49% to 3% in six years? Knowing the story of Nokia can highlight some important lessons for marketers.
Past success ≠ future success:
Nokia had a rich history of innovation and adaptation. The company was formed in 1865 with paper mills and over the years represented rubber boots and car tyres. But it was mobile phones which transformed this Finnish company into a worldwide brand.
And make no mistake, Nokia was hugely successful at making mobile phones. As late as 2007, Nokia alone represented 50% of all profits made in the entire mobile phone market.
But resting on laurels is not recommended in any market, particularly in the fast-moving world of technology.
First-in can be first-out:
Pioneers are not necessarily always the companies who reap all of the success. Nokia was innovative in the creation of mobile phone hardware. It developed its first smartphone prototype way back in 1996, and was developing touch-screen prototypes and internet-enabled phones by the end of the 1990s. It wasn’t just about Nokia phones so hard they can stop a bullet.
But the focus was very much on hardware, crucially not on software.
It wasn’t always a marketing problem:
Nokia was not a marketing fail, at least not for a number of years. In fact, Samsung and Apple have a lot to thank Nokia for, because Nokia developed mobile phones into fashion accessories. Its Expression series introduced the interchangeable fascia in 1998.
But Nokia’s marketing mistake was relying too heavily on its brand name. Despite some R&D trailblazing, they were late to the smart-phone market and relied on the strength of their brand to make up for lost time. But people had already moved on by this stage and were falling for the iPhone.
It’s all about the consumer:
Perhaps the most important lesson for marketers is this one – you must always listen to the consumer. The key to Nokia’s early success was focusing on hardware, the handset itself. But with the introduction of more sophisticated and powerful mobile operating systems, consumers started spending more and more time looking at software – what can my phone actually do?
The Nokia user experience via Symbian was unintuitive and clunky, but being a pioneer it had the opportunity to change its system to Windows Phone from future owners Microsoft. However, it clung onto Symbian until 2011 – 3 years after the launch of Android and a full 4 years after iOS. The train had left the station and the ground that Nokia had to make up was too vast.
This didn’t stop Nokia from trying to catch up – but it was still not listening to the consumer. It had a focus on music when Android and iOS phones were opening up the possibility of the smartphone being a passport to wherever you want (just look at the variety of apps on your phone). In 2013, Nokia launched the Nokia Lumia 1020 – a phone with a massive 41MP camera. But do consumers want a camera that powerful? The emphasis is surely on storage and ease of sharing your photos rather than printing them out in huge sizes?
Nokia is not the first business who hasn’t listened to the consumer and suffered. Blockbuster and Kodak are good examples too. But if business leaders and marketers do not learn from these companies, they run the risk of following them into the history books.