A month ago Microsoft and Nokia announced that Redmond would be acquiring the Finns’ once market leading mobile phone division, in addition to licensing the company’s vast amount of patents and getting to use the company’s ‘Nokia’ trademark on feature phones for the next decade. An era is over, but a new era is also dawning…
In 1987 the Mobira Cityman is launched as the company’s first mobile phone, followed by the first Nokia-branded, GSM-enabled mobile phone launching five years later in 1992 as the Nokia 1011. By 1998 the company is the world’s largest mobile phone manufacturer. In 2001 they launch the world’s first camera phone, the Nokia 7650, and by 2005 the billionth Nokia device is sold. By 2013, when the iconic mobile hardware division is sold off, their Lumia 520 becomes the best selling Windows-powered device in history.
When you ask what most people’s first ever mobile phone was, they are likely to say that it was a Nokia. My first Nokia device was the iconic Nokia 3210, and I have owned plenty after that, as many people have. Games such as Snake, Bounce and Space Impact are some of the most popular, and enjoyable, games ever and played by millions of people. Then there is the iconic Nokia tune, based off of Francisco Tarrega’s Gran Vals, which is heard an estimated 1.8 billion times a day!
Nokia was clearly once a global market leader, sadly despite adapting to the mobile device era quite fast, they failed to adapt to the smartphone era fast enough. Their Symbian offerings were stale, their MeeGo offering dropped too quickly and their focus solely on Windows Phone a grave mistake, despite being the most significant Windows Phone manufacturer, and the key to the platform’s growth to the third largest smartphone platform.
Rumours have it that Nokia had gotten impatient with Windows Phone’s slow growth and had started exploring the possibility of joining in on the Android bandwagon, having quite possibly ordered 10,000 Android-powered prototypes. Of course, rumours are rumours, at least until we see some concrete proof that they aren’t just rumours. Could whispers of an Android adoption be what prompted Microsoft to place their bid?
Nokia’s feelings towards Android in 2011, when they opted to go the way of the Windows Phone, was that it was overcrowded and that they would not be able to provide a differentiated experience, that they would not be able to create a viable alternative to the loads of other Android-powered devices. Well, I feel that they could have, but management was stubborn and that is what lead them to their current situation.
Had they opted for Android, they could have easily created a differentiated experience. Introduce their Swipe UI from MeeGo onto their Android-powered devices, introduced their world class Mapping solution, powered by their NAVTEQ subsidiary, onto their devices, embed their even better camera solutions into the devices and make use of their unique, differentiated designs to make some badass Nokia Android devices. Think about it, no need to bully developers such as Instagram into creating applications for their ill-fated platforms.
Samsung’s rise in the Android market only took off at about the same time as Nokia could have introduced Android-powered devices of their own, and with their superior designs, cameras, software and mapping software, they could easily have overtaken Samsung and run the Android monopoly that they currently rule. They already had world class manufacturing plants that could mass produce said devices very fast and in the large quantities necessary to rule the market once again.
Sadly, the company chose Windows Phone, which wasn’t necessarily a bad choice, but going in exclusively on the platform is cause for major concern. Yes, the company could have ended up like HTC, also once a leader in the market, but their expertise in the market as well as their major differentiating factors, which HTC lacks, would have prevailed in the end. The market could very well have been very different today, though it can still change.
Nokia’s shareholders still have a say. Next month, shareholders in the US as well as Finland, will have a say in the Microsoft acquisition, which many believe is extremely undervalued. If they vote against it, Nokia will have to pay a €38 million penalty, but the company will be free to do as they wish. They will have access to €1.5 billion in loans from Microsoft to keep themselves alive, although I am more than sure banks should be more than willing to loan them more than enough thanks to their vast amount of key assets.
Then, the company can start work on Android-powered devices, I mean make a Lumia 1020 powered by Android, stock for now, and announce it as soon as January 2014, maybe even at CES 2014. Mass produce several other devices, and by the end of 2014, when their agreement with Microsoft runs out, can their Windows Phone line in favour of the much more popular Android, which by then should be outselling their Windows Phone powered offerings.
Of course there is another scenario. The Microsoft acquisition is approved. In early 2014, Nokia smart devices are no longer being produced, the Lumia line remains as Microsoft’s mobile offerings, the Asha 5-series is killed off as to not compete with the popular Lumia 525, Nokia feature phones continue to be produced for the next three or so years, in two years Windows Phone is dropped as yet another miserable failure by Redmond. Nokia’s assets remain and are implemented into future Microsoft devices.
Nokia remains as a mapping and network services provider, stronger than ever, but with a piece of them missing, a hole in their heart…