Nokia's fightback: wielding a swiss army knife against a lightsabre

I enjoyed reading Anssi Vanjoki's blog post on Nokia's fightback. Nokia does need to fight back - once they were the kings of the mobile phone business - the sort of company where senior executives made world headlines by receiving the largest ever speeding fine

Since then things have gone down hill, in fact if we look at stock price performance from January 2002 (when Anssi got his record fine) Nokia's share price has dropped by 64% - over the same period the Dow Jones index is down just 5%, and Nokia have even underperformed Motorola (who are only down 55% in that time)

It's not just financial performance - consumer perception amongst the mass market for smartphones in Europe has shifted to Apple being the premium brand, technical early adopters are keen on Android devices while competition in the feature phone space from Samsung and LG is very strong - IDC are predicting Nokia will lose their number 1 status in western europe in 2010. This pattern is repeated at a consumer level too - I attended an event yesterday, and for the first time ever noticed that there was not a single Nokia device in the room. 4 years ago this would have been unthinkable - it would have been Nokia phones + corporate provided blackberries. Today it's more blackberries, iPhones and the odd Android phone - a spectacular fall from grace for the once trusted king of the pocket.

So what are Nokia doing about this?In 13 paragraphs Anssi sets out his vision for bringing Nokia back to a leadership position in smartphones.

7 of these paragraphs - that's half of the post discusses Symbian and MeeGo. In just one paragraph does Anssi address the consumer - he says

For consumers, it will mean true computing power in your pocket. Something that can deliver everything you want, but be with you all the time.

As a consumer I wonder what does that mean? What can I _do_ with these devices? In what way will a Nokia device be better, cheaper, faster, longer lasting than a competitor's device?

Nokia seems to have fallen for the engineer's trap of adding features to the platform because they can - rather than focussing on what consumers can do, and repeatedly asking the question "are we doing the best that we possibly could here?"

A year ago I set out a roadmap for Nokia on this blog - I challenged them to create three areas of focus where Nokia have a strategic opportunity to WIN.

Nokia continue to execute around these areas - Text messaging is led by the E series devices, Web is led by the N series devices and Mass market are led by their mobile phones and Ovi services.

As I measure their progress 1 year on, they seem to be falling behind in two of the three areas - the only area that they are being successful in is the Mass market.

To fight back Nokia needs to be brave - and to resist the temptation to add too many features, creating products that are swiss army knives - lots of small, useful tools, when the competitors are wielding specialised, focussed modern that look like lightsabres - you will lose the fight.

Could Nokia recover? Sure - they have the scale, marketing expertise and R&D capacity to win back their position.

Will Nokia recover? I'm less confident here - a cultural change is needed, and they need leadership that is prepared to knock heads together, and upset people, with a clear vision that can be communicated to consumers. This means taking greater risks with their core business, in the recognition that continuing to do what has got them into the position they are today, won't get them out - they need new focus, and clear execution.

Good luck to my Finnish friends.

Comments

[Olli-Pekka Perkele]

Problem 1. Anssi Vanjoki is an idiot. Remember, this is a man that told the world that superior Nokia cameraphones would mean they would never again have to carry around those clumsy oversize DSLR's. He is not known for his insight or acuity.

Problem 2. Anssi Vanjoki may be an idiot, but he's the only one among Nokia's senior management with a detectable personality. Journalists will therefore turn to him time after time for the quote.

Problem 3. Nokia have pinned their hopes for future competitiveness around MeeGo, but there is no MeeGo story. Nobody is holding their breath waiting for yet another mobile operating system. It would be better for Nokia to license Android, honestly, but pride and ego will prevent this from ever happening.

[Matt Millar]

In fact camera phones have caused problems for many camera manufacturers who are no longer anywhere near as successful as they used to be - the main impact of camera phones has in fact been a significant increase in the amount of still and video taken though - so there has been a significant increase in the market.

I don't agree with point 3 though - Nokia need to differentiate, and picking "the same" OS as their competitors won't help here - I would much rather see Nokia focus on creating great products for consumers that really meet their needs, and explaining this simply to consumers - consumers don't really care what the OS is, but do care "what does the device do for me" - remember the first generation of iPhone didn't do 3G, nor did it have ANY applications, at a time when Nokia devices did both - you don't have to have more features than the competition to beat them.

[Olli-Pekka Perkele]

Matt, my point is about physics, optics. No phone lens is ever going to replace the glass on a DSLR. If Anssi Vanjoki does not understand this, he has no business speaking to the press.

[Greta]

Lpx02X Good point. I hadn't thought about it quite that way. :)