There is one thing and one thing only that made Nokia the world’s largest manufacturer of mobile phonse and there is one thing and one thing only that is currently kicking Nokia’s ass. The company culture is engineer driven, period. Everything is build upon this very perception of reality, period. This is how Nokia introduced the world’s first mobile phone, the Mobira Cityman 900, and this is why Nokia is losing market share and market value for the last couple of years.
Fredrik Idestam, Nokia’s founder, was a mining engineer back in 1865. Fast forward 145 years and you will realize that every product Nokia ever made was build upon that engineer driven mentality and Finn influence. Engineers and particularly Finn engineers, combine great talent and technology to build amazing devices but that’s all they do. They build stuff based on the engineer assumption of efficiency and evolution but they totally toss the experience. Engineers are happy when stuff work and specs are pumped even if they have to struggle with 15 different clicks and settings to get the hardware running. Finns are a special specimen of engineering force who don’t give a damn about any of the “in between nonsense” at all.
Nokia is blessed to be the world’s largest handset maker or to put it in other words, engineer driven or not what they do brings €5 billion worth of food to the table. It’s really hard to argue against an operating profit of €5 billion as of 2008 but someone actually did. Apple and Google both set the standards for the next generation of smartphone OS while Nokia is yet not ready to officially announce Symbian Foundation phone and get over the engineer driven design of the powerful N900 beast. Apple is already working on the 4th version of iPhone OS for the new iPhone to be announced June-July 2010 while Google is on speed with 4 major release of Android OS already. As of now, Nokia is doomed to fail on the developed world.
On the other hand, Finns measure tremendous growth and success in emerging markets which are now something like the holly grail of low end – S40 mobile phones sales and Ovi services. This is huge for Nokia and the stock price considering the size of the population and the opportunity for further expansion. It’s also extremely beneficial for the locals who now have access to information for the first time ever without asking for permission from the local authorities or the head of the village. This is where Nokia is doomed to succeed.
It would be interesting to see if this new path to financial success and opportunity to change the world as once happened with the Cityman mobile phone is the same path surrounded with the engineer only perception of reality which cut Nokia’s market share down to 38%.