Beyond Nokia: A love story

I'm not sure why anyone signed up to make Android phones. I can only assume it was panic about how far ahead the iPhone was when it was introduced. Microsoft and Intel made all the profits in the PC industry, the manufacturers fought over table scraps. The survivors like Dell quickly moved into enterprise services where they could make actual money.

The cell phone suckers signed up for the same thing in mobile: Let Google and the carriers make all the money while they duke it out gladiator-style to eek out a meager profit. In that situation you're left without the R&D budget to compete with the likes of Apple (who takes most of the profit in cell phones) or Samsung (who has a massive conglomerate including chip fabs, a battery business, and a display business!).

So the tl;dr is that Nokia making Android phones would have been, at best, a shadow of its former self. It was institutionally incapable of making that transition because it wanted to protect its former business. They also believed their carrier relationships would save them (aka the Carrier is the real customer for phones, not the end-user... end-users will take what the carrier offers and like it.) Nokia was also incapable of creating their own platform. The number of surviving companies who have successful done that can be counted with your fingers and all of them are based on the US west coast. It takes a software-is-king culture that neither Nokia nor Blackberry ever had. The only way Blackberry or Nokia survive is to immediately pivot the day the iPhone is announced, open huge software engineering offices in the Bay Area, and start developing their own platforms ASAP. Act as if you're going out of business immediately.

There is also a cautionary tale for startups: By the time you realize your competitor is going to eat your lunch it may be too late to do anything about it. You can't wait until you are losing 20% of your customers to react because it will take you 3-12 months to turn the ship and catch up, then at least as long again to mature features, inform customers, and hit purchasing windows. That can be up to two years you've been focused on catching up while your competitor was free to keep innovating. By the time you get it all sorted out you'll be losing 80-90% of your customers, only now the market is bigger and network effects are even stronger so you'll have to work twice as hard to get back to where you were.

This is a thing I see many people bickering about, but I think they are misguided. Elop tried what he could, and in fact the sale of handset business to Microsoft - which he negotiated - was a very good deal for Nokia, the company (and its shareholders). The price was good. Nokia, the company, is still very much alive and kicking.

The platform for handset business was indeed burning when Elop made the famous speech. His mistake was to signal so strongly to the public the ramp-down of Symbian, which accelerated its demise and loss of sales. But what was laying in the future was clear for anyone to see. The writing was on the wall.

I felt the things were going wrong in about 2005, when Nokia was the market leader, and complacency crept in. Managers and executives forgot about the outside world, and in their comfortable market-leader position the logistics side (always strong in Nokia) was allowed to run things. New phones had under-powered processors, for instance - just to save a few cents a piece, which is huge money when you make millions of devices, but in the end it meant that the user experience suffered and new UX innovations were dumped.

Too much trust in the "we're the gorilla now" position.

It looks a little bit like Apple is now in the same situation. Their cash flow seems unstoppable, but what new are have they recently brought in?

EDIT: FWIW, I was in the infra side (which is still there, although I was made redundant), not in the handset business. I had a lot of friends and former colleagues in the handset side. So I had some visibility and insight to what happened, but no personal axe to grind.