This is like asking what occurred first, the chicken or the egg. Nokia made two mistakes – their first was hanging on to their Symbian OS rather than quickly switching over the popular Google’s Android OS and their second mistake was hiring ex-Microsoft executive, Stephen Elop, as their CEO. It was like inviting the devil right into your home and then not being able to get rid of him – oh wait, he did leave – he went back to Microsoft and dragged you, and your once good name with him as his final act of cruelty, with the final deal to be completed in early 2014. So are the woes of Nokia and another example of Microsoft’s lack of leadership and the “Trojan horse” way they did business with Nokia, the once proud Finnish company that outsold all smartphone manufacturers in 2011, and is now in a downward spiral.
Nokia was the largest vendor of smartphones from 1998 until as recently as early in 2012. Although sales over the past five years declined with the advent of the growing market for touchscreen phones, particularly from the Apple’s iPhone and Google’s Android OS. Nokia watched its share price plummet from a $40 high in late 2007 to under $2 in mid-2012. In what can only be described as a desperate attempt to recover from this beating, in February 2011, they partnered with Microsoft – on the recommendation of Stephen Elop, a former Microsoft executive, now Nokia’s newly hired CEO – and he quickly and methodically replaced their Symbian OS with the very unpopular Windows Phone OS over the very popular Android OS. That move drastically reduced their sales and from 2011 through 2013, Nokia fell from the world’s largest phone maker to tenth largest.
The problem with doing what he did is that the Windows Phone, now Windows Phone 8 (WP8), operating system was about as popular as the Symbian OS that it was replacing. When compared to iOS or Android, the Windows Phone OS has very few applications, that entice consumers to purchase the device in the first place. Microsoft has offered as much as a $100,000 to developers to bring their software over to their Windows Phone 8 OS platform. As developers look to develop future applications, they are looking straight at iOS and Android, where the large numbers of users are, not to WP8 – so not only does Microsoft have to worry about lack of applications now, but also the ones for the future.
Many people expected Nokia to deliver some kind of growth during the last quarter of 2013 – their cheaper Lumia 500 series was selling well and still growing in the Fall, Nokia devices were doing well on Amazon, and the Christmas season would soon be upon them. Most analysts expected Nokia to sell 10 million smartphones, but came up short at just 8.2 million. The high-end Lumia models are not selling well, the European demand for the Lumia 900 series dropped off dramatically, and the major carriers in the U.S. just have no love for Nokia WP8 products due to their low sales volume. Could interest in Nokia products be waning in light of the Microsoft takeover that will soon be completed?
Nokia has continued to work on a smartphone running Android, and may announce it at the Mobile World Congress (MWC) next month. First dubbed the Nokia Normandy, it looks like it may actually launch under the name of Nokia X – either name is appropriate. What we do not know is if the Nokia X has Microsoft’s blessing or not – is it possible that once Microsoft takes complete control over Nokia, will they cancel the launch or will they be smart and sell both a WP8 version and an Android version – covering all of their bases. Elop has already hinted that they may even do away with the Nokia name after the completed takeover.
In Microsoft’s hands, the future of the Nokia brand is still very much up in the air – will the Nokia name still even exist, will Microsoft allow the Nokia X to go to market, just to test those waters, would Microsoft even consider adopting both formats, how will Microsoft grow the WP8 format, can they ever bring it to the prominence of the Android OS. These questions, and many more will be answered over the next couple of years – with Microsoft’s large cash reserves they can afford to experiment, but you can only experiment so long before you have to produce a viable product.
Who knows what could have happened if the Nokia board had decided to adopt Android early on, before Microsoft “muddied up the waters.” I just know that it will be a sad day when we have to say goodbye to Nokia for good – yes, I know it was their own doing, but haven’t we all made mistakes? We would love to hear your thoughts on this topic – hit us up on our Google+ Page and give us your opinion.
Source: bgr