3 Ways Nokia Can Still Salvage Their Dying Company
Nokia has been around more than long enough to know that creating a successful business is never easy – well over 140 years, in fact. Still, the company that was once synonymous with the words smart phone, having created the first one back in 1996, has since hit a rough patch, to say the least.
Now, the company that is credited with creating the first 3g cellphone, and was once the king of the cell phone market, must quickly find a way to get back into favor with their consumers. Especially those consumers in America, who have been all but entirely disconnected from the Swedish communication giant.
Now, having just recently entered into a partnership with Microsoft in a deal that’s intended to bring Windows Phone 7, Microsoft’s mobile operating system, to Nokia phones, they hope to reconnect with that American audience and the world as a whole. At the time, that deal was met with some skepticism. And still, Nokia doesn’t have plans to launch their first phone with the Windows Phone 7 interface for at least a few more months.
But regardless of what the naysayers are suggesting, I don’t think that Nokia is doomed.
Certainly, Nokia is in a difficult spot. Probably the most trying period for the company since it was founded in 1865. But, in a world where large companies fold and consumers typically don’t bat an eye, Nokia still has plenty of opportunity to turn their business around. With that in mind, here are a few suggestions for how they can turn around their currently unfortunate circumstances:
1. Don’t Abandon Windows
Having recently abandoned their own operating system, Symbian, for Microsoft’s tile-based user interface in Windows Phone 7, Nokia knows, first hand, how difficult and damaging it can be to jettison an entire operating system and years of research and development. But for Nokia, it’s become even more important than ever that they continue to foster a working relationship with Microsoft and make their operating system work across their entire line of handsets. Microsoft has seen lukewarm success with Windows Phone 7 thus far, but Nokia’s hardware might be the secret ingredient towards truly penetrating the American audience for both companies in crowded smart phone marketplace.
2. Support The Developers
If Apple’s success with the app store and, in turn, the iPhone are any indication, it’s that people like apps. Not only that, they need apps. Nokia has had decent success with their Ovi App store claiming 5 million downloads per day as of April, but the developer involvement and the level of polish found within those apps, simply put, haven’t even been close to the same level as other apps in the respective iOS and Android marketplaces.
Nokia, with the help of Microsoft, needs to make developer support a top priority. The success of smart phones, more or less, seem to be contingent upon the success of their respective app markets. Blackberry’s failed efforts in creating a successful app store (in conjunction with their tired phone designs) have resulted in other companies quickly taking large chunks out of its market share. Now, Nokia sits at just 24.7% of the market. That’s a lot of regression since it once claimed over a third of the world’s mobile phone market.
3. Rediscover Its Roots in America
Michael Schrage, a Harvard Business Review blogger, summarizes Nokia’s relationship with the American market quite well. “Nokia ignored America. The company simply refused to compete energetically, ingeniously and respectfully in the U.S. America was treated as an innovation afterthought. Nokia tried to get away with preserving its market dominance in Europe and growing its leadership in Asia.” Unfortunately, what that has resulted in is Nokia becoming largely a forgotten relic of a once innovative and extremely influential company. Even worse, it has brought them to the brink of extinction.
That’s why it’s important for Nokia to reconnect with their American audience. Partnering with an American company in Microsoft that has learned, time and time again, how to connect with their American and global audiences is certainly the first step. But it’s also important that the company as a whole makes a concerted effort to penetrate the US market. Connect with carriers, with retailers and most importantly, connect with customers. Nokia makes technically magnificent products. It’s just a shame that most people in America never have an opportunity to experience them.
From here on out, most likely nothing will be easy for Nokia. With Apple and Google (and, to a lesser extent, RIMM) currently dominating the smart phone market, Nokia’s challenges are far from over. In fact, I expect them to continue losing substantial money and marketshare until they can finally gain establish some firm ground in the American market. But that’s okay. Not all is lost.
Often, it’s humbling for companies that were once the king of their respective industry to be brought to their knees. But for a company like Nokia, it’s something that they have needed. Something that showed that their company wasn’t immortal. That success doesn’t come easily and, if it did, chances are it wouldn’t last long.
But Nokia is still alive. Nokia is still kicking. Now, what they do from here on out, during these next crucial months, decides whether their company goes out with a snivel or a triumphant roar in annals of time.
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