Nokia Smartphone Strategy

Nokia is a world renowned telecommunications corporation that connects over 1.3 billion people. Nokia’s mission is simple: Connecting People. Their goal is to build great mobile products that enable billions of people worldwide to enjoy more of what life has to offer. The company started out producing wood pulp and paper, the most influential communication technology in history, in Finland in 1865. By the 1960’s Nokia is a booming business with large production of rubber, cable, forestry, electronics, and power generation, and by the late 1980’s the company was among the very largest T.V. producers in Europe. Nokia launched the mobile phone era in the 80’s by introducing the first international cellular network and started production of the first vehicle cellular phone. Over the next couple of decades Nokia’s market share was huge and dominated the cellular device market. As the new millennium approached, everything about the market changed. The internet went mobile and consumers wanted phones with all new capabilities. Phones are no longer just for calls, and with these changes came an increasingly dynamic and competitive environment. With this intensified competition the development of the Smartphone is born.

Nokia’s position in the mobile phone segment is now being challenged by the iphone and android devices. For the first time Nokia is not in control of the market, and as smartphones progressed, Nokia found a declining market share. There was a clear and obvious need for strategy adaptation, but what would the best path be? The change would be the end of an era for Nokia.

Prior to February 2011, Nokia’s smartphone strategy was to use the Symbian and MeeGo platforms. These are linked by a common developer environment (Qt) and service layer (Ovi). Nokia would use MeeGo in the highest end devices and Symbian in everything else. But the termination of the Symbian platform was made part of the strategic plan, as MeeGo would gradually erode Symbian away. In the past Nokia had a “go at it alone” attitude that was a driving force in their smartphone strategy. The company wanted to control both the hardware and software areas of production. But as the company learned, the market is too complex for this approach. Elop, Nokia’s CEO, stated that “Nokia has failed to keep pace with market disruptions from its rivals and is therefore lacking in competitiveness, that the battle of devices has been superseded by a battle of ecosystems, and that Nokia has lacked accountability and leadership to drive the company through changing times”. The ecosystem he is referring to not only includes the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications, and many other things. The presence of these ecosystems becomes extremely important in analyzing the strategic options Nokia has for its future. Which path would