Wednesday, 4 September 2013

Outflanking Nokia

Outflanking Nokia

This week has seen another pillar of industry bite the dust.  Along with Kodak, Tower Records and John Brown and Son.  All of them reached the top of their industry and stopped.  They were outflanked and didn’t react quickly enough to industry changes. They were complacent.

I have grown up with Nokia.  My first mobile was a Nokia in 2001 and for 6 years after that all I had were Nokia’s – they were the best – other manufacturers tried but couldn’t topple Nokia.  But then Steve Jobs changed all that. 

What the iPhone did was make a computer fit in to your pocket and they included a phone. Internet device first, phone second. They threw in an iPod, which had already changed the music industry, for good measure.  “An iPod, an internet communicator and a phone” Steve Jobs stated.

Nokia were making great phones with add-ons.  They didn’t invest in the software that powered the internet and more importantly apps.  Apps made the iPhone – it was the killer feature.  No one cared what the phone looked like anymore – what they cared about what the software and what you could do with it.

That is where Nokia went wrong – but they needn’t of – they had in in the palm of their hands in 2007/2008. But they continued to invest in the software that had put them at the top and held them there – Nokia still shipped more phones in 2007 than any other provider.  The smartphone software they were developing was seen as niche and specialist.  They didn’t divert resources to it quickly enough.  Once they realised smartphones was the way to go they backed Windows instead of Android.  If they had backed Android – Your Samsung Galaxy could have been a Nokia.

The messages from history are the same.  John Brown and Son shipbuilders on the Clyde didn’t adopt modern manufacturing techniques.  Tower records didn’t move to the digital music revolution  Kodak continued to produce 35mm film instead of digital devices and photo software.

The message is simple.  The change you created to put you where you now has to change again to put you on top in the future.  You can’t stop.  Because if you do, you will be outflanked. 

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