Monday, 9 August 2010

Innovate or Die

It was a feeling of "dejva vu" all over again as I read through an article on Nokia's loss of market share and market capitalization in the Economist. The article does a decent job of articulating the problems.

But how did they get there?

Of course as someone who used to live in Europe, I am quite familiar with Nokia phones. However, when I moved to the US at start of the decade, I was frustrated at the lack of decent European phones in the US market - most of the Nokia or Sony Ericsson phones were the entry level ones. The contrast between the phones on sales in the US market (low end Nokias, Sony Ericsson, HTCs, Samsungs and the PDAs - RIM, Palm / Handspring, Samsung) and those in Europe was noticeable.

Nokia was happy riding the wave of commodity phone sales in the emerging markets and keeping tabs on their European base. They made no effort in bringing their high end devices to the USA, instead relying on other markets to drive their growth.

And then cometh the iPhone. As if the iPhone - which not only took over the US and progressively ate into Nokia's market share in Europe - wasn't bad enough, Google's Android phone and RIM have piled on the pressure (GigaOm has an interesting read on the topic - Apple and Rim sucking profits from SmartPhone industry).

One thing is clear to me as a user of such devices. Having grown up with Nokia phones and then having no access to any decent ones in the US has basically resulted in me (and I am sure many more) discounting them outright. Would I consider a Nokia phone today? Probably not.

Innovation is of course important. But this story also shows that access to innovation is equally critical. If I cannot get it, you cannot sell it! Nokia didn't give wide enough access to their innovation- however much of it there was - in the US.

Good luck to them! Hopefully they can re-invigorate their market.


  1. I agree about the lack of good Nokia phones in the US, but could it be intentional?

    US consumers are crazy about smartphones, whereas Asian (and to some extent European) are more conscious about "high-end" phones - where they see the phone as a status symbol.

    Since RIM, Apple and Android have far better developer support and application marketplaces, I think Nokia may have intentionally held back on marketing high-end phone innovations as it may not appeal to the US utilitarian mindset.

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