This post focuses on the reasons why Nokia failed after enjoying unrivalled dominance in the mobile segment for several years. The ferocious and mighty telecom giant Nokia was well known for its products' hardware and battery life.
For years, it was the talk of the town. User satisfaction with Nokia’s mobiles was globally recognized. The company launched the first internet-enabled phone in 1996 and by the start of the millennium, Nokia also released a touch-screen mobile prototype.
This was the start of a revolution in the mobile phone industry. The Finnish giant was the largest cell phone maker in 1998. Nokia overtook Motorola, a move that was hard to predict. So what led to the downfall of Nokia? It wasn’t a single factor but a myriad of reasons, most of which resulted from Nokia's resistance to change. We present to you the 6 main reasons behind Nokia's failure.
1. The Resistance To Smartphone Evolution
2. The Deal With Microsoft
3. Nokia's Failed Marketing Strategies
4. Moving Too Slow With The Industry
5. Overestimation Of Strength
6. Lack Of Innovation In Products
1. The Resistance To Smartphone Evolution
Nokia failed to take advantage of the Android bandwagon. When mobile phone manufacturers were busy improving and working on their smartphones, Nokia remained stubborn. Samsung soon launched its Android-based range of phones that were cost-effective and user-friendly.
Nokia's management was under the impression that people wouldn’t accept touch screen phones and would continue with the QWERTY keypad layout. This misapprehension was the start of its downfall. Nokia never considered Android as an advancement and neither wanted to adopt the Android operating system.
After realizing the market trends, Nokia introduced its Symbian operating system. However, it was too late by then with Apple and Samsung having cemented their positions. It was difficult for the Symbian operating system to make any inroads. This is the biggest reason behind Nokia's downfall.
2. The Deal With Microsoft
Another reason for Nokia's failure was the ill-timed deal with Microsoft. The company sold itself to Microsoft at a time when the software behemoth was fraught with losses.
Nokia's sales screamed the mobile phone maker's inability to survive on its own. At the same time, Apple and Samsung were making significant strides in innovation and technological developments.
It was too late for Nokia to adapt to the dynamic and rigorous changes in the market. Microsoft’s acquisition of Nokia is considered to be one of the biggest blunders and wasn't fruitful for either side.
3. Nokia's Failed Marketing Strategies
Generally, a startup fails because of a bad marketing strategy and the same happened with Nokia. The company followed an unsuccessful strategy of umbrella branding. Apple was the first company to apply the umbrella branding model with the iPhone at the top. It kept adding new models to this umbrella year after year. Samsung followed the same route by launching the Samsung Galaxy series but Nokia failed to take cues.
The user trust Nokia built over the years was gradually waning. The company was inefficient in its selling and distribution methods. Seeing the mess, Nokia decided to come up with some fascinating hardware and software innovations. However, these were already released by Nokia's rivals and lacked uniqueness. Failure in Nokia’s marketing and distribution strategies played a significant role in its elimination from the mobile industry.
4. Moving Too Slow With The Industry
Nokia never kept pace with changing technology and trends. Nokia was always famous for its hardware and didn’t pay much attention to its software line-up. Initially, the company overlooked technical advancements to avoid the risks associated with bringing innovation to phones.
The business needed diversion but it was too late by the time Nokia realized this. Instead of being amongst the early initiators, Nokia transitioned when almost every major brand had already started producing awesome phones.
5. Overestimation Of Strength
Nokia overestimated its brand value. The company believed that even after the late launch of its smartphones, people would still flock to stores and purchase Nokia-manufactured phones. A misconception! People still make predictions of Nokia retaining the market leadership if it uses better software at its core. However, this is far from the truth as seen today.
The company got stuck with its software system which is known to have several bugs and clunks. Nokia felt its previous glory would help alleviate any sort of trouble. Unfortunately, things didn’t play out that way.
6. Lack Of Innovation In Products
The lack of innovation in its products only added to Nokia's woes. While brands like Samsung and Apple came up with advanced phones every year, Nokia simply launched the Windows phone with basic features.
The Nokia Lumia series was a jump-start measure, but even that collapsed due to lack of innovation. The unattractive and dull features didn’t help. In the era of 4G, Nokia didn’t even have 3G-enabled phones. Nokia also came up with the Asha series but it was game over by then.
Wrong decisions and risk aversion brought the decline of the mobile giant. Nokia refrained from adopting the latest tech. Nokia's failure became a case study that made organizations realize the importance of continuous evolution and enhancements. The journey of what was once the world’s best mobile phone company to losing it all by 2013 is quite tragic. Nokia also strongly lacked leadership and guidance.
FAQs
Why did Nokia fail?
Not switching to android, lack of innovation, Not upgrading the software and overestimating the brand value were some of the reasons that led to the failure of Nokia.
What is Nokia?
Nokia is a consumer electronics company popular for its mobile phones. It is one of the largest mobile phone manufacturers in the world.
Is the Nokia company closed?
No, the company is still running but it has shut down some of its plants.
Why did Nokia reject android?
Nokia never considered android as an advancement and on purpose denied adopting Android in 2011.
Why did Nokia fail to compete with Samsung and Apple?
Nokia didn't adopt Android and focused on its hardware more than its software which is why it failed to compete against Samsung and Apple.
Source :- https://startuptalky.com/ Author :- Devashish Shrivastava Date :-March 17, 2022 at 11:00AM