HOW Did Nokia Fall? [Finalé]

Key Takeaways

you are watching cold houon [Music] TV hio here and welcome to the final episode of the rise and fall of Nokia it's been an amazing journey so far we've traveled from the 1800s to the Year 2006 looking at Nokia's history and how they Rose to power thanks for joining me thus far in today's final episode of the series we'll be taking a look at how Nokia fell the story of Nokia's decline starts badly but ends up terrible as you'll soon see the company succumbed to a wolf in sheep's clothing let's begin in the mid 2000s Nokia's n series was the flagship product line the n95 was a case in point it had all the makings of a modern smartphone just the wrong type of human machine interaction the series received a generally positive reception until the industry was shaken in 2007 the major blow to Nokia arrived when Apple released the iPhone it was a phone with a full touch interface much like the LG Prada before it but the difference with Apple's product and the secret to its success was the capacitive touchscreen display and desktop routes in its OS suddenly the n95 didn't look so impressive anymore and the very next year the game was about to change again Google released their first Android phone and the famous battle of the smartphone os's had begun however Nokia did actually respond with the old touchscreen 5800 Express Music phone it was a commercial success and was largely praised for its supplied stylus and a low price but it was actually viewed negatively by critics for its poor software implementation so great here we have Nokia responding to Google and apple right so where did it all go wrong how did noia fall well hold on to your hats people because what you're about to hear is the real employee inside information that you will not get anywhere else on YouTube a special thanks to the Wall Street Journal for this one the first set of inside information we get is from former vice president and chief of design at Nokia Frank noovo he was at this position during Nokia's Glory Days and resigned in 2006 when the management changed this is noovo speaking I look back and I think that Nokia was just a very big company that started to maintain its position more than innovate for New Opportunities he continues all of the opportunities were in front of Nokia and they were working on them but the key word was a sense of urgency there was a real sense of just saying we'll get to that eventually for example Nokia had prototype 8in tablet computers years before the iPad even emerged okay so we see that Nokia was a bit slow to move but that couldn't really be all let's take a deeper look into Nokia's mindset this is actually pretty incredible Nokia's Engineers stated that the iPhone was way too expensive to manufacture and only worked on 2G networks primitive when compared to Nokia's 3G technology they scoffed as the iPhone didn't even come close to passing Nokia's rigorous drop test it seems funny today but it's almost understandable from Nokia's point of view back then despite this the iPhone ended up selling like hot cakes and by 2008 Nokia's Executives realized that matching Apple's slick operating system amounted to their biggest challenge and their number one priority so in cly within Nokia one team tried to revamp Symbian the Aging operating system that most Nokia phones ran and another effort eventually dubbed Migo tried to build a new system from the ground up people involved in both efforts say that the two teams competed with each other for support within the company and attention from the top Executives it was a problem that plague Nokia's R&D operations as the saying goes anything that's divided internally will never succeed as alista Curtis Nokia's chief designer from 2006 to 2009 put it us spending more time fighting internal politics than doing design key business partners were also frustrated as well the chief executive of Chip manufacturer qualcom Paul Jacobs started working with Nokia in 2008 his main complaint was that Nokia really took too much time when working on strategies this is a quote from Mr Jacobs we would present to Nokia a new technology that to us would seem a big opportunity but instead of diving into this opportunity Nokia would spend a long time maybe 6 to 9 months as assessing the opportunity and by this time the opportunity just often went away the real problem was that Nokia's management just couldn't steer the huge multinational company quickly enough they seemed to just keep throwing money at the problem instead of innovating through it with wisdom even jumping over to Android seemed like a short-term solution a shortcut Nokia's smartphone division management asie vanji dismissed the idea of Android as peeing in your pants for warmth in the winter ouch 2010 Canadian Steven elop took over the helm a bit of his history first in 2005 he worked for macro media which got bought by Adobe during his time as CEO and from 2008 to 2010 he worked for Microsoft working on Microsoft Office products at the time of elop's arrival noky was spending $5 billion on research and development that's 30% of the entire mobile industry's total yet it remained far from launching a legitimate competitor to the iPhone however Nokia did release the N8 and N900 both good attempts but it was still clear that Nokia was struggling to focus on useful R&D Mr elop had had enough he sifted through data and visited labs around the world to personally terminate projects that weren't core priorities as it turns out the organizational structure of Nokia was also extremely convoluted in 2010 for instance Nokia was hashing out some details of software that would make it easier for outside programmers to write applications that could work on any Nokia smart phone at some companies such decisions might be made around a conference table but in Nokia's case it was a nightmare According to some inside attendees of the meeting this is how it went down 100 engineers and product Managers from different offices as far as Massachusetts and China were all called into a hotel venue in Germany over 3 days Nokia employees sat down and jotted notes meanwhile representatives of Migo Symbian and other operating systems within Nokia all struggled to make themselves heard as one person recalls people were just trying to keep their jobs each group was accountable for delivering the most competitive phone as you could see from the situation it was pretty much Cutthroat dog eat dog not a good environment however out of these meetings two os's emerged a new version of Symbian ex successor to the old Symbian OS and Migo a promising software that finally arrived in the Nokia N9 although Migo was a pretty good attempt and was a great step in the right direction it was too little too late the App Store was severely undeveloped at a time when Apple and Google's app stores were rocket shipping off unfortunately it was all fruitless as the Migo operating system was discontinued in 2012 in February 2011 Steven elop and Microsoft CEO Steve bulmer jointly announced a major partnership between Nokia and Microsoft which would see Nokia adopt Windows phone as its primary platform of future smartphones replacing both Symbian and Migo Nokia unveiled the first Windows Phone 7 device prices on October 26th in 2011 they were the Lumia 710 and Lumia 800 which was quickly followed by the Lumia 900 in April 2012 while Nokia's internal divisions were squabbling Samsung overtook Nokia as the largest phone manufacturer in the world in 2013 Nokia introduced the 925 which was a slim down version of the 920 also incorporating an aluminium design after this Nokia went on to release the Lumia 1020 this phone was all about the camera a 41 map shooter with a Symbian based 808 pure view technology the phone did receive critical Acclaim for its camera and general design and performance unfortunately there was still the problem of apps you see the windows Marketplace used in Windows phone devices wasn't exactly that vibrant quality app developers were slow to get on board the platform and this ultimately hurt Nokia although the Lumia series was doing better than Blackberry Nokia still made an operating loss of € 115 million with revenues falling 24% during the second quarter of 2013 but looking at the bigger picture it's even worse since 2011 Nokia sustained 4.1 billion EUR worth of operating losses by this stage the game was pretty much over the ship was sinking and the windows platform wasn't providing much of a Lifeboat Nokia as a company was under a bit of pressure fin it's a beautiful device that is making its appearance in Finland for the first time as this as this show airs okay but as for future products 928 when is it coming out I'll say a couple things about future products I can do one thing I have an iPhone oh how embarrassing I I don't want to have an iPhone I want to I want to I want to have I take care of that for you right here there you go I want to have a Nokia phone I want to have a Nokia phone because I believe in you and I believe in Nokia but I want to have that Lumia 928 when do I get it so let me tell you what we're doing in the future tell me before that when do you I will not sorry I can't answer those questions on the 3rd of September 2013 Microsoft announced that it would acquire Nokia's mobile phone division in a deal totaling 77 billion Steven elop would also step down as Nokia CEO and rejoin Microsoft as the head of devices but the question is was this a conflict of interest for elop was there a dark side behind this move as it turns out this sadly may have been the case it is reported that elop got an 18.8 million EUR bonus after he sold Nokia to Microsoft and stepped down as CEO what's more is that this agreement was only made on the same day as the announcement was elop's shaky CEO position in Nokia just a part of Microsoft's plan to enter the smartphone game all along we may never know for sure in October 2014 the burial had begun Microsoft officially announced that it would phase out the Nokia brand in its promotion of the Lumia smartphones it would now be known as Microsoft Lumia and this sadly was the end of noky as a brand maybe in some distant time and some throwback nostalgic way they could come back but right now this really does look like the end of the trail for an absolutely amazing company so throughout history we've seen the same thing over and over again like Palm with web OS or Intel with mobile Internet devices or even Xerox with the graphical user interface it's been repeatedly demonstrated that being the first to a good idea is no guarantee of commercial success so I put it to you what do you guys think of the demise of Nokia do you think that Mr elop was guilty of purposely selling Nokia for his own personal gain or the gain of Microsoft I think this may be a very interesting comment section so broadening our field of view let this be a lesson to any of us that are thinking of ever running a business be diligent be very aware of your competitive surroundings and most of all be prepared to swallow your pride in order to Asher in a positive change and to leave a positive spin on things this multinational company started from just one man's Paper Mill and lasted for over 100 years so it just goes to show if you do what's right you can do a lot hey guys Theo here and I just want to thank you for watching the whole way through my rise and fall Nokia video it's quite an interesting story when you think about it from start to finish uh quite a lot of stuff went down throughout Nokia's history so it's quite interesting um so yeah if you're new here uh take a look around there's a few other videos that are quite interesting and um also if you want to share this video Feel Free U I'm sure there's some other people out there that will be quite interested in the whole business idea behind um why Nokia fell or you know just any other interesting things about technology they may be interested in so um yeah that's all from me uh thanks for watching don't forget to subscribe give a thumbs up and I'll catch you again soon for the next video have a good one guys cheers cold fusion it's new thinking