Nokia is losing market share fast, which is being discussed in many places. Nokia's CEO Anssi Vanjoki also expressed his view on this topic.
The number of mistakes, that Nokia currently does, is huge, let's take a few:
* Focus on OS technology instead of customer-centric parameters. As Anssi puts it: "The current phase of MeeGo development is looking awesome."
* Believing that the window of opportunity for game-changing devices is still open. Anssi still believes that Nokia can outsmart Apple and Google, creating killer phones and market-changing mobile computers.
* Totally cutting off the pad/tablet form factor, as Anssi puts it: "the computers of the future will not be tied to a desk or even a lap – they will fit in your pocket"
* Putting the bets on multiple platforms (Symbian doesn't seem entirely dead, yet, from a product perspective)
* Demonstrating bad products. At the Open Source Days in Copenhagen, Nokia demonstrated their Maemo based phone, which enables you to have a long conversation with the Nokia representative while it is starting the maps application.
Nokia still delivers most phones, and in some countries they are absolutely huge, delivering a lot of value for a low price. However, almost all early adopters of smartphones in Europe and USA seem to have moved towards Android and iPhone, and statistics shows, that Nokia smartphone users aren't using the internet part of their smartphones nearly as much as Android and iPhone users. In other words, if the phone market would be segmented by amount of internet use, so that smartphones are the phones on which the users have heavy internet use, Nokia would be almost a non-player in the smartphone market.
However, all is not lost. Nokia can produce and deliver real smartphones to their existing and loyal customer base, and if a significant part of these switch to Nokia smartphones, Nokia's market share will jump to very high levels.
However, Nokia needs to start doing a few things right:
* Realize, that if a large organization like Nokia cannot learn quickly enough during the last 4 years, they will also be slow during the next 4 years. Nokia is big. Instead, buy other companies, and let their technology become the new big thing, instead of doing everything in-house. Normally, the largest player in a market wouldn't do this, but if they don't, they won't be the larges player in the future.
* Realize that women will want a small stylish phone and a 4-8" screen in their purse.
* Understand that the consumer doesn't care about operating systems. To the consumer, Android is not about Linux, it's about the Android Market. By promoting Maemo and Meego with an empty app store, Nokia doesn't build up momentum, it's actually destroying the value of the Maemo and Meego brands. Every time a consumer asks a friend for advice about Maemo and Meego, the answer is: "Don't touch it, that's not where the apps are". These advices are remembered for many years, and ads don't change that.
* Realize that functionality is the key to buying a phone, and that it takes years to build a good app market. A facebook app is not enough, you also need the Tour de France apps, the local bus company's app, the university campus apps etc. Developer mindshare is important, and that is probably what Nokia has been losing at the fastest pace.
* Realize, that the real innovation done by Apple, is to make the touch user interface for mobile phones. Even the original Palm Pilot had apps and a similar application chooser. This innovation has started a chain of innovations that just continues in the fiercest competitive environment that the world has seen for a long time, with whole value chains competing for innovation on all levels. Nokia has no chance to outperform this competitive environment significantly, and will have a very hard time to create a killer phone or a game-changing product, if not impossible.
* Realize, that online services are the key to apps. All mobile devices can do games, but the real value to a phone comes, when an online service is available as an app, providing device sensor integration, a good touch UI, offline / bad network capabilities, app/share integration etc. Nokia tries to deliver their own maps product, their own e-mail system etc., but in order to become the biggest map provider, they also need to compete on the computer desktop for the user's attention - being only a map provider on the phone is a losing strategy. But Google is a very large enemy here.
* Realize, that it makes sense to be a huge company that does everything from producing hardware to software, in the mobile industry of the 1990s. But in the 2010s, the business model doesn't favor that. It is similar to the steel industry - they needed to be huge once, when capital costs were huge, but when the cost structure changed towards variable costs, the biggest steel industries got serious competition from very small players that they could not compete against. Nokia should look into the steel industry and learn from that. Quickly.