Where Did Nokia Go Wrong?

Steve Jobs shows off the white iPhone 4 at the 2010 Worldwide Developers Conference (Photo credit: Wikipedia)

Ratings agency Fitch has just this minute cut Nokia's stock to junk bond status, reports Reuters. Five years ago Nokia was the undisputed world market leader in mobile handsets. Today it's routinely referred to as a 'struggling Finnish handset maker'.

Where did it all go wrong? How on earth can you take global market dominance, a near-faultless track record of innovation and product excellence and a loyal base of customers around the world and simply blow it?

The answer is Steve Jobs and a small issue of perspective.

Jobs saw the mobile as a computer. Nokia saw it as a telephone. Nokia was working on making your phone smarter, Jobs was putting a content access device in your hands. Even Nokia's early N series phones tacked a keyboard onto a phone, a bit like a mobile One Per Desk rather than using the powerful combination of smart access device, applications and content wrapped up into a flawless user experience.

For me, the rot truly set in when Nokia first started shipping 'smart phones' that could link to its Ovi store and download apps and stuff. The store was pretty much empty for a very long time indeed. Nokia seemed to miss the whole idea that the mobile was to a handset manufacturer what a SIM is to a mobile operator - a cash cow. Ovi could have been an open platform for application developers and content owners. It should have been.

On June 29th 2007, Jobs took to the stage in his turtleneck sweater and launched the iPhone. Nokia's executives must still have been laughing when, in September, Apple sold its millionth iPhone. They must still have been laughing when Time named it Invention of the Year in 2007.

Apple's iTunes and Jobs' app-centric approach created a revolution. Nokia, in common with mobile operators around the world, persisted in a circuit-switched mentality. When Google joined in with Android, the writing was on the wall. They started fitting the brass handles when Elop announced Nokia was ditching Symbian a year before it was ready to replace the operating system with the Great White Hope - Microsoft's Windows, the operating system that never 'got' mobile. Remember Windows CE anyone?

Today, Apple and Samsung between them account for something like 50% of the global smartphone market. And Nokia is a junk bond. Its first Windows based 'phone, the Lumia, has a name that means prostitute in Spanish.

Am I writing Nokia's obituary too early?