How Nokia Lost The Smartphone Race

How Nokia Lost The Smartphone Race

In the late 1990s, Nokia predicted the future of mobile: it spent millions on research and even demonstrated touchscreen devices that closely resembled today’s iPhones and Android devices. So why is it only now making a dent on the smartphone market?

The Wall Street Journal has a nice article describing the decision-making processes behind Nokia’s ill-fated last decade. It starts by setting the scene, describing the kinds of devices that were being researched by Nokia over 10 years ago:

More than seven years before Apple rolled out the iPhone, the Nokia team showed a phone with a colour touch screen set above a single button. The device was shown locating a restaurant, playing a racing game and ordering lipstick. In the late 1990s, Nokia secretly developed another alluring product: a tablet computer with a wireless connection and touch screen-all features today of the hot-selling Apple iPad.

But, alas, having a prototype product up your sleeve and selling it to consumers are two wildly different concepts. Getting between the two requires savvy management foresight — something that the WSJ explains was sadly lacking at Nokia:

Nokia actually developed the sorts of devices that consumers are gobbling up today. It just didn’t bring them to market. In a strategic blunder, it shifted its focus from smartphones back to basic phones right as the iPhone upended the market.

The result? At least two abandoned operating systems and a ginormous tack of patents, which are now valued at around $US6 billion and make up almost the entire value of the company, followed by a mad scramble to enter the smartphone race again. While Nokia only fell from the top spot as the world’s largest maker of mobile phones earlier this year, that was only because it had a massive head start.

Those mistakes almost 10 years ago have cost Nokia dearly. But now with its new Lumia range and championing of Windows Phone, it’s finally daring to be different. Let’s hope it’s not too little too late. [Wall Street Journal]