Why Nokia isn’t BlackBerry

2013-09-08 10:00

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BlackBerry’s precipitous plummet from glory is being likened to the fate of Nokia, the other fallen giant of the pre-smartphone era.

But Nokia isn’t BlackBerry.

Until September 2010, the two companies’ trajectories were pretty much the same. Both were the dominant players in their respective markets – rudimentary email devices and feature phones – while Nokia sold two out of three cellphones in the world.

Both held an unflinching belief that they were superior. Both ignored Apple’s game-changing iPhone, arguing that their upgrades were significant and their customers were happy.

But when the tide truly turned, Nokia had the balls to do what BlackBerry didn’t. It fired the underperforming CEO and did the unthinkable: not only hired an outsider, but a non-Finn.

Then that CEO, Stephen Elop, did an even more unimaginable thing: he abandoned Nokia’s own aging operating system, Symbian, and adopted that of its once sworn enemy, Microsoft.

Unlike BlackBerry, Elop was quick to realise that Nokia’s long-in-the-tooth Symbian just couldn’t compete against the prowess of Apple’s iOS and Google’s Android. Instead of becoming “just another” Android maker, he took a bold decision and went with the underdog – ironically, Microsoft.

In a devastating assessment, he called Nokia a “burning platform” and embarked on a cost-cutting exercise that saw it sell its corporate headquarters, among others.

Accused of being a spy and a mole for his former company, Elop was derided.

But his moves proved to be correct. Elop saw that the mobile market had shifted from being just about handsets.

In an age where pretty much every top-end smartphone can do what every other one can, the differentiation was not about the hardware alone, but about the ecosystem. This included the apps, the add-ons and the software itself. He realised that being a distant second to Samsung in Android was a strategic dead end. So he chose Nokia’s old foe, Microsoft. It seemed like a marriage of two fallen giants.

Windows Phone 8 is good software from Microsoft and Nokia. Together they opened up another front in the app war with a third ecosystem.

BlackBerry, on the other hand, dug its head in the sand.

BBM, the great proprietary lock-in that BlackBerry ardently believed would keep its users tied to it no matter what, now has about 55?million users. But WhatsApp recently announced it had 300?million active monthly users. BlackBerry has almost apologetically announced it is releasing an app version of BBM for Apple and Android phones. How the mighty have fallen.

In terms of market share and global impact, Nokia now finds itself in a similar position to BlackBerry – on the outside looking in at a market it used to dominate. But it’s a case study of two different approaches to an industry-defining crisis.

Nokia sprang into action, while BlackBerry moved slowly as shareholders dumped stock and consumers dumped phones.

»?Shapshak is the editor and publisher of Stuff magazine

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