The problem with Nokia

Posted by Rob Enderle

Yesterday Nokia rolled out its 920 and 820 smartphones. The problem? They are too dissimilar from the iPhones and Android handsets currently on the market. 

Remember, Samsung and Google basically got on board the Apple bus - initially emulating and then successfully building on both the iPhone software and hardware paradigms.   

In sharp contrast, Nokia and Microsoft tried to create something very different - and arguably more advanced - yet found themselves in the historic Apple position on PCs of fielding a product arguably more advanced but far less successful.   

Google to Apple is basically Microsoft in the 1980s without IBM - and no real understanding of how software patents work. Essentially, Nokia/Microsoft is to Apple as Apple would have been without strong marketing and as two separate entities.  In short, both Google and Nokia/Microsoft are acting as if they didn’t understand what happened in the 80s and as a result, are both far less successful then their predecessors.

Beating Apple

Strangely enough Apple really hasn’t changed, other than becoming a hell of a lot stronger. Clearly, Cupertino is back, with the exception of Intel on their PCs, to being a vertically integrated company with a few highly focused products and a typically effective marketing effort.   

Unfortunately, Apple seems to be losing its marketing focus as of late. For example, using the poorly received Olympics campaign that made Apple users look stupid illustrates just how the once formidable marketing strategy is slowly degrading.

Still, Cupertino remains massively stronger and with far more resources than it held in the 1980s.  Remember, Apple acquired the most aggressive top attorney in the industry from Intel, making it almost impossible to beat in US courtrooms.  If he continues to use the old Intel playbook, even when Apple loses they will do so much damage it may not make a huge amount of difference to Cupertino's opponents.  

Nevertheless, Steve Jobs is gone and the corporation is experiencing some difficulty shifting from a Jobs-oriented micromanaged system to one where decisions are decentralized. There are also more leaks than we've previously become accustomed to. As such, there is little about the iPhone 5 we don’t (allegedly) already know.  This means the company can’t react quickly, the products are losing their "magic" and both will likely continue to degrade until the new organizational structure solidifies.  

To beat Apple you either have to create better iProducts (Samsung/Google strategy) or you have to market well something that people will prefer (the strategy Microsoft/Nokia are not executing well). That’s why Samsung is doing far better than Nokia and why they just got hit by a $1B + judgment.     

Wrapping Up:  Nokia’s Mortal Problem

You can’t create a distinct product and then fail to aggressively market the differentiating features. Indeed, consumers tend to prefer what is familiar and then gravitate to the product that is associated with the greatest personal stature.   

Meaning, Nokia’s very different mobile product lineup likely won’t sell well without massive marketing, simply because it is just too different from the iPhone standard. Remember, better only trumps different if people become dissatisfied with the status quo product - and even Apple has struggled to make headway against Microsoft when positions were reversed (recall the Mac vs. PC campaign).   

Personally, I prefer the new Nokia handsets to Apple's iPhone, but one analyst doesn’t a market make, and unless Nokia and Microsoft step up or change strategies, I'm fairly certain Nokia is done for.