The Collapse Of Nokia Company Mobile Phones

As we all know, in recent years and the use and popularization of 5G technology, the convenience and efficiency introduced by mobile phones have made human beings live with an essential part of their lives. As the mobile phone sector is developing rapidly, we must keep thinking, so we will not repeat the tragedy of Nokia. In 2013, Microsoft acquired Nokia’s mobile phone business. This was the temporary departure of the erstwhile cellular phone market giant Nokia from the personal mobile phone business. During the past decade, Nokia then made efforts to move into the production of smartphones but everything failed. Technological advancement and network development ensured that the market for cell phones has become highly competitive nowadays. The collapse of Nokia has greatly increased the reputation of crisis for all brands of cell phones. In this article, the case study approach is used to analyze some issues that need to be dealt with by cell phone manufacturers. Based on the case of Nokia, this article draws corresponding conclusions about similar issues. Finally, some essential reasons for the failure of Nokia phone business are summarized. Mobile phone operators should not depend on the market and customers to the point of forgetting, and they are going to continue exploring new core competence.

Introduction

With the advancement of communication technology with increased speed, mobile terminals evolved from the initial communication product with a single function of calling to a multi-function mobile communication terminal that supports voice, data and images. From the general development trend of mobile phones, as can be seen in Figure 1, we divide the development of mobile phones into three stages. The first is the transition in terms of volume. The mobile phone has been upgraded from the former large-sized mobile phone to a convenient mobile phone that can be used with one hand. The second is a color change. The screen of the mobile phone changes from showing black and white to showing various colors, then various types of innovative mobile phones, such as camera phones, music phones, and game phones. The third stage is the development of smartphones, which goes from an open operating system to a closed operating system, and can be used to support a range of extended functional applications.

It is not difficult to see that all significant changes are the result of continuous innovation. During the development, there are firms that have evolved step by step from Apple, for example. Some premium brands were left out, for example, Nokia. Nokia performed very well in the first period mentioned above and therefore most people get to use all the features provided by simple-to-use small phones. However, Nokia phones could not maintain their competitiveness in the long run and lost the business of manufacturing and selling mobile phones. Industry analysts and academics have given important insights in examining why Nokia failed in the smartphone market. They analyzed Nokia’s failed partnership the most. This article tries to challenge Nokia’s problems from different angles and analyzes Nokia’s strategic problems using the case analysis method. The case analysis method used by this article was originally developed at Harvard University. It is now widely used in education and vocational training. It is hoped that the final conclusion of this article can provide a reference for the development of other mobile phone companies.

Analysis on Failure of Nokia Phones

Nokia is a multinational corporation founded in Finland in the year of 1865. Currently, the company’s main business is the manufacturing of various types of mobile communication devices and related services. Initially, when the company was founded, it was mainly involved in logging and paper production, and later also in the tire and cable businesses. It is considered to be its mobile phone company that makes Nokia popular around the world. In 1982, Mobira (now known as Nokia) built the first mobile phone network in Northern Europe, Senator. After that, Nokia had officially entered the mobile phone business. During the 1990s, as the cost of manufacturing mobile phones decreased and volumes decreased, Nokia understood that the demand for mobile phones among people would show explosive growth. Based on the company’s growth strategy, Nokia chose to grow into a better telecommunications firm. Nokia also suffers from issues such as lack of money and inefficient management as it involves in too many industries.

Therefore, Nokia’s senior management decided to sell other business areas, and they used the electronics division as the main development direction. Nokia, having taken telecommunications as its development direction, had developed faster and faster. Nokia also emphasized communication technology around the world. The very first international communication conversation was carried out on a Nokia phone, which was done on the Nokia Radiolinja network in 1991. Nokia had held the No. 1 market position for 14 straight years since 1996. It was not until Apple and Samsung achieved immense success on touch-screen smartphones that the popularity of Nokia phones gradually overtook them. Indeed, in the wake of the smartphone tide, Nokia has never stopped innovating.

From a large mobile phone to a small mobile phone, Nokia had already met a variety of people’s demands and turned the mobile phone into an easy communication device. In the year of 1991, Nokia enabled global calls. The Nokia 6110 series achieved long-term supply of mobile phone power for the first time. From wired networks to wireless ones, Nokia reiterated its innovative spirit with the coming of the 7110 series in 1999. The 7110 Nokia mobile phone series was the world’s first mobile phone to have WAP (Wireless Application Protocol) compatibility. Nokia became a renowned multinational corporation during this era of cellular information. Though Nokia’s hold on the cell phone market in the past was not continuous, it still cannot be beaten in terms of its innovative touch. The reason why Nokia failed in the mobile phone field is mostly due to the following.

1. In the market and competition

Nokia’s arrogance has forgotten that its competitors were creating the necessary competition. Jobs, in 2007, brought to humanity a one-button cell phone, the iPhone. Customers know that the functionality of the cell phone can be implemented by simply clicking on the screen. In addition, humans can use it to discover additional entertainment functions, which revolutionized the innovation of cell phones. The new, technological and convenient experience attracted people’s interest at the same time. Google released the Android operating system in the same year. The operating systems of mobile phones were a topic of interest for people. During the time when it was iOS and Android, Nokia did not experience a crisis. Compared to Android and iOS operating systems, the operating system of Nokia, Symbian, was certainly not user-friendly, but Nokia never wasted time. Instead, more investments were put into Symbian in the hope that it would catch up, but it fell behind.

Nokia also failed to meet the demands of consumers. Obviously, with the invention of iOS and Android operating systems, one can now access the internet more efficiently through mobile phones. The consumers’ demand towards mobile phones was no longer just calls and text messages but entertainment functionality and internet-based applications that one can download anywhere, anytime. While other mobile phone manufacturers started working diligently on various application software using iOS and Android platforms in a bid to meet the needs of the people, Nokia was always struggling with how to invest in its operating system. Thus, this keeps Nokia in the dark about the real needs of consumers.

2. Swinging attitude and no need for Android Faced with the power of the iOS and Android platforms

Nokia was able to collaborate with Intel and Microsoft respectively, following the path of building its own platforms instead of employing the Android platform. Looking at Nokia’s research and development of smartphones, we can see that this company had really spent a lot. Nokia and Intel introduced the MEEGO operating system at the 2010 Global Mobile Communications Conference. Nokia officially entered into a worldwide strategic partnership with Microsoft in early 2011. The new Windows Phone platform will be Nokia’s new flagship mobile phone operating system and its resources will be focused on this platform. However, neither of the two-parters allowed Nokia to once again deliver a quality user experience to consumers. It is in this momentum of uncertainty that Nokia allows other competitors to fall behind. Samsung-led Android series phone brands soon exploited the convenience and ease of the Android platform to create their own world of software. Competitors who won over consumers have shared Nokia’s phone market. During such a public trend, Nokia was still reluctant to learn from the Android platform. Holding tight to be devoted to its own research and development system, Nokia lost these years of rapid expansion of the mobile telephone field.

3. Brand aging and lack of a good sense of fashion

Nokia is famous for its feature phones. Nokia did not pay much attention to mobile phone fashion, and as a result, those customers who are looking for fashionable mobile phones left Nokia. The introduction of touch-screen mobile phones by Apple made consumers want the trendiest mobile phones. Brand heritage and innovative design became the aspiration of consumers. For consumers, the mobile phone is no longer an ordinary tool of communication, but a fashion accessory. The following series of Samsung mobile phones also emphasized the fashion of their mobile phones in advertising. With this trend of development, Nokia was forgotten step by step due to the outdated style of mobile phone products.

From its mobile phone leadership to selling its mobile phone division, Nokia was figuring out how it could maintain its strength. Nokia had previously controlled the mobile phone industry for years and thus was extremely arrogant. Therefore, Nokia focused too much on its existing strength and tried to make a quantum leap from its existing strength. As a result of this, the company ignored market development and competition, and therefore Nokia’s investment in mobile phone R&D failed to reflect in performance. Too much investment and unsuccessful market effects sent Nokia mobile phones to oblivion.

Conclusion

Nokia failed in the phone industry because of ignoring the market, competition and consumers’ demand. In addition, the company did not want to use top-notch operating system in-house. Nokia’s experience makes us realize that there is no permanent king, but there is permanent change. The rapid development of the Internet era forces consumers to face new things each day. Mobile phones are products very integrated with the Internet. We cannot deny the rapid change in the market. Industry leaders also have to change the direction of R&D in time to meet the changing consumer demand. Core smartphone manufacturing companies should always be conscious about whether their core technology is meeting what consumers are asking for. While maintaining its core competitiveness, the company moves forward to focus more on technological innovation. In addition, one must create new competitive forces led by the needs of consumers. We do not know when the current advantage will be replaced by other companies, just like Nokia’s mobile phones are overtaken by iOS and Android operating systems. Only with high adaptability, companies can manage to survive amid fierce competition. Hopefully, this research can serve as a reference for some manufacturers of mobile phones. In the current research, some fields served as evidence to make the conclusions more convincing.

Acknowledgements

I greatly appreciate the guidance from the tutor and school. Before writing this research, the tutor explained to me the writing style and ideas of the article, which inspired me a lot. Using the writing skills provided by the teacher, I managed to do this work successfully. In addition, I would like to express my gratitude to my school.

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