28 July 2012 by Chris Edwards
Like the Roman Empire at the start of the first millennium, Nokia still has a massive influence on the global mobile-phone business. But it's hard to see how the company is going to stop the rot knawing away at its business. The decision to cancel yet another Linux-based project intended to salvage part of its market is one more signal of how things can unravel quickly in the electronics sector.
Nokia can argue that as it was never confirmed as a project outside a close-knit group, the cancellation of Meltemi is not one more embarrassing retreat. But this is a company that is cutting one in five of its mobile-phone workforce in a policy focused primarily on retrenchment rather than reinvigoration. A large of Nokia's strategy relies on a single third party that has demonstrated several times over that it will operate against its partner if it sees an opportunity to do so that has greater long-term appeal.
Microsoft helped IBM write OS/2 only to promote Windows much more heavily when it realised it had the opportunity to take over responsibility - with some help from Intel - for defining the overall PC architecture. When Apple's iPod surged ahead in sales, Microsoft moved away from trying to get PlaysForSure into third-party MP3 players and developed its own, unsuccessful Zune. In recent months, Microsoft revealed that, having convinced tablet makers to use Windows 8, it would launch its own range of hardware in direct competition.
When you consider that the current trend in consumer devices is to move back to greater vertical integration, the idea of a Microsoft phone does not seem fanciful. Nokia can take comfort from the fact that hardly any arrangements in which a hardware maker licenses its software have been successful - and the balance of power always goes in favour of those that have been in the market longer. But the degree to which Nokia's fortunes are tied to a third party limit the phone maker's choices at a critical time and tend to focus its attention on making a platform work that does not offer much that the competition does not possess.
Everybody is chasing after Apple without paying attention to what people might actually want - whether they are partners or customers. Microsoft's strategy on Windows 8 is worrying companies that have a lot invested in the PC, such as games maker Steam. These companies are looking at Linux now as a way to step away from dependence on two manufacturers - Apple and Microsoft - that are intent on locking up their development ecosystems.
This is not the first time an open rebellion has formed against the leading personal computing companies - and the results were laughable. The attempt to promote Unix System V as a viable alternative to Windows for mainstream desktops was doomed to failure from the start because of infighting between the interested parties. But this was a time when the tide began to turn against the Wintel hegemony - and there are lessons for Nokia as it's clear that the tides are changing once again as companies prepare for the next 15-year cycle.
During the 1990s, two companies were forced to reinvent themselves by Microsoft's dominance. Apple and IBM chose different paths but both focused on what had gone wrong at their respective companies and made decisions that fixed those problems. Apple looked at the needs of home consumers - then largely ignored by Microsoft. IBM realised it was time to stop relying on hardware and focus on systems and services. Nokia needs to make that same calibre of culture-changing decision. The right thing for Nokia, at this stage, is not likely to be one of fighting its way back to dominance in phones but to look at its role in the wider market in global communications. It may need to let the remains of its empire wither in order to build the next one.
Posted By: Chris Edwards @ 28 July 2012 05:15 PM General
1 August 2012 by Bryan Betts
As far as I can tell, it simply resulted in wasted effort and a range of phones none of which ticked every box for the user. It also shifted the competition from point-of-sale to internal management, which I'd suggest was far more dangerous for Nokia.
|Posted By: Bryan Betts @ 01 August 2012 11:24 AM : Post a reply|
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