What many of you might not know is that the reason Nokia became the biggest mobile phone manufacturer is because of Apple. When all their competitors were standing still, Nokia decided to think a bit differently. This story was one of the hidden gems in “Fast Strategy“, a book co-authored by Mikko Kosonen, a former executive at Nokia, and it tells the story how Nokia was able to challenge Motorola, Ericsson and other big players of yesteryear.

“When everyone saw mobile telephony as a professional service, Nokia’s leadership saw mobile phones as consumer – almost fashion – products. Rather than predict five or ten percent maximum penetration rate, Nokia quickly imagined everyone in the world having one – or why not several? – mobile phones for personal as well as professional use.” (page 3)

“[On the importance of strategic insight] Some insight may result from intense personal awareness and conviction, such as Pekka Ala-Pieitilä at Nokia being an avid Mac user and seeing the potential for Nokia to turn mobile phones into mass market consumer goods the way Apple was doing for personal computers.” (page 21)

One has to wonder why this Mac-love was only visible in the strategic thinking while Nokia’s Mac-support (PC Suite and other things) has been abysmal throughout the years.

So, what has changed so dramatically that blogs and business newspapers are declaring doom on Nokia? First of all, Nokia’s DNA changed the moment the became #1 mobile phone manufacturer in the world. Before that they were a challenger, trying out

The Nokia 1100, the best selling consumer electronics device in the world

different things and taking risks. But now they are playing defensive, trying to maintain their market share. According to Kosonen, Nokia is trying to counter this by being “strategically agile”.

But it isn’t just that. The backwaters of mobile innovation, USA, suddenly became relevant. I would argue that this is mostly due to Blackberry and iPhone and the huge domestic market. Also, one has to remember that the US is overpresented on the internet, so once the web broke through to mobile devices and Apple started to market the idea of software apps on mobile devices, things seemed to change a bit. Nokia has never been strong in the US, or for that matter in any market where consumers do not choose their own phones and where Nokia has never been able to work with operators. That’s probably the only thing that has been constant.

Couple of weeks ago yet another analyst group forecasted how Apple could pass Nokia in as soon as 2011. Now, this fantasy was based on how iPod users would convert to iPhone users and how Apple should launch low-cost iPhones (especially to developing countries) and sell customized ringtones and overall act in a non-Apple way (and eerily like Nokia). And yet, we’re still talking about smart phones which so far represent a tiny minority of total mobile market.

Sure, Nokia needs to get its act together, especially on the services front, but it’s too early to say that they’re doomed. Especially when you consider that Nokia is pretty strong in the developing countries. My prediction is that it’s not Nokia that will be irrelevant in the mobile phone market in the future, but the US market ’s importance will fade and it is the mobile players that win elsewhere that continue to matter. The sheer size of mobile phone markets in Africa just boggles the mind.

In the new world of the mobile web, Nokia’s biggest problem is their own legacy, something that slowed Ericsson and Motorola down when Nokia was decided to bring mobile phones to the masses. Apple, on the other hand has shown that it can take advantage of market discontinuities in many different markets where traditional barriers to entry are crumbling down.

“For decades, the dominant players were EMI and RCA, and more recently Sony Music, which had built up the assets and capabilities … In today’s digital world, however, companies like Apple, which have none of the traditional music industry capabilities, are becoming leading players.”

In summary, it’s all about bringing technology to the masses. Apple did that for smartphones, but Nokia, inspired by Apple’s success bringing personal computing to masses, did and continues to do that for mobile phones. It’s just Nokia struggles with the US and smartphones for the rest of us. In Fast Strategy, Cisco’s Corporate Vice President Strategic Allainces, Steve Steinhilber is quoted to have said “…five years ago could Nokia really have expected Apple to be the main threat to their high end phone business?”

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To those people that have followed my writing these last two months, I’ve been exposed to virtualisation more than I would like, due to an incompatibility between my Macbook, a Java Virtualbox I’m running on it, and the Windows 2003 server managing our company network. As a result, I’ve been booting a lot into Windows via Boot Camp, got hooked on Windows Live Writer, and have been using Parallels frequently just for that app (I need a Crossover fix for .NET apps badly).

The second consequence is that I’ve been thinking a lot about the implications of virtual OSs. With Google OS recently having been announced, which is supposed to integrate flawlessly with Macs and Windows, assumably Android, as well as being designed for Netbooks, I wonder if Intel, with it’s multi-core processors, has not created a situation where nothing else matters, hardware-wise, except to have a powerful enough processor? In other words, have hardware-manufacturers like Sony, Samsung, and to some extent, Apple simply become irrelevant?

Take Sony for instance, which has just announced its first “Netbook.” It’s one selling point?

“Like other netbooks the Vaio W has a 10-inch screen, but its display has a resolution of 1,366 by 768 pixels rather than the more common 1,024 by 600 pixels. That means more of a Web site can be fitted onto the screen, and the user will have to scroll less, the company said at a launch event in Tokyo on Tuesday.” (emphasis my own)

Not much to write home about, except if you absolutely need to use a Sony, and bear in mind that that company was at some point a premium manufacturer of technology. The PC market has long been commoditised of course, ever since IBM opened its hardware up to the world, but with the rise of ultra-cheap PCs & laptops, I think they are digging their own grave.

I think that, as I wrote in a comment to a recent post, Netbooks are a failed experiment and, to add to that, unless either drastic changes in the cost-structure can be made to increase profit-margins, or new business models can be found (e.g. a similar hardware-service bundling to what has been happening in the mobile phone space), I think that we won’t be hearing from netbooks after 2010 onwards.

What also seems clear is that software companies, with their much more favourable profit margins, are winning this war, and, pretty soon, they won’t have to think about hardware at all any more. Instead of writing for a “spec,” you just need to write for a virtual space, which can run anywhere or everywhere.

Arguably, hardware has always been enslaved to software (except for one company), but I see the Sony’s & Samsung’s of today becoming the Nokia’s & Motorola’s of the future.

Since I’m not a technologist (more of a technology philosopher), I may be drastically oversimplifying. What do you think?
P.S. going to stop signing my name for a while. I’ll see if that makes a difference. V.

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…Is if this were possible on it (apologies for the deformation, apparently Windows isn’t good for everything):

Concept iPhone keyboard – a composite made out of  an iPhone + a Bluetooth Blackberry keyboard

I’m actually quite surprised that something like this isn’t possible. The iPhone screen would make a fine portable screen and the touch keyboard is pretty terrible for typers (at least my polls have revealed). With the current bluetooth keyboad even, I would think a simple synergy was possible and I don’t at all get why Apple does not allow for this to work.

Let’s make some noise!!!

Vincent

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Last night, I was called in to check on a friend’s Vista-PC, which kept showing blue screens of death, at sporadic moments. The error-codes were just a collection of numbers and letters, and a Google-search just revealed that it could be a ‘hardware or software problem.’

I’m not going to go into the problem here, but I’ll just say that we tried to run the Windows system restore disks, which crashed half-way through, in the midst of formatting the drive. Vista PCs have, as you know, not been sold with the actual installation-CDs, though I understand that this is a right right now and the owner will go to the store and ask for them. After which, I will install Vista (my first time), as well as all the apps she needs for her productive day.

I’m angered that things like this are still happening! Having been a Windows user since 3.1, the only version that I’ve never had problems with was 2000, and XP now runs fairly good too. Vista, I’ve never tried, but I understand there were some driver-related problems, much like the 64-bit version of XP.

Typically, diagnosing and repairing a system like my friends will cost several hundred euros, if not more. And that is… if the store actually knew what it was doing! The error-codes, as mentioned, don’t point to a specific problem, and they previously suggested replacing the hard-drive, which she did and which didn’t fix the problem. Right now, the way I see it, I’m going to be installing a new Vista on it, the drivers, and the software. I’ll see if that holds. If it doesn’t, I’ll assume it’s a hardware-problem, and one piece of hardware will have to be removed after the other, to diagnose the cause.

Total time used to fix: 1 hour last night, 2 hours Vista CD pick-up, 2-3 hours installation & restore. And that isn’t counting that there’s 3 people involved, some gasoline, not to mention the months of trauma that she’s been experiencing through this problem. As well as whatever store-time + hardware-replacement-costs may be involved.

But why does it have to be so hard????!!!!! It really mystifies me how much of mess the open PC-architecure, in combination a fairly open ecosystem of hardware & software, is. You literarily have no idea, if there’s a piece of dust on a RAM-stick, if there’s a faulty driver, if an app is causing the mayhem, or if the problem is a Windows-update that went wrong. And, in case you are wondering, this is a HP-machine.

So, I ask once again, what the frustration-cost of Windows is? In my estimation, it’s pretty damn high, and I already suggested to them to get a Mac. It may be 50% more expensive and non-upgradeable, but the fact that I don’t have to worry about things like BSODs, is priceless.

I should disclose that I’ve been a Mac-user for 3 years now, which was both a hardware- and software-based decision.

Vincent

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