Philippine Software Development Inc.

What Happened To Nokia?

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Rapid advancements in technology are very evident today with different technologies growing from The Internet to Artificial Intelligence. Research and Development is never been more vital for tech-companies for longevity and survival. Companies such as Google, Apple and Samsung always put emphasis on their Research and Development to stay ahead and never be left behind. Research and Development forms the backbone of these companies to always be competetive and be relevant.

But whatever happened to Nokia?

Well for once, Nokia was the world's biggest mobile tech company. It was "The Company" for mobile phones. With its tagline "Connecting people", Nokia was very successful in its mobile technology business. In fact, the company sold its billionth phone on 2005 and by 2007, Nokia was listed as the fifth most valued brand in the world. But what made its demise?

1. R & D realization

Nokia was never a technological laggard, it had all the tools to produce successful products (i.e. successful smartphones). In fact, it came up with its smartphone back in 1996 way before Apple and Samsung. They even built a prototype touch-screen with internet capability at the end of the nineties. Nokia spent enormous amounts of money on Research and Development. What it lacked though was that it was unable to translate all of its R & D works to products that people would actually buy.

2. Management woes

Faulty in its organisational structure proved harmful for Nokia. Bad decisions hampered its growth and market leadership. Its decision to ignore the North American market was even worse as the company undermined its brand as both a technical and market leader. This also allowed Nokia's competitors to out-innovate it.

3. Deal with Microsoft

Its deal with Microsoft to run Windows operating system on Nokia devices was very catastrophic as the Windows mobile operating systems were pegged irrelevant compared to Android and iOS operating systems.

4. Software underestimation

Nokia at its core is a hardware company. Its engineers were expert at building physical devices.However, the company profoundly underestimated the importance of creating software programs that are much as important as the hardware part of a smartphone. Nokia was long dominated by hardware engineers while software engineers were marginalized. In stark contrast, Apple sees hardware and software components equally important.

5. Transition failure

By 2007, fifty percent of Nokia's revenues are derived from the mobile phone industry. Enthralled by its past successes in its mobile phone department, it underestimated the need to transition its products from mobile phones to smartphones. Nokia failed to recognize lifestyle changes in its consumers and was late to adapt with the current technological innovations.


Today's consumers have constant lifestyle changes. Its evolving and getting more complex. This makes innovation necessary for companies to survive and be competetive. Consumers are not loyal, they simply want better innovation on their hands. Therefore, companies need to adapt with the ever changing needs of consumers. But for Nokia, it was late and was it's demise.

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