Nokia’s Precipice

February 10, 2011

Nokia stands in a tenuous spot.  One thing the company does well: make cheap cell phones for the masses.  That should never be underestimated.  It’s a very important part of the cell phone market.  The value of cheap, programmable cellular devices should never be underestimated.  Current smartphones have lots of overpriced, “value added” features as well.  That’s an opportunity Nokia is in a position to take advantage of.  A phone platform just as good as the iOS or Android that sells for half the price would shift the entire market drastically.  And to its credit, Nokia phones were well ahead of their time when they were first released years ago.  So, Nokia is no stranger to this dynamic.

Elop is right though.  Nokia stands on a precipice.  A critical one.  It has to play ball or pack up and go home.  I doubt he will have Nokia do the latter.  So, then, what to do?

They answer may lay in a simple realization: any platform Nokia adds to its current product line is a step in the right direction.  It just can’t be a half-baked attempt.  The hardware stack of Nokia’s phones has to improve too (faster processors, better networking, different form factors, etc.), and it has to be a hardware stack that Nokia can protect.  That takes true innovation these days.

Simply adopting a brand like Windows Mobile to run on old hardware obviously won’t do. That would be a disingenuous way to satisfy certain stakeholders with a nice sounding story.  It wouldn’t pass due diligence tests as a sound decision in the mobile software engineering and product design communities anyway.

As a long time engineer who has worked in this industry since the pre-birth of the Internet, I can say this: Nokia has to take the attitude of any platform, any software ecosystem, any time.  Continue to innovate the hardware stack, be creative, and tune those platforms and software ecosystems to run better on that hardware than any other product offering.

Why do I think that? I actually interviewed at Nokia a few years ago.  I knew the science and the work of the position I interviewed for but I didn’t get the job … simply because I didn’t know enough about the internals of the Nokia platform.  That can only mean one thing.  Nokia’s management has corralled its engineering talent into a myopic immobile work force.  I’ve met some of those engineers at conferences, and they are smart.  But, does Nokia have the management willpower and culture to cut it’s engineers and researchers loose to innovate freely?

Fortunately Elop has recognized that Nokia does face a management and corporate cultural challenge more so than an engineering challenge.  The Wall Street Journal today said it best (p. B5) when it quoted a telecom recruiter:

To truly revive Nokia’s market clout, Mr. Elop should hire smart, creative executives “who understand what it means to disrupt” the norm …

Android, iPhone, and to a lesser degree Microsoft’s mobile platform are the norm.  WebOS has a fighting chance.  That’s the norm today.  Disrupt it.

Notice that none of the press lately, including the Wall Street Journal has talked about the engineers.  Obviously, Elop is setting the stage for change, and Nokia overall doesn’t have “an engineering problem.”  Nokia has the engineering talent and the cash to do what Apple and Google has done many times over.  That talent can simultaneously embrace multiple platforms and take a leadership position through innovation.  Or, they can completely re-invent mobile platforms in unique ways that are open.  Or they could do both.  There’s nothing restricting Nokia to build an open platform as an answer to Android … one that doesn’t suffer from the threat of lawsuits waged by companies like Oracle.

That’s one hallmark of successful smart phone OEMs in the market today … the ability to give engineers the leeway to take bits of hardware and do something with it that’s innovative – the ability and culture to invent new technologies that give us what we don’t already have and take things into new directions.  Another trait of successful smartphone OEMs: the business savvy to get those innovative products into the retail outlets that are the mobile carriers.

Don’t forget, it was the iPhone’s innovative touch screen, a focus on hardware/software quality assurances, and software ecosystem that helped propel that phone to the dominant position it has today.  It was The Beatles of the phone world.  It bridged cultures.  And, it was the deal with AT&T that gave the phone a fighting chance to get into the hands of consumers.

Nokia faces some critical choices in these regards.  Does Nokia create new hardware technologies that make the feature phones more powerful and reliable?  Or, does it try to cram more and more features onto a resource limited hardware stack and risk it all under-performing?  Can it make profitable deals with carriers at the same time?

Nokia will be fine if it makes wild creative decisions, takes chances, involves creative genius from outside the company, and pushes its innovations to market quickly.

Copyright reminder: all contents of this blog may not be reproduced in any form.  This blog particular blog entry: Copyright 2011 by the author.

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