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Elop utters the D word

He said that the technology world was facing a “moment of fundamental disruption” thanks to the advent of the smartphone, social media such as Facebook, and “cloud computing” which uses the internet to increase the capabilities of home computers.

Via: BBC

It’s encouraging when an incumbent realizes when they are being disrupted. The textbook says however that it usually happens too late to reverse the damage done.

With a new CEO, Nokia may cut one year off from their response cycle but it’s not a certainty that it will happen.

Asymco assessing Nokia’s response cycle

Comments

19 Comments so far. Leave a comment below.
  1. Kevin,

    Reading your linked earlier assessment, it seems that Nokia is currently doing what you predicted they would be doing in 2011-2012. Over 2009-2010, they've talked about user experience and software and platform. They're about to release the first phones with software influenced by iPhone. And they've been through the chair-shuffling several times, now going all the way to the CEO. Is your current assessment that they are a bit ahead of what you foresaw in 2009?

    • They are ahead by about one year. What needs to happen however is a deep and wide management overhaul. In theory the CEO is the necessary first step, but the next step is much harder. The house cleaning may not take place or may take years. I give it even odds on happening. If it does happen then we might see Nokia recovering in 2013.

  2. Johan Krüger-Ha,

    As I see it except buying Symbian which is out of date, Navteq which isn't needed if they would had gone Android and not using Android which would most likely had made them the biggest Android player (they have the most phones so ..) even if Nokia releases Meego real-soon-now they have a huge problem with it:

    They are alone. With Android you get all the same apps on all phones.

    To their advantage however they are still the biggest player so if they got applications running at large on the phone sets even if they are alone they would still run on the most phones.

    Maybe that's what they are betting on.

    If I was Nokia though I would had started of by releasing an Android phone back early, made the N900 a beta-platform for Meego with more and more functionality over time and eventually if you don't feel that Android fit keep on developing Meego and start releasing Meego phones but make them compatible with Android software to.

    If they got to keep on doing what they wanted, keep compatibility with everyone else and have half the phone market that could had played out quite well.

    • Rob Scott,

      Didn't Symbian occupy a similar position to Android not so long ago: multi OEMs and share over 50%? Even Windows Mobile at one time had share over 20%, and it was also multi OEMs and with over 1000 phone options.
      But these "open" OSes failed and continue to fail. Why? Because iPhone happened.

      Android is a poor copy of iOS. Until Android is more than just a copy of iOS (they are busy copying the iPad parts for their next release) and until all the patent infringement cases are resolved I wouldn't bet on Android.

  3. Iphoned,

    Interesting that the smart phones growth chart in that article shows RIM growing nearly as fast as Apples' iphone. "Other" growing even faster, and Android is shown, of course, in a super growth league of its own.

  4. Iphoned,

    @ Rob Scott

    "Android is a poor copy of iOS. Until Android is more than just a copy of iOS (they are busy copying the iPad parts for their next release) and until all the patent infringement cases are resolved I wouldn’t bet on Android."

    With all its warts and legal overhangs, Android is clearly emerging a mobile phone market share winner. Android phones are selling at nearly double the iPhone rates with the gap probably widening and soon to surpass the entire iOS sales (it is already almost same of Android phones vs all iOS). My guess is that Apples' fixing supply issues and expanding onto other carriers will close the growth-rate gap, but no longer can alter the basic trend. (By way of analogy, if DOS, pre-Windows could out-compete Apple Mac, I am not surprised that an inferior Android could out-compete a superior iPhone.)

    And we haven't even seen the impact of MS's entry. I know they've been complete imbeciles in this space, but now that Apples has shown the way, they will likely take major share.

    All this will continue to take a toll on iPhone's growth and market share. After some gear-up time by the entire industry, same is likely to happen to iPAD's share.

    It is a shame, given that Apple basically invented both and continues to ship superior products, and Google is doing nothing good but copying IP and playing a bumbling spoiler (at least MS is making money on their OS). But nevertheless it seems pretty obvious now how this will end as far as market shares. Still good for Apple, as they will likely end up with a much larger (and more profitable) share of mobile than they did with PCs, but not as good as it could have been if Google didn't ruin the party with Android (which ironically may end up doing nothing good for Google.)

    • To see how much things have changed in four years, read the way market analysts were reporting the market four years ago:

      http://www.asymco.com/2010/09/12/gartner-predictshttp://www.asymco.com/2010/09/12/gartner-symbian-http://www.asymco.com/2010/09/12/gartner-windows-

      I would not jump to any conclusions about shares. This market is growing non-linearly (in fact polynomially) and that makes it inherently unpredictable.

    • EricE,

      "With all its warts and legal overhangs, Android is clearly emerging a mobile phone market share winner."

      But can it be a profit winner?

      Not so far. And profits for who? Will all the players get enough to sustain interest in Android? If the carriers get the lions share will Google remain committed? If Google gets the lions share will the carriers play ball?

      And wil the developers make money or see their apps pirated and reduced revenue compared to the Apple App store?

      There are so many moving parts with Android, with a strong, solid and coordinated competitor in the iPhone it's hard to see how all the players can hang in and work together to keep Apple at bay. Android could have toppled Windows Mobile or Palm – but Apple and the iOS (not just the iPhone)? They haven't shown the chops yet – other than the ability to siphon revenue from other parts of the company to prop Android up.

  5. John,

    It remains to be seen how well Android phones will perform. Stories are coming out how carriers are locking down features and adding lots of spam apps that can't be deleted. Not all apps run on all phones and there is still the Oracle lawsuit to deal with. Finally, there is the lack of enterprise security and the proliferation of malware on Android. There may be a lot of Android phones because they are cheap, Apple will still get the lion's share of the profits.

    IMO this is not at all like the contest of windows vs Mac. In that case an industry standard was established. In this case, except for BB, each user chooses their own phone. Different game.

  6. MattF,

    I think the analogy that everyone's trying to make between Microsoft/Apple in the 80's and Google/Apple now just doesn't work. It's worth noting, e.g., that Microsoft didn't just defeat Apple in the 80's– it defeated WordPerfect, Lotus, dBase, Netscape, Borland,… to name a few. I don't expect anything like that to happen in the mobile space. The mobile world is much more fluid, there's really no 'compatibility barrier' between, say, iOS and Android, and there's a whole preexisting distribution and information structure that changes the narrative in basic ways. Different times, different story.

    • Not to mention that distribution of PCs is markedly different than Mobile phones. If it has a cellular radio, it has to go through an orifice called a carrier. That carrier has government-mandated authority to deny suppliers access to the market. Until and unless that authority is removed, don't expect any natural monopoly or duopoly to emerge.

  7. Iphoned,

    @ MatF

    Re. PC vs Smartphone analogy. Indeed things ARE very different on the surface and in details. There is, however, commonality between the two at the core, and I think that commonality is the key predictor of how this could settle eventually.

    In both cases, at the core, you had one single vertically integrated manufacturer competing against. the entire hardware industry riding a common OS.

    (I know, I know, you had IBM back then to set the standard vs. no single standard bearer now, then the IT drove the market and no it is consumer, and then you had Just Apple vs now several integrated providers, and Android is splintered and not controlled like Windows etc etc…but that I think doesn't change the core similarity of one vs. many which is I think will drive the ultimate outcome.)

    • MattF,

      Except that, e.g., Linux fits the same description w.r.t. Apple on the desktop. In point of fact, Microsoft prevailed on the desktop because it went out and deliberately destroyed all the competition. Google doesn't have either the means or the corporate culture to do the same thing in the mobile space. My own guess is that in five years, some descendant of iOS will be resident in your coffee maker, and Apple will be making most of the profit in the computer industry.

  8. berult,

    I believe the key word in mobile to-day is nimble. Like a spider with a minuscule unibody surrounded by a host of quick responding legs capable of moving in any direction, and acting on a prey's timescale and agenda. We're in a Darwinian market like never before in the history of economic development, albeit with a timeline measured in seasonal aggregates instead bi or tri-annual market cycles.

    Mobile is the figurative antithesis of dynosaurian Eco-imperialism. And by Apple intelligent design so to speak. Corporate culture will have a lot to do whether a corporation like Nokia survives, let alone thrives, or withers away into irrelevance or eventual dissolution. The inheritance of past glories can't shield Nokia, and Microsoft for that matter, from the infernal dynamics of an alien cultural "mind" field.

    In the end, look for a showdown at OS Corral between nimble Apple and free swinging Google…

  9. iOSWeekly,

    Nokia is going to switch to windows phone 7 for it's smartphone products.

    It's inevitable…especially with the new CEO being from Microsoft.

    Could be interesting.

    • RattyUK,

      The question would be though, where would the profits come from? If Nokia were to do such a thing and hand the OS share of their market to Microsoft they will have to compete on price. At the moment that's Androids platform free is hard to compete with unless you have a USP such as Apple. How long can Nokia continue selling product at a loss for?

    • I would not be surprised if they did launch a few WP phones, but there are several problems including the fee to Microsoft (not a small thing when you look at the bill of materials), the dilution of whatever platform value exists in Symbian, the resistance of an R&D organization that is in a word, enormous.

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