Earlier today Nokia stock hit a 13-year-low. Despite what CEO Stephen Elop says, it is hard to reconcile the falling share price in what is arguably the hottest mobile market. The funny thing is that as a company they shouldn’t have been in this position.
Started as a timber company, Nokia expanded to produce products including rubber and telephone cables. In 1992, Nokia focused on telecom, and by 1998 it was the largest mobile company in the world. By then the Nokia ringtone seemed as ubiquitous as Coke and Big Macs. In late 1998 it launched Nokia 7111, the first mobile phone with a WAP browser, and, with that, the mobile Internet.
At the time of that launch, in an interview with Business Week magazine, Nokia CEO Jorma Ollila said:
The convergence of Internet to mobile phones will not lead into one single player becoming master of the universe. You’re likely to see the horizontal value chain, like in computers. You’ve got to find your place in the value chain. Our special edge will be in voice and data terminals, where the radio link is a crucial element. Voice terminals, to a major degree, will be wireless. That will mean that our weight in the industry will grow.
I wonder if anyone from the company was paying attention to what Ollila said.It was clear to him that in the future mobile hardware landscape would look pretty much like it does now: PC-styled economics and companies having their special edge. Of course, he, like others in Nokia, didn’t quite grok the power of the Internet and the browser.
In March 2001 when speaking at Stanford School of Business, Ollila said:
“The key challenge of technology companies today is how we renew ourselves. The technological cycles are shorter. We must build on our discontinuities and turn them into our favor….3G handsets will be affected by the number of types of software embedded in the devices. The way in which software is changing what used to be a simple product will change the industry significantly.”
Just as it took Nokia six years to become the largest and most influential mobile player in the world. It has taken Apple and Google about four years to become the most influential forces in the world of mobile. One can only imagine where those two will be in six years.
When I sifted through the transcript of CEO Stephen Elop’s interview at an industry event earlier today, I was overcome by a sense of despondency for the company that introduced me to the magic of mobile. Somewhere in the interview he told Walt Mossberg that it was a battle of ecosystems. Sadly, the company that once owned the largest ecosystem in mobile is depending on another hobbled giant – Microsoft.
As I look into the future, I do know one thing — Nokia won’t be setting the mobile agenda and controlling the zeitgeist for a long time. And frankly that is a shame.