New-Tech Europe | September 2016 | Digital Edition

Nokia's Rise and Fall... and Maybe Rise Again

Paul McLellan, Cadence

business, and Alcatel-Lucent). Nokia’s board brought in Stephen Elop from Microsoft to be CEO. In a period of three years, Elop cratered Nokia’s handset business. At the start of his tenure, Nokia’s handset business was split 50:50 between smartphones and feature phones (AKA dumb phones). Dumb phones fell by a half during his tenure, which might be expected if everyone was switching from Nokia feature phones to Nokia smartphones. But they were not. Smartphones went down even more, by two thirds. All this during a period when the mobile business was experiencing very strong growth. One of the really dumb things Elop did was to announce in early 2011 that future Nokia phones would no longer use their internal operating system Symbian (which was probably not up to running a modern competitive

a revolutionary mobile phone. And the third is a breakthrough Internet communications device. Of course they turned out not to be three devices, but just one. And a bewildered Starbucks barista named Hannah Zhang became the first recipient of a real call from an iPhone when Steve placed, and then canceled, an order for 4000 lattes to-go live on stage at YBCA. If you have never watched it, here is the video of the entire keynote, a piece of history captured in a little over an hour. So what happened? Let’s start the story in 2008. Under Nokia’s then CEO Olli-Pekka Kallasvuo, Nokia had their first decline in revenue and profits. Handsets were still very profitable, it was their networking division which was struggling (ironically, that networking division is now the largest in the world, having swallowed Siemens’ networking business, Motorola’s networking

If you live in the US, then it is hard to believe how dominant Nokia was in mobile. For a time, one in every three mobile phones sold was a Nokia. But they were never a major force in the US for various reasons. But they built a million phones a day back when the market was around a billion phones per year. The story of how Nokia rose from a forest product company to a leader in mobile phones has been written about many times and is a business school case-study. But, like many other manufacturers such as Blackberry (then called RIM), they underestimated the impact of the iPhone. The mobile world changed in one hour in 2007 when Steve Jobs got on the stage and announced three new products: The first one is a widescreen iPod with touch controls. The second is

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