If there’s anywhere in the world that a company enjoys love
of its Customers like Apple in the US, one would argue that it is…or rather was
Nokia in India. As a Nokia fan I feel devastated, knowing that the brand I loved
since I was a child, the phone gifted to me multiple times for academic
achievements shall no longer retain its branding. Just like me , many Indians,
who enjoyed a nokia as their first handset today feel sad, for their first love
in gadgets shall no longer produce phones.
The beginning of the end:
Nokia CEO Stephen Elop admitted that the company’s lack of foresightedness
regarding the major transitions in the smartphone industry is to be blamed for its
loss of market share. In late 2000’s, when all major mobile manufacturers were
going the android way, Nokia chose to continue on its Symbian OS, the one that
ensured its market cap to increase to 110 bn $. However with the change in
market paradigm, Nokia shares started falling, so did its market cap to a meagre
$14.2bn. Nokia experimented with the Meegos OS, an awesome but buggy OS,
although many-a-pundits claim that had Nokia continued work on the OS, it could
have beaten Android hands down.
The revival:
With Elop as CEO, Nokia decided to create a new Niche in the
market, to create a third world in partnership with Microsoft, the Windows
Phone, for which MS is to pay one bn $ to Nokia annually for the next five
years. Though Lumia’s were critical blockbusters, they weren’t able to attract
both customers and Application developers, so much so that Microsoft is
allegedly paying developers for the same. Although I must confess, that I have
a Lumia and I love it, both the hardware and the OS, but the lack of
applications is sometimes frustrating.
Lumia has outsold the BlackBerry range of phones, consolidating
it as the third ecosystem. Meanwhile Samsung dethroned it as the market leader,
though reduction in losses on a quarter-on-quarter basis and a 32% increase in
Lumia sales in the previous quarter offer hopes of a full scale revival.
What the buyout means:
It is the last hope of survival for Nokia, which finds
itself among dwindling cash resources. However fans have mourned the end of the
Nokia brand, and I, as a die-hard fan hope that from the ashes, something
bigger and better shall rise. Microsoft may come up with a phone that matches
the iphone in terms of hardware-software integration.
What it means for Microsoft:
The Redmond giant has real deep pockets and has always shown
that if it can’t innovate, it can buy out anyone who does, be it Skype or Yammer
or even Nokia. With the worlds best hardware manufacturer (No arguments about
that !) under its control, we may see an awesome integrated phone in the next
couple of years. Also Nokia patents (worth billions) now come under Microsoft,
and so does the best Mapping alternative to Google Maps. Perhaps, a very easy
and cost effective bargain for Microsoft.
We might have to wait for a final verdict on the future of a
platform, which despite gaining critical appreciation is yet to prove itself in
the market.
-Alankrit Kharbanda
