Remember the Nokia Lumia days? On September 3, 2013, Nokia’s fate was sealed as the Finnish mobile giant embarked on a downhill path, losing its smartphone market status. Nokia’s downfall began with Microsoft’s $7.6 billion buyout of its smartphone business five years ago. This remains a hotly debated topic, despite the brand’s resurrection by HMD Global.
Was it a Rushed Acquisition?
Microsoft eagerly tackled the growing presence of Google (Android) and Apple (iOS) by acquiring Nokia, attracted by the brand’s reputation and extensive patent portfolio. This move aimed to centralize the development of Windows Mobile devices.
Former Microsoft CEO Steve Ballmer believed the acquisition would revive the company’s mobile prospects, hailing it as a ‘bold step into the future’ for both parties — a mutually beneficial move for employees, shareholders, and consumers. However, as history shows, the outcome was far from successful.
Microsoft adopted the popular Lumia brand and began distributing devices under its brand name. Nokia was out of the picture, and the Redmond giant struggled to establish itself in the smartphone market. Despite having the Lumia brand and releasing phones with similar design, other OEMs didn’t join in, and developers dropped out, leading to the mobile OS’s demise.
Operation Elop
But discussing the end of Windows Mobile is premature without mentioning Stephen Elop. He was brought in from Microsoft to rescue Nokia from its business woes when the outlook was grim.
Elop’s efforts proved futile as the company, once valued at $34.2 billion, dwindled to nearly half its worth when Microsoft purchased Nokia’s smartphone business (valued at around $7.6 billion) in 2013, spurred by the embarrassing ‘Burning platform’ memo leaked online in 2010, revealing Nokia’s dire situation.
This decline in valuation and the company’s failure to recover led to accusations labeling Elop a Microsoft ‘Trojan Horse’ who infiltrated the Finnish giant, deliberately diminishing its value for Microsoft’s benefit in future acquisition.
However, the book “Operation Elop” by journalists from Finnish daily paper Kauppalehti reveals that Nokia’s downfall stemmed from a series of bad decisions and its inability to adapt to fast-changing market trends — not particularly Elop.
Losses Galore
Fast forward two years to July 2015, when India-origin CEO Satya Nadella announced that Microsoft had decided to write off the Nokia acquisition and lay off close to 8,000 jobs, predominantly affecting Nokia’s Finnish employees.
While Microsoft did incur billions in losses, it was one of several sound decisions made by Nadella in his first year at the helm of the company.
Nadella prioritized expanding the Windows ecosystem over solely pursuing Lumia-branded phones, which had limited sales. Refocusing efforts, Microsoft later introduced the Surface laptop lineup, though anticipation for the Surface Phone remains.
In the short term, we’ll streamline our phone portfolio for greater effectiveness while maintaining the potential for long-term innovation in mobility.
Future Prospects
While Nokia’s mobile division has dissolved, its parent company, Nokia Corporation, persists in the mobile network infrastructure sector. Yet, Nokia-branded phones have resurged through HMD Global, a Finnish firm.
HMD Global isn’t just relying on nostalgia but has also embraced a proven approach, which Nokia should have chosen initially, while expanding its lineup with Android-powered phones.
They’ve introduced 15 phones since reentering the market, propelling them into the top ten companies within a year, making them one of today’s most compelling brands to watch.
Missed Opportunities
Imagine if Nokia had sustained its success with Windows Mobile and Asha phones. Android devices from the original Nokia would likely sport a unique UI instead of the current Android One seen on Nokia phones. Nokia, unafraid to experiment with new OSes, once ventured into MeeGo.
Contemplate the market scenario had Windows Mobile retained its popularity and Nokia flourished with Lumia phones. Would this have improved the mobile ecosystem, or was it destined to be Android versus iOS? Share your insights in the comments.
Pritam Chopra is a seasoned IT professional and a passionate blogger hailing from the dynamic realm of technology. With an insatiable curiosity for all things tech-related, Pritam has dedicated himself to exploring and unraveling the intricacies of the digital world.
