In 2007, when the iPhone launched, some of us believed that it was going to change the phone business forever. Nokia (s NOK) and RIM Blackberry (s BBRY) obviously dismissed it as a joke. They focused too much on the “phone” and not on the “i,” which was a metaphor for easy internet access in our pockets. Nokia’s market cap on the day of the iPhone launch was $114.5 billion and markets valued Blackberry at $40.09 billion. This year Nokia’s devices business was sold to Microsoft for $7.2 billion. Blackberry is going private for mere $4.7 billion. That is $134 billion in market cap that went poof.
Funny, isnt it?
Apple’s trajectory will follow that pattern soon enough.A China Mobile deal will be peak or close to it ,after that it’s downhill. Their stronghold is the US but that’s a saturated market, not much upside left. Plus, under Cook , they always fail to deliver what is needed ,when is needed.
Not much upside? Saturated market? I disagree. The size of the iPhone market continues to grow, and it renews itself every 18-24 months as iPhone users become eligible for upgrades. Mac + iOS devices + iTunes + App Store )+ Apple TV) is a pretty formidable ecosystem that is still growing and is pretty effective at getting people hooked on the Apple Kool Aid.
Apple defined the category, but Om, you should know better that Apple isn’t what brought these companies to its knees. Android is.
Nokia was already a small player in North America when the iPhone came out. Not much market share to steal. It is in places like India, SE Asia, and Africa where Nokia has been attacked, and that came not from iPhones (which in many of those countries have a market share so minuscule that even Nokia Lumias push iOS to 3rd place–just look at India today) but from wave after wave of ever cheaper Android phones.
Couldn’t agree more..but in Om’s article, there is a single unsaid point though…
Google quickly recognized the impact that iPhone would soon have and embraced the exact same concept even at the risk of getting into Steve Jobs’ bad books.
But Nokia and BBM neither created a homegrown answer to the iPhone (+iTunes) nor got into a bandwagon which would create that for them. Sloth-ridden incumbent technologies (and more so, technologists) hampered any possible move towards the future. In the case of Nokia, the many different lobbies at work (Meego and assorted Linux flavors) added to the melange, delaying the arrival of a compelling alternative. Samsung and Sony (amongst other existing players), not suffering from the incumbent malaise, moved quickly to Android. Motorola also chose to survive by marrying the green robot.
Moral of the story is simple – when confronted with the innovation tsunami – granted this doesn’t happen everyday, but when it does, you either innovate and survive or you die.
Or, like Android and Samsung, you get on the bus and leverage the innovation of others as an effective fast follower.
“Nokia was already a small player in North America when the iPhone came out. Not much market share to steal.”
No. Samsung was busy copying BlackBerry’s qwerty smartphones and Moto’s flip phones, but Nokia and Sony-Ericsson were king of the candy-bar phones, and it was a big chunk of the market in North America.
Three things are responsible for the downfall o Blackberry: 1. Apple, 2. Samsung, 3. QNX.
QNX was/is a huge mistake. It’s a fine operating system, but it isn’t competitive with the footprint of iOS or Android. And don’t tell me “it’s big in cars”, because iOS and Android are already starting to muscle into that market too. QNX is going to get squashed. Blackberry should have embraced Android and made the Blackberry devices the gold standard for secure Android. They had the skills and the market footprint to pull that off, but instead, some genius decided that a QNX science project was a better idea.
Interesting. My game is, this is a classic case study in marketing.
Realistically speaking, almost all Nokia phones before the iPhone already did what most people do everyday with their phones. (When I say most, I don’t include the geeky types who want to run geeky things on their phones, they are a tiny minority in the ocean of consumers). These old phones running S40 or S60, or even some of Motorola A678 or such, allowed you to browse, attend to email, message, IM (these phones had IRC clients), they had Wifi, GPS, I ran Google Maps on them, I could game photos etc.
However, these companies failed to create a positive buzz around their phones. They failed to market them. Of house they also failed to create more innovative phones, but more importantly, they failed miserably to make their phones appear attractive.
Enter Apple. The champion of marketing. (believe me, I am a huge Myac FanGirl). They introduced a less than ready phone with spectacular marketing, and it went on to change the dynamics of the industry. The earliest iOS was lacking, didn’t allow copy paste, I couldn’t search properly in the contact list, adding media to the iOS devices is still a pain (my non techie boyfriend still can’t get why he can’t drag and drop media to an iOS device icon), but iOS is a religion.
I have tried the Android, which seems to look so much line iOS, but it feels good ONLY on the most expensive and best hardware, is an apology on those cheap phones. I have also tried Windows Phone 8, found it to be beautiful. I am typing this one from a BlackBerry Z10, which is an awesome phone as well.
But I don’t see any marketing communication coming from either BlackBerry or Windows Phone telling the general herd of consumers what an exciting phone system they have. The marcom tone of voice seems to sound apologetic and ‘me too’, rather than confident, exciting and innovative. So that’s what the consumers feel about them.
“almost all Nokia phones before the iPhone already did what most people do everyday with their phones.”
Phone functions, yes. Everything else (i.e., 80% of what I use my iPhone for), no way. I just used a level app on my iPhone 10 minutes ago to straighten a picture.
It’s not just marketing. I remember the world before the app store. Don’t forget, in addition to disrupting the device form factor, they also smashed down the walls of the wireless carrier app ecosystems and unleashed 10s of thousands of app developers. That may have been the more important disruption.
“I have tried the Android, which seems to look so much line iOS, but it feels good ONLY on the most expensive and best hardware, is an apology on those cheap phones.”
Agree 100%. I can only appreciate Android on the Nexus devices with stock Android. Somebody please tell Samsung that Touchwiz is indeed a differentiator, but not in a positive way.
It doesn’t matter if the BB Z10 or WP8 devices are beautiful because their app ecosystems are inadequate. There is a good chance that Microsoft will solve that for WP8, but I don’t think there is any chance that BB can solve that for QNX. QNX was a huge mistake.
http://gallery.mobile9.com/f/1514910/
Symbian S 60 Spirit Level app with over 50,000 dpwnloads.
It isnt the apps. Its marketing and brand image. An illiterate peon in my office bought a really low end lousy samsung running android. I asked him why this when he could have bought the new Nokias, hey have so much better build quality, he says “nokias are so old”.
Willl he ever use the Play Sore? No. He doesnt even have a credit card. So many people i know who own iPhones don’t have credit cards.
Not everyone uses his/ her ipne as a swiss army knife. Those who do, are a percentage, but perhaps not the overwhelming majority.
Om,
You will really enjoy the Perspective story from @asymco’s Horace Dediu which tells a great visual tale of mobile in the “post-PC” era: http://pixxa.com/s/x1MkXkW4 on your iPad/iPhone.
It wasn’t “buzz”, which is empty promise as Microsoft is doing, it was the lack of eco-system that goes with the device.
Buckingham.
Appreciate you sharing your thoughts and also the link to Dediu’s piece. I did get a chance to check that out.
Thanks
Hi Malik,
Very good! But I felt that in this chart should have Apple (are they making so much money?) Samsung, LG, Sony, Motorola. At least they are the most representatives in the same period. Is it possible to have?
would have been great if the chart showed SAMSUNG as well