We all know that Nokia missed out on the smartphone trend in the consumer electronic business, because of a business strategy that did not see the potential of phones with touchscreen. (much like the companies that bet against the rise of the automobile, which are… – well you see they don’t exist anymore). As a result the company was bought by Microsoft to cut losses.
Surprisingly, Nokia has so far held its head just above the rising water. After 2011, when Nokia sold its mobile phone business for 7 Billion dollars to Microsoft, the Scandinavian company switched its business strategy towards the telecommunications infrastructure business. Nokia Networks is a very profitable business so far and has recently acquired the start up Eta Devices. With this acquisition Nokia wants to get a share of the building 5 G market. Eta Devices offers Nokia the technology to significantly boost the battery life of smartphones up to 50 percent. That is definitely a competitive technology that gives Nokia an opportunity to catch up on the competition.
However Nokia does not stop there, they recently announced a smartphone comeback with Android 7.0 Nougat devices in Q1 2017. One focus of the new Nokia smartphones will be high end quality, (maybe as indestructible as the Nokia3310?!) including premium metal designs and up to date water resistance. Furthermore, the two smartphones include 2K displays and sensory technology based on graphene, which is considered a wonder material in the industry. The graphene technology is not even included in the iPhone 7 yet. Other features are a long battery life and 3D Touch-technology. The price is rumoured to be around 500 dollars for the most expensive version. This definitely sounds like a promising product, that is able to get on eye level in terms of quality with competitors like Samsung or Apple. Considering that one of the business partners of Nokia is Foxconn, rumors has it that a combination of the design expertise of Nokia combined with the manufacture expertise of Foxconn definetly sounds dangerous for the other smartphone companies.
Both the investment in 5G network technology, as well as flagship level smartphones in the end of 2016 sounds like Nokia survived as a company after all. It will be interesting for the consumers how their new market strategy turns out considering competition like Apple or Google. Nevertheless high competition always leads to better products and in the end better smartphones for us as consumers.
Thank you for the interesting post! I did not know that Nokia was planning on a comeback so it is nice to be informed by your post.
I think that if they manage to strike back with a smartphone and 5G network this may be called the recovery of the century since ‘we all gave up on Nokia, didn’t we?’. But to be fair I personally think they could actually take a spot in the crowded smartphone market by focussing on their competitive advantage, which you already mentioned, the indestructability of the phone. We have all seen posts, videos, pictures and remembrance of Nokia phones which survive literally everything. Besides, one of the biggest complaints and annoyances of smartphone users is that their phones break down so easy. So if they manage to combine the new 5G network with an indestructible smartphone which is reasonably priced they make a fair chance to make a comeback. Nokia’s biggest problem will be their current reputation in respect to smartphones because Nokia showed the world that it could make phones but is it as good in producing smartphones?
I will keep a close eye on all developments around Nokia and time will tell us if this strategy will work out in the end.