Letter of transmittalJanuary 13, 2018Nokia Head Dear Sir,We are submitting the attached report entitled Nokia and its Downfall. This report examines about Nokia industry and its Downfall. Wrong decisions made by Nokia is the cause of its failure. We also discussed how Nokia can improve its progress by making some serious decisions.I hope that you find this report useful.Sincerely yoursMuhammad Amjad102 Downtown KarachiAbstractIn this report I am going to discuss about Nokia industry. From its humble beginning to its downfall.
And this is not secret what happened to the biggest brand their biggest competitors crushed it especially Samsung and iPhone. Its Wrong decisions especially its failure to switch to smart phones it was also its over smartness and believed that we will win the Competition of smartphones. It’s true that Nokia had seen a worst past but it was the only company who gave us some best phonesNokia was the most trusted brand in all over the world not only by its name but also by its efficiency and strength to overcome the competitors brand. Nokia made its first smartphone in 2000 and it was called a first Symbian phone and it was marketed as smartphone.
In 2007 Apple introduced its first smartphone that supports multitouch screen.Table of ContentsIntroduction 5DOWNFALL OF NOKIA 6Redrafting Strategies 7Wrong decisions 7Progress of Nokia 8Results 9Conclusion 10Suggestions 10References 10IntroductionNokia was one of the biggest industry of their known time. It was founded by Fredtrik Idestrem. He took the first step in making the foundation of Nokia to connect the people. Nokia famous saying is also “Nokia connecting people”. Its previous background was almost unrelated to the hardware and Software industry. As it was started as Paper, Rubber and cable Industry.
And then it jumped to Electronic Section and Telecommunication Industry in 1967 and 1970 respectively. As Nokia’s major is in mobile industry and they made on of their phone that is most used in 1970’s to 1980’s. And its most popular phone in worldwide was Nokia 1100.It was a failure to properly manage as one of the biggest industry was going to be sold to a second party name Microsoft. As Nokia was unable to compete the current mobile industry so they took this step. Apple and Samsung were performing their very well on this time. Nokia had stop their mobile market for some time but later it is said by Nokia that “We will start making phones in 2016″A rising graph of Nokia is making some positive progress from 2017 to now. Nokia has made some of the most demanding phones like NOKIA 8 and NOKIA 3310 etc.
Nokia as other smartphones see that revolution is coming so it is going to shape it according to the trend but it is far behind as Apple totally change the mobile industry with iPhone in 2007 and then smartphone running Google Android arrived in 2008. DOWNFALL OF NOKIAFailure of Nokia can be described in three words CLS Complacency Lack of innovation and Symbian to Windows. Nokia was usually unware of the future and its self-satisfaction led into a deep black hole. Nokia previous experience was very good as it was largest network of selling & distribution. It also had customer relation because it had wide range of products for all class. Including some strength there were also some weaknesses in it as it has low voice quality it’s designs were not too good in low price products. Its sets weight was too high and unlike Apple iPhone, Nokia N series is complex, tough and not user friendly.
Nokia could overcome its weakness by finding some new opportunities as the market was newly growth it could be easy to compete any industry by concentrating on smartphones as People were going into smartphones trend because they were tired of button mobile systems. They could also make their industry better by well-designed and styled set. Mini notebooks were the new trend of Nokia.
Some threads made Nokia industry more decline when China Mobile made the exact copy of Nokia. Competitors like Samsung and Apple were a bigger thread of Nokia. Sales of Nokia may decline due to global economic downturn and also Standard and poor downgraded Nokia with low grade.
Apple was testing smart Phones with multi-touch screen features and Blackberry was adding Email Functionality on their Phones but Nokia was very slow on this whole process. When every mobile industry maker is busy in adding some unique features like multiscreen Nokia felt that these features would be out of scope and would not capable to be used by customers but customers overwrote their exceptions. We are still using touch screen mobiles email like features and Now a Days smartphone will not be a smart Phone without it. One of the biggest factor to rise company is to make something unique and keep its pricing low. This will increase the chances of buying and also increases trust factor. Samsung adopt this trend their Android phones are user friendly and budget friendly too.
(CHANG A, 2011)As it was the fierce competition, Nokia started losing grip on the market and started reporting financial losses. Maybe it was due to bad management so they start looking for a management and complete their search by finding Stephen Elop on September 21, 2010.The company was in the burning platform and main reason for this is that Nokia uses Symbian Operating System for the long time. As this was very discouraging and Elop made his 100% to handle this situation but company was already in a great loss. Nokia stated that we had a loss of 368 million-dollar euros in 2011. Its market share decreased from 45% to 35% in 2011. Fig:1 Top SmartPhones Vendors(Bishop, 2011)Redrafting Strategies In 2011, Nokia made a partnership with Microsoft to fortify his position in supermarket.
Behind the leadership Stephen Elop Nokia decided to stick only and only with Windows OS. Nokia lunched Window series and named this series Lumia. On this on time Nokia came with full preparation. It started his Nokia Lumia series from a 520 to 920 and then award-winning Lumia 1020 its photography features are unique. In September 2013 Nokia agree to make an agreement with Microsoft in this agreement Nokia devices and Services would be purchased by Microsoft. Stephen Elop signed this deal and his role as management is questionable.
Wrong decisions When entire smartphones industry is evolving into OS to make it better and better at this time one result is came into being that although hardware has its importance but software has more importance as compared to hardware. manufactures moved on and adopted various OS like Windows, Bada, Meego and Nokia decided to stick only with Windows OS. Nokia new technologies were almost reliable but they were not very user friend.As Android and iOS became more popular but Nokia failed to get popularity.Progress of Nokia• GSM phone was made by Nokia in 1992 name the Nokia 1011.• It launches the new series name 2100, the very first Phones that had features the Nokia Tune ringtone.
It was the biggest turnover that this series goes on to sell 20 million Phones worldwide. It was over there expectations because Nokia target was 400,000.• In 1998 Nokia was the Bos of all Mobile industry.
• Between 1996 to 2001, Nokia turnover increases almost fivefold 6.5 billion to 31 billion EUR. Below is the relationship between iPhone vs Lumia (Methy, 2015)Fig:2 iPhone vs LumiaNokia net Sales increased to some extent in Geographical area here is the report in fig 3 Fig:3 Nokia Sale Graph by Geographical Area(Lover, 2015)Results(Yadav,2014) Elop was Nokia CEO during from 2011 to 2014. During these years Nokia rating down from AAA to B’s. Nokia share dropped a maximum percentage round about 60% and it lost minimum of 13$ billion in value.
According to Financial Times, While CEO Elop was responsible for the worst condition of Nokia as Nokia payed 1 million $ for every 1.5 billion EUR to Elop.Stephen was former worker of Microsoft before moving to Nokia and he is sent to Nokia and he is sent to Nokia to devaluate Nokia and make it easier and cheaper to buy for Microsoft. Microsoft had a major in software firm so they wanted to takeover hardware firm and Microsoft announced that it had bought Nokia for 7.2$ billion. After all this happened Stephen comes back to Microsoft and Vp of Microsoft Devices and Services and signed a bonus of 25$ million. Conclusion• From 2000 to onward Nokia graph fell down from AAA to junk due to focus on Symbian OS.
• From strategy side view though Nokia made awesome products but it lost in race with Samsung and iPhone.• Due to bad management company were totally in loss.• Decisions of Stephen (former CEO of Nokia) were not originally for the Nokia industry it was for the Microsoft as Microsoft Industry interested in hardware of Nokia. SuggestionsAs Nokia major drawback was its mobile phones were not user friendly as compared to Samsung and iPhone Nokia can make it better by working on this issue. As Nokia get results from Android OS different companies working on latest technologies like face detection and other smart features Nokia should have to make something unique to get back in to industry again.
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