CSP #07 | Will Apple Be The Next Nokia?
Susmit Chakraborty
Finance Business Partner – FP&A ? Enabling Ecosystem between Business & Legal Finance ? Driving Discussion Through Insight ? Penning Possibilities #foraBetterTomorrow ?
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I often share my view and thoughts on various topics like Leadership, Culture, Technologies, and other interesting facts, based on my personal experience & understanding.
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Alright, let’s begin...
Apple is now one of the prominent global market leaders with a $2.23 trillion market capitalization, and their success current success routed in 2007, with their first ever iPhone launched by Steve Jobs on January 9, 2007, at the MacWorld Convention in San Francisco with the below magical note:
“Three things: A widescreen iPod with touch controls, a revolutionary mobile phone, a breakthrough Internet communicator.
These are not three different devices, but only one. And it is called the iPhone.”
Currently, Apple is leading with promising and polished Operating Systems, an app-rich AppStore, and the flagship ecosystem experience. However, we all know that Android is taking the lead with its open-ended offerings, enabling better experiences at affordable prices.
In terms of software, both Android and iOS (the operating system) reached a maturity stage where both share similar experiences (android looks more feature-rich and iOS looks polished to some extent).
On the hardware front, many statistics show nowadays that apple is no longer focusing on profound innovation, whereas Android OEMs keep on investing heavily in several R&Ds. Whether it is with folding phones, under-display camera technologies, optical biometric scanners, and lots more - android is taking lead ahead with true innovations.
Seeing the facts, many analysts also heightened that the iPhone could be the next Nokia in the coming years if they not considering deep innovation as one of the top priorities.?
Okay, let's portray the Nokia story first to understand why the analyst is comparing Apple with Nokia...
While mobile communications evolved rapidly in the early 2000s, Nokia established itself as the market leader (more than 38%) in the mobile handset segment, till early 2008 with the help of Symbian OS.??
After that, the market began to agitate with the introduction of Apple’s iPhone and Google’s Android OS. Nokia’s operating profits shrank soon after the events and by 2011, it lost most of its market share due to competitive offerings by the new players.
Between 2008 to 2011, Nokia explored various strategic initiatives owning full ownership of Symbian OS, launching of Ovi Store (in 2009) in competition with iTunes/Appstore and Android marketplace (aka Play store), and launching of flagship N series alongside budget Asha/C series & budget phones. Ovi store did not become as premium as Apps Store or play store as Symbian OS was not so polished at that time. The budget android phones were able to grab more attention by providing better app support and a good overall experience, which led drop in market share in Nokia’s budget segment line-ups. Also, their flagships were not able to match the ecosystem experience that Apple targeted from the beginning of its journey.
At this point, most of the OEMs decide to evolve except for Nokia. This stubbornness has cost them a lot of money and finally, they realize, with Symbian OS, they were not able to counter the apple ecosystem and android’s popularity. Thus, in 2011, they collaborated with Microsoft to create a new mobile segment Lumia to build an ecosystem like Apple by leveraging the potential of the popular Windows OS.
While mobile communications evolved rapidly in the early 2000s, Nokia established itself as the market leader (more than 38%) in the mobile handset segment, till early 2008 with the help of Symbian OS.?
After that, the market began to agitate with the introduction of Apple’s iPhone and Google’s Android OS. Nokia’s operating profits shrank soon after the events and by 2011, it lost most of its market share due to competitive offerings by the new players.
Between 2008 to 2011, Nokia explored various strategic initiatives owning full ownership of Symbian OS, launching of Ovi Store (in 2009) in competition with iTunes/Appstore and Android marketplace (aka Play store), and launching of flagship N series alongside budget Asha/C series & budget phones. Ovi store did not become as premium as Apps Store or play store as Symbian OS was not so polished at that time. The budget android phones were able to grab more attention by providing better app support and a good overall experience, which led drop in market share in Nokia’s budget segment line-ups. Also, their flagships were not able to match the ecosystem experience that Apple targeted from the beginning of its journey.
At this point, most of the OEMs decide to evolve except for Nokia. This stubbornness has cost them a lot of money and finally, they realize, with Symbian OS, they were not able to counter the apple ecosystem and android’s popularity. Thus, in 2011, they collaborated with Microsoft to create a new mobile segment Lumia to build an ecosystem like Apple by leveraging the potential of the popular Windows OS.
Source: https://www.statista.com/
In September 2013, after two years of close cooperation between Nokia and Microsoft, the companies announced that Microsoft would purchase Nokia mobile business. But with this also they were not able to create any impact in the market. In 2016 Microsoft finally abandoned its mobile business by selling the rights to Finnish the startup HMD Global. Later, in 2017 they also created some value flagship and budget phones along with features phone under Nokia branding. They also recreate the old classic models in the new design language to grab market attention, but they constantly fail to succeed.
From this analysis, we can easily understand the inability to act proactively to cater to customers’ expectations and the importance of lifestyle products like the iPhone caused a shock, thus failure for one of the pioneer mobile manufacturing brands, Nokia.
Now let's back to our main discussion, let’s evaluate the current market scenario and future potential of Apple Inc.
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The subject claim appears quite promising if we analyze based on current statistics only, but if we focus more on patents registered by apple (which is significantly higher compared to other OEMs) we can easily get the visibility that apple is investing heavily in R&D, but they will update their hardware only when they reach to the certain benchmark what they set to keep their polished experience intact.
Also, to add, apple has always been perceived as a premium brand as they used to offer best-in-class hardware along with their refined software experience. But now as they also realized their bottleneck with hardware constraints, they are exploring the new customer segment by addressing the upper-middle-class requirements and making the iPhone a customer lifestyle product in an emerging market like APAC & Africa. Starting from their iPhone XR launch back in 2018, or the launching of the new SE line ups - they start focusing on the entry segment to acquire new customers, where they can create a potential scope by providing comparatively affordable ecosystem experience alongside the entry-level phones (which are best sellers in the sub-continental markets).
They update their hardware in the phones petty slowly so that people did not feel the urge to upgrade their iPhones often. They also provide a long software update guarantee to its all line-ups. Combining this with their ecosystem offerings, eventually, helps to build customer loyalty to a large extent.
If we refer to the below pastel analysis, we can see that the company heading towards a right direction with their recent strategic decisions.
Apple CEO, Tim Cook & his team understand the market very well and they know exactly when and how to react. Their exhibitions, commitment, and value creation are also admired by most of the other OEMs in the segment or even beyond. Needless to say, they can continue holding their market share and keep on investing (and reduce the costs exposure to maintain a sophisticated margin) to make their offering more lucrative to the new customers.
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Thank you for reading this article and I appreciate your time. If you find this post interesting, please like it, and comment with your thoughts. Please let me know in case you find anything I missed or if you have any points to add. I also am eager to see a different perspective on this topic too.
I will be grateful if you can share your feedback/observation on my writing – as it will refine my thought process further.
I am also currently researching on few more interesting topics and will publish those in the coming days.
Alright, see you soon!
Best regards,
Susmit Chakraborty
#foraBetterTomorrow?#strategicleadership #sustainability #nokia #apple #iphone #android #successstories #businessstrategy
Credit: Source & References -
9. Can the iPhone become the next Nokia or BlackBerry in the coming years? - Isrg KB (isrgrajan.com)
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