The Rise and Fall of a Mobile Giant: Nokia's Untold Story

In August 2008, Finnish journalist Lauri Malkavaara, writing for Helsingin Sanomat, expressed his frustrations with Nokia smartphones. Despite Nokia's reputation for producing excellent phones, their latest models left many users puzzled and struggling to navigate their features, especially when compared to Apple's offerings.

Lauri's third Nokia phone, the E51 running Symbian OS, proved notably more challenging to use than his previous devices. Unlike his seamless experience with Apple's iPod Touch, which he quickly mastered without consulting a manual, the Nokia phone's complexity was discouraging.

“I pondered this for about a week. At first, I didn't even know how to make a call until I consulted the manual, and even now, many functions remain unclear. About six months ago, a colleague showed me Apple's iPod Touch. I instantly fell in love with it because it allowed easy internet access and many other features. I bought one, turned it on, and immediately understood how to use it. Over six months of daily use, I never needed a manual. Its design is intuitive to me and others. It's no surprise it’s so successful worldwide.”

Lauri highlighted the unintuitive navigation of Symbian and the difficulty in performing basic tasks such as changing ringtones or sending text messages.

“By releasing devices like the E51, Nokia risks losing its legacy of user-friendly phones. This could lead to serious problems. The next day, Nokia's management contacted me to explain their strategy, but I wasn’t interested in corporate plans—I simply wanted to share my honest feedback. One executive even offered to meet and discuss the issues.”

Nokia’s leadership argued that different users require different phones, to which Lauri responded, “No one wants a bad phone.”

Nokia Recognized Symbian’s Limitations Early On

A company representative admitted that Nokia had delivered a subpar product and apologized. They revealed a "top-secret" project developing a new operating system aimed at simpler, more user-friendly phones. Nokia closely monitored Apple’s 2007 iPhone launch, sending a batch of iPhones to their Espoo headquarters. One director’s 4-year-old daughter quickly grasped how to use the device, signaling Nokia’s urgent need to innovate.

That evening, the director’s daughter asked, "Can I keep this magic phone under my pillow?"

iPhone Disrupts BlackBerry, Android Yet to Compete

By September 2008, analytics firm Canalys reported that the launch of the iPhone 3G halted Symbian’s growth. Android had yet to gain significant traction, while the iPhone effectively displaced BlackBerry in the U.S. market. Verizon dropped BlackBerry, adopting Android phones as an iPhone alternative.

By late 2010, Android sales remained sluggish, prompting Verizon to embrace the iPad and, with the iPhone 4 launch, solidify Apple’s dominance.

Maemo and MeeGo: A Dead-End Strategy

Nokia’s secret weapon was Maemo, a Linux-based OS previously used in netbooks and introduced for smartphones in August 2009. Initially intended to replace Symbian, Maemo merged with Intel’s Moblin project in February 2010 to form MeeGo. Nokia rushed to complete MeeGo by summer 2010, debuting it on the N900. However, MeeGo’s broader release was delayed until September 2011 with the N9, missing critical market opportunities.

Partnership with Microsoft: The Final Chapter

Desperate, Nokia partnered with Microsoft, whose Windows Mobile was also struggling. Microsoft launched Windows Phone to regain market share, but consumer response was lukewarm. Within two years, CEO Stephen Elop, formerly of Microsoft, dismantled Nokia’s in-house software efforts, abandoning MeeGo and making Windows Phone Nokia’s primary platform.

Nokia’s smartphone market share plummeted from 29% to 3%, and the company’s value collapsed. Microsoft acquired Nokia’s mobile division for just over $7 billion, a fraction of Nokia’s peak valuation.

Seven years after the iPhone debut, Nokia was once valued at over $116 billion—comparable to Apple at the time. In 2000, before smartphones, Nokia’s peak market value reached $222 billion. Today, Apple’s market capitalization exceeds $400 billion, illustrating the stark contrast between the two companies’ trajectories.

A poignant end to a once-mighty mobile pioneer.

(source)

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