A year ago this week I spent a Sunday evening at Barcelona’s Casa Llotja de Mar, an imposing 14th century gothic pile that used to serve as the city’s stock exchange. Alas, I wasn’t sightseeing; this was a work gig, and a tough one at that. Press had been invited by Nokia to the venue on the eve of the 2011 Mobile World Congress to communicate its master plan aimed at reviving its ailing fortunes. With a print deadline for the following morning’s event Show Daily looming at about the time Nokia CEO Stephen Elop was due on stage, we had spent the previous few weeks unsuccessfully trying to get the lowdown from Nokia on what was to be announced in advance. Instead, I was facing having to write up the story on-site as it happened and trusting the Wi-Fi gods to get it sent back to the newsroom in order to go to press that night. This is about as dramatic as telecoms journalism gets (no sniggering at the back please).
As it happens, my personal drama was nothing compared to what had been unfolding at Nokia in the days since Elop had issued his now-infamous ‘burning platform’ memo to employees. The reason Nokia’s PR couldn’t furnish us with any details is because the firm wasn’t announcing anything at all; rather it was using the event to explain one of the most controversial decisions in the company’s history.
Nokia announced two days earlier (on the Friday) the dramatic news that it was phasing out Symbian (and sidelining the MeeGo OS tipped to succeed it) in order to go ‘all in’ with Microsoft’s new – and as yet unproven – Windows Phones platform. All hell broke loose. Nokia’s stock lost a third of its value that morning, while in its home market of Finland – where this was front page news – employees staged mass walk-outs. And then there were the rumours: was Elop – an ex-Microsoft man appointed by Nokia just a few months earlier – some kind of Trojan horse for the US software giant? Did he stand to make millions from the deal as a Microsoft shareholder? Was Nokia’s MeeGo partner, Intel, only informed of the Microsoft deal three days earlier? (that last one is true, apparently). There was also some cattiness from rivals: Google’s Vic Gundotra’s comment on the tie-up was that “two turkeys do not make an Eagle” – sour grapes, perhaps, that Nokia had passed over on Android in favour of creating its “third ecosystem” with Microsoft.
It was against this fervent backdrop that Elop stepped out to address the media throng at La Llotja. Performing ‘in the round’ theatre-style, in a dimly-lit medieval hall, it felt at times more like watching a Shakespearean tragedy than a press conference – though maybe the grandiose setting, Mediterranean air and fast-approaching print deadline had simply heightened my sense of romanticism (check the YouTube clip to see for yourself).
Elop did a decent job of communicating Nokia’s new strategy as well as setting the record straight on some of the more fanciful rumours. The story was to dominate Congress, and Nokia arguably ended the week in better shape than it started it. It is testament to the power and scale of the GSMA’s annual event that Nokia had everyone in the industry it needed to brief on the matter in the same city for a week.
But the harsh realities of Nokia’s new direction soon came to the fore. Elop’s biggest blunder was probably to announce plans to halt support for the flagship Symbian line without giving any indication of when their successors would appear. This spooked not just investors and customers, but channel partners too, and led to Nokia reporting two disastrous financial quarters that saw it haemorrhaging both market share and cash. Nokia had started 2011 as the clear smartphone market leader; by Q4, Apple was selling almost twice as many smartphones as Nokia.
Nokia’s first two ‘Lumia’ Windows Phones were unveiled in September with a third version designed exclusively for the US market announced at the beginning of this year. It has sold only a million or so Windows Phones to date but it is – for the first time in a while – managing to generate some momentum behind its smartphones.
Nokia will exhibit at Congress this year after a two-year hiatus in which it was in the wilderness, both physically and metaphorically. But gone are the days when a new Nokia device was the talk of the town. A new flagship Lumia device would be up against a wave of new devices from the Android camp: Samsung’s Galaxy S3 now seems unlikely to make an appearance, but expect performance-packed flagships from the likes of HTC and Sony (sans-Ericsson) running the latest Ice Cream Sandwich release.
The reality for the once-mighty Nokia is that it is now just another vendor, albeit one with a reputation for build quality that is head and shoulders above most of its rivals (Apple arguably the exception). But Nokia can at least cock two fingers at the doomsayers who said the firm would never make it into 2012 alive, and will head to Barcelona next week in the knowledge that, while its future may not be bright, it is not quite as bleak as it once seemed.
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members