How quickly the mighty fall – RIM and Nokia

It did not seem that long ago that the major fears at Microsoft were the existing and looming dominance of two foreign companies: the Finnish mobile giant Nokia and the ultimate business device, the Blackberry from the Canadian wizards at Research in Motion(RIM).  But the industry has a funny way of misleading you down the wrong path. Time and time again you fear a competitor or a group of competitors, only to discover you were not watching your back and have someone else fly by in the night and destroy everything in its path.  In this case Microsoft focused on Nokia and RIM only to be destroyed by Apple and Google.  But in their day these two companies seemed to be on top of the mountain and it would be very difficult to defeat and knock RIM and Nokia off that mountain.  They were the companies everyone envied.  But fate was cruel and today we see two companies about to disappear.

RIM was a lot like Apple is today.  Their famous Blackberry was often called “crackberry” due to the addictive behavior it caused in its user base.  People roaming the streets, typing away on their little Blackberry keypad, anxiously awaiting a response.  They became the standard in corporate America.  Originally an email device it would evolve to be a smartphone.  Early on at Microsoft a lot of employees carried them. That was until Microsoft launched its own Windows-based phone with partners, primarily HTC.  Then RIM was the company that Microsoft wanted to defeat. Originally Nokia was not on the radar, it was all about the smart phone and taking down Blackberry.  Presentations to perspective clients and carriers usually centered around, “Is this a Blackberry killer?”  RIM had done some innovative things.  The thumb wheel on the device was particularly addictive.  It allowed you to navigate fast.  The tiny keyboard seemed to be a hit.  If Microsoft could defeat RIM then it could go after a larger pie that was owned by Nokia, it was the classic Microsoft playbook.  Go after number two and then set your sights on number one. RIM, however, would prove very resilient in this pursuit.  Microsoft had to fight and claw for every percentage point gained in market share.  Slowly Microsoft seemed to be gaining momentum, but RIM users were hard to convert.

Nokia was a different animal, where RIM appealed to corporate America, Nokia appealed to the world of mobile consumers.  When mobile technology and the cellular phone world became real, Nokia was really the first to grasp it and what the possibilities were with these devices which had interfaces.  They were pioneers in the world of SMS (texting). They were also the ones to have accessories for their phones.  All of a sudden you would be walking around the mall and people would be holding colorful designs to their ear.  The old dove bar phones would sell 80 million in a single year.  Nokia in comparison to RIM was a true giant.  The company was not merely participating in the industry it was defining it.  However they made mistakes along the way. Nokia lost America early, when the public was asking for a clam shell device, Nokia said no as it thought it knew better.  It would still be powerful for years. Despite its US setback it was strong in the rest of the world and it bet early on markets like China and India.  It pursued more or less a dual strategy of low-end phones and high-end smart phones, all using the Symbian OS.    The OS would come back to haunt it.

Sometimes Tsunami’s happen and when Apple released the iPhone it laid waste to the competition.  In its wake lay RIM, Nokia and yes…Microsoft.  Only Google seemed to grasp the change that was happening in society.  It seemed in Nokia;s case and RIM’s case they spent the next few years in denial.  They believed they had good products and a good road map, when in reality they had none.  A large part of the problem was  in senior leadership where they seemed to not be willing to jump and make the big change.  When you have a cash cow it seems hard for some companies to realize the cow is being slaughtered. Nokia tried to correct the ship when Microsoft exec Stephen Elop took over as CEO.  He quickly penned “The Burning Platform” memo, which in short said Symbian sucks and we need to try something different.  Enter Windows Phone.  Nokia was late in making the change and Microsoft was late in delivering the Windows phone. Nokia continued to bleed cash for several more years.  RIM, on the other hand, just never seemed to realize what was happening.  Worse, they did not seem to know what to do.  By the time they came out with a competitive smartphone it seemed they were hoping that their loyal “crackberry” users would resurrect them. Problem was that loyal base had all turned to meth.

Now they are both gone.  The device business of Nokia purchased by Microsoft, while RIM was acquired by a Canadian holding company and being taken private.  This has all happened in a matter of weeks.  Two of the biggest names in mobile history about to become a permanent part of history.  It all comes back to one of my favorite quotes from former Microsoft GM Bill Baker, “The future comes slowly, change happens quickly”.  Predicting the future is not that difficult, but timing that is the challenge.  In this industry you need to think big or risk becoming small.  Jobs set a high bar when the iPhone was being developed and when it came out even Bill Gates said, “….we did not set the bar high enough”.  When you miss the boat and are not taking risks to catch up, the end become inevitable.  Such was the case for both RIM and Nokia.  They will go down as legends of a bygone era.  There leaders left to ponder for the rest of their days, “how did we get it so wrong”?

Good Nigh and Good Luck

Hans Henrik Hoffmann September 24, 2013

Categories Uncategorized

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