Alec Saunders provides his analysis of Nokia’s recent report that profits fell 90 percent in the most recent quarter. I agree with Alec’s points. I would add that this news fulfills my predictions (here and here) that it’s not about the hardware. If it were, Apple would already be in trouble. The iPhone doesn’t compare on a hardware level to Nokia’s high-end phones. As I said before: Apple isn’t winning because their phones are better. Apple is winning because the experience is better. iPhone has opened up a whole new world of uses for a mobile phone to ordinary consumers. People are doing things they never dreamed of doing before on a mobile phone (even if these things were technically possible on the phone they had before).
Nokia is playing a hardware one-upsmanship game, while Apple has swooped in on the flank and utterly redefined the handset landscape.
And the really bad news for Nokia is that even if they are able to realize they are playing the wrong game, they are in no position to be any good at the new game that Apple has created. Apple knows how to build good-enough hardware. More importantly, they know how to market it and they have their own distribution – all things out of Nokia’s reach. And the nail in the coffin? The App Store. Not only do they not have one, but Nokia doesn’t own enough of the parts to create one, nor do they have the expertise for operating one.
Nokia’s numbers will continue to slide as the DIY niche continues to narrow. I’m not smart enough to know how to get them out of this situation, but I can make one suggestion: Make your platform the easiest to build for. Get rid of “Symbian Signed” and let a third-party app marketplace thrive. Don’t make it easier to get certs – get rid of certs entirely! This is one place Nokia can immediately leapfrog Apple – not follow, but lead. Get rid of approval and let anybody write code and let the market, the community, rate the apps, and let end-users decide which ones they want to install based those community ratings.