6 Reasons Why Nokia failed After Enjoying Unrivaled Dominance

Devashish Shrivastava Devashish Shrivastava
Feb 10, 2021 6 min read
6 Reasons Why Nokia failed After Enjoying Unrivaled Dominance

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This post focuses on the reasons why Nokia failed after enjoying unrivaled dominance in the mobile segment for several years. The ferocious and mighty telecom giant Nokia was well known for its products' hardware and battery life. For years, it was the talk of the town. User satisfaction with Nokia’s mobiles was globally recognized. The company launched the first internet-enabled phone in 1996 and by the start of the millennium, Nokia also released a touch-screen mobile prototype.

This was the start of a revolution in the mobile phone industry. The Finnish giant was the largest cell phone maker in 1998. Nokia overtook Motorola, a move that was hard to predict. So what exactly happened if all was going well? It wasn’t a single factor but a myriad of reasons, most of which resulted from Nokia's resistance to change.

The Resistance To Smartphone Evolution
The Deal With Microsoft
Nokia's Failed Marketing Strategies
Moving Too Slow With The Industry
Overestimation Of Strength
Lack Of Innovation In Products

Why Nokia Failed
Why Nokia Failed

The Resistance To Smartphone Evolution

Nokia failed to take advantage of the Android bandwagon. When mobile phone manufacturers were busy improving and working on their smartphones, Nokia remained stubborn. Samsung soon launched its Android-based range of phones that were cost-effective and user-friendly. Nokia's management was under the impression that people wouldn’t accept touch screen phones and would continue with the QWERTY keypad layout.

This misapprehension was the start of its downfall. Nokia never considered Android as an advancement and neither wanted to adopt the Android operating system. After realizing the market trends, Nokia introduced its Symbian operating system. However, it was too late by then with Apple and Samsung having cemented their positions. It was difficult for the Symbian operating system to make any inroads. This is the biggest reason behind Nokia's downfall.


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The Deal With Microsoft

Another reason for Nokia's failure was the ill-timed deal with Microsoft. The company sold itself to Microsoft at a time when the software behemoth was fraught with losses. Nokia's sales screamed the mobile phone maker's inability to survive on its own. At the same time, Apple and Samsung were making significant strides in innovation and technical developments. It was too late for Nokia to adapt to the dynamic and rigorous changes in the market. Microsoft’s acquisition of Nokia is considered to be one of the biggest blunders and wasn't fruitful for either side.

Nokia's Failed Marketing Strategies

Nokia's Market Share Holding
Nokia's Market Share Holding

Generally, a startup fails because of bad marketing strategy and the same happened with Nokia. The company followed an unsuccessful strategy of umbrella branding. Apple was the first company to apply the umbrella branding model with the iPhone at the top. It kept adding new models to this umbrella year after year. Samsung followed the same route by launching the Samsung Galaxy series but Nokia failed to take cues. The user trust Nokia built over the years was gradually waning. The company was inefficient in its selling and distribution methods. Seeing the mess, Nokia decided to come up with some fascinating hardware and software innovations. However, these were already released by Nokia's rivals and lacked the uniqueness. Failure in Nokia’s marketing and distribution strategies played a significant role in its elimination from the mobile industry.


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Moving Too Slow With The Industry

Nokia never kept pace with changing technology and trends. Nokia was always famous for its hardware and didn’t pay much attention to its software line-up. Initially, the company overlooked technical advancements to avoid the risks associated with bringing innovation in phones. The business needed diversion but it was too late by the time Nokia realized this. Instead of being amongst the early initiators, Nokia transitioned when almost every major brand had already started producing awesome phones.

How And Why Nokia Failed

Overestimation Of Strength

Nokia overestimated its brand value. The company believed that even after the late launch of its smartphones, people would still flock to stores and purchase Nokia-manufactured phones. A misconception! People still make predictions of Nokia retaining the market leadership if it adapts to and accepts Android or uses better software at its core. However, this is far from the truth as seen today. The company got stuck with its software system that is known to have several bugs and clunks. Nokia felt its previous glory would help alleviate any sort of trouble. Unfortunately, things didn’t play out that way.


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Lack Of Innovation In Products

The lack of innovation in its products only added to Nokia's woes. While brands like Samsung and Apple came up with advanced phones every year, Nokia simply launched the Windows phone with basic features. The Nokia Lumia series was a jump-start measure, but even that collapsed due to lack of innovation. The unattractive and dull features didn’t help. In the era of 4G, Nokia didn’t even have 3G-enabled phones. Nokia also came up with the Asha series but it was game over by then.

Wrong decisions and risk aversion brought the decline of the mobile giant. Nokia refrained from adopting the latest tech. Nokia's failure became a case study that made organizations realize the importance of continuous evolution and enhancements. The journey of what was once the world’s best mobile phone company to losing it all by 2013 is quite tragic. Nokia also strongly lacked leadership and guidance.

Frequently Asked Questions - FAQs

Is Nokia Chinese company?

No. Nokia is a company based in Finland and was recently taken over by HMD Global.

What does Nokia mean?

Nokia is the name of a river in Finland.

Is Nokia Android?

Yes, Nokia smartphones come with Android. The Lumia series that once used Windows-based operating system has been discontinued. The new variations are Android-based.

What are the reasons for Nokia's failure in India?

Nokia failed to keep pace with changing customers needs and did not want to adapt to the market dynamics. Instead of adopting Android (like everyone else at the time), it stubbornly stuck with Symbian. Nokia also failed to update its software offerings and only focused on hardware.

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