If one is to look for a good example of a success story gone wrong, the story of the Swedish phone company, Nokia, should suffice. The company has all the points that one needs to look at in order to learn about how to come up with a successful branding, and how to avoid the downfall and the wrong decisions that can bring about that decline.
Nokia was at the forefront of the cellular phone market in the 1990s. The company was a driving force behind the development of GSM. GSM is an acronym for Global System for Mobile Communications, and is the predecessor of current mobile phone technologies. This investment had provided Nokia with great returns by the late 1990s, when the popularity of the mobile phones soared beyond everyone’s expectations. This popularity had prompted Nokia to reevaluate its operations, and a focus on telecommunications and the requisite gadgets was decided on. Nokia held the distinction of being the world’s largest provider of cellular phones by the start of the new millennium.
Much of Nokia’s success is the user-friendliness of its units. Unlike today’s next generation mobile phones, Nokia’s interface was intuitive. Anyone can learn how to find the menu for a specific action just by looking at how the phones’ menus were arrayed, and the central “Nokia Navi” key. Another reason for the popularity of the Nokia phones was the Snake game, which is basically just a mobile port of an old arcade game.
The early 2000s could be considered the peak of Nokia’s success in the mobile phone market. At this time, Nokia released the 3310. The 3310 would become its most successful offering, and would be more popular than any of its previous and following releases. Nokia held on to the top post of the mobile phone manufacturing market until 2012, but the decline would begin in 2008. Apple’s iPhone 3G will prove to be the catalyst for this fall.
While the first generation iPhone was not a threat to both Nokia and its Symbian mobile OS, the iPhone 3G took away a big chunk from Nokia’s market share. By the fourth quarter of 2008, Nokia’s share of the market was at 40.8%, a significant drop from the 62.5% that it enjoyed in the last quarter of 2007. Nokia was unable to recover its market shares, despite its release of the successful Nokia E71. The saturation of the market with smartphones from many different manufacturers also made it impossible for Nokia to regain its previous dominance.
Frank Nuovo, a former insider at Nokia, cites not the lack of innovation from Nokia as a factor behind its decline. Rather, it was the lack of a sense of urgency in the development of flagship products. In an interview with the Financial Review, Nuovo revealed that Nokia was already developing touchscreen technology ahead of Apple but did not hurry with the development, causing it to be beat by Steve Jobs and the team at Apple. Despite that, Nokia focused more on maintaining its position rather than competing.
As of April 2014, Microsoft had acquired Nokia’s handset division. This deal gave it access to all of Nokia’s mobile assets but not the trade name. Nokia and Microsoft had announced the Nokia X Android devices in February 2014, but as of July 2014, Microsoft has reportedly ceased development of Nokia X in favor of Windows Phone.