Fall of Nokia – A Case Study

From being a monopoly in the Mobile phone segment to being acquired by Microsoft, this 180+ years old company made a grave mistake. Now, it has become a case study on what not to do. Read on to know all about it.

Abhishek Gupta

Management Student, Former Brand Management & BD Professional

There are innumerable examples of successes and failures of Businesses in the world. While a lot of them have failure stories usually when they are in the initial or mid stages, there are a few companies that failed after achieving the highest peaks of their businesses.

Should you drill down to understanding why a business failed, most of the times, the reason will be a failure to adapt based on the new trends. Sometimes, one becomes so engrossed in their success that they forget a key factor. Customer trends change with time and a buyer is often looking for new things. Nokia (perhaps the first phone any of us ever bought) has a similar story.

Once a Telecom Giant with Net Sales of over $50 Billion, Nokia saw its swift downfall, with share prices falling from $48.15 in 2000 to $2.93 in 2012, that culminated into an acquisition by Microsoft. So, where did they go wrong? What was that key thing this 180+ years old company did or did not do that led to this?

In three words – Failure to Change!

Nokia had its own software, Symbian, that it had been using for most part of 2000s. While its competitors had already started working on the touch interface mobile (primarily Apple), Nokia just kept launching new phones on the same technology. When Steve Jobs launched the first iPhone, it decimated the biggest its competitor. By the time Nokia finally decided to switch tactics, they had already lost most of their market share and were too far behind to even innovate.

From once being a monopoly in the Mobile Phones segment, Nokia fell flat on its face after its attempts to enter the smartphone market with Microsoft’s software failed. The only emerging competitor to Apple’s IOS was Google’s Android, a software that could have become the saviour Nokia needed had it recognised the opportunity. Ultimately, from being called the most durable mobile phones with a massive market capitalisation, Nokia just ended up becoming a statistic in the Telecom history.

However, all is not lost for this nostalgic brand that most of us have associated with in our younger years. While Nokia plans a revival in the mobile phone industry, a lot is expected from this brand.

What do you think should be the strategy/ primary focus for Nokia now? Let us know in comments below.

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