Pender's Blog

Blog archive

Nokia's Last Stand

Whitey Bulger went down this week. After years of searching for him (with various levels of effort, evidently), the FBI finally caught one of Boston's most notorious gangsters. Just a week after the Bruins won the Stanley Cup (yes, we found another reason to mention it), the city is abuzz again.

At this point, let's be clear: We're not comparing Nokia to Whitey Bulger. Not at all. Not in any way. All we're saying is that it's always a shock when a big name goes down -- a name that seemed forever immune from whatever might cause its demise. We've seen this in the technology industry: Wang, Digital, Compaq (among others). At one time or another, they were all powerhouses, seemingly untouchable. Until they weren't.

This brings us to Nokia, the once-powerful handset maker that used to sponsor the Sugar Bowl and seemed unassailable only a decade ago, maybe even more recently than that. Nokia, now under the direction, of course, of former Microsoft executive Stephen Elop, is struggling -- so much so, in fact, that pundits are predicting its demise at an increasingly rapid rate. How Nokia got where it is today is a story too long for us to research and tell here, but let's just agree that the company is in trouble. It is.

This week, Yahoo Finance (yes, the irony is glaring) became the latest source to forecast the end of Nokia, saying in this case that the Finnish company will be finished by the end of 2012. Now, Yahoo's clairvoyance is questionable, to say the least. In a similar article last year, Yahoo Finance predicted the imminent death of T-Mobile, which will indeed become part of AT&T and effectively disappear if AT&T's proposed buyout of T-Mobile meets regulatory approval.

Yahoo Finance also said that Blockbuster would go away, and while the brand does very much still exist -- notably as an apparently undeletable and incredibly annoying app on your editor's Android phone -- the company did declare Chapter 11 bankruptcy and eventually sell to Dish Network. But other Yahoo targets, including Kia and BP, are alive and kicking.

Regardless, the author of the Yahoo Finance article had his reasons for predicting Nokia's end; specifically, he mentioned the company's falling market share and the fact that Nokia still runs the Symbian operating system and is just now transitioning to...yes, you know, Windows Phone 7 (ignominiously called "Windows mobile" in the article). Details of Nokia's first WP7 phone leaked this week (video below).

Here's the thing about Windows Phone 7. As we've said before, it actually looks pretty cool, particularly with the forthcoming Mango update. But its success is far from guaranteed, and Microsoft, at this point, has undoubtedly hitched its mobile OS wagon to a horse that could very soon founder. And that's kind of a shame.

Windows Phone 7 might survive the death of Nokia, should Nokia actually cease to be. But Microsoft is getting a seriously delayed start in the mobile OS game, and it doesn't seem as though other manufacturers are falling all over themselves to get WP7 on their devices. Nokia is probably WP7's best hope for success and probably provides Microsoft's best chance to establish a foothold in the mobile OS market.  

But WP7 is almost assuredly Nokia's only hope for survival, and there's a big difference there. Microsoft would be able to absorb even the total failure of WP7, although not easily. Nokia likely would not. What that leaves us with is a struggling company betting its existence on an OS that's behind its competitors, relatively untested and thus far actually pretty unpopular. Somehow -- and this is kind of a non sequitur -- the image of two drunks trying to help each other home after a long night at the bar springs to mind. Eventually, they're both going to take a tumble. Neither is strong enough to hold the other upright.

Unfortunately, Nokia might not get back up. For the sake of WP7, and for the good of Microsoft and its partners, we'd like to see Microsoft rely less on Nokia and make every effort it can to get its OS on other handsets as well -- and we're sure this is happening. But for now, we just don't see WP7 being strong enough to keep Nokia afloat, and that means that Microsoft will have to start over at some point with some other "reference" handset maker.

As incredible as it might seem, once-mighty Nokia really does appear headed for the dustbin of history. Then again, we're continually shocked that Corel still exists, so you never know.

How long does Nokia have to live? Would you buy a WP7 Nokia phone? Send your thoughts to [email protected] or leave a comment below.


Posted by Lee Pender on June 24, 2011 at 11:57 AM