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Farewell Nokia: End of an era for mobile pioneer

Los Angeles

YOU never forget your first cellphone. Mine was the Nokia 5110. By today’s standards, it was bulky and embarrassingly lacking in features. It made phone calls and played the game “Snake”.
Forget a Retina Display; it boasted a monochromatic screen with a green backlight.

And how’s this for fashionable: It came with a freebie leather case and belt clip that I, regrettably, wore proudly. It was perfect.
Nokia served as my ambassador to the wireless world, letting me experience for the first time what it truly meant to be unfettered from landlines and payphones (remember those?).

It was a massive revelation for a young reporter on the road. For better or worse, Nokia helped set me on the path to becoming the gadget-obsessed geek I am today.
So it’s with a fair bit of melancholy that I bid farewell to Nokia. On Friday, the once-staid Finnish company confirmed that it had completed the sale of substantially its entire devices and services business to Microsoft.

Microsoft said the unit, now named Microsoft Mobile Oy, would fall under its devices group.
“Today is an exciting day as we join the Microsoft family, and take the first, yet important, step in our long-term journey,” said Stephen Elop, the former CEO of Nokia and the new head of devices at Microsoft, in a blog post.
Microsoft’s US$7.5 billion (about M79 billion) acquisition is a sobering reminder that even the strongest companies can fall.
Next to Motorola, which invented the mobile handset, there was no bigger name in the business than Nokia.

The company has been on such a steady downward slide over the past six years that it’s easy to forget how dominant and long-lasting its reign was over the cellphone business.
Samsung Electronics is heralded as a titan with just over a quarter of the global handset market today; Nokia at its peak in 2007 controlled 41 percent of the market.
“It’s hard to imagine any vendor reaching 41 percent share in today’s world,” said Ken Hyers, an analyst with Strategy Analytics.

By the end of last year, Nokia’s market share still sat at 15 percent, thanks to a horde of cheaper basic phones, according to data compiled by Strategy Analytics. Its share of the smartphone market was in the low single-digits.

But when Nokia was on top, nobody could touch it. That kind of success eventually bred an obstinate attitude and vulnerability that was exposed first by the Motorola Razr, and then more fully by Apple’s iPhone.
Floundering in a world that was moving forward without it, Nokia tapped outsider and Microsoft veteran Stephen Elop in 2010 to shake things up, which he promptly did with a controversial decision to drop the company’s proprietary software and adopt Microsoft’s Windows Phone mobile operating system.
What followed was a three-year battle to gain acceptance for Windows Phone software and its Lumia phones.

Now, Nokia’s devices and services business finds itself a part of the Microsoft family. “You forget when you see a giant fall, when you’re that tall, that high, the collapse is pretty dramatic,” Hyers said.
Nokia isn’t going completely away. Beyond mobile devices, the company’s telecom infrastructure business, mapping services, and advanced technology division will continue operating under the Nokia brand. It’s the latest incarnation of a 150-year-old business that can trace its origins back to making rubber galoshes.

Nokia was an industrial conglomerate in multiple areas before Jorma Ollila took over as CEO in 1992. Prior to his appointment, Nokia was in shambles, having made several poor investments in new businesses — all in an attempt to transform itself from a paper supplier.

Those investments went sour after a massive recession hit Finland. At one point in the late ‘80s, the board had considered selling the fledgling mobile phone business.
Ollila, however, convinced Nokia to not only stick with the business, but to throw its full weight behind it and the telecommunications infrastructure unit.
The company would go on to jettison the rubber, cable, and consumer electronics divisions in the subsequent years.

In 1998, Nokia overthrew Motorola to become the world’s largest phone manufacturer. By the time I purchased the 5110 in a year later, Nokia supplied a little more than one out of every four phones in the market.
“Nokia was to mobile as Kleenex was to tissue paper,” Hyers said. “That was how dominant they were.”

Nokia embraced “Nokia DNA”, a concept that its phones all have a distinct, but consistent look. While the company experimented with multiple designs, its engineers were wedded to the “candy bar” look.
That stubborn refusal to change the design turned out to be the first crack in its dominance.
While most of the world was gobbling up Nokia’s steady menu of candy bar-shaped cellphones, consumers in North America began eyeing flip phones, handsets with a clamshell design.
Motorola, mounting a comeback of its own, led the charge for flip phones, and cemented the trend with the debut of the ultra-slim Razr in late 2004.
It remains one of the most successful cellphones ever, reigning as a top seller for nearly three years.

Nokia refused to succumb to the whims of a select region, instead pressing on with its candy bar designs featuring higher-end components such as metal ball-bearings found in luxury cars.
I asked Nokia executives about the possibility of a flip phone several times in those years.
They dismissed it as a fad.

It was at this point that Nokia largely abandoned the US market. The US carriers were increasingly looking for vendors to supply customized phones, a request that upstarts Samsung and LG were all too happy to fill.
The carriers backed away from Nokia, which maintained a niche presence in the US through a handful of boutique stores.
“Nokia wasn’t delivering, or not delivering quickly enough,” said Gartner analyst Tuong Nguyen. “The Korean vendors could deliver it faster, and they were able to pick up on (Nokia’s) weaknesses.”
Nokia’s N95, for example, was hailed by the company’s fans as the ultimate showcase device. But in the US, it was largely ignored because the carriers refused to sell it.
Motorola, fueled by the Razr, had taken the crown in the US, and then-Motorola CEO Ed Zander believed he had enough momentum to realistically gun for Nokia’s global leadership position.

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