Comment by cs702

Classic innovators dilemma.

The entire point of an organization is to systematize, standardize, and make reliable something that is working.

When that thing stops working, and the wind changes, that organization is now a giant anchor full of the wrong people doing the wrong stuff inside the wrong systems on autopilot.

It’s nice to see that they got it even if they weren’t ultimately capable of doing anything about it.

I was an intern at BlackBerry (then RIM) Jan-Apr 2008 and it was astonishing to me how little anyone seemed to care or be taking the threat seriously. Obviously as a student I wasn’t in any of the high level war room discussions, but from what I could see it really did seem like the company was drinking its own marketing koolaid as far as the iPhone not being a relevant competitor because it was missing, like, cut and paste and encrypted email.

The comparison to the Titanic was quite fitting. I was with Nokia then, and there was an overly large administration, excessive politics, and far too many managers and meetings for anything to be done on time. If I recall correctly, we spent 1-2 weeks in meetings just to discuss replacing apache with nginx as a web proxy for a less critical service. The actual work for that change would take about 10-15 minutes.

Although they attempted to make improvements, they failed to recognize what Apple understood: ordinary people wanted to walk into a store and purchase a visually appealing phone that was easy to set up and use, everything in 20 minutes max. Nokia had an overwhelming number of models, catering to everyone from older individuals to tech enthusiasts. If you wanted to buy a new phone, you had to be prepared to spend weeks searching for the right model.

I think the presentation was enough to show they knew they were in trouble.

But it also showed they didn't actually understand the significance of what was happening.

They thought essentially "all this fancy stuff will redefine 'cool', the 'high end'". They imagined a mid-range phone with special email features could slow the iPhone - ie, they imagined phone makers dribbling out features per dollar. But the real lesson of the iPhone was "the 'phone' is going to become a general purpose computing device with multiple connections to the world and hardware features controlled by general purpose software".

Quickly and accurately understanding the competitive landscape is hard, to their credit, and not sufficient.

Even if they came up with a strong response, it would still involve innovation and execution, and probably disruptions to their go to market strategy. All things that have large chances for failure.

Also, Apple at the top of it's game from the iPhone to the iPhone 4. If they were facing a competitor that was strong, but not quite so remarkable, they'd have had more room to maneuver.

Well, there are also a lot of assumptions and complaints about the iPhone and its impact that were commonly made at the time that ultimately didn't matter:

- Has no changeable battery

- Has no physical keyboard

- Is too expensive

- Has no support for Java applications

They clearly thought that these might be potential vectors for attacking the newcomer, but none of it worked out. Rather than having to play the game that the legacy phone makers like Nokia were playing, Apple just changed the entire game, and now Nokia et al were suddenly playing at a disadvantage where their existing knowledge and experience didn't really matter.

They caused their own disaster with the Microsoft marriage. Nokia was still huge, market share and coffer wise, and had plenty of options, but killed them all for MS.

Classic big company problems.

"If we built a product like this it will cannibalize some of our existing and profitable divisions, and those existing divisions have a lot more clout internally than we do. The CEO worked his way up from those divisions. We can't make this."

Then someone else makes that product and eats your lunch anyway.

> N-Series and SEMC Walkman probably need to clearly undercut iPhone pricing to succeed in the market.

I think this is where they went wrong. They got scared of the new cool kid in school and immediately dropped all their prices, essentially marketing themselves as budget to Apples premium.

This is spot-on, and it's a remarkably common pattern when dominant players are faced with a seismic shift—even when it comes from within.

Kodak essentially invented the modern digital camera, and had a phenomenal lead going into the 90s. It was not a little side project—they hired IDEO to do vision work, design enclosures and create on-camera UIs. They poured money in, and did ship products. I'd love to know what happened internally, but externally they simply didn't move as quickly and aggressively as they needed to.

Very similar story at Polaroid—it's not like they didn't see the iceberg.

On the computing side, we have Xerox. Just couldn't figure out how to monetize any of the world-changing innovations from PARC.

Someone should really interview all these key players while they're (mostly) still alive and put together some kind of unified field theory of corporate disruption.

Same like 3Dfx and many others. Miracles happen too often........

The whole report shows that it was a company being run by bearcats and middle-managers who focused on sales rather than product. The detailed out exactly what was coming and why it was great and their general response is atrocious. Some of the highlights of the presentation which stood out to me (on page 12):

  1. "Work closely with T-Mobile" 

  2. "Prioritize touch UI development, simplifying basic functionality and PC suite development very high." 

  4. "Analyse what could be Apple’s next release of “iPhone mini” to mass market price points and plan counter-measures for it." 

  5. "Kill market for such an expensive device by filling mid-range with own/Google/Yahoo experiences" 

  6. "Accelerate Nokia's own free push e-mail project and make it less hidden within the company." 

  7. "Investigate and play hard in possible IPR infringements" 

  8. "Drive key partnerships to highlight Nokia's superior strength in the market, keeping things in perspective." 

  10. "Highlight potential weaknesses of the iPhone" 

This whole report shows exactly why Nokia failed.