What was once the world’s biggest maker of mobile phones, is now a company in distress. Nokia has indeed seen better times, but the company has seen its fortunes reverse since its failure to respond to Apple’s challenge in the form of the iPhone launched in 2007. The Finnish handset maker had initially passed off Apple’s iPhone as another one-off product while it boasted of a large portfolio of different products. Any rational individual would have assumed that one product cannot possibly bring down another company’s large portfolio. However, everyone was proved wrong when Apple’s iPhone became a runaway success.
Ironically, Nokia had been developing products similar to today’s iPads and iPhones way back in the late 90s, when Apple was just working on the iPod. According to Not only was the company thinking about a tablet, but also of a phone featuring a color touchscreen equipped with a single button. The Finnish giant not only had a vision for a tablet but even a phone with a color touchscreen with just one button.
However, these products were shelved because Nokia’s corporate culture is such that multiple teams try to compete among themselves to develop different products, targeted for the same need. This resulted in delays in getting any product ready for shipping, which were comparatively less in other companies that focused on a core product portfolio. Thus, Nokia lagged behind in the rapidly changing dynamics of the smartphones segment, which was invaded first by Apple’s iOS and later by Google’s Android mobile operating systems.
As soon as he joined Nokia, Stephen Elop, CEO of Nokia, came to the realization that the company was lagging behind and that Nokia would not be able to compete in the smartphone segment if it continued with its system of internal platforms. Then, he wrote the famous “burning platform” memo and created a partnership with Microsoft.