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The Fall of Nokia and Blackberry and Lessons Learned

By Finserv MARKETS - May 8,2019
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The failure of Nokia and Blackberry, two of the world’s most valuable mobile phone brands is legendary. There are valuable lessons that can be learned by businesses from the failures of these once successful tech conglomerates. In this article by Bajaj Finserv EMI Store, we will discuss the rise and demise of these two companies and try to figure out the reasons for their failure. Perhaps, we’ll be able to learn a few business lessons too. After all, the wise learn from the mistakes of others.

BlackBerry’s Reign

BlackBerry, initially called Research in Motion, was founded in 1984 in Canada by two engineering students and soon became one of the world’s most valuable communication companies. They were known for their email devices, pagers and the BlackBerry phone. Back then, you were a sophisticated person if you owned a BlackBerry smartphone.

BlackBerry smartphones were focused on providing secure communication and enhancing productivity for professionals, government employees and corporations, their primary user base. Users had to subscribe to their email service for secure communications and during its peak (September 2013), BlackBerry had 85 million subscribers worldwide.

Nokia’s Success Story

Nokia, a telecommunications company based out of Finland, became the bestselling mobile phone brand in the world in October 1998. By 1999, the company’s operating profit was $4 billion. Astonishingly, Nokia enjoyed an extremely healthy 50% of global smartphone market share while the iPhone was still a baby with 5% global market share in 2007. But that was when the trouble began.

The success and demise of these two mobile phone brands almost run parallel to each other and the reasons for their failure are quite similar. We’ll try to explore a few of them below.

Ignoring the iPhone

Executives and decision makers at both BlackBerry and Nokia failed to recognize the potential threat of the iPhone disrupting, or rather, redefining the smartphone market after its entry in 2007.

While Apple worked hard to develop a smart device into a phone, both BlackBerry and Nokia were trying to make their phones smarter than iPhones. BlackBerry was still satisfied with business and government customers when iPhone was already targeting the general market. Unlike Apple, BlackBerry failed to instil a desire in the hearts of people for their smartphones and relied on the support of businesses and governments to increase sales.

It was once reported that Steve Ballmer, CEO of Microsoft, made fun of the iPhone saying that business customers won’t like it because it had no keyboard unlike a BlackBerry or a Nokia phone. [1] Microsoft eventually acquired Nokia in 2013 but its fortunes never saw a revival even after re-entering the smartphone market in 2018 through a licensing arrangement with HMD Global.

iOS and Android apps killed it! (Pun intended)

BlackBerry and Nokia could never comprehend that apps (short for applications) could be used in mobile phones and not just PCs and laptops. iPhone that ran on iOS had a lot of useful apps and games that were fun to use and users could download them easily from the App Store. Similarly, Google launched the Play Store for Android based apps. All this happened in 2008, just within one year of the iPhone’s launch, yet the former giants refused to change their old strategies.

There was no way Nokia and BlackBerry could match the value addition that Android and iOs apps brought to smartphone solely by improving their hardware and design. The end result: they gradually lost favour among customers worldwide. iOS and Android apps really killed it but the final blow came with the resurgence of Chinese smartphone brands. After that it was next to impossible for these two former giants to stand again. The mighty had fallen again! The moral of the story for all business to learn: Change or perish.

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Read more about the best Nokia smartphones at Top Nokia Smartphones In India

Read more about What happened to home grown Indian smartphone brands?, Mobile Phones and Privacy Concerns: Overblown or Reality?, 10 things you can do on your phone that you probably did not know and more on the Bajaj Finserv Markets Blogs.

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