The news just goes from bad to worse for Nokia. A huge cut in its sales and profit forecast at the end of last month cratered its stock to its lowest price in 13 years. Then the company was put on credit watch and its rating cut by Standard & Poor's. Nobody's surprised (its fellow hardware maker Motorola has been ineffectually struggling for years).
Just visit any telecom services provider website and you'll understand the problem in about a nanosecond. Lots of phone are free to consumers, and people consider them pretty much replaceable. They're a commodity, mostly.
Worse for Nokia, the devices that aren't throw-away and instead winning in the marketplace integrate glorious new software (swiping controls, apps) with the hardware, with Apple's iPhone leading the way (Apple has all but determined the look-and-feel of device hardware for the foreseeable future). This is what prompted Nokia to cut a huge deal with Microsoft in February to use a new version of Windows as the innards to its phones. There have been rumors that Microsoft might buy Nokia so it can look more like Apple.
So the situation isn't just dire, but full of dumb ideas.
First, let's get Microsoft out of the way. You need look no further than its website to assess its ability to create hardware...or lack thereof. Zune anybody? Xbox is the one exception but only because it's to game consoles what Twitter is to standard accounting principles. The likelihood that the company could produce groundbreaking software (which it never has) and wed it to earth-shatteringly brilliant new device design (which it, like Nokia, is bereft of a track record) is all but zero. Of course, that means there'll be lots of media and blogosphere speculation about in the months to come.
What if Nokia doesn't want to become a stepchild division of Microsoft? Could it do things to market its brand out of this miasma? Here are three thought-starter ideas:
- Build wildly innovative phones. I know this must sound like a colossal duh but brands from automobiles to insurance understand that bleeding-edge products (and services) help define them. That's why there are concept cars at auto shows and weird, one-off insurance offerings (like pogo-stick insurance, or whatever). Better yet, there's always a universe of early-adopters who hunger after this stuff, so limited edition/beta products are what drive buzz. Where are these products -- which have no real hope of making money -- that are used instead as marketing investments?
- Don't settle for B2B. One of the weakest links of the Smartphone Age is the kludgey intersections between hardware, software, and online services providers. I've had repeat trouble getting my GoDaddy email to work on my AT&T provided Apple iPhone, and nobody seems to ever fully own the problems (well, I end up owning them, which is very frustrating). Why couldn't Nokia find ways to go to its existing customers and establish a better, more productive and satisfactory experience for them? It could think like a true B2C brand, and I bet doing so would endear it in ways that no gee-wiz tech trick would.
- Aggressively chase its competitions' customers. I still have this nagging hope that big brands will use social media to do something other than entertain us, and there's a large group of current iPhone or Android customers who are ripe for something more. They're not completely happy with the deal they've gotten, so aren't they a natural focus group or community that Nokia could reach in order to crowdsource better offerings? Couldn't it swap future sales deals for their insights into performance, utility, etc.? It could ask them to help build the next, better smartphone experience. Nokia could be the safe harbor for everyone…
Nokia (like Motorola) hasn't done much if anything on the communications front, or at least anything notable or successful. But it has the technical cred and now perhaps it has the motivational desire to take action. It should skip inventing its own cloud services or otherwise copying what a variety of other companies are doing, and instead focus on brining real, tangible programs to the market (i.e. truly "connect people"). The alternatives are to let Microsoft crush it into irrelevance, or doing so on its own.
What do you think?