The hype surrounding Nokia’s speedy crash isn’t justified, or what do analysts say?

And right away, let's start with the typical exclamations of many analysts / readers / users:

• Stephen Elop - a Microsoft fan, came to ruin Nokia!
• Nokia are fools! It was necessary to switch to Android!
• It was not necessary to switch to Windows, they would develop Symbian!
• The Finns had such a wonderful Meego OS! Elop, a bastard, killed her!

Do you recognize yourself?

So, having read a lot of such moods on the open spaces of the Habr and the Internet as a whole, I could not resist and nevertheless decided to express my, in my opinion, quite reasoned and objective point of view regarding this issue.

“These days, the battle between devices has been replaced by a war of ecosystems.”

Stephen Elop has said more than once that in a couple of years there will be a struggle not of hardware phones, but a struggle of services and ecosystems. The yellow press and most journalists with analysts continue to stubbornly skip these words. So what is Mr. Elop talking about?

Let's get back to 2007 for a short while. Nokia dominates the market, followed by Sony, HTC and Samsung.
But what then was the smartphone market? People bought phones from different manufacturers based on design, some services and features. And nothing more, except maybe habits, kept them on the product of a particular manufacturer.

Let's see what this market is today.
These are primarily services and ecosystems. If a person began to use a service or ecosystem, then he becomes attached to it much more strongly.

Why is the ecosystem so tempting?

• Take, for example, Apple and its ecosystem of iProducts. This is, first and foremost, an ecosystem centered on iTunes and iCloud. I have a lot of friends who cannot leave this ecosystem because they have whole collections in iTunes, ratings, purchases and much more. And my friends use this service and they can’t easily take it and transfer it to Google services, for example. Perhaps in Russia this is not so pronounced in contrast to foreign countries, but this phenomenon does occur.
  We look further at the Apple ecosystem - the iCloud service, which allows you to combine tablets, phones, laptops, computers. People use this synchronization and they have a lot of information stored there and they are not able to easily transfer it to the platform of another manufacturer. Yes, they often do not need it, most are happy with everything. You can also note the Siri service, which is quite popular in the west.
  These services in the ecosystem keep Apple users on their platform.

• Now let's look at the Google ecosystem - tablets, Android smartphones primarily have deep native integration with Google services (GMail, YouTube, Google Calendar, Google Drive, Google Docs, GMaps, Google Reader, Picasa, Google+) and, as in the case with Apple services, many people find them convenient and do not want to stop interacting with them. And don't forget that Google is trying to enter the desktop PC market using Chrome OS. Perhaps for now this does not look serious, but after all, Android was also not taken seriously at first by anyone.

• And the last example: Microsoft. She has changed a lot now, she has very powerful services. For example, Skydrive for exchanging data between any Microsoft devices, in addition there is Office support directly from the browser.
  
  Web version of Office on SkyDrive

  
  
  She has an XBox SmartGlass, which allows you to synch everything and everything between Microsoft devices, as well as turn your living room with an XBox and a large TV into a multimedia center at home.
  
  Demonstration of XBox SmartGlasses and content sharing between Microsoft devices
  
  Xbox Music, which allows you to listen to music absolutely free and stream it to any device with Windows 8, Windows Phone and XBox. Also a single interface paradigm on all devices.
  
  

  Microsoft provides users with access to their services from any device currently available on the market.

  
  On PCs, Laptops, tablets - Windows 8;
  On smartphones - Windows Phone;
  In the living room and at home on a large TV - Xbox 360;
  And all this is already up and running.
  Apple is also working to expand the ecosystem.
  

Perhaps now it’s not so much developed and you will consider it empty words, but after a couple of years, users will choose phones and platforms, primarily paying attention to the services and ecosystem provided, in the same way as today many people primarily pay attention to quality and the number of applications in OS markets, although in the same 2007 everyone studied only the characteristics of iron, and third-party software was already a small pleasant addition.
Times are changing and at the moment there is a transitional period and, as we see, all the IT giants have seen what the future is and are now actively working to expand their infrastructures and spheres of influence.

Let us pay attention once again: the giants of the industry, which have very large material resources, as well as the influence on the IT market as a whole, are represented above.

Phone as a piece of iron will not interest anyone

I hope I was able to convincingly tell you why in a couple of years few people will need a phone by itself, there will be a struggle between services and ecosystems.

Meego to the rescue?

Now let's take a look at Nokia. In which segment did she have influence? Only in the segment of phones. What opportunities did she have? The first thing that comes to mind: either continue to develop Symbian (obviously a failed solution), or switch to Meego.

But look at how monstrous ecosystems Apple, Microsoft, and Google created.
In your opinion, with only one OS for smartphones, Nokia would be able to withstand such an onslaught?

Plus, the market has changed, the way distribution of applications has changed. Now you need your own market with its own format for developers. In the case of Nokia, it was the Ovi Store. But they launched Meego too late and most developers no longer took it seriously. Everyone wrote first for iOS, then for Android, and only then, if they had the strength, ported to the Ovi Store, and then often Nokia had to sponsor porting of applications financially, otherwise the developers had no interest.

Elop also understood that Nokia would have to fight for third place with BlackBerry and Microsoft.
And if the first did not pose a big threat, then Microsoft, with its influence and resources on marketing and advertising, could calmly take third place. Plus she has her own ecosystem.

Elop looked to the future and yes, perhaps if they stayed on the SIM and promoted Meego, then the first 2-3 years Nokia would still be afloat with more or less tolerable indicators, but after 5-10 years, when the market was full If there was a war for ecosystems and integration, Nokia couldn’t compete with the above-mentioned IT monsters, who spread their tentacles on all devices, from TVs, to tablets with laptops and PCs, with only one mobile OS for smartphones.

Therefore, it was decided not to enter this bloody battle, since Nokia a priori would not have had enough resources for promotion, marketing, sponsoring developers, etc.

Okay, Symbian and Meego will lead to a dead end, but why not Android?

Switching to the Android platform, they would start the battle with Samsung, which simply has unlimited production capacity.
Some, of course, object, they say, until 2007, Samsung also riveted phones, but Nokia was ahead. But now is another time. If earlier Koreans had to work on the OS themselves and it turned out to put it mildly not quite high-quality (the same Bada), now the professionals from Google and Samsung are engaged in the OS; they just need to provide iron volumes. And in this matter, no one can compete with the Koreans.

Samsung would easily score Nokia with both price and quantity. Actually, this is exactly the picture that we are now witnessing in the Android smartphone market, once the market leaders Sony and HTC suffer big losses ( Sony losses last quarter totaled $ 115 million ,HTC continues to receive losses for the sixth consecutive quarter ) and occupy a tiny fraction. Sony makes high-quality phones with a first-class design, but Samsung finishes it with price and quantity.
Well, plus Android in 2010 was still not a first-class system, it encountered brakes, lack of thought, it was necessary to work very hard on optimizing its own graphical shell.

And Windows Phone offered a fast OS without brakes in the interface (often buyers pay attention to the smoothness of the system when they first met). It was different from all the OSs on the market. No one would have thought to compare the flagships of Nokia Lumia with the iPhone trendsetter. And this is also an important part of marketing, when a product enters the market that is fundamentally different from current offers on the market. It must be shown that this is not a clone of an existing product.

Plus joining the large ecosystem of Microsoft, where, by the way, there was no strong player. Therefore, Nokia decided to play on another field and stand out from the crowd, as this, in fact, was the only adequate way to survive.

To summarize: always look a couple of steps forward

Dear habretchiteli, I hope after reading this article you were able to assess how difficult the current situation in the mobile IT market is, how many subtleties are there and how important it is to look ahead and evaluate the long-term prospects of the reforms. Please do not superficially evaluate the actions of Nokia and Stephen Elop and assume that they do not see the obvious.

If you do not know the logic of their actions, this does not mean that you are smarter than them.

Of course, I do not presume to say that my assessment of this situation is absolutely true and is the ultimate truth, but common sense is present here.

Well, probably, you could imagine how many factors and data the board of directors of Nokia and Stephen Elop himself keep in mind, who, apparently, in 2010 told Nokia management his vision of the future IT market (and, as we see, did not fail) and presented his a variant of the company's development strategy, after which the Finns gave him the chair of the CEO and gave him all the levers of managing the company. The board of directors will not allow any second-rate manager to board a company with such a long history. I'm sure there are far from stupid people.


Well, it’s worth understanding that all of the above is only part of the current state of IT development, because there is another major factor: the Microsoft business model is under threat from Google. But this is a completely different story.