Nokia and 34.2% until it reached 9.5% in 2014

    Nokia is a Finnish multinational
communications, information technology and consumer electronics company that
was founded in 1865 by Fredrik Idestam, Leo Mechelin and Eduard Polon. It is mostly
known for the production of mobile phones. For almost more than a decade it
dominated the phone industry, but then, all of a sudden, its market share has
plunged from 46.7% to just 9.5% in 7 years (Sam Oliver, apple insider). What
caused such dominant firm to lose its market share that quickly? During the
same year, Nokia met its new competitor, Apple. In 2007 Steve Jobs, founder of
Apple, introduced to the world a new phone called iPhone. Was this the main
reason of Nokia’s failure? What did the Apple do that Nokia did not? Is it a
failure of the Nokia brand, or maybe a result of a bad corporate strategy? This
essay aims to find the main causes that caused Nokia to fail.

    In 2007 Nokia’s phone market share was as
high as 49.4% according to Gartner’s research. From that year onwards, Nokia’s
market share has been decreasing every year to 43.7% then 41.1% and 34.2% until
it reached 9.5% in 2014 (BBC). Apple, as well as Samsung were definitely one of
the main causes leading to that failure. Both companies just took over the
phone market share. Nokia was falling behind as they rocketed. Why is Apple so
successful? There are many reasons why Apple is so successful compering to its
competitors. One of the reason is that Apple’s approach is towards creation of
products is different. Often engineers create something because
they can, whereas Apple engineers are creating their products for themselves.
When Steve Jobs was alive, he represented the “real consumer” of Apple
products. What is more, Steve Jobs was innovative, he was able to see the
future unlike his competitors. During his announcement of the first iPhone he
showed the world how easy his product is to use which actually had a huge
impact on its success. Also, apple keep making things simple. Unlike the
majority of phone makers Apple has just one product, in this case iPhone.
Thanks to that it minimizes the decision making for the consumers. This
may seem limiting given the number of smartphones available to users however, the
truth is the revers. According to Tim Bajarin “Our company has done
consumer research for over 30 years, and consumers constantly tell us that
while choice is nice, in reality they want the process of choosing a tech
product to be simple and not complicated by a plethora of choices.”
Furthermore, Apple wasn’t inventing new products but they were recreating existing
products they just made smartphones better and were at least two years ahead of
the competition. They had the vision of future smartphones. They were
innovative which undoubtedly was the major key of their success.

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We already know that Apple
and Samsung crushed Nokia, but are they the only reason why Nokia failed? Did
Nokia’s corporate strategy fail? What were Nokia’s decisions during that
period. In order for a company to work it must analyse the behaviour of competitors, or
evaluate the company’s share price or consider different ways to expand the
business. A company must seek for strategic long-term activities of their
business which is known as strategic
management. The firm needs to have competitive
advantage which are the various factors, such as lower costs