Some ten years back I was fascinated about the stories Nokia told about the upcoming technological evolution of mobile phones. As a Finn, I was of course proud of Nokia’s success, and almost religiously believed in Anssi Vanjoki’s preaches.  He said that in a few years, most of the cellphones would contain a camera, and a significant portion will also have a GPS receiver. Nokia would be shaping the markets dramatically. Now we can see that it was true.

In parallel with the device evolution, irreversible changes have emerged in business, communication, information, personal and social life and wherever you can imagine, along with the internet era. We have changed our behavior, thinking, expectations and so on because of so many internet-enabled services. We have learned to want services and tools that work. No more can we tolerate applications the setup or use of which requires a technical expert. And frankly, we want it and often get it for free. A great range of software applications, services, hosting, disk space, whatever – in practice for free. Just select what you like most.

During the last decade, Nokia started to realize that device business is not enough for the shareholders. Phones – albeit the superior production ecosystem – can not be the single foot Nokia is standing on. That’s too risky, and there’s not enough business growth potential due to strong price erosion. Services were a more than obvious new target business, and where else could that business be based than on the internet. Services for everyone. That’s it, let’s go – some restructuring of the organization, launching Ovi services and Comes with music. Who knows if there was something else too.

I don’t know how many Nokia device models I have used. The user experience has been pretty good, and my E71 is an excellent business phone with quite nice web browsing and email capabilities. When comparing it to the pieces of plastic from RIM called Blackberry, I feel more professional. In the past, however, I have never been happy with the PC suite in any sense. PC suite? Yes, I would say it used to be the thing somehow distantly connecting Nokia to the PC (and internet) domain. Last summer I had a reason to sign in to Nokia Ovi. The reason was the wish to improve the backup capabilities and use the phone content with the laptop. The first impression was rather positive, as the backup was easier than ever before, but this experience evaporated quite quickly. The sync process gets stuck. My overall user experience is bad. Should I know why? I don’t mind, I just expect it works.

I also activated an Ovi email account. That’s fine, one more email. I just don’t know how much disk space I can use, and not much else either. Ovi gives me a plain website with nothing interesting whatsoever. That’s a list of a few options: maps, store, email… Such sites have existed for ages. So far I have not seen revenue generating opportunities for Nokia.

A few weeks back I noticed I could download an Ovi software package, the Ovi Suite. My expectation was that this would replace or be an option for the Ovi portal. I was wrong. Well, I could retrieve the device information to my laptop and such stuff – table stakes. The real disappointment was that there was no integration of the messaging services between the device, Ovi portal and Ovi  Suite. Ovi Suite only understands SMS and MMS but nothing else. The user interface of the Ovi Suite is clumsy and old fashioned. Nothing fancy for me.

Where is Nokia now? Last year Anssi Vanjoki said that Nokia copies with pride. A couple of years back iPhone was a joke for Nokia. Now the joke is no more funny. The annual Consumer Electronics Show in Las Vegas just ended. That’s the place to release new products and services. Instead of great releases, Nokia was happy to tell that they have some 1200 million device users, out of which 5 million are active service users. That makes some 0,4 per cent. In Nokia’s terminology, active user is one who shows up once a month. We could expect that the number of “hyper users” (which could be Nokia’s definition to a daily user) is a small fraction of that, probably tens or hundreds of thousands. That’s next to nothing, and I would call it a disaster. Nokia has failed even in copying appealing services. Ten years back the offering would have been great, but the times, they are a-changin…

Probably internet business is so hard. That’s what it looks like. Jorma Ollila owns a piece of Fruugo, which does not look a success story at the moment. Pekka Ala-Pietilä established Blyk in order to capture an internet business model into mobile domain. The results were not quite as good as anticipated. Or probably Nokia does not offer enough challenge and reward to the executives, and that’s why they want to spend time elsewhere, like Anssi Vanjoki solving the problems of Amer. Or they go and turn around smaller companies, like Pertti Korhonen did for EB before continuing elsewhere.

I’m stunned, as I was ten years ago, but for the opposite reason. Nokia, could you even try?

The guest post was written by Heikki Mäkilä, a senior business executive with a long perspective of mobile and internet businesses, technologies and ecosystems. Heikki focuses on strategic business development and bringing innovation into everyday life of especially start-ups and growth companies. Currently Heikki is a partner at Dazide Oy.

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