When bad management meets bad software, even great hardware is useless
Ten years ago Microsoft absorbed the handset division of Nokia. The world's biggest operating systems vendor was going mobile in a big way, and buying the erstwhile world leader in mobile phones to ensure its success.
Nokia went all-in on SMS in the 1990s and built the first handset specifically designed to use it. At the time, one executive told this hack that they had learned SMS was going to be"a thing" by analyzing some unusual traffic. Specifically, they noticed there was a spike in European messaging late on Friday and Saturday nights – when people in nightclubs couldn't talk on their phones.
Meanwhile, Microsoft was lagging in mobile, in part because of Bill Gates's suspicion that the platform might cannibalize sales from the desktop – a decision heThat OS was succeeded by Microsoft's Pocket PC platform at the turn of the century, later rebranded as Windows Mobile. Microsoft did convince some vendors – notably– to adopt the platform, and it was soon gaining a respectable market share. But users found it power hungry and difficult to use.
When Ollila took the reins it was a bad time to be a Finnish CEO. A post-deregulation banking crisis and the collapse of the Soviet Union saw unemployment levels peak at around 17 percent. Nokia was in trouble – and its accounts were in the red. Elop was someone Nokia thought they knew. At Microsoft, he'd been working to port Microsoft apps to Symbian, was an apparently accomplished man, and a friend of Bill Gates. When the Nokia CEO slot came up in 2010, they gave it to him rather than a local - putting a non-Finn in the hot seat for the first time in Nokia's history.
"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable," he told staff. It didn't go down well. They were great phones, but were designed around possibly Redmond's worst OS since ME – Phone 8. Designed for tablets and, one suspects, by marketing departments, it was a disaster. To add insult to injury, when Microsoft"upgraded" to Windows Phone 8 it dumped the old WinCE kernel for one based on NT – meaning that apps developed for the earlier operating systemRedmond announced it was going the whole hog and buying Nokia's handset business outright for $7.2 billion.
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