OPINION: Mobile market paradigm shift hurts Nokia

With the launch of iPhone (using Apple IOS) in January 2007, existing mobile phone brands, especially Nokia did not realise what hit them.

For Nokia, once the industry’s most powerful brand, it was as if the rug had been pulled out from under their feet.

More recently, Android from Google is said to be giving the iPhone a run for its money. Motorola, HTC and Sony Ericsson smartphones use Android while Japanese manufacturers Sharp, NEC, and Kyocera are expected to jump onto the bandwagon soon.

Of course, Nokia (using the Symbian OS) under a new leadership will make a valiant effort to arrest their rapid decline. In this connection, it has even tied up with Microsoft (to use their Windows Phone OS), whose hegemony has long been challenged by internet stars like Google and Facebook.

Can Nokia really claw back and challenge the iPhone? Seems highly unlikely. iPhone has totally changed the rules of the game and redefined the mobile phone space by being much more than a mobile phone.

Let’s rewind to the nineties when a similar paradigm change happened. Microsoft Office was built on top of Windows and their competitors (remember WordPerfect, Lotus, Dbase) were suddenly left behind.

While individually the competition was better, the tipping point for Microsoft happened when they integrated the Office apps (Word, Excel, PowerPoint) into one seamless environment to become defacto standards in the business world.

In the case of the iPhone, not only is there a paradigm shift, but it is a better product with better features and an infinitely better, game-changing user interface.

The other key reason for iPhone’s raging success are the unique and popular apps, most often specifically written for it. Both – iPhone and the apps written for it – feed of each other’s success in a relationship that surely must be the envy of other mobile phone makers.

Today Apple IOS has created an apps ecosystem of around 350,000 apps and counting. Google Android has an ecosystem of 150,000 apps, which is growing at the same rate as that of Apple. On the other hand, it is not as easy to write apps with Symbian and is one of the reasons why OVI Store, Nokia’s app store did not go anywhere. Windows Phone OS has an ecosystem of just around 10,000. At the end of the day, it is all about how vibrant an ecosystem a smartphone can provide customers and Nokia sadly comes up short in that area.

What then can Nokia do? Make a better product to fight iPhone? One seriously doubts that will happen. Apple must already be working on the iPhone 5 and as is Apple’s wont, it will be packed with newer, easier to use features.  Also, Android users claim that its user interface is as good as Apple’s and can only get better with newer versions.

And if Nokia is thinking of targeting the middle to lower end of the market, then good luck to them because there is talk that Apple will launch a more affordable version of iPhone soon.

This is what happens when brands become too comfortable with the status quo and stop innovating. Complacency prevents them from driving themselves to be ahead of the curve.

I am no futurologist but a similar development can obliterate the compact camera category, as we know it. An affordable Smartphone with a good enough camera (good lens, zoom, resolution) might shake the current compact camera category of its complacency. And as in Nokia case, it might be too late.