IN THE ICT UNIVERSE ** My prelude to CEO Stephen Elop’s talk on Nokia’s corporate strategy. A part of BRIE-ETLA collaborative research (www.brie-etla.org). Petri Rouvinen, ETLA Aalto University Course 21C00600 Nokia House, Espoo, 9 April 2013
It’s all about coded info… … and ways to monetize it A narrow US-centric view: Amazon, Apple, Google & Facebook fight the main battle Nokia & Microsoft are falling back …Source: The Economist (1 Dec. 2012). Technology Giants at War (Briefing): Another Game of Thrones. Vol. 405, No. 8813, Pp. 23-26.
… but any map is hopelessly 2D… real competition is at least 4D How did we get here? Dynamics of competition in ICT?Nokia’s path and its implications for Finland?
History:How Did WeGet Here?“In the northern skunkworks called Finland,the 21st centuryis in beta...”Steve Silberman,Wired Issue 7.09,September 1999http://www.wired.com/wired/archive/7.09/nokia_pr.html
The Foundations Were Laid Over 100 Years Ago• Telephony Decree of the Finnish Senate in 1886 – Numerous private operators – Competitive operator & equipment markets• Industry’s / hobbyists’ interest in radio technology since 1920s – Salora, Finnish Cable Works, Radio Laboratory (Ministry of Defense)• Word War II & subsequent war reparations – Advanced Soviet demand (DX200)• Keen interest in digital technologies particularly in banking – Advances in computing & data transmission• Two rounds of standardization: NMT & GSM (shift to digital) – Nordic authorities: analog cellular NMT standard in 1981 (roaming, caller pays): The Nordics became the biggest & most advanced market worldwide (Mobira) – European authorities & industry: digital cellular GSM standard: rolled out in the early 1990s (the first GSM network/call: Radiolinja)• Worldwide deregulation & liberalization since the 1990s – Keen competition & crazy market expansion: Nokia outperforms (bets on winning standards; focus on consumers & developing mkts; excels in logistics/manuf.)
Towards Industry/Technology Convergence Source: Hernesniemi, Lammi, Ylä-Anttila & Rouvinen (ed.) 1996. Advantage Finland: The Future of Finnish Industries. Taloustieto (ETLA B 113, Sitra 149).
Phases of Competition in the Mobile Handset Industry 1990s 2000s 2010s Separate sectors Weakening Convergence, boundaries Ecosystems Official standards, symbiosis of Industry consortia, Apps, content, operators & innovation at the platforms, equip. providers edges of sectors services Industry leaders: Industry leaders: Industry leaders: Nokia, Ericsson, Nokia, Motorola, Apple, Google, Motorola, Samsung Samsung, MS, Siemens Nokia
I’ve seen the God… January 2007 Photo: v.gd/D1ZYvo… or is it the Devil?
Photo: v.gd/1zLk63Digi + Converge: Opening of a huge unconquered domain Titans clash over dominance of ”Internet of Everything” Early positions established – Uncertain future ahead
Telecom operators & Platform competition manufacturers with Re-shuffling of value stacks end-to-end control Hardware commoditization Dumb-pipe operators Photo: v.gd/gPtce3
In early 2000s Nokia grew lazy …… in the new landscape it wascaught in a difficult situation &had to choose: Android, MS or ???Windows 8 provides the power ofunified industry-strength ecosystemMicrosoft (Back-end IT, PC domain, Office etc. ) &Nokia (“owns” mobiles; IP; manuf./logistics)retain many assets & strengths …… but are they able tocapitalize on them?