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How & Why Nokia Failed

How & Why Nokia Failed

When we talk about Nokia’s failure, there are many reasons why the giant lost its dominance in the phone market. Nokia gained its peak in early 2000s which was starting of telecom bubble. In the year 2000, Nokia alone accounted for 4% of Finland’s GDP, 21% of total exports, and 70% of the Helsinki Stock Exchange market capital.

In spite of this success, Nokia failed terribly in the market. 

Let’s see the reasons behind the failure of Nokia.

Between 2001 and 2005, a number of decisions were made to attempt to reawaken Nokia’s previous force and energy but, far from reinvigorating Nokia, they in fact set up the foundation of the decline. Nokia’s decline in mobile phones cannot be explained by a single, simple answer: Management decisions, dysfunctional organizational structures, rising bureaucracy and deep internal rivalries all played a part in Nokia’s downfall.

Also in 2007 something huge happened. Steve Jobs launched this insanely great smartphone that didn’t even have a keyboard, the iPhone. Not only that, he made buying apps so simple that people would actually pay money for them.

If this was not enough, another giant Google decided that they will sell their software i.e Android to every smartphone manufacturing company for free to compete with Apple’s iPhone.

The biggest reason for Nokia’s failure is also its failure to adapt to the changes. In 2013, Nokia sold its phone branch to Microsoft. Nokia CEO Stephen Elop said during this announcement that 

“We didn’t do anything wrong, but somehow, we lost”

With this case we can learn one thing for sure despite being the market leader; Nokia missed out on adapting to the changing trends and learning new things and thus failed to survive in this throat cutting competition.


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Vrutti Jakharia

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