By Alexandra Burlacu | Jul 19, 2012 12:30 PM EDT
Once the undisputed king of the mobile market, Nokia is now seeing its shares drop and its customers flee to the competition, including Apple's popular iPhone. The Finnish company has been struggling for years to come up with a true competitor to the mighty iPhone, and the most ironic part is that Nokia had what it took, but thought it was not good enough.
In the late 1990s, Nokia spent millions on research to anticipate the future of mobile, and even created touch-screen devices very similar to today's iPhones and Android smartphones. The company decided, however, that it was not a good enough product, as it did not yield satisfactory results on a "drop test." In an extensive article, the Wall Street Journal explained how Nokia came incredibly close to winning the smartphone market, but decided to walk away.
"More than seven years before Apple Inc. rolled out the iPhone, the Nokia team showed a phone with a color touch screen set above a single button," writes the Journal. "The device was shown locating a restaurant, playing a racing game and ordering lipstick." Moreover, the Finnish company even had a head start in the tablet market, but also failed to take the plunge. "In the late 1990s, Nokia secretly developed another alluring product: a tablet computer with a wireless connection and touch screen - all features today of the hot-selling Apple iPad," added the WSJ. "Oh my God," Frank Nuovo, Nokia's former chief designer, told the WSJ. "We had it completely nailed."
However, having a great prototype and actually selling it to consumers are two completely different things. In fact, consumers never saw those smartphone and tablet concepts Nokia developed more than a decade ago. Sure, Nokia has its own smartphones on the market, but that ship has sailed long ago, carrying iPhones to the top of the market.
'Nokia Failed to Recognize the Threat'
"Nokia's smartphones had hit the market too early, before consumers or wireless networks were ready to make use of them. And when the iPhone emerged, Nokia failed to recognize the threat," explained the WSJ. "Nokia engineers' 'tear-down' reports, according to people who saw them, emphasized that the iPhone was expensive to manufacture and only worked on second-generation networks - primitive compared with Nokia's 3G technology. One report noted that the iPhone didn't come close to passing Nokia's rigorous 'drop test,' in which a phone is dropped five feet onto concrete from a variety of angles."
While Nokia phones are famous for their sturdiness and incredible impact resistance, the last few years have proved that consumers would rather take a chance on a sleek smartphone that may break when dropped than buy a bulky, yet very resistant cell phone. Nokia executives finally realized sometime in 2008 that Apple's iPhone was a smashing hit (no pun intended), but considering the company's current position on the market, that realization might have come too late. "I was heartbroken when Apple got the jump on this concept," Nuovo told the WSJ. "When people say the iPhone as a concept, a piece of hardware, is unique, that upsets me."
After trying to revamp Symbian and even trying to build a new system from ground up with MeeGo, Nokia has now put its last hopes in Windows Phone, hoping to grab some of that market share and revive its fading brand. The company has lost roughly 90 percent of its market value in the past five years, and its CEO is feverishly trying to convince investors that Nokia is not in a "death spiral."
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