The buzz around Nokia’s early collapse is unjustified, or what are analysts keeping back?

And immediately begin with the typical exclamations of many analysts / readers / users:

• Stephen Elop - the defender of Microsoft, came to destroy Nokia!
• Nokia fools! It was necessary to switch to Android!
• It was not necessary to switch to Windows, they would develop Symbian!
• The Finns had such a great Meego OS! Elop, scum, killed her!

Do you recognize yourself?

So, having read enough of these sentiments in the open spaces of Habr and the Internet as a whole, I could not resist and decided nevertheless to express my, in my opinion, quite reasoned and objective point of view regarding this issue.
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“Today, the battle between devices has been replaced by a war of ecosystems.”

Stephen Elop has said more than once that in a couple of years there will be a struggle not on phones, but on the struggle of services and ecosystems. The yellow press and most journalists with analysts continue to persist to ignore these words. So what does Mr. Elop say?

Let's go back to 2007 for a bit. Nokia dominates the market, followed by Sony, HTC and Samsung.
But then what was the smartphone market? People bought phones from different manufacturers based on design, some services and features. And nothing else, except the habits, did not keep them on the product of a certain manufacturer.

Let's see what this market is today.
This is primarily services and ecosystems. If a person has started using a service or an ecosystem, then he becomes attached to it much more strongly.

What is so attractive ecosystem?

• Take, for example, Apple and its ecosystem iProducts. This is, first of all, an ecosystem centered on iTunes and iCloud. I have a lot of friends who cannot get away from this ecosystem because they have entire collections in iTunes, ratings, purchases and much more. And my buddies use this service and they can’t easily take and transfer all this to Google services, for example. Perhaps in Russia it is not so strongly expressed in contrast to foreign countries, but this phenomenon is taking place.
  We look further at the ecosystem of Apple - iCloud service, which allows you to combine tablets, phone, laptops, computers. People use this synchronization and they have a lot of information stored there and they are not able to easily transfer it to a platform from another manufacturer. Yes, they often do not need it, most are satisfied. You can also note the service Siri, which is quite popular in the west.
  These ecosystem services keep Apple users on their platform.

• Now let's take a look at the Google ecosystem - tablets, Android smartphones primarily have deep native integration with Google services (GMail, YouTube, Google Calendar, Google Drive, Google Docs, GMaps, Google Reader, Picasa, Google+) and, as is the case With Apple services, many people find them convenient and do not want to stop interacting with them. And do not forget that Google is trying to enter the desktop PC market using Chrome OS. Perhaps so far it looks frivolous, but at first no one, too, took Android seriously.

• And the last example: Microsoft. She has now changed a lot, she has very powerful services. For example, Skydrive for data exchange between any Microsoft devices, in addition there is support for Office directly from the browser.
  
  Web version of Office in SkyDrive

  
  
  It has an XBox SmartGlass, which allows you to sniff everything and everything between Microsoft devices, as well as turn your living room with XBox and a large TV into a multimedia center at home.
  
  Demonstration of XBox SmartGlasses and content sharing between Microsoft devices
  
  Xbox Music, allowing you to absolutely free to listen to music and stream it to any device with Windows 8, Windows Phone and XBox. Also a single paradigm of interfaces on all devices.
  
  

  Microsoft provides users with access to their services from any device currently available on the market.

  
  On PC, Laptops, tablets - Windows 8;
  On smartphones - Windows Phone;
  In the living room and at home on a large TV - Xbox 360;
  And all this is already running and working.
  Apple is also working on expanding the ecosystem.
  

Perhaps now it is not so strongly developed and you consider it to be empty words, but after a couple of years, users will choose phones and platforms, first of all paying attention to the services and ecosystem provided, just like today, many people first of all pay attention to quality. and the number of applications in the OS markets, although in the same year 2007, everyone studied only the characteristics of hardware, and third-party software was already a small pleasant addition.
The times are changing and at the moment there is a transitional period and, as we see, all the IT giants have been thinking about what the future is and are now actively working to expand their infrastructures and spheres of influence.

Let us pay attention once more: the giants of the industry, which have very large material resources, as well as influence on the IT market as a whole, are presented above.

Phone as a piece of iron will not be interesting to anyone

I hope, I was able to convincingly tell you why in a couple of years the phone itself will not be needed for very few people, there will be a struggle between services and ecosystems.

Meego to the rescue?

Now let's look at Nokia. In which segment did she have an impact? Only in the phone segment. What were her opportunities? The first thing that comes to mind: either continue to develop Symbian (a deliberately disastrous decision), or switch to Meego.

But look at how monstrous ecosystems created Apple, Microsoft and Google.
Do you think Nokia’s smartphone operating system would be able to withstand such an onslaught?

Plus, the market has changed, the way applications are distributed has changed. Now you need your own market with its own format for developers. In the case of Nokia, it was the Ovi Store. But they brought Meego to the market too late, and most developers no longer took it seriously. Everyone wrote first for iOS, then for Android, and only then, if they had enough power, they ported to the Ovi Store, and Nokia often had to financially sponsor porting applications, otherwise the developers did not have any interest.

Elop also understood that Nokia would have to fight for third place with BlackBerry and Microsoft.
And if the first did not represent a big threat, then Microsoft, with its influence and resources on marketing and advertising, could easily take the third place. Plus, it has its own ecosystem.

Elop looked into the future and yes, perhaps, if they had stayed on Simba and promoted Meego, Nokia would have kept afloat for the first 2-3 years with less tolerable indicators, but after 5-10 years when the market was full if the war for ecosystems and integration, Nokia couldn’t compete with the mobile OS for smartphones alone with the IT monsters listed above, who spread their tentacles to all devices, from TVs to tablets with laptops and PCs.

Therefore, it was decided not to enter this bloody battle, since Nokia a priori would not have enough resources for promotion, marketing, sponsoring developers and so on.

Ok, Symbian and Meego will lead to a dead end, but why not Android?

Moving to the Android platform, they would start a battle with Samsung, which has just unlimited production capacity.
Some, of course, will object, saying that before 2007 Samsung also riveted the phones, but Nokia was ahead. But now there are other times. If earlier Koreans had to work on the OS themselves and it turned out, to put it mildly, not at all of high quality (the same Bada), now the OS is handled by professionals from Google and Samsung only need to provide volumes of iron. And in this matter no one can compete with the Koreans.

Samsung would easily have scored Nokia with both price and quantity. Actually, this is exactly the picture we are now seeing in the Android smartphone market, once the market leaders Sony and HTC are suffering heavy losses ( Sony’s losses last quarter amounted to $ 115 million , HTC continues to suffer losses for the sixth consecutive quarter ) and occupy a scanty share. Sony makes high-quality phones with a first-class design, but Samsung finishes it with price and quantity.
Well, plus Android in 2010 was still not a first-class system, it encountered brakes, lack of thought, it was necessary to work very hard to optimize its own graphical shell.

And Windows Phone offered fast OS without brakes in the interface (often buyers pay attention to the smoothness of the system when they first met). It differed from all the operating systems on the market. No one would have thought of comparing the flagships of Nokia Lumia with the iPhone trendsetter. And this is also an important part of marketing, when a product radically different from the current offers on the market enters the market. It is necessary to show that this is not a clone of an existing product.

Plus, joining a large Microsoft ecosystem, where, by the way, there was no strong player. Therefore, Nokia decided to play in another field and stand out from the crowd, as this, in fact, was the only adequate way to survive.

To sum up: always look at a couple of steps forward.

Dear readers, I hope, after reading this article, you were able to assess how complex the current situation in the mobile IT market is, how many subtleties are there and how important it is to look ahead, to assess the long-term prospects of the reforms being carried out. Please do not superficially evaluate the actions of Nokia and Stephen Elop and assume that they do not see the obvious.

If you do not know the logic of their actions - this does not mean that you are smarter than them.

Of course, I do not dare to say that my assessment of this situation is absolutely true and is the ultimate truth, but common sense is here.

Well, you probably could imagine how many factors and data the Nokia board of directors and Stephen Elop himself hold in his head, who apparently told the Nokia leadership about the future of the IT market in 2010 (and, as we see, did not lose) and presented his a variant of the company's development strategy, after which the Finns gave him a chair of the general director and gave him all the levers of company management. The board of directors will not allow any second-rate manager to come to the management of a company with such a long history. I am sure that far from stupid people are sitting there.


Well, it should be understood that all of the above is only part of the current state of IT development, because there is another major factor: the Microsoft business model is under threat from Google. But that's another story.