When leaders loose their way: Nokia

Nokia's brand challenge was brought to life during a conference I attended last week. We were given rather cumbersome hand-held devices for doing digital voting. The conference chairman said "Pick up your Nokias and vote." Ow.

In a only a few years Nokia seems to have been left behind. The brand is still the volume leader in smartphones, with a 44% share. But this is down a full 5 pts vs. last year (see below). All the momentum is with Apple's iPhone and Google's Android devices, with shares for these up + 5pts to 15.4% and +8pts to 9.6% respectively.

And to make things worse, Apple have just posted stellar quarterly results. Compare these with Nokia's anexorexic growth:

Apple: revenue + 69%, record; profit +78%

Nokia: revenue +1%, profit -40%

So, it was no surprise to read
this week that Nokia is hunting for a new CEO to replace
Olli-Pekka Kallasvu.

Screen shot 2010-07-21 at 07.35.55

What can we learn from Nokia's problems?

1. Neglecting the "sausage" is suicidal

It seems that Nokia has made the fatal mistake of neglecting the core product sausage, according to a great post on The Prodigal Guide: "An open letter to Nokia CEO, Olli-Pekka Kallasvuo: The 10 things you
need to do today to be a contender in the high-end smartphone market".
In this post a series of product issues are highlighted by frustrated fans of Nokia, including software issues, lack of memory and quality control problems. [Thanks to them as well for the great image below].

Screen shot 2010-07-21 at 19.57.50

2. Losing out on innovation

Nokia's neglect of their core phone business is bad. But with the right attention, this could be fixed. More worrying is that they've been left behind by Apple and Google as the market action shifted to music and then "apps". In music, Nokia tried to catch up via its "With Music" offer, but this offer was much weaker than iTunes. And the Ovi app store is a pale imitation of Apple's awesome offering, as I posted on here.

3. Lack of leadership

Another issue facing Nokia is the brand leadership they are getting. "Kallasvuo is a bad communicator in a world where his competitors are
Steve Jobs, Eric Schmidt and Steve Ballmer," said John Strand, founder
and chief executive of Danish telecoms consultancy Strand Consult. "He is good at selling phones, but bad at selling the Nokia story."

So, a sobering lesson of how a leader brands can lose momentum. Leader brands need to be obsessed with the quality of their core product sausage, lead on innovation and have a brand leader who can inspire and guide the business and stakeholders.