In 2009, it was reported that the Nokia tune was heard worldwide an estimated 1.8 billion times per day, about 20,000 times per second. Now the tune is an endangered species amongst the sea of Apple & Android ringtones. What went wrong and what can we learn from it?
In the 1990’s Nokia had transformed itself from an Industrial conglomerate which was losing money into an enterprise with almost $4 billion operating profit by 1999. Within 15 years the $4billion profit had turned into a loss-making division of Microsoft, the brand was then licenced to a group of old Nokia Executives working under the HMD global brand.
In 1993 Anssi Vanjoki, then Executive Vice President of Nokia, with Lauri Kivinen (then Head of Corporate Communications) choose the Nokia ringtone. The first phones to use the ringtone shipped the following year.
In 2002 I joined Nokia as an OS developer supporting the work on one of the first true smartphones, Bluetooth hands-free protocol (Nokia 3650).
At this time Nokia’s smartphone division was operating like a current day startup. Decisions were made quickly, each device program owned its own P&L; we were the “bleeding edge” of tech and seen as a low volume future play compared to the cash cow of feature phones. Typically each program ran for 18-24 months and sold around 10 million units globally.
Fast forward to 2005 where I lead a software integration team for the Nokia N80. Nokia smartphone division had morphed from an agile startup to a slow-moving monolithic beast. Now any major SW feature needed to be mapped out 2-3 years ahead of delivery, to get acceptance you needed to go through several committees. SW development had turned into a bureaucratic nightmare, All SW deliveries were late and generally of low quality as the SW architecture could not keep up with the growing smartphone needs. Because the SW teams were fragmented the user experience differed across each app.
In 2007 the game changed. Apple announced the iPhone. Initially, in Nokia the iPhone was seen as a minor irritation, it hardly had any capabilities (2g only, 2mpx camera, no app store etc.). But what Apple managed to do was make the basic experiences highly polished and they focused on the core needs of the owner (call, SMS, email and browsing the web) without the distraction of a whole raft of features.
In 2008 I started work on the Nokia N78. The ringtone was being refreshed. In 1993, two people decided on the ringtone. Now Nokia had several committees who could not make decisions on the best version. The decision took 6 months. Also in 2008, the phone market had changed. Customers wanted touch phones, the old format keyboard phones became outdated overnight.
The huge supertanker that was the Nokia R&D machine (the largest in the world at that time) could not react quickly enough. Nokia’s operating profit went from $2.6 billion per quarter to $215m in 1 year. Nokia was now playing catch up and was always going to be behind the new kids on the block of Apple and Google.