What a week.
The latest? Nokia expected to cut 10,000 additional jobs by 2013 and cut out some research and development in Burnaby, BC and Ulm, Germany.
This isn’t really anything new. When Steve Jobs II returned, he immediately slashed and burned. Specifically, R&D. He then killed the Newton (his disdain for John Sculley evident - it wasn’t his baby, so bye bye Newton). He killed off a million Macintosh models and simplified the Apple product matrix into Prosumer and Consumer and split between desktops and laptops. Wow, what a different time we live in. Now, cloud services, content and thin clients drive the strategy.
Missed in all of this “noise” about struggling brands like the former Palm (WebOS), RIM, Windows Phone, Nokia and HP (WebOS acquisition) is that software has truly won. It’s all about the software. Yes, software is the lion in the wild. Lazaridis, with RIM still, believed that the best speakerphone technology on RIM Blackberry’s would drive unit sales. A smart perfectionist, yes, but not a realist. In some way, not really different than Steve Jobs except that Steve picked the smarter battles.
When Jobs was ousted from Apple c. 1985, “nimby” took over. Better known as “not invented in my backyard”, it was the prevailing “wisdom” at Apple and the Achilles heel to success. That arrogance polluted Apple for a greater part of twelve years until Steve Jobs returned. “Nimby” also polluted Research in Motion, infected Ballmer and Microsoft as well as Nokia proper. Imagine the mindset of these tier-1 brands in 2007? Both RIM and Nokia stood out by mocking Apple with “good luck” inferences with its iPhone product launch. In most cases, like Dell, all phone competitors simply said Apple should focus on computers but Apple knew that mobile would become the revenue king for the coming decades. Both companies poo-pooed Apple’s entry into the “phone” market.
Microsoft was probably the most arrogant. Here’s Ballmer:
It’s truly hard to watch arrogance in full motion. When you’re big, fat, and slow…you’re arrogant. Arrogance is the warning sign when you should REALLY be very afraid. It’s just sad to see. Under Gassee and Spindler, Apple’s arrogance and blindness was so bad that they thought they could save themselves but ended up with Amelio, someone with National Semiconductor stripes but oddly, way out of place for a company like Apple. No way — it was horrid. Thankfully, Steve Jobs came back through a NeXT software acquisition to give Apple its new operating system software strategy that had plagued the company for so long: Pink, Taligent (with IBM), Star Trek and Copland.
And herein lies the message. Jobs came back to Apple as a result of a software acquisition. NeXT as a company did not succeed as a hardware company focused on targeting enterprise and universities. It was the object-oriented NeXTstep software that Apple wanted. This acquisition was a coup d’etat in the making. In it, the world would benefit with the powerful OSX and iOS variants for iPhone, iPad and iPod Touch.
Apple won because of software. While everyone else spent their entire R&D on hardware engineering, Apple rebounded because of agile software strategy, coupled with great hardware engineering and product design to explode unit sales. As well, Apple under Tim Cook (operations extraordinaire) benefited from cost and operational efficiencies like no other major technology company had experienced. Apple’s passion for design won the customer but Apple’s marketing spoke about experience - which could only come from software U/X.
Apple’s early ads about the MacOS spent more time informing consumers that a MacOS upgrade was like having a new Macintosh computer. It was always about software. Hardware was/IS important. That said, even Jonathan Ive spoke about the iPhone on the basis of software: All activity defers to the screen. To Jony, the screen is the operating system. Yes, the hardware and touch gesture technology drive the user experience; but ultimately, the U/X (user experience) is driven by the software. In this case, iOS.
Sadly, no one beyond Apple figured this one out. OK, Android did after Apple. RIM spent all of its time on hardware technology, battery efficiency, radio technology, network efficiency and security . Nokia, as well. Yes, even Palm Inc. and Microsoft with early iterations of WinCE and Windows Phone 5 & 6. While these companies made “software attempts”, most of them focused on hardware versus software.
If we really think about it…Apple is a software services engineering firm. The Mac GUI has been the centrepiece of attention and focus since Apple’s 1984 revolution. It certainly was NOT about the Mac (box) in a backpack. No one else got it. Steve Jobs did. Now…everyone is suffering as a result while Apple seamlessly scales more products, more services, and more utility to a discerning audience.
Competitors are facing internal bloodshed as they re-architect their business to software strategy and engineering. But, competition is a good thing. Let’s hope they survive.
I added a link to Harvard Business Review at the end of this article which claims that Nokia’s current mess is tied to “ignoring America”. Get over yourself HBR. Such American arrogance isn’t necessary.
NO. NOKIA IGNORED SOFTWARE. That’s why they panicked and went with Windows Phone because Symbian had been a disaster for much too long.
RIM is facing the same challenge but I am confident that BB10 will be a far better value proposition to end users than the end result which is Nokia. May Nokia survive as I have been a huge fan for a long time.