For decades, Blackberry was the most
dominant player in the smart phones market while Nokia dominated the low end
phone market. The dynamics have swiftly changed in the recent past, with entry
of other players such as Huawei, Samsung, Apple, Sony, LG and many others, the
titans of the phone market have been falling. In a bid to recover, Nokia
announced a strategic partnership with Microsoft in February 2011, leading to
the replacement of Symbian with Microsoft's Windows Phone operating system in
all Nokia smartphones. Following the replacement of the Symbian
system, Nokia's smartphone sales figures, which had previously increased,
collapsed dramatically. From the beginning of 2011 until 2013, Nokia
fell from its position as the world's largest smartphone vendor to assume the
status of tenth largest. On 2 September 2013, Microsoft announced its intent to
purchase Nokia's mobile phone business unit in which Stephen Elop, Nokia's
former CEO, and several other executives will join Microsoft as part of the
deal.
Looking
at Nokia’s nostalgic past, for a brand familiar from black rubber boots with an
unusually clever heel design, it was highly unlikely that the company would
reign the telecommunications world in the late 1990s. Even more fascinating, the company had a
triple-layered Nokia toilet paper that gave you that luxurious wiping
experience. While most of the electronic companies like Apple, Siemens,
Sony and Philips focused on televisions, gaming, computers and so on,
Nokia took a leap into the mobile telephony industry. Nokia’s main rivals were Ericsson and
Motorola but Nokia was dominant at a 30% market share. In Kenya, Nokia took the
lion’s share with the most popular device being the Nokia 3310, with consumers
convinced of its reliability and durability. A Kenyan based company, Virtual City,
developed applications based on Nokia’s Symbian OS due to its popularity and
through which the company won $ 1 Million in a Nokia sponsored global
competition.
On the other hand, Blackberry’s Research In Motion is
quickly becoming one of the most troubled companies in the mobile technology
industry. For years, the company was atop its game, delivering some of the
finest products in the business and generating stellar earnings for
shareholders. But this has since changed and the company has lain off some of
the staff to contain the operational costs. The financial
statements of the company paint a downward trend of performance; the reported
profits fell from $797 million to $329 million in 2013. The major Blackberry
outages have not been helping either. The devices access data via propriety
Access Point Name (APN), which could be based on RIM infrastructure -
BlackBerry Internet Services (BIS) - or on-premise infrastructure- BlackBerry
Enterprise Services (BES). In April 2007 and again in February 2008, there were
outages on the BIS platform that affected Blackberry customers but none of the
other smart phones which normally ride on a public APN. The outages have
overshadowed the security benefits that a Blackberry APN offers and customers
now prefer a public APN with security features onboard on their phones.
RIM has also been
lagging behind in providing a more user friendly interface of their mobile
devices. Consumers would find the device complex to set up and use, opting for
other friendlier devices. Until the Blackberry Storm, the company did not
provide touch screen phones unlike their competitor such as Apple iPhone,
Samsung Galaxy, HTC, Motorola Droid and many others. Another growing trend in
the enterprise space is Bring Your Own Device (BYOD) such that different
employees have varying devices depending on their preference. This means that
enterprises find investing on BES less lucrative than before.
According to Gartner,
the total global sales of mobile devices declined by 1.7 percent in 2012
compared to 2011, a worrying trend for companies whose profits are already
declining. Partly could be because of the hard economic times throughout the
world but also because the market is saturated by companies producing smart
devices based on free Android OS. The populous markets such as in Asian have
more and more home branded devices and import sell of the foreign established
smart phones manufactures such as RIM. The future is bright for tablet though,
researchers predict a PC-less future.
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