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Nokia's Surprising 2nd Shot at the Wireless Game

By Jeff Kagan
Nov 20, 2014 6:40 AM PT
nokia-n1

Many thought after Nokia sold its wireless phone business to Microsoft earlier this year, the company simply would fade away from the space. However, all of a sudden it's starting to look like Nokia is coming back. It just took the first step back into the wireless and tablet market with its new Google Android tablet.

It appears Nokia is getting ready to re-enter the smartphone space in 2016, competing with industry leaders like Apple iPhone, Google Nexus, Samsung Galaxy and Microsoft, which acquired its smartphone business, including the Lumia line.

What a turnaround. Will it be successful? Stranger things have happened, haven't they?

Second Time Around

This is not Nokia's first time up to bat. Remember, it was No. 1 in the traditional handset space for roughly a decade. It won the No. 1 spot when Motorola lost it in the late 1990s, when networks switched from analog to digital.

In the 1990s, Motorola was king with the StarTac, but it began failing years before the first iPhone was even on anyone's radar.

Motorola has been trying to make a comeback, but it hasn't done so in a meaningful way to date. So will Nokia be successful its second time up to bat?

After Nokia sold its handset business to Microsoft, we all expected it would no longer operate in this space. However, the smartphone space is still one of the hottest around -- if you can figure out a way to carve out some market share.

So, since Nokia still has a very strong brand name in this space, it is going to re-enter the tablet space, then the smartphone space. Tablets are the first test to determine whether it will be a successful player.

The smartphone, tablet and smartwatch space continues to grow and to change over time. When the first iPhone and Android handsets hit the market seven years ago, it changed the marketplace very quickly. Leaders like Nokia and BlackBerry were clobbered.

They tried several smartphone devices, but they just barely carved out a few percentage points of market share.

What will be different this time?

Another Chance at Bat

One, Nokia still has its brand to build on. There will be no confusion, since Microsoft has stopped using the "Nokia" name on its smartphones.

Two, Nokia has had the chance to recognize the new smartphone world. It no longer is rushing to deliver something just to hang on. Instead, it can start thinking in advance of about creating smartphones and tablets that can capture a slice of the market share pie.

Three, the smartphone space is maturing, and users may be looking for more than just an iPhone, Nexus or Galaxy.

If Nokia can do this, then I think it can indeed become a player and a competitor once again in this new world. It has the potential, if it hits home runs, to reinvent its company and start a growth track once again.

Whether it will is the question. That is what no one can predict. It all depends on its strategy, its marketing, its advertising and so on.

Does it understand the new and changing marketplace? Does it understand the strengths and weaknesses of its brand in the marketplace? Does it see certain areas it can capture and own on the business or consumer side?

The big question is, can it reach out and grab a slice of the market share pie with a new OS, new handset and new software? If it can, and if it somehow can win a slice of the pie, then it could indeed grow from there.

That is the question. We'll just have to wait and see.

Either way, it's good to see that Nokia has not thrown in the towel and will get back into the ring once again. It's good to keep things shaken up.

I hope it does well, and I wish the company the best.


E-Commerce Times columnist Jeff Kagan is a technology industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at jeff@jeffKAGAN.com.


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