Sean Park Portrait
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I say profound things

Nokia: Banking People

If I ran Nokia, I would probably do two things:

  1. I would set upon transforming the company into a retail financial services powerhouse, focusing in particular on developing markets like India and Brazil; and
  2. I would buy Skype.

I don’t have time to articulate the whole thesis here (and besides, if they want the whole thesis they can hire me!) There are some hints in my Platforms, markets and bytes presentation.

The Economist has a good summary of the fix they find themselves in. I think they are at risk of becoming the new Microsoft, in that they buy all sorts of neat, smart start-ups (including a minority investment in Obopay), only to then kill them. According to the Economist, they are trying to adapt and having some success especially in markets like India:

All this will no doubt help Nokia come up with better, if not magic, products. The firm may even reach its goal of 300m users by the end of 2011 because its efforts are not aimed just at rich countries, but at fast-growing emerging economies where Nokia is still king of the hill, such as India. There, services such as Nokia Money, a mobile-payment system, and Life Tools, which supplies farmers with prices and other information, fulfil real needs, says John Delaney of IDC, another market-research firm.

Which only strengthens my view that their path to salvation lies in (yet another) complete re-invention, this time to a 21st century, sixth paradigm, retail financial services platform (built on a mobile substrate.) They might even want to keep (at least some of) their handset engineering know-how: it might come in handy for building handsets that are particularly well adapted to mobile financial services.

In any event, if Nokia want their share price to go up, they better hurry up and change their frame of reference. I mean really, who would you rather compete with? Apple? Google?

Or Citigroup?

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  1. […] Nokia's path to salvation lies in (yet another) complete re-invention, this time to a 21st century, sixth paradigm, retail financial services platform (built on a mobile substrate.)Close […]

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  3. At 11:28 am on 13 Jan 10 Rob Knight said:

    Nokia are a frustrating company. They've actually done some really good stuff with some of their acquisitions – for example, after acquiring Trolltech they released the Qt libraries under a reasonably permissive open source license and have (as far as I can tell) generously funded futher development. This open source/open standard approach stands in fairly stark contrast to Apple's “our way or the highway” approach to using their technology, and even Google's somewhat limited open source releases.

    Of course, the fact that I like Nokia's [acquired] technology doesn't mean that they've got a good business model. I think they're suffering somewhat from being caught in the middle of a market that is growing in so many directions. They haven't got Apple's ability to focus, or Google's ability to plug their new stuff into an existing money factory, and they're trying to compete on many fronts by acquiring innovators in those areas.

    In fact, the Trolltech/Qt acquisition is a good example. Qt is a pretty excellent software library for cross-platform software development – I've used it to make software applications which can (by virtue of Qt) run on Windows, Mac and Linux and – in theory though not in practice yet) – on Symbian phones. But Nokia's pre-existing “next-gen” operating system, Maemo, is based on a branch of Linux that uses GNOME for its front-end, as opposed to KDE (which is Qt-based). It's not a disaster, but it's sub-optimal and reflects the rather ad-hoc, acquisition-based approach rather than the somewhat more integrated approaches of Apple and Google.

  4. At 12:02 pm on 13 Jan 10 parkparadigm said:

    Thanks Byla. I'm no expert on Nokia – or other handset makers for that matter – but my intuition tells me that in the medium term, they will lose this game, squeezed on one side by the 'premium' manufacturers (Apple, RIM..) and on the other side by the Asian low(er) cost producers (HTC, Samsung, but probably even more the mainland Chinese manufacturers.) They are fast becoming the GM of handset makers: sure they have enormous market share and volumes now but so did GM in the late 80s, early 90s. I don't think they can win in this game. You need to be BMW or Hyundai. Not GM.

    Of course what I'm suggesting is radical – as radical as a pulp and paper mill deciding to make mobile phones. Get out and go into banking. Why? Because banking is an industry crying out for disruption (people like Virgin and Tesco are acting on this in the UK) and a huge growth market in developing nations. And it just so happens that having no legacy technology is a darn good thing. Better the customer UI going forward is going to be all about mobile which of course gives them an advantage over legacy banks. Finally, they have a truly global – and still strong I think – brand. Banking and financial services is really at it's heart about selling trust. Again vs incumbents it should have an advantage.

    I think the mobile operators should focus on being infrastructure providers, and possibly wholesale payment clearing providers. I don't see network equipment providers – like Ericsson – crossing over, but rather should probably aim for an 'intel inside' type strategy if they want to avoid total commoditization.

  5. At 12:08 pm on 13 Jan 10 parkparadigm said:

    I'd suggest their 'frustrating' nature comes from not knowing which way to turn: the classic curse of being big and 'stuck in the middle'. The GM analogy in my reply to Byla above I think is particularly apt (at the risk of horrifying Nokia directors and shareholders if the comparison resonates with them!) If I'm right (about them being the GM of their current industry,) Nokia won't disappear overnight, or perhaps ever, rather they will have a decade or two long, slow, silent slide into irrelevancy or perhaps even bankruptcy. But it is far from too late to change the future. They are almost at the top of their game now, so it would be the perfect time to hatch the complete transformation I suggest. Time for the caterpillar to start spinning its cocoon.

  6. At 12:29 pm on 13 Jan 10 azeem said:

    Can't argue with this–only push it even more so. Nokia needs to think 'blue ocean' strategy. And that is almost certainly not going to mean more handsets or better handsets. The Ngage and the 800 series together were 'worse' than an iPhone. And now there is a substantial lock-in around the developer ecosystem, they may simply have to admit that medium term they have lost the handset battle. This can happen to large firms (look at Ericsson or Motorola in handsets)

    While they still have a base, you could be right: mobile banking in the so-called third world could be a place to go. In fact, their new head of design cut his teeth as a youngster in Kenya and Tanzania, so who knows…

  7. […] This post was mentioned on Twitter by Justin Paterno and Nauiokas Park, Peter Vander Auwera. Peter Vander Auwera said: Nokia: Banking People […]

  8. At 12:16 am on 15 Jan 10 alexisrichardson said:

  9. At 12:54 am on 02 Jul 11 fengyu03213 said:


  10. At 12:55 am on 02 Jul 11 fengyu03213 said:

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