Innovation/Global Risk

Microsoft & Nokia: Another Desperate Comeback!

Innovation as “Rope-a-Dope”

By Shlomo  Maital  

     

 

 Ali vs. Foreman: rope-a-dope

Microsoft and Nokia share one thing in common.  Both miss key trends, and both somehow manage to come back from the dead, from being ‘on the ropes’.  This time, they’ve done it together, as partners. *

     Microsoft missed the Internet.  Bill Gates rallied the troops, threw money and 20,000 development engineers at the problem, and erased Netscape, replacing its browser with Internet Explorer.  Nokia missed the smartphone, even though it led in developing it. 

   A year ago, Nokia’s head of smartphones Jo Harlow told journalists in Barcelona that Microsoft and Nokia had established an alliance to develop smartphone software to replace Symbian, the Nokia operating system for smartphones, with Windows.  The deal was done so hastily that when announced, it did not exist – there was only a verbal agreement and handshake between the two comeback companies to cooperate. Harlow’s role was appropriate. She had been captain of Duke University’s women’s basketball team in 1982-3, and engineered several great comebacks.   She promised to deliver two new Windows-based phones by year end.  And she did.

   Nokia still trails.  It has a 12 per cent market share in smartphone operating systems, behind Android (Google) with 51 per cent and Apple.  RIM (Blackberry) has 9 per cent.  Nokia’s Windows smartphone Lumia sold 1 million by end 2011, a very small number. But Nokia recently announced three new Lumia phones, including one (Lumia 900) with an amazing 41-pixel camera (best in the business) that uses Symbian (innovation in the junkyard) and one that runs on LTE (Long Term Evolution), the next cellphone technology after 4G.  Apple as yet has no iPhone that uses LTE. 

   Nokia has a long way to go, to fully recover from its disastrous defeat by Apple and Google.  But we should recall prizefighter Muhammad Ali, who fought George Foreman to regain the world heavyweight championship, in Zaire (now DRC Congo), in 1974.    Ali let Foreman pummel him for eight rounds, leaning against the ropes, until Foreman was exhausted. Then in the last rounds, he defeated Foreman to regain the title.   Nokia (and Microsoft) seem to be like Ali’s “rope a dope” strategy. Let the opponent pummel you, then fight back.  It’s a weird strategy for innovation. And unlike Ali, Nokia and Microsoft employ rope-a-dope unintentionally – they simply miss trends unintentionally.  But never count out companies with talented people, good leadership and deep pockets. Somehow, they just keep coming back.   The key for Nokia will be the big US market. Nokia has been erased in America. If it can pull a comeback there, its chances for the future are good. If not? Well… not every fighter pummeled on the ropes wins. 

  • Kevin O’Brien, “A fruitful year for Microsoft and Nokia”,  Global NYT, page 1, Feb. 28/2012
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