Originally Posted by Tomi T Ahonen
I appreciate the suspicions in your first reply (and I wish I was so famous that there were Tomi-impersonators, haha). There have been so many hoaxes online, too easy to do.. But I also do appreciate it greatly, that you then gave me the benefit of the doubt, and engaged me with several very good comments.
The Nokia pride thing with Finns. Yes, its many things actually, even more than just a small country. Finland used to belong to Swedish kings or Russian Czars, before Finland became independent during the first world war. In Finland telecoms - the infrastructure, fixed landline phones and earlier mobile phones, were almost synonymous with Swedish telecoms giant LM Ericsson (obviously who also are half owner of SonyEricsson handsets now). So when tiny Nokia took on not just over-the-ocean rival Motorola, but our nearest neighbor rival, Ericsson, and eventually overtook Ericsson in handsets, that is a kind of way of a former "colony" if you will, striking back at the former rulers. That "overtaking Ericsson" moment in Finnish telecoms history was reported with as big headlines as any Finnish athlete winning gold in the Olympics or something like that. Yes, even more an issue of national pride.
Also remember, in Finland of only 5 million people, a Fortune Global 100 sized company will have an enormous impact to the total economy. The joke goes that Helsinki Stock Exchange is the Nokia stock exchange, because any little change in Nokia will shake the whole index on a daily basis. I remember there was an analysis at one point early in this decade that something like 20% of the total Finnish economy is directly or indirectly related to Nokia's success, but this was done with the widest definition, so say they included the pay of teachers in schools in those Finnish cities with Nokia factories, etc..
Now, yes, there is certainly a lot of Finnish pride that comes through. Now, separately, think about this side - Nokia was literally the first phone that was used to transmit a person-to-person SMS text message. Nokia was also the first handset maker for whom all phones were SMS enabled. Today we talk of the US being addicted to SMS and President Obama being the first texting president. The SMS itself was not invented by Nokia, it was invented by Matti Makkonen, then of Telecoms Finland (he won the Economist award for IT innovation last year, and happens to be a former mentor of mine).
Nokia execs have been there to see the phenomenon. Nokia execs have been writing white papers and preaching to the world about this fantastic technology, invented in Finland but not by Nokia, and then rapidly deployed by Nokia and exported as an idea to now literally every country except North Korea. There are SMS experts in America, they are emerging now. I see lots of pretty good papers written in the past few years about how a business might do CRM with SMS or how you can do advertising on SMS or do voting like American Idol by SMS etc (Estonia by the way, will become the first country where the national elections will accept votes by SMS.. So its not just a teenager toy ha-ha, SMS that is)
Anyway, my point is, that there is plenty of honest valid merit, in that Finland happened to be the country where the data revolution for mobile started (first digital cellular network etc) and Finnish telecoms experts, whether they worked for Nokia or not, have had a decade more of that exposure and experience. So there is also plenty of reason for some of these "Nokia fanatics" to make issues, where they really have a good point.
I like to make the comparison with iTunes and ringing tones. iTunes are worth about 2 billion dollars annually today. Ringing tones are worth about 5 billion dollars worldwide (last year, they may be peaking, so it may actually start to decline this year, or be close to a plateau level). Both are downloadable music, sold in digital formats, and paid for content. And iTunes song is cheaper and by far better quality. But ringing tones are a far bigger global business. Now, where was that ringing tone invented - in Finland. Again not by Nokia (the inventor was a finnish internet company called Saunalahti, later called Jippii Group, which has since merged with finnish carrier group Elisa) but yes, the first 5 phone models in the world, that would accept these silly forms of music, ringing tones, were all Nokia models.
Imagine the moon landing. Who was most competent to talk about moon habitation and hopping along in moon-level gravity in the early 1970s? The US obviously, because they had been there. In very many cases of the mobile telecoms industry, it happened to be that Finland (or Japan or South Korea) was first. These three countries have contributed far more than half of all innovations and inventions to the industry.
(Sorry about long rambling reply but you asked ha-ha) But last point about Finnish Pride. The point you might take to heart, is what do they say in major markets that are not Finland, ie what do they say in the UK or India or Australia. That is where you see Nokia passion that has really no Finnish pride..
You also said that you felt that it was Apple's innovation in the usability of phones, that now propels Apple to very strong growth. Now, I totally agree, the usability innovation was huge and has impacted every handset maker, and will continue to further push the Apple rivals to try to catch up. I've said many times including in my books that Apple's ability to create ever better user experiences is so strong, that nobody will catch them. But, like with Windows, the gap will not grow wider, the gap will eventually grow less wide.
But is that really the cause of Apple's dramatic rise? It is certainly one strong reason, yes. I would argue, that Apple's wonderful UI is causing a shift in behavior, that many users will now for the first time go online using the internet with a smartphone (the iPhone) and many who do learn to surf on an iPhone for the first time, will almost certainly not be willling to take the "backwards step" of abandoing the iPhone and trying to surf on lesser phones. Here in terms of phone users, I see the biggest effect of the iPhone and its UI.
But what propels Apple's rapid rise? Part is the brand, Apple users are often fanatically loyal. Part is the handset esthetic appeal, many will buy a phone because of the way it looks, in some cases this is the overriding reason. Apple is still in a class of its own, when it comes to that ultra-large screen touch screen no keypad of any kind, and flat slim phone. Lots of pretenders, but nothing quite like the iPhone in appearance.
But I do think that the biggest reason is carrier relationships. Apple had very much trouble signing up the first half dozen carriers in the first year. That meant that in most countries aroudn the world you could not get an iPhone locally. You had to have it "smuggled" from the US or another early iPhone country. So there was a large pent-up demand of people who really wanted the iPhone, but it was not sold in their countries. Apple now has expanded that to past 100 countries, now they can more-or-less fulfill their initial potential.
My point, if Apple had had 50 countries in 2007, they would have easily sold 20 million iPhones that year. But exactly like I posted in my prediction posting analyzing the iPhone 2G's chances to reach its very aggressive 10 M unit initial sales target, I said 10M was possible but much beyond that was totally impossble, in very large part due to these difficult carrier relations.
So in response, I'd say yes and no, certainly UI is part of Apple's rise and will certainly help further in Apple's growth and in holding onto loyal customers. But obviously its not the only reason and I don't personally think its actually the biggest reason.
(more replies later, now gotta rush again, my customer meeting is coming up)
Tomi Ahonen :-)