Nokia’s Anssi Vanjoki has always been the one executive from Finland who provides, on a near consistent basis, one line quotes that are ridiculously memorable. He called the camera in the iPhone a “toy camera”. When he announced Ovi in London in August 2007 and then proceeded to demo a concept of what Nokia’s touch user interface may look like, he said the company can “copy with pride“. This weekend, in an interview with the German publication Wirtschaftswoche, Vanjoki admitted that Nokia’s transition from a handset manufacture to an internet services company is occurring too slowly, and that Nokia is currently not prepared to take on RIM, Google and Apple. When Vanjoki was asked about the idea to sell the hardware manufacturing unit of Nokia and to focus on software, he said “never say never” and then injected the well rehearsed public relations line that Nokia’s huge scale gives them a cost advantage that must not be forgotten.
In an open letter to Nokia that I wrote in August 2009 I suggested that the company sell their hardware manufacturing facilities and focus on becoming an international banking powerhouse. Apple doesn’t make the iPhone themselves, RIM doesn’t make their BlackBerry products, and Google doesn’t make their own mobile phones. One can argue that Apple, RIM and Google focus on such a small segment of the mobile phone space right now, the mid to high end smartphone area, but as we’ve seen with Apple, it isn’t the company that ships the most devices that is the most profitable, it is the one with the highest margins. Chinese OEM handset makers with their MediaTek chipsets will take care of the ultra low end.
Nokia is fighting in the low, mid, and high end of the device space, and in the services space. They’re losing on all sides.
Update: As expected, Nokia is in full damage control mode this Monday morning after Vanjoki’s latest statements. Here is the latest from Reuters:
“Our logistics and manufacturing network is a very important competitive advantage for us, and a core part of our business,” Nokia spokesman Thomas Jonsson said.
“We have no plans to change our business model,” he said.