Dividends and Transforming Nokia

If you owned a mobile phone before 2008, it was probably a Nokia. The company had a dominate share, the features were cutting edge and Nokia seemingly had a license to print money, investors were happy. A short time later, in less than 10 years the mobile phone division was sold to Microsoft at  discount. What happen and how Nokia came back is the book Transforming Nokia by Risto Siilasmaa published by McGraw Hill, NY, 2019. The book written by the Chair of the Board has lessons to be learned and trying to avoid the problems through paranoid optimist and senario based planning.

In 2008, Nokia had 44% marketshare of the global markets of smartphones, that translated into Nokia sold 115 million phones, Apple sold 1.7 million phones. The reality the Apple phones did not work well, however the hype and to swipe rather than to press buttons sent Apple and Nokia’s market capitalization similar.

Nokia used the Symbian software, Apple had its iOS, Google owns Android. The good thing with Symbian system in was owned by a variety of companies and became a global standard. The bad thing is as the public wanted apps, the ability to add was in technology time a very long time. It would take 48 hours to add, and 2 weeks to know how the app was working or required fixes. As the market changed from hardware to software, the Symbian software was not as good as the competition.

Another change was in chip technology, as chips became more powerful, a Taiwanese company called Mediatek was offering inexpensive chips which allowed many manufacturers to compete at the low end of the market and threaten the mid market.

In the book the two biggest trade shows are held in Las Vegas for the Consumer Electronics Show and Barcelona, Spain for the Mobile World Congress. These shows help people see the trends in the industry.

Linking to dividend paying stocks, every industry has a conference or two, for your industry fund out where they are and watch for the trends. Nokia went from global leader to a seemingly bit player partly because of trends and what the industry believes the consumers want and the networks will provide.

There are more questions than answers  till the next time- to raising questions.








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