2009 Year in Review: For Nokia, 2009 is annus horribilis

Nokia will want to bury 2009 very deeply in its corporate memory. How a world-leading company managed to get so many things wrong in the space of 12 months will surely become a case study for future business students.

Chief among a long list of errors was Nokia's failure to respond to the overwhelming success of the iPhone, more so given its very obvious appeal to consumers and operators alike.

Perhaps realising, albeit belatedly, that its days as the dominant handset vendor were over, the company's CEO stated in early 2009 that it would transform itself into a services company, and set the target of multiplying the users of its services nearly six-fold, to 300 million by 2012.

The company decided to rebrand many of existing services under the Ovi label, with its Ovi Store consolidating a number of its existing app and media-sharing platforms into one consumer-facing app store. Unfortunately, Apple's iStore had set the agenda and Nokia's app store attempt continues to be lampooned by comparison. The company admitted in December that the first revision of Ovi Store was a stop gap measure and promised a new and more customer focused release in 2010.

Unanswered questions
While Nokia would appear to have quashed rumours that it will dump the Symbian OS for the majority of its mid-term smartphones, the company has many questions hanging over it--and very few credible answers.

Its Comes-With-Music service has proved to be an embarrassment by attracting so few subscribers--for example, less than 600 in Switzerland.

Its partnership with Siemens (Nokia Siemens Networks) looks destined for increasingly hard financial times and will come under stress - the NSN venture was given the ‘kiss of death' earlier this month when senior execs from Nokia and Siemens sent letters to customers reassuring them that the JV had their full support.

The company's decision to halve its portfolio of handsets looks sensible, but timescales for new devices that will start to effectively compete with the iPhone and handsets from Samsung and LG are not revealed.

But the biggest question for Nokia is how it would, as stated by CEO Kallasvuo, be successful by offering consumers "irresistible solutions that improve their lives."

He has since confirmed that the shift to becoming a services-based company would mean a profound cultural readjustment within the company, but would not require any major restructuring - just a case of fine-tuning. Believe this if you will.

Related stories:
Nokia: Forget handsets, services are the way forward
Nokia: No turnaround for 12 months, says Goldman Sachs
Nokia bets its future on Symbian UI improvements
Nokia's new strategy fails to impress

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