Nokia is a 140+ year old firm with a rich history of corporate makeovers. The most famous disruption came about in 1992 when it transformed itself from a traditional manufacturing conglomerate into a computer peripheral firm and then, out of the blue, into a mobile phone powerhouse.
It looks as though there is a new Nokia transformation underfoot. Clearly cellphone hardware is now a commodity, soon to be ruled by the likes of HTC and other firms catering to the mass market needs of Asia. Nokia and others will find it financially difficult and impractical to compete in that environment. Nokia is slowly but surely changing its business model.
Despite recent rumors that Motorola will get out of the cellphone business, it won’t be a surprise if Nokia is the one that actually gets out of the mobile phone hardware business within the next three years. Unfortunately, firms like Motorola that are clinging to plain vanilla manufacturing and slow growth products are going to be lost in the shuffle pretty soon.
Here’s Nokia new deal: it’s all about mobile software services: mapping, photo sharing, presence, music and entertainment – in essence the Android and iLife of the mobile space. In this new scenario, there are only two challengers, Microsoft and Google. Apple, of course, is going to be, as always, a consumer and innovative re-packager of technologies, so partnering with Nokia (or Google for that matter) is a given.
Overall, it looks like the market will breakout into three distinct segments (with some obvious overlap): the lower end commodity market (currently served by pretty much everyone except Apple), premium (Apple, blackBerry), and mobile services (Google, Nokia, Microsoft).
So, which Chinese firm is going to buy out Nokia’s hardware business?


