Will Apple be the next Nokia?

I remember the nineties of the last century, when cell phones came into fashion for the majority of people in a quickly globalizing world. The early adaptors of the eighties aside, who carried large batteries with a phone on top, it wasn't until the nineties that the cell phone took over for good. In the early days, there were many companies that tried to gain market share in this growth market.



Sony tried it, so did Philips, both not very successfully. Ericsson was pretty successful, with cute high end phones like the infamous T28, still one of my all-time favorites. In the US, Motorola sold the majority of cell phones, however in Europe there was another Scandinavian company, the Finnish giant Nokia, that took over the market. Being one of the main developers of the high quality GSM network, their reign of the European market started. With user friendly phones (especially the battery time was better than any competitor) and ever evolving models, Nokia kept control of their market share from 1994 for over a decade.

With the third generation network 3G the decline of Nokia's market share started. 3G enabled more data traffic, paving the way for smartphones to take over. Nokia did not respond to this development early enough and missed the opportunity to keep their leading position. It saw US newcomers as Apple with its iPhone and RIM's Blackberry as well as Asian parties as Samsung, HTC and the merged SonyEricsson take over the (smart)phone market.

More than ever not the phone itself, but the operating system became important. Nokia was still a great contender with its Symbian operating system, but lost the battle against Apple's iOS and Google's Android. The partnership with Microsoft gave Nokia access to the Windows OS, but this is not seen as innovative or more user friendly than market leaders iOS and Android. As Nokia recognized that Google is the competition, it partnered with Groupon. Both partnerships are strategically sound, but they just don't cover the ground with Apple / iOS and iPhone and Google's Android as used by HTC and Apple's greatest contender, the Korean conglomerate Samsung. Nokia lost the battle and should try to work towards a profitable business model.

The current number one, taking the market by storm since the introduction of the first iPhone 3G, is Apple. Apple's success is a remarkable story, Steve Jobs coming back to the dead and buried Apple company to bring it back to life.
The huge success of the iPod was the first step, the introduction of the iPhone made Apple break all records.
With the iPad and the beautiful iMac, MacBooks and Apple TV, the company dominates the 21st century and by the time of Steve Job's passing in 2011, Apple had become the largest company in the world by market cap.

The recent iPhone 5 release still shows that Apple is a strong brand, with people queuing overnight to get the new phone first. Apple's iPhone is the new Nokia as the top selling phone maker in the world. However... as Apple needs to fight off Samsung in their mobile phone and tablet product line, other giant Google is getting stronger and stronger. Google is not a big phone seller, but its Android is the top selling operating system in the world. Google is watching the battle between Apple and Samsung and is ready to take over with new innovative products.

It will probably take a new innovation to make Apple the next Nokia, losing its grip on the markets like the Finnish blue chip did, and odds are that Google and Facebook will be putting up the fight for world domination in the next decade. Big question is if Apple can follow their US competitors, or if perhaps another company will emerge. My guess is that Google will be in charge five years from now, with a small sized can-do-all product that will be controlled by eye movement, as is currently being developed in the Google glass project. If this innovation will take over, the use for handheld objects like iPhones could very well become less and less obvious. Like Nokia that could never guess it would lose its market dominance in only 3 or 4 years, Apple does not seem to be to worried right now. They have the cash to feel confident, but will cash still be king in 5 years time? My money is on Google...