Thursday, September 06, 2012

For Nokia, the gloves come off. But now they don't have to. How does egocentrism affect product plans?

When the first iPhone was unveiled back in January 2007, I was working for Nokia out of "Nokia House," the company's beautiful bay-side crystal headquarters located in Espoo, Finland. A few days after Apple's announcement, I happened to have lunch with one particularly sharp Nokia vice president. Just like most water-cooler talk in the building that week, the iPhone became the topic of our lunch-time conversation. While I (like most of the other grunts in the building at the time) insisted the product would be a game changer for the smartphone business, that particular Nokia VP was rather dismissive of Apple's entry into the segment. His key argument against the iPhone's potential market success was the all-touch form factor. After all, he said, the device couldn't even be used with gloves on.

Wouldn't work with gloves on! I thought that was unique rationalization, but I then began to hear the same argument from some other top Nokia executives. While this might sound like bizarre thinking, you have to realize that these executives come from the land of the frost, not too far from the North Pole. Winters often start in October and can end in April. If you live in an environment where you might need to wear gloves outdoors half the year, it's not strange to want a smartphone you could answer without stripping down a bit.

So, yesterday Nokia (CNET story) unveiled two new smartphones, the Lumia 920 and the Lumia 820, which could indeed be used with gloves on. To the best of my knowledge, this is the first time a mainstream smartphone vendor touted gloves-on usage as a feature. I doubt any California-based handset company would ever have thought to make this a key-selling point.

After working in foresighting for many years and seeing many good products and features get canceled for strange or no reasons, I have often wondered how much egocentrism can contaminate product and feature planning. Egocentrism is the very natural result of projecting one's own experiences and environment to a general level. It's gut instinct gone very wrong, and as we see in industry over and over again, egocentrism can lead to some extremely painful and expensive lessons.

I've said many times that there is no such thing as a technology disruption, that is, rarely does a new technology come along and change the playing field in a very short amount of time. For the most part, competitors who do their foresighting homework have access to the same information and the same or very similar technology developments as the so-called disruptor companies. No, there are no technology disruptions, only bad judgement calls and strange decision making.

It's good to learn from your own mistakes. It's even better to learn from the mistakes of others. Welcome common sense in your decision making, but beware the potential deceptions of egocentrism.

Don't let your company get left out in the cold.

Does your view of the world fit across the globe?


Alex said...

The other iPhone denial argument which I heard in Nokia House: lack of one-handed operation would limit it to niche product.

Mika Peltokorpi said...

Yes, heard lot of dismissal for iPhone inside Nokia on those days.

This is my take in TAMK Strategy Leadership course 30.9.2007 (translated from Finnish) in topic "Paradigm shift". I had put iPhone to my radar when it was introduced in January 2007. I think, I posted most of these (or at least similar) remarks to your intranet blog back then.

"Good example on paradigm shift is iPhone, (technical) capabilities of which are purely based on running "old hardware" in double clock speed than most of the competition does. Without this "development step" product like iPhone could not exist. Redesigning the UI from ground up made it finally possible.

To emphasize the paradigm shift they (Apple) took new way of marketing the iPhone. I.e. the product is new revolutionary user interface to MP3-player - that now includes also a mobile phone, not a mobile phone, that has new UI and could be used to listening music, viewing videos (ref. Video-iPod), and so on. The most revolutionary in the iPhone is, after redesigned UI, the way it is marketed. So in iPhone the paradigm shift is actually double. In UI and in marketing.

New (iPhone vs. other smartphones) marketing strategy is very strong paradigm shift - both for the operators, and the ODMs. The most important factors are co-marketing and more balanced shared revenue model. If iPhone would of been marketed as new smart phone, this would of not ever achieved. iPhone is a Horse of Troy that came outside of industry, that will revolutionize revenue share and marketing models of smartphones. At least for the high end products."

* iPhone was introduced 9th Jan 2007
* iPhone US sales started 29th Jun 2007
* iPhone EU sales started in Q4/2007

Peter Bryer: Mobile Foresighter said...

Alex, regarding the "one-handed operation" issue, yes, I also heard that from several vice presidents at Nokia. The argument was that people were used to having a handset that could be conveniently used with only one hand, and the iPhone would therefore be a niche. The rationalization among many top managers was rather consistent, so they may have been reading from the same script, whether they believed it or not.

Mika, I agree with your takes. The UI was the real killer app for the iPhone I think and multi-touch was the absolute WOW feature. Too bad. Multi-touch was known about for a while before and research was even supported by Apple competitors at university labs.