PowerPoint Palace. Nokia's destiny was embedded in its HQ's namesake all along.

And today, a short history lesson...

In the very late '90s, a meeting took place between top Microsoft and Nokia executives at Nokia's sparkling new headquarters in Espoo, Finland. Literally a stone's throw away from Helsinki, Nokia House is a beautiful place with water views on three sides, a mostly unused helipad, and a slightly subsidized lunch menu that had some of the best food in town.

A legend was built up around acrimonious talks between then Nokia CEO Jorma Ollila and Microsoft's Bill Gates. The two companies intended to discuss the future of the mobile computing world. Nokia was the mobile leader at the time. Microsoft was the computing leader. The talks were destiny between giants. (At one point, the two would have a combined market cap approaching one trillion dollars.)

Nokia House would come to be known as "PowerPoint Palace" within certain circles, for the most part an endonym used around the four corners of Nokia's globe. Whether or not this term was a pejorative I never knew. I think that some wore the name with pride, and it did accurately describe the slide-based communications culture of the company. As one Nokia employee once said, slightly in jest: "Stop talkin' and just send me the fuckin' slides."

The apocryphal origins of the term "PowerPoint Palace" are worth a quick blog entry here, given it's an easy-going Friday morning, a breezy end to a historic mobile week. The term is said to have originated from the mouths of Microsoft executives —perhaps even by Bill Gates himself— who were shocked at the number of PowerPoint slides they had to endure as they met with various Nokia unit heads. Yes, even Microsoft people were amazed at Nokia's intoxicating use of PowerPoint. While Nokia House didn't manufacture hardware, it was a factory of sorts.

So the irony makes for weekend thinking: PowerPoint Palace didn't just describe the stream of deliverables coming out of the building, it described the company's fate. This will be fun to follow and I wish both segments of the company all the best.

PowerPoint Palace: a crystal castle on a shining sea.

PIC source: harrypwt via Flickr.

The planned IBM-ification of Nokia is almost complete. So, who's next to be Sega-fied? Get ready for the dance.

Sometime in 2011 I predicted that Nokia would exit the handset business within three to five years. I just didn't think it would be Microsoft which bought the unit. Not that it matters. (I had been thinking Huawei, ZTE, or maybe even Foxconn.)

The writing was on the wall. To me, the pattern was clear: Nokia execs had the historic experience of picking up and leaving a business when all the lower-lying fruit had been picked. When the margins begin to fade, it's time to move on. Take for example, the set-top box business. Nokia was a top vendor of equipment to television broadcasters (and the world's #1 supplier of digital set-top boxes for a while), but when most of the profitability evaporated, Nokia picked up and left the industry altogether. Computers, displays, televisions. And there are other examples. Push aside sentimentality and adjust to the realities ahead.

Let's consider for a moment what IBM achieved under Louis Gerstner, as this was a big influence on Nokia. For many Nokia executives, IBM was not just a case study, not just an example, it was an idol. When IBM picked up and left the commoditized hardware industry in 2005, selling the ThinkPad and related sub-brands to Lenovo, IBM proved that it was possible to re-invent and refocus a company. Elephants could indeed dance. Old business models and ways of working would have to be placed to the side to make way for change.

IBM placed more emphasis on services leading up to and after the end of the IBM PC era. And Nokia executives realized that the same changes which took place in the PC industry would smack the handset business within a few years as well. It was time to prepare the company for similar changes. Nokia executives talked more and more about software and services. The company was reorganized adn re-reorganized. An "S&S" unit was created, service related companies were acquired. Maps, music, money, and more. Acquired growth. Organic growth. All options were on the table. The checkbook was out. Employees were shuffled around.

So now it appears that the IBM-ification of Nokia is nearing completion. While I had predicted that a large Chinese vendor would likely buy Nokia's handset business when the time came, Microsoft serves the same purpose: one potential Nokia strategy is complete. I'll even offer some conjecture now and say that Microsoft will further sell off much of what they are buying from Nokia, getting rid of factories and logistics and perhaps even the feature phone unit altogether.

There is already some speculation that Nokia proper might re-enter the smartphone business with Nokia-branded Android devices in 2015. I'm not buying that unless there is some fantastic value-added they can discover. By 2015, smartphone ASPs and margins will have slipped further down toward the bottom of the consumer electronics life cycle. With luck, Nokia will be deeply busy with services and solutions, working with hardware and platform vendors of all sorts: smartphone manufacturers and auto makers, cloud-based internet services and big-data gatherers.

Next on deck is BlackBerry, a company I already predicted would soon leave hardware behind for services of some kind. Perhaps some vendor looking for a world stage will license the BlackBerry brand.

And prepare for more placement changes from vendors such as Apple and Samsung. As any fund investor knows, past performance is no guarantee of future results. When the company that completely dominated an industry only a few years ago essentially exits the business, it's time to get ready to jump to the next hot thing.

I think about the recent news articles covering a potential strategy shift at the world's largest shipping company, Maersk, where executives talk about moving away from the shipping business to more profitable services. I commend their foresight. I've heard Maersk described as the IBM of Denmark, and that Danish elephant is getting ready to dance. And more.

You see, elephants have to do more than dance these days: they have to reach new heights.

Remember this heart-warming video from Nokia?

All this talk of mobile healthcare apps and sensors brought back some heart-warming memories for me: remember the Nokia N79 Active? (Actually Mobihealth reminded me about this.)

From 2009, Nokia's N79 Active sensed, collected, and shared. Too bad it ran out of time. This sort of gets the blood boiling in some ways. Samsung is running with this baton now.

Putting your company's futures planning on ice?Foresight now... or face extinction.

Ask yourself: what refrigerator equivalent will come along and disrupt my industry... and kill my job?

When you’re in the ice business, you had better be prepared for the invention of something like the fridge. Or face a cold, dark future.

Disruptions happen. Just ask the once happy shareholders of the Knickerbocker Ice Company. Once a major supplier of frozen H2O to homes and businesses along the East Coast of the United States --and beyond--, Knickerbocker Ice had it all: an extensive and complex distribution network, fantastic supply chain, brand recognition, scale. And apparently a killer recipe for ice. Yes, Knickerbocker was flying high, and the company’s executives certainly never wanted the ice age to end.

With company headquarters next to a crystal fresh-water lake very close to the Hudson River, and only 40 kilometers north of New York City, Knickerbocker Ice had smooth-sailing access to one of the world’s largest markets for ice. By the mid-1800s, Knickerbocker Ice had become a major utility. The company employed thousands at its peak, had ice warehouses (“icehouses”) up and down the East Coast, employed expert global ice traders, and established a brand name via the ubiquitous “iceman” who yelled “ice” from the city streets. Consumers would rush down to buy ice by price. “Give me 10 cents worth of ice, Tony.”

Then along came electric utilities, a killer enabler as far as Knickerbocker Ice should have been concerned. Electric juice enabled refrigeration. And the fridge put an end to the profitable business of pushing ice. In 1924, the Knickerbocker Ice Company closed up shop. The ice age had come to an end for KIC.

What does this have to do with trends in the wireless industry? I suppose nothing directly. But there is a lesson to be learned here. (Living through the current power outage in the New York region was my inspiration for this initial post, having to hunt down ice at various supermarkets.)

Looking at the wireless industry, certain companies are flying high right now. Smartphone sales are exploding across the globe, consumers are cutting the cord, and the internet is headed toward mobile favoritism. Yes, things are hot in the wireless business these days. The device form factor is in place, service providers have sliced up the pie, and adjacent industries are beginning to melt into the mobile milieu.

So, now is the time for mobile-related firms to prepare for the day when the mobile industry as we currently know it dries up. What will be the disruptive enabler? It’s a tough call.

After years of following and reporting mobile developments for a major handset vendor, I plan to use this blog to share my observations and opinions a bit more widely. I enjoy trying to catch trends and spot opportunities. And uncover that coming disruptive enabler.

Remember, every business goes cold at some point. And then it’s time to move on to the next hot thing.



A Knickerbocker Ice factory:
A great supply chain & logistics weren't enough to keep the firm afloat

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