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Interesting, I remember when Nokia exited the chip business in 2007. Up until then they had a lot of in house expertise for that. A few of my colleagues in Noki
by jillesvangurp 5y ago
Interesting, I remember when Nokia exited the chip business in 2007. Up until then they had a lot of in house expertise for that. A few of my colleagues in Nokia Research were pretty upset about that at the time. In retrospect, this became a contributing factor to their demise. Their reasoning was that chips were a commodity, which at the time was correct. However they then backed the wrong partners (e.g. Intel, MS) and got cornered in a market they used to own and dominate. Windows phone and MS get a lot of blame for this. Also betting on Intels failed mobile strategy and going for Wimax instead of LTE definitely did not help.
But the key thing was outsourcing their core technology bit by bit. And that started in 2007. By 2012, a lot of Nokia factories no longer existed and production had moved to China and they had changed software strategy so often that it all got very confusing.
In the space of about five years they went from being the largest smart phone manufacturer to selling out to MS who then unceremoniously pulled the plug on the whole thing because there was very little left in terms of tech and skills worth salvaging. Windows Phone was a dud. Nokia as an Android phone manufacturer did not make a whole lot of sense (they actually launched one Android phone just before MS took ownership). Around the same time they also launched what could have been a Meego flagship device but was effectively a dead end when they killed off the entire team before putting that in the market.
Already in 2010, Apple felt they needed to do the exact opposite and have more control over their hardware. Fast forward 11 years and now world + dog is doing their own chips. And Apple of course dominates the phone market with a strategy of basically doing everything in house. Just like Nokia used to do.
- pjmlp 5y agoThe US phone market. Typing this from a Nokia phone.
- lotsofpulp 5y ago> Their reasoning was that chips were a commodity, which at the time was correct. I think the real reasoning is to cut costs once a company achieves domination. If there is no political will in the executive ranks to continue spending on R&D, the executives will choose to cut costs today, coast for a few years and cash out on their “increased” performance. It is one of the reasons I like dapple, since as far as I can tell, Microsoft is just planning on collecting rent from Office, and Google execs like to toy around with a project for their own prestige and then kill it once a new boss comes around who cannot claim the initiative as their own.