The secret is out: Why Nokia and Sony Ericsson are getting their butts kicked by Apple

Sony Ericsson just reported a $300 million loss for the second quarter of 2009 and Nokia reported a 71% decline in profits for the same period. Times are tough for the (shrinking) mobile giants.

Gee, wonder why…? Let’s start this off with an illustration:

Yes, ALL those cell phone models in the top picture are from just ONE mobile maker: Sony Ericsson. And Nokia has a similar number of models.

The above image reveals the huge contrast between Apple’s iPhone strategy and that of the traditional mobile makers. Apple has “one phone to rule them all,” while Sony Ericsson and Nokia have a gazillion models to try and cover every little market segment imaginable.

Here’s what’s wrong Nokia’s and Sony Ericsson’s current approach:

  • Giving consumers too many products to choose from just creates confusion.
  • It’s simply not cost effective to have that many different cell phone models; not from a marketing standpoint, not from a product development standpoint, and not from a production standpoint.
  • Having one unified, consistent platform makes it easier to provide a compelling user experience.
  • From a third-party developer perspective, the iPhone with its consistent interface and features is a no brainer (not to mention the infrastructure in place to push out those applications).
  • Both Nokia and Sony Ericsson are careful to also cater to budget-conscious consumers. Apple only has its relatively expensive iPhone. But guess what? Apple does have a budget option after all: older models of the iPhone. So they are slowly seeping into that end of the market as well.

We were discussing this over lunch today because Sam Nurmi (Pingdom’s founder and CEO) was amazed at the total inability of both Nokia and Sony Ericsson to adapt to an evolving market. And it’s not like he doesn’t want them to do well; he’s Finnish-Swedish so he has emotional ties to both companies (Nokia being Finnish and Sony Ericsson Swedish). Those loyalties hasn’t stopped him from getting an iPhone, though.

We want these companies to do well, so consider this an open letter to both of them. Nokia and Sony Ericsson, if you’re reading this, can’t you see that you’re shooting yourselves in the foot with your current strategy?

We’re not saying that you only need to have ONE cell phone model, but how about abandoning today’s hit-and-miss tactics and focusing your considerable resources and expertise on just a couple of strong projects with a clear strategy?

If you did that, then Apple would have reason to worry.

9 comments

  1. They are getting their butts kicked for an entirely different reason.

    Its the Apple OSX operating system which gives Apple ability of to design all of it’s products so that don’t even need a user’s manual. Their is no user manual in an iPhone box. But, within minutes after turning the IPhone on you have a smile on your face because you understand how it works and can use it. A pretty soon your showing off your newly found skills to a friend and telling them how great a product it is.

  2. This is similiar to what Apple does with their notebooks. They (basically) have three models (13″, 15″, 17″) and then customizations from there. Unlike companies like HP, who have hundreds of near-identical models that only seem to be on the market for a short while.

  3. Nokia is selling 500 million mobile phones each year. I don’t think Apple needs to teach them a lesson. Just cause a few rich geeks can afford the ridiculous contracts tied to the iphone in US and other countries, that does not represent any significant part of the mobile phone market. Nokia is making 50 billion dollars in revenues each year.

    Though I agree with you, Nokia will go bankrupt if they don’t start using Android as soon as possible.

    Basically the whole industry needs to use Android on all devices. Apple as well.

  4. True points, Apple only has a few devices and then they really screw consumers big time with each of their ridiculously overpriced products.

    You are it seems actually suggesting that Nokia and Sony-Ericsson need to copy the Apple model, of making exclusive distribution deals to sell an overpriced gadget with a $2000+ 2-year contract. There is a financial crisis, people are short of that kind of money. It’s just plain evil from Apple to take that from those types of gadget addict geeks.

  5. You are right.
    But not totally.
    There are a lot of us out there who dislike apple because we dislike a phone with touchscreen. And the need to use itunes and to buy all applications and music from appstore.
    I like buttons, smooth but a bit larger than the smallest.
    I like SEs menus, nokia gets me confused nowadays.
    But even though I dislike a slide phone, I would like to see a E75 from ericsson, working fast as hell.

    SE’s problem is that they don’t concentrate. Try to keep up 5-6 models, maybe have a standard model that are there year after year, for those who only want to make a call now and then.
    And have a see to it that almost all models have the same spec.

    as for now, the difference between w995 and c905 are very much alike, BUT:
    3.5 mm jack is missing on c905
    scratch free glas is missing on w995
    there are a better camera in the c905
    WY?
    they could have made just one phone with all in it…

  6. Brilliantly Right! Confusions, and just more confusions in the end. Besides, I have a feeling, by year 2020, most of us would be having an iphone but with various skins for covers and home page?

  7. Its the old story give ’em too much choice and they wont make any decisions. Far too complicated. But, give it to Steve Jobs one thing does it all! Why waste time finding out about stuff you may or may not want or need?
    As we always say 2 choices, Maximum! But make sure you know what to pitch!

  8. Well I think you’ve cracked it on the head regarding the huge range of models, save yourself some money and make a dozen models!.

    Having come from a SE K850i and then a C902 I’m not stuck between a rock and a hard place when it comes to upgrading my handset as they’ve stopped doing the C905.

    What manufacturers like SE & Nokia must realise a 5 Mega pixel camera are now pretty much basic requirements for any customer.
    If I wanted a 3 Mega pixel I’d go back to the early 2000’s

    I personally couldn’t care about touch screen features but regardless the screen must be either glass or scratch resistant.

    We want nothing to do with these flexible touch screens!.

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