'Nokia chose wrong markets, BlackBerry failed to adapt’: Ex-Nokia CEO on why mobile giants collapsed

Shiv Shivakumar, the former CEO of Nokia for Emerging Markets and now Group Executive President for Corporate Strategy & Business Development at the Aditya Birla Group, recently shared his insights into the decline of iconic mobile phone brands Nokia and BlackBerry. In a discussion with Raj Shamani, Shivakumar highlighted the distinct factors that led to the downfall of these once-dominant companies. Shivakumar pointed out that Nokia's failure was primarily a significant strategic misstep. He stated, "Nokia made a mistake of choosing Windows against Android. It was a strategic mistake. Wrong decision by the CEO and the board. They suffered." The operating system decision, he argued, was pivotal in steering the company into decline. In contrast, BlackBerry, while having a robust product, struggled to adapt to evolving consumer behaviors. According to Shivakumar, "BlackBerry was really blind. The biggest use on the phone today is WhatsApp. BlackBerry had that as BBM. They did nothing with it." He noted that despite being the first to offer a messaging service similar to WhatsApp, BlackBerry was unable to scale it or anticipate changing trends in consumer preferences. Shivakumar traced BlackBerry's initial success back to its stronghold in secure email services, making it a must-have device for professionals like lawyers and stockbrokers who needed real-time communication. However, this advantage was short-lived as competitors rapidly improved their email capabilities. "In about three to four years, companies like Nokia and Apple offered email capabilities as good as BlackBerry’s," he explained. BlackBerry's failure to evolve beyond its email-centric mindset ultimately proved detrimental. Even high-profile endorsements, such as Barack Obama's use of a BlackBerry, did not significantly alter the company's downward trajectory. Shivakumar remarked, "That 50 million coverage we got was enough, but focusing on past successes rather than evolving consumer needs was a fatal error." Shivakumar also emphasized BlackBerry's unmatched early advantage with its BBM messaging service, describing it as a precursor to modern social communication tools. He recalled, "People loved BBM at 100%. In Saudi Arabia, girls would put BBM codes on their hand and show it to boys going by. It was a great way to connect." Despite its popularity, BlackBerry failed to broaden BBM into a more extensive communication platform, which ultimately cost them the chance to lead in the global messaging market.