Shulou(Shulou.com)06/02 Report--

What is the first mobile phone of post-90s and post-00s? The answers may be varied, but to be sure, few people will choose Nokia.

Nokia phones, which were once popular all over the world and of excellent quality, which claimed to be able to "smash walnuts", disappeared in the public view because they missed the last bus of 3G and 4G.

Perhaps the best-known phrase left in history is what Yoma Ollila, then CEO, said when he sold to Microsoft in 2013-- we didn't do anything wrong, but somehow we lost.

Of course, Nokia is not completely out.

What it lost was the mobile business. In the carrier market, Nokia still has a lot of fun.

Huawei is the world's largest equipment supplier in 2019 with a market share of 28 per cent, while Nokia Bell ranks second with 16 per cent and Ericsson ranks third, according to DellOro Group, a consultancy.

Recently, however, even this stronghold has become somewhat shaky. Nokia suffered frequent setbacks in the 5G market, not only failed with "zero order" in the second phase of China Mobile's 5G wireless network collection, but even turned its head to its counterpart China Unicom. Let's taste this painting style--

Of course, Nokia officials quickly spread rumors, claiming that the letter "does not represent our position and attitude."

I don't know how the company seal is stamped with this "invalid" document, and I dare not ask. However, it is an indisputable fact that Nokia has been gradually distanced by other competitors in the 5G project when the assembly horn of "new infrastructure" is sounded.

With regard to 5G, the giant's turn can be smacked out. At least, the former king experienced another "unexplained" fiasco, and the "white head of the famous general" is always touching.

Plump ideal and cruel reality: Nokia's 5G Journey

With the completion of 5G coding standard, all countries have entered the fast lane of the actual construction of the network. Globally, only five major communications equipment manufacturers can provide the communications equipment needed to build 5G, namely Huawei, Ericsson, Nokia, ZTE and Samsung. So before exploring the "why", it is necessary to sort out what Nokia, which fades out of the mobile phone market, has done in the carrier market to gain the status of TOP3.

To sort it out, there are probably three core reasons:

1. With a strong family background.

Why Nokia is able to gain a foothold in the 5G era starts with its background in communications.

Although the mobile phone business has become a thing of the past, Nokia's early accumulation in communications basic business and communications technology has enabled it to retain enough research and development to support the development of 5G.

After the mobile phone business was acquired by Microsoft, Nokia is mainly composed of two departments, one is Nokia innovation and technology, mainly engaged in new technology research and development, patent licensing, digital health and so on. The other is Nokia communication technology, which provides 5G-oriented base stations, communication equipment and other products for telecom operators around the world.

We know that the most direct revenue of communications companies comes from the licensing fees of communications standards patents and the sales of basic equipment such as base stations. Some time ago, Nokia announced its own number of 5G patent applications, which has reached more than 3000, which is comparable to Huawei, which ranked first in the number of 5G patent applications, and is naturally able to deliver good market performance and financial statements.

two。 Actively expand.

As early as 2011, Nokia began to layout 5G to join METIS, a large-scale scientific research project funded by the European Union (EU) with 27 million euros. However, it is of course not enough to rely on your own research and sit idly by. In order to make up for your shortcomings, Nokia has also launched a drastic "financial father" program over the past decade.

One of the most noteworthy acquisitions is in 2013, when Nokia bought a stake in Siemens' joint venture for about $2.2 billion, which officially established Nokia Network and established Nokia's advantage in communications infrastructure.

The other is the 2015 acquisition of French rival Alcatel-Lucent for $16.6 billion, acquiring some of its key patents in 5G, with fixed-line, core and IP network technology capabilities. "this acquisition gave the company a strategic advantage in developing 5G communications technology," said Nokia CEO Rajeev Suri at the time.

After the completion of the merger, Nokia also overtook Ericsson to become the world's second largest communications equipment supplier.

3. Marketing strategy.

Although Nokia is a Finnish brand, HMD, the parent company of Nokia, has given it a certain tendency in marketing strategy since it broke its arm in 2013.

For example, focus on expanding the American market. In September 2018, Ericsson won the competition with Huawei and successfully secured a $3.5 billion order from US operator T-Mobile, the largest 5G order ever made public in the world at the time.

Due to various restrictions in the United States, many domestic mobile phone brands have not entered the 5G terminal market. Nokia has won the cooperation of two telecom operators in the United States, Verizon and Cricket Wireless, to launch two low-cost contract machines. It also plans to launch a contract machine in cooperation with Canadian telecom operators.

It is not difficult to see that the US market is becoming a protective barrier for Nokia.

Every dark cloud is framed with clouds, and tuition fees must be paid for each harvest. Nokia's pace in the 5G field is also faltering.

On the one hand, 5G has become a core pillar of Nokia, with the communications business contributing 88% of revenue. As a result, it has no other business as a refuge, and the slightest change in market competition may turn into a hard wound.

For example, Huawei leads the world in 5G orders, with 91 orders (as of February 20) and 81 orders for Ericsson, but only 67 for Nokia.

This also led to its "wind review" in the capital market, some investors believe that Nokia may not have an advantage in the global 5G market, the share price hit the biggest decline this year.

This is why, even in the global TOP3, Nokia still needs to "rest on its feet" and explore 5G growth opportunities everywhere.

Lost in passivity: Nokia didn't do anything, but it was wrong?

Like the failure of the mobile phone business, Nokia's siege in 5G may be helplessly attributed to nothing wrong, but we lost.

At present, the core reasons for Nokia's gradual loss of market share are as follows:

First, it is difficult to recover from the decline due to the lack of technical precipitation.

Although Nokia Bell mentioned in a letter to China Unicom that it did not get the order because "the bidding rules consider low prices rather than historical service performance", however, people involved in China Mobile's 5G test once told the media, "not only this time, but in the long run, Nokia Bell's historical test results are not good." Even "among the major manufacturers tested by China Mobile this time, Nokia Bell is the only one that cannot deliver high-performance products."

Obviously, the technical deficiency is the core reason for the loss of the order.

The reason is that 5G is an area that needs to be tested and accumulated for a long time. Huawei launched 5G related research in 2009 and made a large number of breakthroughs in technology research and development, joint testing, ecological construction and so on. Starting from 2018, Ericsson will increase its R & D investment by 10%, continue to expand investment to ensure technology leadership, and cooperate fully with 45 universities and research institutions in the 5G field.

Although Nokia has a certain stock of technological advantages, this spillover advantage has been gradually weakened with a series of processes from the birth of the standard to the experimental network to testing and industry promotion.

After all, price is not the main consideration of operators, strong strength is. In this respect, long-term exercise is more reliable than short-term ginseng soup.

The second is the "attention sequela" brought by the acquisition.

Why doesn't "buying" create sustainable competitiveness for Nokia?

At present, Nokia audience has shook hands with the patented technology of many giants (Siemens Communications, Alcatel, Lucent, Nortel) and got off to a fierce start.

But the operation also left Nokia with a lot of complexity, which in turn distracted its focus on 5G products and markets.

For example, with the acquisition of Alcatel-Lucent, Nokia did succeed in breaking through its patent shortcomings-- strengthening its capabilities in fixed-line, core and IP network technologies. However, it has to restructure the business, divided into five business groups: mobile network, fixed network, IP/ optical fiber network, application analysis and Nokia high-tech.

In November 2018, Nokia merged its mobile and fixed network businesses to form a new division called access Network (Access Network). It was originally hoped to simplify the management structure and increase customer attention. But the reshuffle of the department has also led to a change in management. Mark Rouane, who has been president of the mobile network business, left, and Tomi Uito was appointed as the new president.

In 2019, Nokia reformed again, splitting the customer operation part of Customer Operations (CO) into two parts: Americas, Europe, Middle East and Africa and EMEA & Asia. In the same year, Rajeev Suri, Nokia's 25-year-old chief executive, also left, bringing in Pekka Lundmark, president and chief executive of Fortum, the energy company, to revive its "shaky" 5G business.

Not long ago, Nokia's mobile phone business unexpectedly "revived", releasing its first 5G mobile phone, NOKIA 8.35G, which is not enough to arouse users' desire to buy 5G mobile phones, which undoubtedly scattered Nokia's "ammunition" to some extent.

What is brought about by frequent acquisitions and adjustments is Nokia's continued internal friction in the 5G strategy.

The third is the arrogance and prejudice brought by the market advantage.

As we mentioned earlier, the kinship advantages of the US parent company and the cautious sentiment towards Chinese companies in overseas markets were originally the driving force for Nokia's development. At present, 5G equipment orders still have national boundaries, and the US market is divided between Ericsson and Nokia and has nothing to do with Chinese correspondents.

This also gives Nokia a great deal of instability. For example, once there is a change in American customers, it may affect their own situation. T-Mobile, such as the "sky-high order", plans to merge with Sprint to "bet all on 5G" in the future. The deal originally addressed some investors' concerns about Nokia's 5G competitiveness, but became a sharp knife to turn around and stab itself in the event of volatility in the US market.

Market inertia also brings the blind spot of Nokia's perception of competitive advantage. For example, the "low-cost manufacturers" mentioned in the "lawsuit against China Unicom" are regarded by industry insiders as connotations of China Xinke and Ericsson, implying that China Mobile is biased in the tender for the second phase of the 5G project.

It is worth noting that although Nokia does not have a competitive advantage in price, its gross profit margin fell to 29% in the third quarter of its last fiscal year. This shows that the relatively high price has not brought higher profits to Nokia, and it, which has a secondary market share, has not reduced costs because of the large-scale coverage of the 5G network. This obviously can not blame Ericsson, Huawei and ZTE, Xinke and other dark horses cost control is too good, technology is too advanced.

After all, under special restrictions, Huawei has signed 91 5G contracts, and even directly entered the Samsung base to compete for $9 billion of 5G equipment orders in South Korea. Ericsson has also won high orders one after another in the European and American markets. 5G cooperation agreements have been signed with 38 leading operators around the world.

As for the attribution of Nokia's "failure in bidding", apart from laughing, it is still suggested that it should "reverse itself".

Frankly speaking, the failure of a collection does not mean anything. Nokia's position as the top three in the 5G market will not change in the short term.

But the subtlety of its response can not help but make people sigh. There is an old Chinese saying that when a person is alive, the Buddha competes for incense. Whether a person or an enterprise, first of all to live out of self and dignity. Without this "spirit", no matter how heroic it is now, it will make others murmur-- is it making a mistake again because it is so nervous?

Just last month, Nokia lent another 500 million euros to the European Investment Bank to invest in the "end-to-end" 5G strategy. The operation is as fierce as a tiger, whether to return to the peak or repeat the same mistake, let's just eat melon.

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