Former CEO admits errors led to Nokia downfall

Ex-CEO and chairman Jormal Ollila says the Finnish phone manufacturer was unable to compete against makers of cheaper handsets in Asia and failed to identify popular trends such as touchscreen and clamshell models.
Written by Eileen Yu, Senior Contributing Editor

Nokia's management team made several mistakes, including its failure to identify changing consumer demands and compete against Asian manufacturers, which led to the company's eventual downfall.  

Former CEO and board chairman, Jorma Ollila, said in his 450-page memoir published Thursday that the Finnish phonemaker was unable to maintain its lead due to intense competition in the market as well as the emergence of cheaper handsets from Asian manufacturers. 

Written in Finnish, the memoir--which title translated as "An Impossible Success"--detailed how Nokia had become "painfully aware" its mobile platforms lagged behind U.S. software and could not deal with challenges posed by the Apple iPhone, reported the Associated Press. 

The company also failed to identify key trends including consumer demand for touchscreen models and clamshell phones, said Ollila, who further blamed U.S. service providers for telling Nokia there would be no demand for smartphones priced above US$300. Apple later launched its phone at more than US$600.  

He admitted, though, that Apple had "managed to create something completely new", offering great user experience, and supported by an ecosystem of services and applications. Nokia, he added, failed to create this ecosystem. 

Elop wasn't first choice for CEO

Currently non-executive chairman of Royal Dutch Shell, Ollila was Nokia CEO from 1992 to 2006 and its chairman from 1999 to 2012, steering the company into the world's then-biggest handset maker. He led the board in its search for a new CEO in 2010, following then-CEO Olli-Pekka Kallasvuo's failure to turn the company around, and eventually appointed Stephen Elop

In his book, Ollila revealed that Elop was not his first choice for CEO. In a Wall Street Journal report, he did not disclose the name of his first candidate, saying only that the executive was in his 50s and the "No. 2 man at a well-known American technology company". The candidate had taken himself out of contention due to personal reasons. 

Nokia last month sold its devices and services unit to Microsoft for US$7.2 billion. While he described the deal as "dramatic and brave" on the board's part, Ollila noted in his memoir: "It was a sad to see how more than 40 years of Finnish engineering was being sold abroad."

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