Undisruptable

12Defeated by Victory: Nokia

‘The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow’.

— William Pollard

In November 2007, Forbes ran a cover story entitled, ‘One billion customers, can anyone catch the cell phone king?’. That year the S&P stock index was up only five percent but Nokia's stock surged one hundred and fifty-five percent with a peak stock price of around forty dollars per share. Two years later, the share price had dropped below ten dollars. Within eight years, the share price plummeted below five dollars and Nokia offloaded its once-dominant smartphone business to Microsoft.

What went wrong, and what can we learn from this tragic case of disruption? We will dissect the affair through the lens of S curves, but before we do, let's briefly explore how Nokia climbed to the top in the first place.

Nokia's history dates back to 1865, when it began life as a pulp mill in Finland. The company inherited the name of the neighbouring town of Nokia and the nearby river Nokianvirta. After World War I, Nokia was on the verge of bankruptcy when it was acquired by the Finnish Rubber Works. Then, in 1932, the Finnish Rubber Works acquired the Finnish Cable Works. In 1967, The Nokia Corporation was formed by merging these three companies.

Throughout its diverse history, the Nokia Corporation excelled in a variety of sectors, from toilet paper to textiles, rubber boots to electronic equipment and cabling. This diversification eventually ...