Vitaly Demin Senior Strategy Consultant Read about Vitaly

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November 2011

“The total is much greater than the sum of the parts”
Steve Jobs, R.I.P.

In October 2010 Microsoft released its new generation mobile operating system called Windows Phone. They were just another player in the game after Apple iPhone with iOS and Google Android but they decided not to come up with a different strategy for launching their product (I don’t see much sense in keeping Blackberry in the equation at this point).

iPhone and iOS is a unique combination of superior hardware and the most advanced mobile operating system that comes from one company. Apple managed to conquer the world with this device. Android being a multi-hardware platform operating system is a different case. Google did a great job in becoming the world’s most popular mobile operating system by getting into the race at the right time and making the system free.

So where does Microsoft fit in with their Windows Phone?

The Redmond company decided to follow Google by opening their system to all the manufacturers who already made Android phones. Being just another player in the market, they simply copied the business model from their biggest competitor and for some reason they thought it made sense.

Four months later they announced their strategic alliance with Nokia. The latter would produce only Windows Phone devices. Here comes the lost opportunity. The opportunity was to create an absolutely new and exclusive brand of a smartphone built on the Nokia hardware and running the Microsoft mobile OS. Let's give it a name, say, "Lexor" so we have a real brand. This way, they would have become 1) different, which is the core of branding, and 2) exclusive, which would create a perception of high value and interest in the consumers’ minds.

Simply compare two scenarios:

First scenario – you have a Windows Phone mobile operating system that runs on smartphones from various manufacturers like Samsung, HTC, LG, Nokia, etc. Your strategy is no different than the one of Android – your competitor number one (I mean no iPhone owner will switch to a Windows Phone device but an Android device owner can).

Second scenario – you have a brand new phone called "Lexor" that is made by one of the world's best mobile phone manufacturers and runs a brand new operating system by Microsoft. Not "Nokia Lexor," not "Microsoft Lexor" - just "Lexor."

There is no doubt that Microsoft-Nokia negotiations started much earlier than October 2010 when Windows Phone was released. If only they took their time (I mean they both were already late in the game so there was really no rush) and thought of a different approach to launching that brand new product, the customer perception would have been drastically different.

I put a part of the Steve Jobs’ legendary phrase at the beginning of the article which Microsoft and Nokia failed to understand. The total is much greater than the sum of the parts – total being the brand new smartphone called "Lexor" and the parts being simply Windows Phone, Nokia and all the other phone manufacturers.

Read also:

• Three strategies that can give Nokia and Microsoft a chance

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Free on iBooks

This eBook is a brief insight into the core of the executive management of Sony Corporation, the core that is unfortunately filled with one of the most perilous human qualities – arrogance.

For a very long time now Sony has been known as an organization permeated by arrogant attitude toward their suppliers, their distributors and now their customers. This culture is felt everywhere in the world. I remember having meetings with Sony people in Moscow Russia when I consulted the largest electronics retailer in the country. These meetings were very adversarial and not a most pleasant experience. Also, as I worked with electronics retailers in Kuwait, Emirates, India, England, US and other countries, the opinions I received about Sony were the same. Nobody liked them and nobody wanted to do business with them because it was just too painful. Obviously, they could not stop carrying Sony products in their stores but some of them did try to reduce the assortment. Sony rarely partners. They dictate.

This work is an attempt to show how corporate arrogance affected the decisions Sony made along the way, the decisions that led to mistakes, mistakes that got them dethroned from the position of being the best and the most admired consumer electronics company in the world.

I hope this eBook helps other companies see a bigger picture of how decisions that are made inside their organizations affect their brand, their customer loyalty and profitable business growth. Very often top managers do not realize that many of wrong decisions are made not due to the lack of knowledge about the problem but due to the mentioned above human flaw – arrogance.

The 2nd edition includes financial updates from 2010 as well as other recent events associated with the Sony organization.

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