The Smartphone Bloodbath: One Business Lesson from it

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Growing up as a student, my father always told me when it was time for exams, “Do the easy questions first. Then you can tackle the hard ones later.” I found that to be very good counsel, seeing that I have failed very few exams in my life. Likewise, in business, tackle the easy markets first, then push in the tougher ones. This is simple common sense. Yet, some of the most outstanding technology companies of our time failed at this.

Permit me to paint the picture with even more depth. When you are weak is not the time to attempt to conquer hostile territory. Don’t go being an aggressor in hostile territory right away. Build up your strength by taking out easy targets first. Build capacity as you go. Go for the low hanging fruit, and use whatever gains you make on that to tackle the higher placed fruit.

Years back when Nokia adopted Window Phone as their smartphone platform, they made a decision to attempt to conquer the US market. I said back then that it was a bad idea. They needed to focus on where their strengths lay, and then build. They were in a position of weakness. Investing too much resources in conquering a hostile market was a bad idea. They tried. And it failed. Today, Nokia still does not have the US market, but their Lumia phones are doing well the most in regions where Nokia has traditionally been strong – emerging markets. Lumias are flying off the shelves in South America, India and Nigeria.

How about BlackBerry? This was a company that has struggled in recent years for a number of reasons. They addressed one of them – creating a new modern OS, then failed woefully by ignoring this simple lesson. Rather than push the new OS10 smartphones in the markets where they were traditionally strong, BlackBerry decided to – in the words of a friend – outApple themselves. The new BB10 devices were overpriced and unrealistic in BlackBerry’s strongest markets. Fail.

When in a fix, push where your strengths lie and where you have a ready market. Then attempt more difficult markets from there. It really is very simple. While Nokia and BlackBerry fought futile battles on the US front (a market that is currently hostile to them), new entrants went for the easier markets and are thriving. TECNO is making money from Nigeria and other African countries. Xiaomi, Lenovo and others are reaping huge profits from other emerging markets.It would have been foolish for TECNO or Xiaomi to have taken on the US market from the word go.

Huawei tried it (sort of) – and failed woefully. Huawei still survives because they did not throw too much of their resources at the US market while ignoring their traditional areas of strength. They were smart enough. Mobile manufacturers can thrive outside of hostile environments and still be a force to reckon with. But should any decide to make an attempt on such hostile markets, they need to at first focus on the markets where they are strong and have ready buyers.

If Microsoft wants to succeed after acquiring Nokia’s mobile divisions, they need to implement this strategy. If not, a few years from now, this acquisition will be a certified failed adventure. Emerging markets hold the key to smartphone success for Microsoft.

As a business person, I have found dad’s advice to be sound. There were times that under pressure, I ventured out of my area of competence and ready market. It always ended bad. Eventually, I learned that the lesson was true for business as it is for exams. Are you a business person, or an entrepreneur? Remember this lesson from Grandpa Mo: In an exam, always solve the easy questions first, and then tackle the tough ones after that. When low on resources or in a weak position, focus on your strengths and easy markets. In other words, discretion is the better part of valour.

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