Comments on: Is Nokia in denial? http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/ for students and teachers of AP and IB Economics Sat, 22 Nov 2008 09:53:49 +0000 http://wordpress.org/?v=2.6.3 By: Jens http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3822 Jens Tue, 22 Jan 2008 08:18:33 +0000 http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3822 Is Nokia in Denial? No, they're not. They understand pretty well the impact of the iPhone on the mobile telephony market. And I am sure they certainly think about bringing out phones with a similar feature set and will try to copy some of the smart pricing approach that Steve J. has negotiated with operators. But it does not surprise me at all that they are not proclaiming that as their strategy. Why should they? It wouldn't be a smart move to name a competitors product as benchmark. It is much wiser to point out the technical unimpressiveness (by pointing to a lack of certain features). Additionally they are not putting themselves in a me-too-position by copying a competitors product but rather put the customer in focus. That's what customers want to hear, anyway. And if customers demand music phones (which Nokia btw has since ages) then so be it. And Nokia can still claim that it is "just coincidence" that an iPhone like music capable phone is launched briefly after the launch of the iPhone. Customers demanded it. Is Nokia in Denial?

No, they’re not. They understand pretty well the impact of the iPhone on the mobile telephony market. And I am sure they certainly think about bringing out phones with a similar feature set and will try to copy some of the smart pricing approach that Steve J. has negotiated with operators.

But it does not surprise me at all that they are not proclaiming that as their strategy. Why should they? It wouldn’t be a smart move to name a competitors product as benchmark. It is much wiser to point out the technical unimpressiveness (by pointing to a lack of certain features). Additionally they are not putting themselves in a me-too-position by copying a competitors product but rather put the customer in focus. That’s what customers want to hear, anyway. And if customers demand music phones (which Nokia btw has since ages) then so be it. And Nokia can still claim that it is “just coincidence” that an iPhone like music capable phone is launched briefly after the launch of the iPhone. Customers demanded it.

]]> By: Dana Yeon http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3607 Dana Yeon Tue, 08 Jan 2008 16:58:44 +0000 http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3607 Apple has been famous for its innovation for a long time now. Even the 1984 commercial of Apple's new personal computer is stunning. Drawing inspiration from George Orwell's novel, 1984, Apple manages in successfully portraying a 1984 without an infringement in personal freedom, which is exactly what is portrayed in the book. Getting back to the point, Apple has revolutionized not only the computer industry it failed to penetrate the first time round, it has become one of the most "hippest" gadgets to carry around nowadays, whether they be iPods or iPhones. Naturally, Nokia is clearly sensing the threat posed by the burgeoning phone sector of Apple. Otherwise, Nokia wouldn't be befuddled to the extent they are to make contradictory comments, and neither would they go out of their way to deny the fact that they are indeed imitating iPhones. This is not new: Microsoft copied iPods, and now it's Nokia. At the end of the day, economic principles are true: interdependence is the key in oligopolies. Apple has been famous for its innovation for a long time now. Even the 1984 commercial of Apple’s new personal computer is stunning. Drawing inspiration from George Orwell’s novel, 1984, Apple manages in successfully portraying a 1984 without an infringement in personal freedom, which is exactly what is portrayed in the book. Getting back to the point, Apple has revolutionized not only the computer industry it failed to penetrate the first time round, it has become one of the most “hippest” gadgets to carry around nowadays, whether they be iPods or iPhones. Naturally, Nokia is clearly sensing the threat posed by the burgeoning phone sector of Apple. Otherwise, Nokia wouldn’t be befuddled to the extent they are to make contradictory comments, and neither would they go out of their way to deny the fact that they are indeed imitating iPhones. This is not new: Microsoft copied iPods, and now it’s Nokia. At the end of the day, economic principles are true: interdependence is the key in oligopolies.

]]> By: Teemar Ratanasirigulchai http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3602 Teemar Ratanasirigulchai Sun, 06 Jan 2008 06:45:23 +0000 http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3602 What exactly is being sabotaged? The interdependence between the companies benefits the consumers with lower prices and innovative products, however, the products may just be cheaper copies of each other after a while. It is a competition for market share, and if a company can benefit from introducing a new product into the market, then it probably should (disregarding ethics, providing that some products are unethical). The claim that Nokia is driven by the consumers has some truth to it, however, the consumers are also influenced by Apple. With the iPhone, the consumers tend to lean towards the “revolutionary features.” Because consumers demand these new features, such as downloading and playing music, Nokia is providing them. Nokia is truthful that the consumers are driving them to create their new phones; however, they ignore the catalyst for the demand for music playing/downloading cell phones. Thus, Nokia is being influenced by Apple. They, however, probably consider it, at most, as an indirect influence. I recall that music playing cell phones have been out for at least 2 years now… so is it really the music playing that people want? Or is it the downloading? Possibly the all in one – downloading, music, touch screen, internet combo? It's all about the innovation. What exactly is being sabotaged? The interdependence between the companies benefits the consumers with lower prices and innovative products, however, the products may just be cheaper copies of each other after a while. It is a competition for market share, and if a company can benefit from introducing a new product into the market, then it probably should (disregarding ethics, providing that some products are unethical).

The claim that Nokia is driven by the consumers has some truth to it, however, the consumers are also influenced by Apple. With the iPhone, the consumers tend to lean towards the “revolutionary features.” Because consumers demand these new features, such as downloading and playing music, Nokia is providing them. Nokia is truthful that the consumers are driving them to create their new phones; however, they ignore the catalyst for the demand for music playing/downloading cell phones. Thus, Nokia is being influenced by Apple. They, however, probably consider it, at most, as an indirect influence.

I recall that music playing cell phones have been out for at least 2 years now… so is it really the music playing that people want? Or is it the downloading? Possibly the all in one – downloading, music, touch screen, internet combo? It’s all about the innovation.

]]> By: yunqimok http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3552 yunqimok Sat, 15 Dec 2007 04:01:18 +0000 http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3552 Michael sentiments exactly. Oligopolies are willing to sabotage everything in order to gain market power, as they know that in the long run, gaining market power will lead to profits. Nokia, one of the world's leading cellphone makers, feels threatened by Apple's new iPhone, and thus creates a substitute for it. In a way, the fight between oligopolies is even better for consumers, as new and improved products are constantly being created, and the prices are also constantly being pushed down as firms race to create something absolutely un-imitable. Michael sentiments exactly. Oligopolies are willing to sabotage everything in order to gain market power, as they know that in the long run, gaining market power will lead to profits. Nokia, one of the world’s leading cellphone makers, feels threatened by Apple’s new iPhone, and thus creates a substitute for it. In a way, the fight between oligopolies is even better for consumers, as new and improved products are constantly being created, and the prices are also constantly being pushed down as firms race to create something absolutely un-imitable.

]]> By: Michael Daily http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3544 Michael Daily Thu, 13 Dec 2007 03:48:49 +0000 http://welkerswikinomics.com/blog/2007/12/05/is-nokia-in-denial/#comment-3544 I find the concept of interdependence between firms in an oligopoly pretty funny. Especially in this situation since the executive vice-president of Nokia is denying actions influenced by Apple. Nokia's actions make sense, but it is pretty funny that they would deny something so obvious. It is even more funny that they call Apple's product "technilogically unimpressive," since they are the ones copying its design. I find the concept of interdependence between firms in an oligopoly pretty funny. Especially in this situation since the executive vice-president of Nokia is denying actions influenced by Apple. Nokia’s actions make sense, but it is pretty funny that they would deny something so obvious. It is even more funny that they call Apple’s product “technilogically unimpressive,” since they are the ones copying its design.

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