Nokia Knew in 2007 that the iPhone was a threat

An internal Nokia document from 2007 reveals the Finnish mobile pioneer’s reaction to the launch of the first iPhone. The presentation shows that Nokia recognized the threat, but management ignored the warning signs.

Nokia’s panic behind the scenes

When Steve Jobs unveiled the first iPhone on January 9, 2007, the mobile industry changed forever. While the public was enthusiastic, there was alarm behind the scenes at the then market leader Nokia – at least among some people. A recently published internal document now provides fascinating insights into the Finnish company’s reaction to Apple’s revolutionary smartphone.

The presentation with the title “Apple iPhone was launched (yes, it is ‘iPhone’*)” was created just one day after the iPhone was unveiled (via 9to5Mac). However, the slightly mocking tone of the title belies the actual content: the document reveals a mixture of panic, fear and awareness of the enormous challenge Nokia faced.

The internal document comes from the recently launched Nokia Design Archive. Aalto University in Finland curates this fascinating collection, which provides deep insights into the workings of the former mobile communications giant. In the case of the iPhone, a nine-person team analyzed the threat posed by the iPhone and came to alarming conclusions: “The Apple iPhone is a serious challenger in the high-end segment.” The innovative touchscreen user interface in particular was identified as a potential “new standard” and “biggest threat.”

Deaf ears in the executive suite

Although the team recognized the threat, Nokia’s subsequent history shows that leadership largely ignored the warning signs. The company underestimated the importance of usability and the “coolness factor” of the iPhone. Instead, Nokia focused on perceived weak points such as the high price and the lack of a physical keyboard.

The analysts warned that action is needed and recommended hiring a “Chief UI Architect” to reinvigorate Nokia’s user interface innovations across platforms. But this advice went unheeded. Despite these findings, Nokia was unable to respond adequately.

The company, which once had a market share of around 50 percent in the mobile phone business, lost its dominance within a few years. In 2013, Nokia sold its mobile phone division to Microsoft – and that was the beginning of the end.