Nokia’s Next-Day Internal Competitive Analysis of the Original iPhone Largely Got It Right

Saturday, 18 January 2025

A few days ago Nokia unveiled their Design Archive at Aalto University in Finland. Fahad X spotted a real gem — an internal confidential slide deck shared within the company the day after Apple had introduced the original iPhone at Macworld Expo in January 2007. To the credit of the team that put this presentation together, they mostly got it:

• “iPhone touch screen UI may set a new standard of state-of-art: The new user interface may change the standards of the superior user experience for the whole market”. They quote Avi Greengart (a keen and sharp observer): “visually stunning and incredibly responsive”.

• The on-screen keyboard is mentioned only in passing on a deck titled “Other Great Innovations” as “Predictive, corrective input from on-screen qwerty-keypad”. Most of the existing smartphone makers simply could not believe the iPhone’s touchscreen keyboard would work. Steve Ballmer famously laughed his way into getting sacked from Microsoft over the iPhone’s price and lack of a hardware keyboard. BlackBerry was obsessed with hardware keyboards. This Nokia deck is remarkably open to the idea that Apple was onto something. It does have a bullet point, under “iPhone has the biggest impact on the definition of coolness” (true!), that states: “Even though Steve Jobs emphasized iPhone superiority to ‘Buttons’, it is to be expected that the Consumer QWERTY category will continue to succeed.” But still, this deck is remarkable for acknowledging the potential significance of the iPhone’s keyboard.

• It’s a swing and a miss regarding third party software: “No mention either of Java support, unusual user input method may be the reason. Lack of Java would shut out a big mass of existing SW.” So close to getting it right. The iPhone’s lack of support for the then-“dominant” Java ME (Micro Edition) platform did shut out all existing mobile software. But all of that that software sucked, big time. Sucked to develop, sucked to distribute, sucked to install, sucked to use. Not supporting it was a huge win for the iPhone, just like not supporting Flash Player wound up being a huge win for both the iPhone in particular and the mobile web generally.

• It’s weird in hindsight that the deck makes mention of Java mobile apps but the only mention of the web is in passing: “Browsing - Safari web browser – (reportedly most advanced ever) Full screen with touch zoom-in functionality.” This speaks to Nokia’s pre-iPhone mindset that mobile platforms were not really internet-first devices but instead were mostly for running shitty software from carriers (for consumers) or corporate IT departments. The iPhone’s excellent day-one version of Mobile Safari, with support for the “real internet”, not the “baby internet” (to use Steve Jobs’s own terms). It’s so easy to get blinded by the way things currently work and to assume they’ll keep working that way.

• The Nokia team nailed the remarkable and potentially industry-changing nature of Apple’s relationship with Cingular:

  • Cingular got multi-year exclusivity to iPhone. In exchange it gave up to Apple in many respects:
    • Cingular has allowed Apple to launch a device with WLAN and inbuilt services
    • The Yahoo and Google experiences are built in to the Apple phone
    • iTunes synch is done in cradle, no OTA
    • The multi-year exclusivity of the Cingular — Apple arrangement makes one ask if Apple gets a share of data revenues or Cingular iTunes revenues?
    • This may be a start for the whole market to change
  • iPhone will be sold both in Apple stores and Cingular stores
  • This is a marriage of convenience built on mutual distrust and recognition that each has assets the other needs

  Nokia concluded, “Other US operators need desperately something against Cingular and Apple” and advised that Nokia should “work very closely especially with T-Mobile.”

The most prescient line in the whole deck was this, recognizing that the iPhone was a UI breakthrough and that the entirety of Nokia’s offerings were far behind:

Nokia needs to develop the touch UI to fight back. S60 should be focus. Maemo platform is critical strength due to openness. Nokia needs a Chief UI architect to re-energize Nokia’s UI innovation across platforms and businesses.

I’d translate that as the presentation team imploring Nokia’s leadership to recognize that Apple’s primary priority was creating and delivering a great experience, both hardware and software, and Nokia had no such institutional value placed on design quality — on coolness — and would need to reinvent itself to prioritize the same ideals if it was going to compete.

Upton Sinclair’s famed adage is apt, as ever: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”