The squid and the jellyfish: Why Nokia, RIM, and Microsoft got the Economist cover snub

By Nathaniel Mott , written on November 30, 2012

From The News Desk

Everyone wants to believe in rebirth. Whether it’s the story of an orphan becoming a wealthy businessman, a former addict taking control of her life, or – to go all corporate on you – a business edging back from the brink of destruction, many of us have a fundamental urge to root for the big turn-around. As RIM, Nokia, Microsoft, and perhaps a dozen other veteran technology companies (I’m talking about you, HP, and your pal, Dell) face this inexorable sinking towards the abyss, the dramatic tension tightens, promising, if all goes according to the script, of a thrilling success story.

Unfortunately, such happy endings are rare. Apple is an often-cited example of a company that lost its way in the 90s, and if Steve Jobs hadn't come back around the company may have gone bust. The trouble with using Apple and Steve Jobs as an example is, as Sarah has pointed out, many of the "next Steve Jobs" contenders simply aren't.

There’s a reason why Nokia, RIM, and Microsoft aren’t part of the Economist’s nautical cover depicting the “big four” tech companies battling squid: They simply aren’t relevant anymore. Time is a cruel mistress who doesn't care that they were among the biggest companies of the 90s and the turn of the millennium. Each has misconstrued the lesson behind Apple’s success, and they’re paying for it. Apple isn’t in the business of radical breaks from the norm or reinvention – it’s all about staying true to the course and using existing momentum to reinforce future endeavors.

Indeed, Apple has been on a relatively straightforward path since Jobs’ return. Once it cut the crusts and narrowed its focus down to a few products, Apple released the service that would fuel its expansion for the next eleven years: iTunes. After the music service was launched, Apple has built its most lucrative product lines – the iPod, the iPhone, and the iPad – around the idea of expanding and maintaining iTunes’ dominance. That iTunes has started looking long in the tooth is almost irrelevant; because it was the genesis of many of Apple’s products, the service has burrowed its way to the core of the company.

Other companies were said to have their core as well. RIM had BlackBerry Messenger and Wall Street in its back pocket; Nokia had Symbian and, later, Windows Phone; and Microsoft had both Windows and Office, two mainstays of the personal computing revolution. Unfortunately for all three, their dominance has been superseded by newer companies that have solved the same problems without accruing all of the bloat surrounding the three former kings.

But, at least for now, each of these companies is shackled by its legacy. Microsoft is trying to make a clean break from the Windows of old and build a solid, cloud-based platform, but it has been plagued by poor sales of its Surface RT tablet and Windows 8. Nokia jumped from the “burning platform” of Symbian and MeeGo to Windows Phone only to find itself morphing into a perpetual pink-slip dispenser forced to dismantle its empire. And RIM, well...  RIM still hasn’t released its ace-in-the-hole, and it continues to shed customers and developers are losing interest in the platform – it’s hard to build a company without one of those markets, let alone losing both.

Of the three, Microsoft seems to have the best chance of survival. Its future may look vastly different from its present or past, and its “iTunes” analogue is quickly shifting from Windows and Office to the Xbox brand. Business is healthy enough – hell, the company sold almost a million Xbox consoles over Black Friday, despite the console being on the market for seven years now.

Perhaps the Economist should have chosen something besides squid to represent the four largest tech companies. The Turritopsis dohrnii, or “immortal jellyfish,” which is able to revert back and forth between its “youth” and its “mature” state to stave off death, might be a more apt comparison.

According to a New York Times report on the jellyfish, a leading expert theorizes that the secret to its longevity lies in its tentacles. When applied to technology companies, these “tentacles” could represent a core product, like Apple’s iTunes or Google’s search tools. RIM, Nokia, and Microsoft currently find themselves without tentacles, and are rushing to replace the lost limb before it’s too late.

It’s also theorized that harming the jellyfish causes it to regenerate sooner than it would under normal conditions. This “rebirth” takes some time, but helps to heal, or perhaps erase, the damage caused by an outside force. If there’s one thing Apple is good at, it’s “poking” itself before someone else has the chance – consider the way the iPhone and iPad make the iPod less desirable and you’ll have an idea of what I mean.

Most other companies don’t do that. They would rather float along in the sea of their own success, happy to stay the way that they are, without needing to be reborn. Whether it’s by our new emphasis on cloud-based computing, Apple’s reinvention of the smartphone, or too much time spent dallying on fruitless pursuits, these companies are being forced into rebirth against their will. Without new tentacles, they may find themselves unable to do so.

[Illustration by Hallie Bateman]