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James Ashton: When I was being told of Nokia's strength the death spiral was not far away

  • @mrjamesashton

Despite the notion that modern technology changes in the blink of an eye, time passes so slowly in some of the corporations that are supposed to be at the cutting edge.

It is a little more than two years since Olli-Pekka Kallasvuo assured me of Nokia's long-term viability. A change of management and strategy later, and this week's profits warning shows it is still no closer to working out how best to challenge the iPhone, which Apple brought to market in 2007.

The Finnish mobile phone maker had seen off one set of competitors, Mr Kallasvuo explained to me in his staccato English at an industry conference in Barcelona. It was more then capable of battling with another cohort.

It is true that the days when Siemens and Alcatel churned out handsets is long over. But in the era when Apple, Samsung and HTC lead the way – some aided by the ubiquity of Google's Android operating system – Nokia looks to belong increasingly in the past, not the future.

Steve Elop, the Canadian chief executive Nokia imported to Finland to lead a turnaround, bet the farm on teaming up with his old employer, Microsoft. Ditching Nokia's operating system and throwing in its lot with Windows wasn't quite hitting the panic button, but not far off. It might have proved the right choice if the first product of the alliance, the Lumia, had been a roaring success. It wasn't.

Instead of simply partnering, Mr Elop should have fashioned a merger. Now that nimbler rivals are eating into Nokia's dominance of the low-cost ranges on top of its woes in the smartphone market, we are seeing the beginning of a death spiral at what was once Europe's most important technology company. The sad thing is, on that day in Barcelona, the die was already cast.