Wednesday, October 15, 2014

Finland and Apple

On Monday, Finland lost its AAA credit rating.  This is the only country that paid its WW I war era debts to USA and the country that managed to maintain it independence from USSR after WW II by paying its onerous reparations through heroic efforts that included housewives turning in their wedding rings for the gold.  These are people who pay their debts.  So for them to lose their AAA rating, there must be something seriously wrong with their economy.

There are two major things wrong with the economy of Finland these days—the collapse of Nokia and the continued decline of the global paper industry.  The problems at Nokia are especially sad.  As recently as 2007, it was arguably the world leader in cellphones and the hardware that made them work.  Then came the iPhone—a device that wasn't much of a phone but was a spectacular hand-held computer—and suddenly, those gems made by Nokia looked like something from the dark ages.  Things that once mattered so much—range, signal clarity, durability, etc.—were suddenly irrelevant in the new world where the new abilities such as numbers and availability of applications now dominated.  Nokia could have responded with a line of smart-phones of its own but the company structure was so dominated by cell-phone experts, it had no institutional way to fight back.  Eventually, it would be sold to Microsoft for the fire-sale price of $7.2 billion and the layoffs—over 12,000—began.  For a country with barely over 5 million people, this is a catastrophe.

The paper industry also became a Finnish specialty.  Here in Minnesota, every paper mill in the state is owned by Finns.  They had achieved global dominance through hard-work and innovation—Finnish paper-making machinery was extremely reliable and efficient and Finnish management techniques were first rate. What could possibly go wrong?  People could stop buying and using so much paper—that's what.  Computers had long promised a paperless society but had in fact delivered a paper boom when desktop publishing exploded in the 1980s.  Then came the iPad and its imitators and suddenly, the promise of the paperless society began to come true.

So it wasn't much of an intellectual stretch for the Finnish PM to blame its economic problems on Apple's two big marketing breakthroughs—the iPad and the iPhone.  Finland makes others things of course, but paper and cellphones were the two major accomplishments.  And for all the brave talk, replacing them as engines of the national economy will be damn difficult.

Apple Charged With The Death Of An Entire Country's Economy

The Huffington Post | By Alexis Kleinman 10/13/2014

Apple is more powerful than you think, apparently -- it is being blamed, in part, for an entire country's economic hardships.

"The iPhone killed Nokia, and the iPad killed the paper industry, but we’ll make a comeback," Finnish Prime Minister Alexander Stubb told CNBC on Monday.

For those unfamiliar with the intricacies of the Finnish economy, the paper industry and cell-phone manufacturer Nokia were once Finland's two biggest industries. Nokia in particular was Finland's pride and joy until 2007, when the iPhone was first released.

Since then, Nokia has been in a steady decline. Microsoft bought Nokia for $7.2 billion last April and immediately started to cut jobs. Last July, Microsoft announced it would lay off at least 12,500 Nokia employees.

A Bloomberg Businessweek story from last August pointed out that Nokia and paper were declining due to the rise of new technology and the end of print, and Stubb last June famously accused Apple co-founder Steve Jobs of taking away Finland's jobs.

Sure, Finland would likely be better off if Nokia had stayed on top and if the print industry weren't dying, but Apple can't take all the blame. After all, Google sells more Android phones than Apple does iPhones, and iPads certainly aren't selling like they used to. Plus, isn't the Kindle partially to blame for the death of print as well? Maybe Stubb should have chosen a broader target than Apple -- like technology.

Apple did not respond to a request for comment from The Huffington Post. more

2 comments:

  1. Clearly we have things wrong as long as we continue to allow markets, products, and credit ratings to rule our lives…much less to suppose that those same things can or should be allowed to rule our world. (Or worse, that there are some insane lunatics who might believe that markets, products, and credit ratings should and must rule our world because, in their opinion, “that’s what god intended,” or because in their opinion, “that’s how things have always been,” or because in their opinion, “money talks and whoever has the most money at the end wins!”

    I believe we must make our human economic system “real” and “compatible” with what the earth’s eco system requires…with whatever the earth’s eco system can actually tolerate “realistically” in order to provide for the well-being of all forms of life on earth (not just those who are bankers and financial experts). And I believe we must be quick about it (to step up our pace of making “that” transition to “that” whole new “real” human economic system that will support and nurture the earth’s eco system and not compete against it. Winter is coming and it just might stay here forever (or turn the earth into a scorching, desolate, extreme weather watery hell) if we don’t do something soon to change our ways, habits, and assumptions about what money can, or can be allowed, to buy, and what it can’t!

    Markets, products, and credit ratings will either count for nothing in the future of our world…or there will be no world left “inhabitable” by the likes of us. And that’s what I believe, if beliefs and opinions are all that count. But I also believe it could be a wonderful world if enough of us could agree on enough actual facts that could turn things around and make life on earth the true pleasure it can be…when the crops are harvested, the larders are all full, and the Thanksgiving for it all is celebrated with great joy over many days…long into every night…and all through the long cold winter in warmth and comfort.)

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    1. Well written! I could not agree more! Thank you!

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