Interactive Value Creation, Apples and Nokias

Recently I’ve been talking with my colleague Esko Kilpi about interactive value creation and its relation to social media. In Esko Kilpi’s new blog he writes (I suggest you to follow his space, even though part of the articles are in Finnish, there will be highly relevant stuff in English too):

As the demands for higher value and creativity are the norm today and the complexity of offerings has grown, we have begun to see that division of labour has reached its points of diminishing returns.”

I agree. The industrial production logic has reached its limits in the increasingly networked society. He continues to elaborate that higher value creation is impossible without interaction. There is a move from action dominated by division of labor to interaction driven by increasing complexity. The result is higher value activity.

My example that follows is very personal regarding the Finnish psyche: why Apple is doing better in interactive value creation compared to Nokia?

Closed Design Process

Apple is very well known for its secrecy in creating new product. Nokia is well known for embracing openness through open source and open platforms. So from interaction point of view, Nokia should be doing better. Or is it?

In innovation, if you believe you know better than anyone in the world  how to complete a certain task, there are good reasons to operate in a closed manner. If you know for sure that in-house resources, ideas and capabilities are limited in achieving a certain goal, you should open the process up for outside contributions.

Apple has a focused design process and knows how to do it. It has a vigorous design process outlined here, including some basic principles grounded in perfectionism:

Pixel Perfect Mockups [...] removes all ambiguity.
10 to 3 to 1
: [...] start with seven in order to make three look good.

Nokia is known to be an engineer driven land, where production efficiency often has the ability to dominate final design decisions. They might have better technical devices, but not the most original and detailed approaches to UI design. What matters is the ability to produce a truck-load of devices with minimum costs.

Apple constantly designs new products ending up as trendsetters. Their activities doing so seems almost effortless. In the background, there is obviously the unquestionable belief in their own design ability.

Open Value Creation

Let’s take the iPhone. It’s beautifully designed. What Apple doesn’t know, is how people would use the device. Every usage pattern is contextual in nature.

What you have on an iPhone is a minimum set of features that would be needed for an internet-connected phone and multimedia device. The end-user is the final missing piece in completing the product. Apple created the Appstore, so that people could come up with new ways for using the device. If you are a sailor, you might need some maps for sailing. If you love restaurants, you might have a restaurant guide. If you are a Star Wars fan, maybe you have lightsaber in your pocket. The clue is that Apple doesn’t have the resources nor the crystal ball to say how the device would be used.

Open interactive value creation is about designing the bare minimum and let people build on top of the platform and have the ability to try (almost) everything. Apple has invested in communicating their design principles regarding the iPhone. Take a look at any of the engineering documents and you see the difference. That’s why so many applications look so great: everyone is working on an app as if it would be eventually approved by Steve Jobs himself.

Ambiguity of Designing for Demographics

Nokia has a very different strategy. It runs focus group studies, figures out various demographics and designs phones for the imaginary average middle of the gaussian shape. At least that’s how it looks like. You end up with products like the Nokia 5300 XpressMusic and a myriad of other differently branded products obviously targeting different demographics.

As a result your phone will be full of pre-loaded apps, music and other details that a typical average user in the target demographic might use (let’s bet in this case we are talking about a 25-35 year old hip cool group that has  a life). The end result? You use 5-10% of the features, because nothing is really exactly right in context.

This is why designing for demographics creates unnecessary clutter and ambiguity in product design. Apple seems to know this by making the phone as simple as possible: one device, you customize the rest for yourself: apps, music and physical appearance.

The byproduct of the way how Apple designs their core offering and how people build on top of it is meaningful conversation. Creative work, that people do in interaction. Pushing boundaries.

What really matters is context. The context of use. The conversation that happens around a particular context. The way how the company listens and links this conversation back to its R&D. Designing a product too far and insisting on saying what it is doesn’t result in interactive value creation.

As far as engineering goes, Nokia is very open on the technical level but lacks the ability to be open on the design level.

Nokia is very open in the beginning, but behaves more closed as they make final decisions on how the device would be used.

Apple is very closed in the beginning, but becomes more open towards the long tail of usage.

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  • markkupelkonen

    Dear Teemu,
    Excellent points and I very much agree on many aspects of the analysis. One point I personally slightly disagree with is “Human element” of demographical pre-thinking.

    In order a person to “want” additional Apps and elements in a functional communication tool such as a mobile device you need to have certain elemental human needs filled.

    By proving People pre-build use scenarios Nokia has enabled many (millions) to learn more about the possibilities of the mobile World. Apple has in fact chosen a “target audience” of free thinkers and people who have time to sip their “Lattes'” and dream about the ultimate application or design element. Some people in their current battle for livelihood appreciate the factory presets. Email for everyone – a good quality camera at a low cost – banking as security for the people without a home. Just examples.

    Nokia is Connecting People (in wide numbers) – Apple is building on a different strategy. There will be room for both unless…

    Being an owner of multiple Apple and Nokia devices I would say the truth is Out there. Thans for your nutrients of Thinking Teemu.


  • tarina

    Markku, thanks, great points. I perfectly agree these are different strategies. If you want to set a trend, you don't aim to be the largest mobile phone manufacturer in the world. If you want to be the biggest, you use open source as much as possible and improve your production processes. Fully open source in fact is even more about having the ability to try everything, it just takes a lot more time to arrive at great design decisions.

    Kilpi pointed out to me that sociologically the behavior of asking what apps you have on your home screen on an iPhone is a new kind of phenomena. We share great apps by asking our friends what they use. The home screen in a way defines who you are.