Dear Finland, it’s not Apple’s fault your economy’s flagging
Finland’s prime minister has blamed the tech giant for undermining its two chief industries. But is he being a bit unfair?
Stubb complaining: Finland's prime minister Alexander Stubb has blamed Apple for the country's flagging paper manufacturing and mobile industries. But laying the blame at the tech giant is wrong, and damaging, says Lizzie Meager
Due to an ageing population, reduced exports and a rapidly shrinking workforce, Standard & Poor’s have downgraded Finland’s sovereign debt rating from AAA status to AA+. Prime minister Alexander Stubb provoked quite the reaction when he pointed a finger at a somewhat unexpected target, claiming US-based tech corporation Apple is largely responsible for the nation’s economic downturn.
“We have two industrial problems – two champions that went down,” Stubb told CNBC. “I guess one could say that the iPhone killed Nokia and the iPad killed the Finnish paper industry, but we’ll make a comeback.” Finland is the main production site for Europe’s largest paper manufacturers, UPM-Kymmene and Stora Enso, and the industry is central to the country’s economy. Forestry accounts for around 20 percent of Finland’s total exports, but is expected to shrink again in 2014 for the fourth year in a row.
Nokia’s tale is a sad one. The manufacturer of the beloved 3310, many look to the brand with rose-tinted glasses, to an easier time when Snake was the only ‘app’ you’d ever need. That’s not to say many people would want a Nokia phone now. Among the cacophony generated by market leaders, most notably Samsung and – of course – Apple, Nokia has been lost. Since 2007 – when the first iPhone came out – Nokia’s share price has fallen by 75 percent, and in 2012, S&P downgraded its products to “junk” rating. The former king of mobile was acquired by Microsoft in April this year for $7.2bn.
The truth is that Apple is an easy target. If you really wanted to, you could probably find some obscure way to blame a lot of the world’s problems on it. US stocks are down? Blame Apple – its sheer size means just a one percent decline in its stocks can impact the Nasdaq 100 Index. Celebrities’ iCloud accounts have been hacked? Blame Apple – iCloud’s security issues allegedly made it too easy for the hackers, according to Business Insider. Finland is just another addition to the long list of businesses, industries, and now countries the corporation has reportedly obliterated in its cold-blooded clamour to world domination. Except for the fact that it’s not – in the second quarter of 2014, Apple’s iOS held just 11.7 percent of global smartphone market share, according to data by the IDC. Android continues to dominate the global market, possessing a whopping 84.7 percent, with the remainder shared among Windows Phone (2.5 percent), Blackberry OS (0.5 percent) and ‘Other’ (0.7 percent).
If you really wanted to, you could probably find some obscure way to blame a lot of the world’s problems on [Apple]
More accurately, Apple redefined the smartphone, giving the industry the kick it needed, and Nokia was too slow on the uptake. Up until 2012 – five years after the launch of the iPhone – Nokia was still the world’s largest handset manufacturer, when it was overtaken by Samsung. On that principle, surely the Korean mobile giant would be a more logical scapegoat for Stubb to point a finger at. Nokia’s penetration of the smartphone market was well-established through close and long-standing distribution relationships with mobile operators around the world and its decline happened gradually, giving the corporation ample time to regain its footing.
Stubb’s comment on the impact of the iPad on the paper industry is the most puzzling of all. The tablet market has been shrinking almost since the devices first came into existence; iPad sales have fallen by eight percent year on year since 2010. Tablet’s are great for many things, but to hold them – and not even just tablets, but one particular model of tablet – responsible for the decline of an entire industry seems slightly far-fetched. Plus, paper demand has been declining for decades, long before the iPad was even a dot on Apple’s periphery.
A more realistic suggestion for the cause of Finland’s economic downturn would be current affairs in the Eurozone. “EU sanctions against Russia and the severe slowdown in the German economy heavily impacted Finland’s economic health, with both Russia and Germany being Finland’s largest trading partners,” said Camilla Goodwin, Communications Officer at the Institute of Economic Affairs. “While the fortunes of a large firm like Nokia can have a major impact on countries with a smaller population, rising political risks with both Russia and the Eurozone crisis have a far greater effect, undermining confidence and deterring new investment.”
It’s not all bad – Finland was rated the fourth most innovative nation in the world this year, and Stubb acknowledges this fact, remaining optimistic: “Usually what happens is that when you have dire times you get a lot of innovation and I think from the public sector, our job is to create the platform for it.”
Stubb must busy himself proving to investors that Finland is able to keep up, and that it has more resilience in the face of healthy competitive innovation than its former darling of commerce, Nokia. His comments, however facetiously they may have been intended, could in fact prove quite damaging. Taking a swipe at an unsuspecting and somewhat guiltless party is suggestive of poor leadership and a reluctance to accept responsibility – not very attractive to investors at all.
