> Europe had iPhone precursors before iPhones were a thing

That’s the point. Where are they? They couldn’t compete due to lack of scale. They couldn’t scale due to structural restrictions on scale.

The next iPhone isn’t going to come from Europe. It may be first developed there. But an American or Chinese copycat will rapidly advance upon them.

The previous range of state of the art smartphones did come from Europe. They couldn't compete but not because of structural restrictions on scale - just because of a series of bad decisions that were independent of the continent they were developed on.

It's more likely the next generation will come exclusively from China - not because of structural restrictions on scale but because it's deliberately built up its electronics manufacturing base while the US and Europe allowed theirs to dwindle because short term profit margins outweighed long term industrial strategy.

> previous range of state of the art smartphones did come from Europe

Right, but where are they now? The article says in just its third paragraph that "Europe used to pack a punch." Up to 2000, "nearly a third of the combined value of the world’s 1,000 biggest listed firms was in Europe, and a quarter of their profits." That aligns with the state of the art having a home in Europe around then.

But something changed over the past 20 years. It's apparent from the outside looking in. But it remains--as made apparent by this thread--shockingly controversial within the Continent.

>That aligns with the state of the art having a home in Europe around then.

Does it? Bigger doesn't mean more state of the art. Comcast isn't state of the art. Exxon isn't state of the art. Most big companies aren't Apple.

Moreover, the size of American companies is somewhat exaggerated cos of liquidity being pumped into the stock market.

The US gov didn't pump liquidity directly into the stock market: they reduced the cost of borrowing, which increased investment in basically everything, e.g., collectible baseball cards. My point is that investors bid up the price of European stocks as well as US stocks.

Who says the change was in Europe? The US got around to leveraging its comparative advantages in internet tech and grew some huge companies. The Facebook was never going to emerge from Poland, no matter how much public policy tried to support smart Polish engineers building PHP frameworks for people to upload pictures of their friends. Europe did not create any Facebooks, but achieved comparable productivity and GDP growth rates spread across a more diverse range of fields, and excelled in fields like Coronavirus vaccine research despite comparatively modest success stories in selling digital advertising. It is not obvious that we are worse off as a result, or that a giant company like Facebook is substantially more likely to come up with the Next Big Thing in technological progress than a merely large one like Siemens, or even a reasonably well capitalised research company well outside the top 1000 firms. The value of growth is demonstrated in goods and services, jobs and potential for goods and jobs across the entire economy, not in vanity metrics like number of companies with enough monopoly power to show up in top companies indices.

(And China was always going to move up the value chain in consumer electronics and grow faster than both of us; when it does so further in the next couple of decades it need not represent a flaw in US/European policy)

Nokia? Lack of scale?

Nokia couldn't compete because they made a string of incredibly poor investment and management decisions, such as the N-Gage, until their mobile division was eventually bought out by Microsoft. Even with Microsoft's scale they couldn't turn things around.

The reality is that there were a number of mobile phone manufacturers making lots of really bad decisions whilst trying unsuccessfully to compete with the likes of Apple and Samsung. They aren't gone from the market because they lacked scale: they're gone because they were stupid.

Microsoft buying Nokia had nothing to do with saving the company. Arguably, buying Nokia and running it into the ground was an expensive gamble to push Windows 8 Mobile + Windows 8 desktop at any cost. Which was already failing before the acquisition was even complete. I'm still stunned the Finish government allowed it to happen. Nokia went from, "probably could turn this around" to "smoking wreckage of a company" in less than a year.

At least from Risto Siilasmaa tells a different story in his book. He was in the Nokia board in the last good years and then lead the effort to turn things around. If I remember correctly, he writes in his book that at the point of sale to Microsoft, Nokia was already very close to go under. In Finland, it is generally seen that the deal with Microsoft was a complete steal from Nokia, they got much more than the value was at that point and Microsoft even agreed to loan them hundreds of millions to buy full control in Nokia-Siemens networks.

> They couldn’t compete due to structural restrictions on scale.

Mhm. Cause a working marked with healthy competition never did anything good.

Just one question, how did European car makers then become what they are? Even though its impossible?

> how did European car makers then become what they are?

Cars have for a long time been tightly linked to the military. Every major Western car maker up to the last decade at some point built tanks.

So basically you're saying Europe should start another World War to make sure their companies stay competitive?

> you're saying Europe should start another World War to make sure their companies stay competitive?

No. You asked how Europe got certain economies of scale. I answered. Through the engines of past wars. Future wars don't guarantee similar results.

If Europe wants globally-relevant big businesses, it will likely require social upheaval on the scale of war. (I’m not betting on it.)

The precursors to the iPhone were just garbage (I say this as a power user of these devices). There is a reason Android dropped their existing plans to mirror the iPhone form factor. It was a fundamental shift that fixed so many usability problems that it started the entire smartphone revolution.

> And don't forget ARM was initially a UK/EU design.

For sure, but ARM doesn’t manufacture and has not meaningfully stepped into the datacenter where low power could be a home run with some more effort.

>Arduino and Pi still are.

Yep, but these serve very little of the public. The Pi as a desktop for regular users has failed.

These are great companies but they don’t have the engineering and financial muscle to completely reshape entire industries. You need to own the stack top to bottom to do that kind of change and those companies are innovators at just one level.