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« Am Ready to Call it: Apple iPhone world's biggest smartphone maker Q2 of 2011 | Main | The Ecosystem Myth and Stephen Elop's Alternate Universe at Nokia »

June 07, 2011

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Comments

cibyr

I know it's a bit of a side-note to this blog post, but it's a bit unfair to pick on the original iPhone for not being a hit outside the US when it was only offered in a handful of countries (because Apple was trying for a repeat of their AT&T exclusivity deal).

Roo44

I just hope the billions in "concessions" this clever CEO was able to negotiate out of Ballmer for this agreement is enough to buy some very nice flower arrangements for Nokia's funeral.

PhoneBoy

Wow, Tomi. If the channel has truly revolted against Nokia, incompetent is not nearly a strong enough word to describe what Stephen Elop is doing. Hopefully the Nokia Board takes swift action.

virgil

You know... you might be right.
Which means Nokia is already dead: the fist Nokia-WP7 phone will not be a success (*) because the carriers won't let it be a success.
Ouch.

(*) Unless it is truly a world-changing device. I find this highly unlikely - if Nokia could do such a device, the OS on it wouldn't really matter that much (and anyway, it wouldn't be important that the OS is WP7)

Jonathan MacDonald

In my opinion, this post is 100% spot on.

I totally agree with every single point and it would only be half as tragic if it weren't for the fact that so many of us in the industry saw it coming AND WARNED THEM.

But no...the arrogance is incredible...the Nokians let by the Dark Lord Elop and the Grand Master Ballmer (one of the least successful CEOs every to walk on planet Earth - check the share prices over his term) are determined to 'do things their way' - which is the polar-negative way our technological, sociological and commercial marketplace is moving.

I tried to tell them, you tried to tell them, we all tried to show them.

As the ancient Chinese proverb says - "when the winds of change are blowing - you can either build a shelter or a windmill"

Nokia are in the shelter game now.

But the wind is strong my friend. The wind is very strong

agoedde

Much as I disagree wit your views on where the current leadership in smartphones lies (it's certainly not Japan!), and in your assessment of the performance of Nokia's smartphone business pre-Q1-2011 (remember that blog post you wrote about artificially propping up market share in Q1-Q3 2010?): Your are spot on about Nokia's current situation with the operator distribution channel. I don't see Nokia phones in the operator shops anymore - unless I really search for them. Even then, very few models are carried, and at unattractive prices. As for adoption by customers: I have, so far, seen two N8s, one E7, one C6-01, and not a single C7 in the wild. I fear for Nokia's survival, not in 2012 and beyond, but this year.

RobDK

Let's face it Nokia's Symbian smartphones were not used as smartphones. They had appalling GUI's. They were difficult to use, and very few functions were used. They were slow with underpowered processors, stuttering transitions and slow response. Second grade internet and web experience. I have tried the N8 so-called iPhone killer. It was an appalling experience. Symbian is dead and we should be glad for it!

The questions for Nokians is why they were not able to bring a coherent narrative response to the iPhone, why the software was not good enough, and why it took 4 years to respond... Nokias collapse will be a text book case for business schools the world over for many years to come!

Øyvind Mo

Nokias demise is terrible for its staff and shareholders, of course. But it will accelerate the disruption of the mobile business, most notably the carrier's unsustainable dominating role. Consumers want advanced phones and simple network services, not the other way around. The carriers have been dominating many of the world's markets for far too long. Especially Android's march to victory will hopefully commoditize all network services, since Android phones are routinely rooted and modified outside of any operator control. It's about time. And it will be much easier without Nokia in the game. Ironically the carriers are bringing this upon themselves by outing Nokia, leaving all the room of the low/mid segment for Android.

Nelson

If this is happening, Nokia's Board has to act fast. In this industry a competitive portfolio of products is a critical factor of success of any company, without it fierce competition will drive it out of the industry. Nokia doesn’t possess a competitive portfolio of products anymore thanks to Elop. Now I believe that Nokia has the financial resources to pass through the year even if their revenue decreases significantly, but the board must decide what to do next, and honestly I don’t they now what to do anymore. I guess they’ll hang to the WP7 hope, and that won’t be enough. If this road is taken, then we will have a finish Motorolla. On the other side if Nokia Board acts quickly and brings Anssi, or has Tomi suggested Jorma, I don’t now if there is still time to save Symbian, or even make an All-in on MeeGo. Symbian is death right now, it was chop to pieces and sold by its residual value to Accenture, the developer already fled, and MeeGo might take too long to implement successfully.

Sander van der Wal

Tomi, are these people talking about European sales or worldwide sales?

Carphone Warehouse is definetively talking about European sales, and what you are seeing in Europe is that demand for Nokia smartphones has disappeared, because people now either want an iPhone or an Android. You cannot extrapolate that without confirmation to other markets.

GJW

So, how long is it going to take before Elop the Dead (parrot) gets the boot, and should Vanjokki replace him? (Note that Olilla is leaving already.)

A Reader

Great blog - very thought provoking as always ....... but it is very easy to be wise after the event.

If we had a time machine what would we do differently, not only in 2011 or 2010 but even in 2009?

As with hindsight Nokia seem to have been making a number of "big bets" for a number of years - none of which have played out as intended. Perhaps this was one of Nokia's biggest failures R&D and their ability to capitalise on it

The Apple and google story has had a huge disruptive effect on the market with their views of what the future looks like - it would have been interesting to know what Nokia's vision was. Perhaps this is what went wrong lack of clear vision...........

Keep on with the thought provoking blog

Nicolaas

The most frightening thought in this excellent article is the notion of Elop using Microsoft software to do teleportation and time-travel with a mobile phone. Your body would end up in one Tokyo, your head in New York, your arms somewhere in the Pacific Ocean, your legs would never be found back again and in the case of time-travel you would end up in a big blue void ;).

Steve Barker / @stevebarker

Hi Tomi

As good a read from you as ever, but I wonder what you make of Apple's iMessage service announced yesterday? This is designed to compete directly with your favourite medium - the good old SMS (no dancing, now!) Do you think the carriers will punish Apple the same way you maintain they are now punished Nokia for buying Skype?

Will this be the first 'death nail' in the Apple coffin?

German

Hi Tomi,

Your Skype fear is overblown. In the US they have really expensive data overages (or only sell you data if you buy unlimited minutes) and in Germany I burned through EUR 10 prepaid with just having the phone check e-mail every 15 minutes...

Otherwise you are spot on and the only hope for Nokia is to fire Elop and switch to Android with a custom Nokia skin. It's interesting what HTC is putting out recently with getting people to make apps for their Sense UI. I even can see a Nokia skin supporting QT -- why not?

Also the convergence of tablet, phone, and computer - see Windows 8 and Apple's Lion & iOS would favor Microsoft and I can see why Elop would push there. But I just feel that Google is further along with it's cloud offerings which will be at he heart of this converged world -- also they don't seem to be too restrictive otherwise Amazon wouldn't be able to muscle in. I am just more confident that Nokia could carve out a very profitable space in the Android eco system.

Regarding Symbian, Mego, Windows Mobile 7 -- the train has left the station. I feel there is no room for a third big ecosystem and even Blackberry aknowledges hat by making it's Playbook run Android apps.

Tomi T Ahonen

Hi all

Excellent comments, thank you everybody. I am on heavy business travel this week but hope to have time for a few replies now, will definitely be back later and respond to each of you. Please keep the comments coming.

Many asked how to fix it, I think Jorma Ollila needs to step in for interim - that would calm the investors. Anssi Vanjoki would have been excellent choice as CEO, I doubt he'd take the job now, and furthermore, with the poisoned relationship with carriers/operators, that is not the best case. I think the best choice is to fire Elop now and cancel the MS migration. Then commit to Symbian to the end of the decade (I have some ideas how) and that Symbian would power low-cost Nokia phones essentially forever, and go to MeeGo, the only new OS on which Nokia can release at least some phones this year. The new CEO? Ideally hired from a carrier/operator.. and ideally from Asia. I'll have much more on this in next blogs on this topic, but I have to blog about the big tsunami-wave disaster heading to Nokia HQ right now. It is not this blog. There is honestly worse still to come..

Keep the comments coming, I have read all and am learning a lot from them and our readers will enjoy them I am sure, as much as I do.

Tomi Ahonen :-)

Borik

I think analysis of WP7 + Skype being bad combo is inaccurate.

Look As Sprint and Deep Google Voice integration.

Its coming and maybe Nokia wants to be a head of curve for a change, or maybe they are already too late....

Vulcan

There is something Microsoft can do to please the operators: Kill Skype. That would make it. The end users would be dissatisfied, but that would not be Nokia.

But how to explain that this was needed to the shareholders of MSFT?

piscao

it amazes me ho the rest of the board see the direction that events are taking and do nothing! are some of micrsoft millions reserved to them too?

John H

Didn't you mention in a previous post that Nokia spent gobs of money to keep their phones on retail shelves and for retailers to push them? Nokia is in cost cutting mode now. If the new strategy is not to pay retailers for competitive space for current S^3 phones of course they won't be selling well now. Nokia/MS may decide to spend money to have their WP7 phones on the shelf; which will be their focus OS moving forward.

Android didn't sell well its first year on the market. I wouldn't call WP7 a dead platform especially with the Mango update coming along with Nokia's lineup. MS has the $$$ to make a platform succeed when it wants to; just look at the XBOX.

Why not give the West Coast design team a fair chance? If Finnish designs are so desirable they should be selling themselves, but as you state they're the worst selling phone in the UK; their typical stronghold.

You're judging Elop on devices that were in the pipeline before his arrival. He is actually taking actions on Nokia's past mistakes, where previous management stayed the course with slow and poor updates to existing platforms.

Martin Wilson

Tomi,

A great post. The position that Nokia find themselves should not be a surprise - many of us saw this coming a long time ago and yes warned this would happen.

Nokia are fare from unique. The challenge, as many other organisations are also finding out - including the good old Yellow Pages publishers - the market environments is rapidly changing. Yet, these organisations have consistently failed to adapt. WHY? Two simple reasons: Management and Process.

Management: Nokia like others are being run in the same way, by the same team that they have seen historic success. They use to get away with this when they were dominant, remove the dominance and they start to see their business rapidly fall away. They fail to adapt because the senior team life is too comfy, very few are willing ruffle feathers and stick their head above the parapet in case they get struck down. They become nodding dogs and the business starts to falter as more agile businesses start to take share.

Process: Nokia are tied to process this means that agility to change and adapt takes far too long. The market moves in quarterly cycles (or quicker). Nokia seems to not understand. The Smartphone market is fast moving. The Microsoft deal was announced in February yet we are still yet to see anything resembling a Nokia device with a MS operating system some 4 months later or anytime soon. This is just too slow and has killed device sales.

Nokia is going to suffer from this without doubt. Their Brand and market share will be hit. But can they survive? Absolutely! Get some of the basics right they can again become a force to be reckoned with. They need stop feeling sorry for themselves and pretending this is not happening, get the right people with the guts and inclination to take risks to get this ship back on course.

Martin

Michele

I'd rather be honest, so this is not totally a comment, but an observation about Nokia in the past years. I owned many N phones, starting many years ago; my first smartphone was 3650 (awfully designed with round keyboard) and then many others more till N97. In the past years N gives many impulses to the market but two of them in my opinion were mainly missed. First, the design: this is a big point 'cos N design was indubitably on top but this was ported in several models as a lack of usability (strangely shaped keyboards, buttons moved or missed through models). I mean the design in some models was gorgeous but in some others... damn too bad. I remember the waiting for the leaks of the new model photos on the internet sometimes turned in frustration for a bad form factor o lacking feature. Second, the bugs. I don't remember a N smartphone without a serious bug at launch. And this is totally unacceptable for what was such a huge brand. I turned to Android after a disastrous N97 and I came to the best phone experience of my life even I missed (and I still miss) really something from Symbian.
And there were many other mistakes:
The too anticipated exhibition of new model before market launch (often delayed).
The great slowness in software updates even in presence of main bugs.
The feeling of not met the needs of consumers or mainly, not totally listen them. And so on...
I don't know the reason of these mistakes, but I can observe they were ignored on the base of market sales. They don't needed to fix them, they anyhow sold. Now that music is changed they not only cannot ride the WP7 horse now (because of all the things Tomi said) but they must fire Elop, they must join Google and for God's sake absolutely face these main points and don't repeat all these mistakes.

Crowbar

Sorry Tomi, correlation does not imply causation. All of the stuff you're bringing up now was known already around summer time last year.

Andre

when Elop signed up as CEO I thougt what a lucky bastard. OPK and Anssi had the good strategy with the QT bridge. apps were groing, downloads were growing. the n8 was about to be launched was an awesome phone. meego had full support and huge financial resources from intel.

you are right elop is killing nokia. was just in mexico and wondered why i don't see any of the s3 phones nore medium priced nokias in the big phone stores. nokia used to be extremelly strong in mexico.

not sure who can now save the nokia smartphone brand as symbian is declared dead :(

JukkaGM

"They will not let go, until Nokia Board of Directors fires the CEO and reverses the stated strategic direction to Microsoft."

This will save nothing, in fact, Nokia is doomed for a couple of years. Last fall, Anssi Vanjoki convinced everyone at E7 launch keynote, that you can forget about compatibility issues between different phone models. Qt will fix it. Some coders started to develop Qt - and then Nokia pulls the carpet from under their feet. Nobody trust Nokia, because they have failed to deliver the promise and the MS announcement was simply betrayal for everyone who invested in qt. It takes time to earn back that trust, it does not happen overnight. What if Nokia reverses the MS decision? Nobody will believe, everyone thinks that they will reverse it again in a couple of months.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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