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« Why Nokia Board Decision to Fire CEO Stephen Elop Is Now Urgent | Main | In Other 'Bloodbath' News: Recent Developments in the Smartphones Contest »

June 10, 2011

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Antoine RJ Wright

I know this is fast, but this was one of your easier reads, hence my quick reply on Twitter and its expansion here...

Nokia's previous plan, before OPK was let go, was for Symbian to take over the range where S40 is, and Maemo (before MeeGo came) was to be the high-end platform and place of experimentation. I don't want to dig for the graphic, but it was presented and made quite public when that was brought forth. This was also not long before the efforts to being S40 into the Ovi Store ecosystem more heavily.

Symbian, in its current condition, wouldn't provide much differentiation for Nokia. They'd effectively end up with about 7 models max which which they could play the form factor and internal memory specs game. They'd have to ditch the whole "X series for music" thing, but the other ranges could stand - if optics/camera became no longer associated with Symbian but was a Maemo/MeeGo platform differentiator. Sure, they could (and according to rumors of upcoming devices, will) add faster processors for a spec-sheet game, but the system really doesn't benefit from it - its too optimized *right now.*

The upcoming iterations (Bella and 'C') push the UI further towards what was supposed to be Symbian Touch v4. Also, Qt is supposed to mature by that point and the entire UI shell is supposed to have changed that apps need to be writting in Qt or nothing at all. That might still hold as coming, and that, with declining developer interest, might not be good enough even if Symbian is the one and only Nokia platform.

Here's the gem, and you kind of mention it, Symbian is already operator friendly. Too much so (that was the cause of the problems that led to management issues).

Whew...

Other sticky point, I don't know if Anssi Vanjoki would return. Would be nice (fans and national interest), but I'm not sure that even he would take on this one. They'd need someone a lot stronger, and who knew that they were in for a recovery job, much like Ford's CEO Mullay understood his role to be when he was brought on board there. I could see someone from an Asian cellular company considered though, call it a hunch, but if you were to make that kind of a move, you don't swing slow, but swing just as hard.

Last sticky point, if Nokia pulls out of the MS WinPhone agreement. that might also trickle to other MS partnerships Nokia has. And definitely trickles to the fact that MS paid Nokia to use WP. Would a depleted Nokia have the funds to even take on cutting off MS in such a fashion without selling off NSN, or even having to split anyways? I don't think they can get off without a split even if your suggestion came to pass. They are a bit lower than a hole, and while this would be a pie in the sky and 18mo recoverable action, I'm not sure they'd do it - or even that it wasn't already thought of Feb 12 internally.

John H

Let it go Tomi.

Elop had approval from the executive board for their current strategic path.

Should they be fired as well?

henrique

tomi, what about the money coming from Microsoft as "marketing incentive" in next years?

EM

You are high as a kite. Seriously. Hook me up with some quality Asian narcotics.

Step 1: Fire the handpicked CEO whose plans the board approve of and make the board's Chairman the new CEO.

Step 2: Bring in some random dude who jumped off Nokia because he (correctly) viewed Nokia as a hellhole as co-CEO and name a phone after him as a proxy for constant blowjobs from the interns.

Step 3: ???

Step 4: PROFIT!!! Where Symbian + MeeGo somehow equal profit.


You've lost it. Regardless of whether or not the current plan is right, the alternate plan is from South Park. You ignored profits for something like three years because you were obsessed with market share. You've now been proven wrong, since Apple makes more money off iPhones then every single other entity in the industry (possibly combined, IIRC, and indeed Apple could theoretically buy every other mobile handset maker in the business in cash). If Nokia in 2006 dumped their entire operations and—magically—made the iPhone they'd be making more money then Nokia of 2008, 2009, 2010, and 2011.

Profits matter. Market share doesn't.

cycnus

Tomi,

How about china?? china has the most mobile user? would having a CEO from china mobile benefit nokia? or maybe you?? you seems very capable of running nokia.

German

They hived off Symbian to Accenture so that train left the station.

In the converged world the same (at least it looks that way) is now running on tablets, computers, and phones -- with some synchronization lock-in through the cloud. Nokia only makes phones so they are missing the two other pieces. I can also not see Symbian powering a tablet nor a computer -- however Meego has that potential. So the only strategic option is to "join" a big computer maker like Dell or Lenovo (most suitable) or -- it can be like the Nissan/Renault partnership which would provide enough $$ to buy Microsoft out -- and then release Meego for tablet, computer, and phone and start in China...

BUT iOS and Android are light years ahead -- so without the China play Nokia would need to adopt Android in any meaningful way + roll out Honeycomb tablets + fast. So they would need to raise $$ and buy some competitor (Motorola?). So

Then you need some CEO crazy & talented enough to pull that all off --

Sami

Elop didn't kill Symbian's credibility, he just - finally, I might add - said publicly what everyone already knew.

Nokia is set to decline for perhaps a year longer. If it can defend against any acquisitions, it may survive.

Matt

Frankly, I don't think any of this will work. Not to say that Nokia shouldn't try, but the complete destruction of consumer confidence in Symbian over the past 6 months (accelerating a process going back years) has been irreversible. Is it open-source or not? Is it multiple-vendor or not? Does it have a future, or has it been EOLed? If an update is announced, how many months or quarters late will it be delivered?

If Nokia follow through on this plan, they will have to begin a transition to MeeGo from a market share position around 10%, all on low-margin handsets. So the big question for me is: what is the true state of Nokia's MeeGo device group, to be targeted for mass-market handsets? The BusinessWeek (?) article suggested that the MeeGo program would only allow three devices through 2014 - a statement that has not been widely explored. Is it reflecting an inability to push MeeGo down to lower device specs, or a fundamental unsuitability outside the 'geek' market? Or is there some other reason MeeGo is not ready to take over from Symbian?

Breno Peck

I loved Nokia shift from Symbian to WP7. I loved Nokia's recent passion for Skype. I hate operators. I hate Symbian. I hate Symbian's slowness. I hate Nokia's slowness. I hated N97.

So now that Nokia is doing everything right someone comes out of nowhere proposing a total retrocess to "save" Nokia.

Hopefully the new Nokia CEO will stay on track and save Nokia from saviors like mr. Ahonen.

P.S: Nokia's two-chip cellphones are selling like hot bread at breakfast time here in Brazil.

Piot

"But remember, Nokia's problems of the past were mostly execution and marketing, not phone design or software or ecosystem."

I'll just repeat that: "not phone design or software or ecosystem".

Sorry Tomi, but that pretty much sums up all that is wrong with your analysis. All of us have witnessed the disruption caused by the iPhone and compounded by Android. I could understand your failure to see it coming.... Or to underestimate it's speed.... But to simply ignore market reality, after the fact, is appalling from a self-styled mobile guru.

Timothy Meade

What did Intel ever do for Nokia? Intel didn't license a Nokia baseband for every laptop ala Centrino, MeeGo only made sense as a partnership if Intel could get anybody to build and sell an Atom phone, otherwise it was just rhowing money at the wall in hopes Moorestown would magically work out. MeeGo is Maemo, which is X+a hacked-up GTK+a session manager and window manager orignally designed for the Itsy. It finally got somewhere with Mx and working compositor but it's still limited by X and even with all of the work a Nokia employee has done to improve the situation, X is not quite the experience on ARM that it should be.
The other option is pure Qt, like old Qtopia/QWS it would be on a framebuffer, but this time using a hardware accelerated GL context and compositor. In theory it's a better Android and a better iOS Quartz Extreme. In practice though, Qt is not as portable and the developer tools not as usable on OSs like Symbian.
I'll propose a slightly different path, go back to Brazil and INdT, go back to the earliest Maemo days and start over with a Qt stack, closed and working Nokia GSM stack, a working Wifi daemon (either Intel's or something like Android's against wpa_supplicant directly). Kill Symbian with source-based migration path to Qt and developer tool support. The S40 thing would be nice, but whatever OS would then have to run on one-chip SoC phones, not simple by any means. Maybe binary compatibility with Linux ELF and ABI could be achieved, or stripped down Linux with a hypervisor for the Symbian and RTOS stack, but this been tried before and failed.
More likely, S40 dies a slow death with more and more migration of feature sets up the stack, and an all in one ARM11/9 Nokia dual-core baseband (like MSM7k.)

Alexander Manu

Tomi, how is it possible that a traveller such as yourself, can be wrong ALL THE TIME?
EMI has it - and I also posted in this space the same idea last Fall - that "Profits matter. Market share doesn't." The resellers never read the Feb 11 memo that you are so obsessed about. They just go with the magic word "profit" which somehow escapes your vocabulary (and the NOKIA's mindset).
Let it go, really. Use your blog for something useful. Rant in the shower if you must.

Poifan

It seems premature to call the WP7 migration a failure when Nokia hasn't even released a single WP7 phone and the OS itself is less than a year old. I'm not convinced it will work (though I love the OS and usually leave my N8 at home now), but I think panicking now is crazy. Anyone who didn't realize the interim months would be a disaster is blind. Wall St. acts like this is a surprise, but anyone who lost money in the market betting on Nokia in the short term shouldn't be trading. This is a bold and risky move, but better than sticking with a dying platform.

Baron95

OMG!!!! This is EXACTLY why Elop had to slam the door so hard and permanently on Symbian and Meego.

To (try to) stop these reactionary delusions that Nokia can continue another 4 years trying to fix Symbian, trying to launch Meego, trying to have a competitive ecosystem.

So, you fire the CEO, pay billions in penalties to Microsoft to terminate the contract, bring back Ollila who has already been pushed out (you know that, don't you?) by investors, revert back to the same PROVEN failed Symbian/Meego strategy, and you think Nokia's share would go up.

Anything is possible on Wall Street, but I can almost guarantee that Nokia would enter a very quick death spiral with this recipe.

Elop and the Nokia board knew full well that the transition would be painful. You yourself knew full well as well. Why act surprise now? Why panic and run back to the Symbian sinkhole?

The decision was made, the execution has started, that is all there is to it.

fucykou

Tomi,

It doesn't matter what kind of operating system Nokia can choose, it can be WP7, Symbian, iOS, Android, Badu, Meego, RIM or whatsoever... but as long as the same guys take in charge, you will stay in the same crisis (I mean from the mid management up to upper management, except the CEO). The real problem is not the platform or OS, it's the guys who manages it.

I have the feeling that everyone can get a lead or responsible position within Nokia even if he/she doesn't have the core competences or know-how experiences (under the condition that he/she can "talk" and do some nice powerpoint stuff). For example:
- a former multimedia VP can be a sales VP and vice versa?
- a marketing lady can lead a technology team full of software engineers and designers?
Everyone can bullshit him with some buz words and he/she will take it. Just imagine that "opportunities" within Google, Microsoft, Apple or any of software company, they will go downhill.
I guess Nokia doesn't have the ability to run a software company yet. They should just concentrate on one thing that they can do the best first (hardware). Just see how many times they do organization changes within Nokia from 2006 until today and see who are still staying in mid or upper management level...
Back to couple of years ago, some of them said that Nokia is a software or internet company, (how funny). They also said, this one will be an iPhone killer, if not then the next flag ship device, if not then the next next one and so on (they were not the iPhone killer, they were actually "helping" end users decide to buy iPhone). And still, you expect that they still lead within Nokia? Or even as the CEO?

The whole software process should be fast, transparent and less red-tape. Just imagine, when you find a bug in one branch of OS version. How long you'll expect to get it fixed within Nokia? Either they will refuse it (because it's not a showstopper) or they will fix it only in the next PR branches (they get scared because they could mess up the branches). And how many clicks you need until it gets approved? e.g. through synergy and a lot of request forms?

Again:
First, the OS is not the real problem, but the guys who manage it. Second, fix the whole internal (software) process.

Marco

I wonder if I should buy some Nokia shares. Maybe some execs at Nokia read your blog.

Joshua

OK Tomi, just an advice, take your pills, forget your citizenship and the Nokia pride.

At this point you are raving. Seriously.

So Vatar

It is interesting to see how many commenter here think that Elop's way is the right way and he should just be given time and we will see that he can perform.

Can we agree on a few things that are obvious?

1) Nokia is on a downward trajectory since 2007. The 2007 peak share price was just shy of $40.
2) In March 2010 the share price is roughly $13. In less than 3 years Nokia lost 2/3 of its value. Reasons for the downfall are multiple. A changing competitive environment, poor software. However I happen to think that execution was their worst problem. Everything self inflicted, no doubt about it.
3) Finally in March 2010 the board gave in and announced a new CEO, apparently to turn the company around. The new CEO came out publicly and embraced the existing Qt/MeeGo/Symbian strategy for Nokia's smartphones. Quarterly results in Q4 2010 were not great, but they made money. Share price recovered about 10% to a peak of about $15.
4) In February 2011 Elop leaks a burning platform memo and announces death of Symbian, and shifts strategy to Windows Phone. Will be available 2012. The stock market reacts and takes out about 20% of Nokia's value after the announcement.
5) Nokia reports Q1 2011 earnings, there are bad market share and unit sales numbers. However, they still make money and reiterate guidance for subsequent quarters and year 2011.
6) Never mind, about 2 weeks later Nokia issues a profit warning and says they have trouble to stay profitable, and they won't provide any guidance any more. Nokia's shares get hammered and lose about another 20% of their value.
7) All taken together Nokia lost 50% of its value within less than 5 months, since the burning platform / WP announcement.

So yes, Nokia fails since 2007.
Additionally, Nokia under Elop fails horrendously. Since Elop announced and executed on the WP strategy investors lost 50% of their money.

Elop's job is to run a company and make money, for Nokia's shareholders. There is just no sugar coating, he failed. Look at the numbers, look at the share price.

So, yes, maybe Elop was on mission impossible. Fine, it does not change the fact that he failed.

Now that this is established, what should the board / the shareholders do? Wait and see? For how long? How much more damage must be done to Nokia to replace a failed CEO? Okay, the previous CEO was allowed to ride the company down for 3 years after its peak. Should Elop also get 3 years?

What more evidence is necessary to come to the conclusion that Elop failed for Nokia?

So,

So Vatar

So, no I do not agree with all of Tomi's suggestions. But at least he proposes ideas about a way out.

I just cannot understand that people with an open mind cannot see that Nokia gets destroyed if Elop continues. Change is necessary, and needed fast!

hc kek

Nokia's Symbian is a black & white silent movie. MeeGo or whatever is too far away. Like it or not, MS can build OS & have the resources to correct it.

I have been a fan of Nokia Communicator since first launch but hated it a few years ago.

I will buy the first Nokia Windows Phone. I want to give it a last try.

Nokia knows how to build a phone. I use Android now; and I hate it as a phone. But the apps & browsing are acceptable.

I still believe the ecosystem that Nokia can contribute & as a Nokia WP user, I should be able to benefit tremendously from it. That's why I will want to buy a Nokia WP and try it.

Christian

I loved symbian, i liked the strategy. But why did nokia not manage to come with an iphone-alternative after three years? Though they invented the smartphone etc. On Nokia World 2009 Anssi announced to fight back. Out came the n900 with an os not ready to use. Nothing has improved since then. Obviously the software development is so complicated and slow that innovation is impossible. Is this due to symbian, meego or due to very bad organisation? I do not know. But yesterday i got to play with Nokia X7 and E6. Besides the browser not much has changed. And they run on 680 Mhz. Compare this with Galaxy S 2 with 2 x 1200 MHz. Speed matters, simplicity as well.

former N900 user

Retailers boycotting Nokia superphones, that everybody would happily buy for 600€ a piece? Naming the next communicator "The Vanjoki"? This genius of a man that openly said Android was piss? I am sorry, Tomi, but it's not Elop, who's delusional. That's just you.

Actually I heart a completely different story from a friend of mine here at Nokia Berlin (Ovi Maps Dev). He said now that Symbian has finally been scrapped and he can work together with some top developers from Microsoft his life is worth living again...

Alec

This just shows how every phone manufacturer is at the carriers' mercy. They had Symbian as its cash cow, now it's Android. However you try to get them back it isn't going to happen.

Same thing can be said about WP7. I walked into several stores here in the UK and pretty much any customer that who was looking at WP7 phones were pulled away by the salesmen to the Android phones. I asked them "Why?". The genereal reply was similar to this: "It's buggy, has a weird interface and generally I advise Android because that's what I use". That doesn't spell much success for WP7 on the frontlines, does it?

Carriers also aren't interested in selling WP7 phones because there are limited value-added services they can tak onto them post-sale (like own app markets, for example). They already have a phone with a limited ecosystem - an iPhone - so why would they need another? I also fail to see how Nokia's tarnished brand would play well with an OS that got its very first update so royally screwed up.

Now, on to MeeGo. What MeeGo offered was something fresh, there was excitement around it, just like it was with Android. People (and Symbian-bashing blogs like Engadget) were actually looking forward to it hitting the market. There was a certain geeky mindset already well-formed around it, creating its own sort of hype at the prospect of another Linux-based OS wrapped into Nokia hardware. What we've got instead is a big 'meh' because people already know what WP7 is and guess what? It doesn't sell.

I do agree with your position on ditching WP7, but it's too late - another indecisive move would be the last nail in Nokia's coffin. They just have to push ahead now with what they have and become just another mobile arm of Microsoft. Sorry, the Finns have lost their company.

I just hope there would be another brave soul (probably Intel) who'd pick up MeeGo where Nokia has left off and put out a product that can compete with Android.

Also, I hopethat some day we'll get away from carriers pulling the strings so they just become the dumb pipes as they are and compete solely on that basis.

virgil

Tomi, I generally like your articles, but seriously, let it go.
I know it hurts, but Nokia is already dead. Let it go, mourn it in private if you wish... but let it go. You cannot help them, chances are nobody can.

Sergey

Sounds like Toni's suggestions are much easier implemented by starting a new Nokia company - the existing corporate is likely too far down the path of no return (tied into the MSFT deal, Accenture deal, staff have been let go, etc.). With some determination, an immense amount of luck and signficant capital it might be possible to assemble the pieces to create Nokia-Symbian while Nokia-Wm still continues under Elop. (This has been done before - in everyone's favourite parallel industry, Volvo Trucks and Volvo Cars are separate from each other).

And by the way, to suggest that an IT executive is a wrong person to lead a mobile devices company is lunacy.

Operator power is changeable, iPhone was the key differentiator for ATT even though they had a crap network so they needed Apple just as much as Apple needed operators. And remember what happend to wired telecom providers

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