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« Apple 20.3M iPhones in Q2. WOW. Throws gauntlet to Nokia and Samsung: stakes claim at biggest smartphone maker status | Main | Mid-year Update to Nokia Smartphone Forecast to 2011, with View to 2012 and new Microsoft based phones »

July 21, 2011

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Comments

Murat

Do you remember back when you said the iPhone market share had peaked?

Just goes to show you how important UX is, 4 years and 4 phones. Crazy yes, but everyone could see it happening, well not everyone...

@rodrigottr

*APPLAUSE*

Baudrillard

When will this board wake up and realize their mistake in hiring this idiot?

FIRE ELOP NOW!!!!!

Sami

Firing Elop will not save anything anymore; that ship has sailed. Nokia is looking at diminishing market shares for at least a few more quarters, and who knows how deep it will dive - and that dive will be dictated by the smartphones division; the fact is that the vast majority of devices in 5 years time will be "smartphones". The market will simply disappear from the basic phone business of Nokia (and everyone else).

I don't blame it all on Elop. Certainly, flat-out refusing to support MeeGo is an odd choice (even Samsung can handle multiple platforms, and Nokia can't handle two??), and Windows Phone was a worse choice than, say, buying WebOS would've been, but the seeds of this destruction were sown long ago and had nothing to do with Elop.

@rodrigottr

@sami

really? Not even announcing you gonna abandon your most important product without a ready product to substitute? That is full blame on Elop. Nokia was profittable on Q1. Why isn't it now?

Boris

I am speechless.

Elop set up home (Nokia) on fire.

He called firefighters (MSFT).

Firefighters came, but trucks didn't have water. Instead, they were loaded with gasoline.

P. S.
Elop is psychopath. Read Andrew M. Lobaczewski "Political Ponerology: A Science on The Nature of Evil adjusted for Political Purposes".

Sami

rodrigottr, I didn't say I don't blame _any_ of it on Elop. I said I don't blame it ALL on Elop.

Tomi T Ahonen

Hi gang

Nice to see many comments already. Thanks! I am still absorbing the Q2 results - ie the handset unit real performance generated a loss of over 1 Billion dollars, but the loss was less due to accounting, as the Apple 1-time payment of royalty settlement came in during Q2 and is recognized as income. That was not 'earned' in Q2, it was earned from 2007 to 2011 so it should be boosting the profits of the past 16 quarters. But yes, the current operation of Nokia's handset unit is making some of the biggest losses EVER in handsets, at the rate of 1 Billion dollars per quarter (4B per year) and this was before Nokia slashed its prices by 15% in early July so for Q3 the losses will be massively worse...

Anyway, I love reading your comments, keep the debate going, I'll return later with my responses too, but you guys know each other and feel free to dig into it all here haha

Tomi Ahonen :-)

peter

Fire Elop and the whole nokia board immediately

Sad Day For Europe

I am a Samsung Galaxy S2 user and a sentimental Nokia Fanboy... (used to work for them but when I suggested that the Nokia N900 should have GSM capabilities, Ansi Vanjoki called me an idiot, his words were: No one would buy a big touch screen phone...)

I played with a windows mobile 7 phone the other day and I was seriously impressed. It was fun and intuitive.

Microsoft with that product is in for the long haul. bet its going to be a 3 horse race in 3 years MS 40% marketshare Android 40% Market share and iOS 20%

MS will grow by tying in their phones into the rest of there ecosystem (specifically XBOX)

Android will grow by tying in the rest like PS3 and Nintendo.

If iPhone does not do something as revolutionary as they did when the launched the iPhone then I think they are going to suffer...

Seriously Just seeing the 3D pictures that the LG Optimus takes shown on a 3D TV was mind blowing. And that was in a commercial environment.

If iPhone5 does not have NFC and/or Dual core then I think they are gonna run in to problems.

Where does Nokia fit into this? Well this is a tragedy for Finland and Europe of King Lear proportions. We let our nobility and righteousness cloud us to American Ruthlessness. While we are still adhering to the Geneva convention the Americans have built Guantanamo and killed Osama Bin Ladan. When will Europeans learn that the Americans win by seeing rules as barriers to be circumvented rather than guidelines for ethical behaviour?

Boris

From Bloomberg:
---
The second-quarter net loss was 368 million euros.
...
The handset division was boosted by a 430 million-euro in royalty payments. As part of its settlements with Apple, Nokia will start receiving royalty revenues from the Cupertino, California-based company.
---

368 + 430 = 798 million € loss

harry in singapore

the present predicament of Nokia is solely the responsibility of the previous management and Board of Directors.

Stephen Elop's strategy & execution, although producing very poor results now, should be given some time to show results.

I feel that if the previous board had continued steering Nokia, it would have fallen off the cliff/waterfall helplessly and without any chance of survival.

I also feel that the OS of the phone is no longer that critical as the Eco surrounding the OS. If Nokia can execute their proprietary knowledge on mobile onto Windows phones and then onto Windows tablets, it would do very very well.

The profit margins on smartphones and tablets will be very low (similar to PC) and the bulk of the money will be made in the "add on services".

My reason for such optimism is I feel very strongly that the previous management of NOKIA could NOT execute any strategy at all.

It made money simply because it was in the right industry at the right time. It could NEVER compete in a really competitive industry under the old management (simply because it could not execute anymore!)

Now, I feel that Nokia has a great chance to revive its heritage and attract/retain their core people.

I will be the first to buy the Nokia Windows phone.

The Marching Morons

Typo in the title: By "SAMSUNG" of course!

Don't be fooled by your "love" - be realistic, Apple's recent growth is "orgasmic," indeed but they're next after Nokia while SAMSUNG is just starting the foreplay.

KPO'M

Android would be the fallback strategy. I'm guessing Elop wishes he'd have gone with them rather than Microsoft. Yes, it would have made them a commodity manufacturer, but the market would have reacted more kindly. After all, Android was a proven winner. That said, I don't think switching to MeeGo would really do much for them. Get Windows Phones out as quickly as possible on that nice N950 hardware. Changing to another unproven OS (MeeGo) would drive whatever business they have left away.

Michael

Personally I'm happy because of Nokia's downfall. After selling me crap smartphones for years with no real invention, the time has come for competition to put them where they really belong.

KPO'M

Oddly, the stock is stable, so the market clearly priced this in already.

peter

Fire Elop and go Meegao N9 is the only way to revive Nokia.

cycnus

Save Meego/QT
Save Meego/QT
Save Meego/QT

FIRE ELOP!!!
FIRE ELOP!!!
FIRE ELOP!!!

TPTBH

.
.
.
it's time for Nokia to sell the phone division to Microsoft or Google
.
.
.

Jonathan

OK, Tomi just goes and claims Elpo has "destroyed" Nokia.

That is the most stupid statement I have heard in a long time. Sure, he is not a Finn, he speaks good English and seems coherent, there is every reason to be jealous and hate him. He is diffrent, he *must* be the reason for Nokia's problems.

But truth to be told, there is no way in earth a single guy running *any* big company, let alone Nokia, which is the slowest organisation I have ever seen, could "destroy" it in little over half a year. Claiming otherwise is just idiotic.

Tomi is bitter for his old company and needs a scapegoat, the seeds of destruction were planted in 2007-2010. After iPhone Nokia did almost all the wrong moves in the Smartphone category, and also *before* iPhone Nokia behaved nothing like a market leader should have.

The platform has been on fire the whole time Kallasvuo was running Nokia, perhaps longer. There was no clear vision, the success of the company and relative poorness of competitors masked loads of problems that should have been taken care of.

When Elop joined the company the trend was clear, Symbian was toasted, Elop was brought in to restructure the company. Everything he has done has been approved by the board, chaired by Jorma Ollila.

If you need a single person to blame it is Ollila. But obviously the world does not work like that in reality.

Sam Clark

History is made by those that make bold decisions. I remember Apples share price was rock bottom, and the a copy of Macformat dropped through the door with a photo of the first Bondi-Blu iMac on the cover. It took stones to make that kind of product shift, especially when facing destruction.

The old Nokia board would have led Nokia into the Abyss. History may remember Elop as Nokia's executioner, but it takes high risk, decisive action to transform business's. While Elop wont be sleeping well tonight, in the long term I think he'll be vindicated for making sweeping changes where before there had only been in-action. Business is risk, and those that risk the most have the most to gain.

GJW

Great analysis, Tomi, telling it like it is and not taking prioners.
After reading this I have one multi billion bucks question is: what is your assessment, will Nokia go on like this until the very end or will they do what they should have done on 11 February 2011 at 17:00 sharp: kick out @selop?

peter

Jonathan, Symbian is toasted by Elop, that's why individual investors, nokia employees and nokia consumers want to fire Elop.

Wolfram

Hey, Nokia was infected by ignorance and megalomania already in 2005/2006 and in this time the company forgot their customers entirely. In these days Nokia was lead by Finns!
Then the Finns ignored not only the customers but also the developers (remember the silly Nokia signed program) and the competitors.
Then Apple came and Nokia (still the "old" Finns) was not able to find an adequate answer for more than 2 years. Yes, the plattform started burning, and the fire was initially set by ignorant Nokia senior management.

BUT then a US boy was elected (by the US investors???) as CEO, a person who had no understanding at all of the speed in mobile market. Elop only wanted to make the investors happy by telling them a nice story (buring plattform, Symbian is rubish, blah blah) but he also ignored the customers. So the customers leave the "dead" Nokia brand now immediately. So he put even more fire on the Nokia plattform.

And now?

Very difficult, but on thing is clear: Bringing old Finns back is not the solution and firing Elop is not fixing the NOKIA problems at all.
The entire company needs a "re-invention" by a very charismatic person. Such a person is diffcult to find (as the election of Elop has shown)
Nokia must speed up, forget their arrogance against teh customers and developers, serve their customers with humble, work hard, make clever descisions (make MeeGo devices?) and then may be, the have a little chance to come back...

peter

Jonathan, after iphone 4 launched, antenna problems showed up, can you imagine Steve Jobs came out and tell the whole world: IPhone 4 is the burning platform, it has antenna problem, and glass is easy to be shattered, we will release IPhone 5 which will be much better.

if he did so, iPhone 4 would have no sale. that's exactly what this criminal Nokia CEO Steven Elop has done to Nokia.

No excuse and No escape !

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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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