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August 11, 2011

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MIP

@LeeBase

You have tried to provide many alternative theories/explanations regarding Nokia's and Elop's decisions, seemingly almost always trying to justify them, but I don't think you have written anything about why Elop is so absolutely set on making sure the N9 fails, by (among other things):

1. Elop publicly saying that the N9 is a dead end as soon as it was launched, regardless of whether it sells well or not (when was the last time you heard a CEO trash his own flagship product like that, despite the rave reviews it has received?). Any other CEO would have not only gone with the hype when the N9 was released but also boosted it. But instead Elop did his best to shoot the N9 down.

2. Not releasing the N9 (through carriers at least) in the countries where Nokia will release their WP7 phones, instead of letting the N9 go head to head with WP7 and let the *consumers*, not Elop, decide what they want: such direct and real feedback should be invaluable to Nokia, if Elop really does not have an agenda to support MS rather than Nokia; if WP7 really is so superior and more attractive than the N9/MeeGo as Elop claims then he should have no fears whatsoever - on the contrary he could then use that direct consumer feedback to prove that WP7 is in fact better/more desirable than MeeGo. Don't you agree?

3. Same as 2. but adding to that that Nokia is also losing money right now, so releasing the N9 world wide could provide an important revenue boost, while keeping Nokia on consumer's radar.

Yet Elop obviously won't have ANY of that.

I look forward to reading your explanations/theories regarding each of the points above.

Leebase

@Mip - there is no mystery regarding the N9. Nokia wanted to be able to alter Windows phone and put Nokia technology into it. Microsoft does not allow any othe manufacturer to change windows. So Microsoft agreed to Nokia's demands and offered billions in marketing support IF Nokia agreed that windows would be THE OS for Nokia. Nokia couldn't get any concessions from Google. So Nokia took the Microsoft deal.

If Nokia had believed in their ability to execute on Meego, they would never have gone to Msft or Google in the first place. The real mystery is why they are releasing the N9 at all. I assume it's because they had a commitment with Intel to do so.

Folks can fantasize about how great the N9 is going to be,and how Maemo (it's not really Meego) is going to rock our world - but it's not going to matter. The deal has already been made. Nokia told us in Feb that Meego is only going to be a lab experiment and that they are committed to windows. There is no secret conspiracy here. Nokia abandoned their platforms because they didn't think the could deliver in time.

Lee

cycnus

@Leebase

There's really a two side of coins :)
For me, reading that article make me BELIEVE that elop was an IDIOT.
he, who was thought to be the savior, turn out not good at all in finding out what's wrong at nokia software team, and take a STUPID short cut instead.

For me,
it's one of the other reason to FIRE ELOP!!!

proElop

hi everyone.

long live Elop
long live Nokia board
long live WP
long live Microsoft
long live burning platform memo

/happy Nokian

Baron95

You guys are so naive. Elop's memo and WP announcement was carefully crafted to achieve a goal.

First off, to get the best terms (including advanced money) from Microsoft, there were conditions on Nokia. One of which, likely, was a public announcement of near-unconditional support for WP. Did you see how the number of WP apps shot up after the announcement. That is to guarantee that there is a vibrant ecosystem of apps when Nokia launches WP devices.

The memo was intended to put Nokian's on notice that continued sub-par performance would not be tolerated and to signal partners, suppliers, investors, etc, that Nokia would no longer through good money after bad investments (Symbian, Meego, etc).

Sure these were shocks to the system. That is what it takes.

What Elop did was no different than when Steve Jobs came back to a near death Apple, and said "Our PowerPC platforms are not competitive, we will switch to Intel, and will have first machines out in 12 months."

That was the move that started saving Apple, and provided the funds for the iPod, etc.

You guys simply don't have the stomach for bold action.

Sad.

Leebase

@Baron95 - good analysis. Not exactly the same situation but similar.

Lee

Jay

Elop killing Meego N9 makes perfect sense in point of view of his strategy. Why would he not kill Meego/N9?

His strategy is to eliminate Nokia platforms - including proven technologies such as Symbian, and replace it with unwanted, proprietary, expensive MS crap.

The OS wars are on again and MS is losing.

Nokia has more than proven its mettle in terms of mobile operating systems, and was a forerunner in the race for the embedded/mobile OS.

MSs solution, then, is to simply kill the Nokia heritage and software engineering teams. Which has been done. Then devalue to the company, take it over, and control Nokia's patents.

Peter

@Jay, well said, but don't forget Jorma Ollila who betrayed nokia by hiring Elop to destroy nokia from inside at a time when Nokia got n8 ready to ship.

keep in mind, Jorma Ollila knew the status of Symbian ^3 N8/E7/C7/C6 and Meego N950 were coming out to fight back ipohne and andiod.

Do not know how to say Fins, but Jorma is absoultely traitor and criminal in the first place.

Peter

tomi, how can a long term ceo and board chairman of nokia holds only 720,000 nokia shares ? thats wht he can easily betray nokia by hiring Elop to destroy nokia from inside.

khim

@Baron95: Sorry, but this is bullshit. Compare.

Steve Jobs:
"The most important reasons are that as we look ahead, though we may have great products right now, and we've got some great PowerPC products still yet to come, as we look ahead we can envision some amazing products we want to build for you and we don't know how to build them with the future PowerPC road map."

Stephen Elop:
"At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms.

...

How did we get to this point? Why did we fall behind when the world around us evolved?"

---
This is not the question of WHAT Elop actually did, but HOW he did that. You may say that Steve said it on WWDC 2005 (very public event) and Elop said it in internal memo (which was "unexpectedly" leacked), but this is bullshit too. Take a look on the Steve's talk:
http://www.youtube.com/watch?v=ghdTqnYnFyg
Note "Secret Double Life"? Very few engeeners knew about said "Secret Double Life" AND they always knew it's "Just in Case" (so leaks were not as important) - but Elop sent Memo to thousands of employees in a company which is known for leaks. Either he's incompetent or this document was actually intended to be leaked.

Note how many times Steve explains that it's all about some nebulous "future Intel products" (it was about Intel Core which was not even available even for the demo) and that "we still are at the top NOW". This is because ANY such transition is inherently risky - but when you can explain it as "not your fault" (IBM just can not create good CPUs) but your are in charge (look, what we've seen is atually MacOS on Intel system) - it's one thing, when you say "WE are lost, WE did a crappy job, WE will go to 'big daddy'" - you get an Elop effect.

murphy

Hopefully Intel does see Meego's potential and makes good OS (&busines) out of it. Meego is real Linux, compared to Android. Meego could be that famous factor, Nokia would stand out in relief.
It's stupidity for Nokia head to one platform. Samsung an LG, they are open in all directions - and later on can make desision, where to put more efforts.
If you look new Nokia N9 expedition of World conquest, Nokia does not even try. With full invest, it could be a Hit (which is not acceptable - just before first Windows phone). Pity.

James

@khim Totally agree with your Jobs vs Elop analysis. Apple was building MacOS on both Power PC and Intel before the announcement. They were ready to go the moment the hardware was ready. While Apple had no room for Power PC once Intel was running, the mobile business is quite different with other phone makers being able to support multiple OSes. The only reason Elop is killing Symbian/MeeGo/N9 is possibly because the billion from MS had strings attached.

And concerning the popularity of WP7/8, consumers don't really care about the OS. Some who use computers may have a clue, but average Joe Sixpack doesn't. This decision is usually made based on their friends phones and what the store salesperson steers them toward or some fancy UI feature. Considering that MS has/is suing Samsung and HTC for Linux royalties on their Android phones ($5 to $15 per phone), I expect there is much heartburn among phone builders and the cell companies about MS trying to destroy the hot Android phones. With Nokia's patents, Apple and MS would not be able to do this but it appears MS went in through Trojan Horse Elop to get the same result.

Tomi T Ahonen

Quick comment to all

Thank you for the comments. Wow. 81 already. I am on my summer vacation so I will be quite slow in responding, but I will return to respond to you all, please keep the discussions going.

Tomi Ahonen :-)

MIP

@Lee
If you don't find it a "mystery" that a CEO is not interested in selling a high-profit hit product, at a time when his company is bleeding money, then it's simply because you chose not to follow that fact to its logical conclusion, the same conclusion that you completely avoided in your previous reply: i.e. Nokia's CEO is not, by choice or by [contractual] force, acting in the best interest of the company.

Now whether that is because Elop is obliged by contract to sacrifice the N9 despite the rave reviews it has received, or if he is doing it simply by choice, is a moot point if the end result is the same: Nokia, under Elop, is currently not allowed to maximize its profits.

And THAT is a reason itself to question his postition as a CEO.

But even giving Elop the benefit of the doubt and assuming that he signed such a contract in good faith (i.e. he did not expect that the N9 would have that great reception by reviewers and the public), in hindsight it is increasingly looking like an enormous mistake, otherwise there would be no need for him to actively kill the N9 - the market, or rather the lack thereof and the lack of buzz, would do it for him.

And such a misjudgement cannot be accepted at that level of management, period. Hence all the demands that Elop be fired, even though you seem to make a deliberate effort to avoid mentioning that consequence.

Thus I will ask you two direct questions, that only require yes or no for an answer.

1. Do you think that a CEO should need to actively shoot down his own product that is creating hype and excitement everywhere, regardless of whether that "shooting down" is by contract or by choice?

2. Do you think that Elop should let the N9 go head to head against Nokia's own and upcoming WP7 phones, and simply let the market decide which they like better?

Two straight and simple questions, and your personal opinion - yes or no?

Please humor me.

Eurofan

Prior to joining Nokia in 1985 Jorma Ollila worked eight years in corporate banking at Citibank's London and Helsinki offices, and when he joined Nokia his tasks involved international investment deals. (From Wiki)

The iPhone is a line of Internet- and multimedia-enabled smartphones designed and marketed by Apple. The first iPhone was unveiled by Apple CEO Steve Jobs on January 9, 2007, and released on June 29, 2007. (From Wiki)

In October 2007, pending shareholder and regulatory approval, Nokia bought Navteq, a U.S.-based supplier of digital mapping data, for a price of $8.1 billion. Nokia finalized the acquisition on July 10, 2008. (From Wiki) [October 2007 was the high point for Nokia share price. By July 2008, shares were selling at less than 75% of the high. Now they sell for 13% of the high.]

On January 28, 2008, Nokia announced that they had entered into an agreement that Nokia would make a public voluntary tender offer to acquire Trolltech. The total cost for Nokia is approximately € 104 million. Trolltech has since accepted this offer. (From Wiki)

Maemo Version history:

OS2005 Desktop. Shipped with the 770 in November 2005, this is the original Internet Tablet OS. It came bundled with the Opera web browser, Flash 6, basic Email and RSS clients, audio and video players, PDF and image viewers, a graphical APT front-end (dubbed simply "Application manager"), and a variety of simple games and utilities. Maemo is mostly based on open source code, and has been developed by Maemo Devices within Nokia in collaboration with many open source projects such as the Linux kernel, Debian, and GNOME. Maemo is based on Debian GNU/Linux and draws much of its GUI, frameworks, and libraries from the GNOME project. (From Wiki)

MeeGo is a Linux-based open source mobile operating system project. Primarily targeted at mobile devices and information appliances in the consumer electronics market, MeeGo is designed to act as an operating system for hardware platforms such as netbooks, entry-level desktops, nettops, tablet computers, mobile computing and communications devices, in-vehicle infotainment devices, SmartTV / ConnectedTV, IPTV-boxes, smart phones, and other embedded systems. MeeGo is today hosted by the Linux Foundation. (From Wiki)

The Navteq purchase hurt Nokia worse than even Elop. Navteq is worth $2-3B today, max, and took time and resources to integrate into Nokia's symbian OS. Symbian development suffered. Maemo development suffered from this misallocation of resources. All this paved the way for Elop, who will try to drive the stake through the heart of Linux at Nokia.

But it is ok. WP will fail, hard. WP8 will fail and so will "Tango" -- Mango for cheap phones. Elop is trying to rescue Microsoft in the phone space by giving up Nokia's efforts in the Linux space. Symbian is a big waste of time and a distraction. Symbian can't compete above a $200 price point unlocked today so it makes no difference whether Symbian phones have turn by turn navigation downloadable for free. Meego 1.2, however, can compete at a $1,000 price point unlocked and could do so with Google Maps. Considerable amount of N9s will sell in countries where unlocked phones are a rarity. That tells you something. In 14 months when Elop's WP line of phones goes exactly nowhere in the North American market, the N9 will still be a cool phone to buy in all markets. Dispite Mr. Ollila's international dealmaking with Navteq and Elop, Nokia has a future. That future does not lie with Symbian. Symbian was a British OS and it worked for a while when there was no competition other than Symbian. Nokia's future does not lie with Microsoft, any more than any other cell phone maker's future lies with Microsoft. Nokia's future lies in Linux. And it is Trolltech's Qt which put a consumer ready UI on top of Maemo/Meego's Linux base. So that was a good deal for Nokia even if it too some more time to integrate. Nokia was slowly building a permanent and durable platform in Linux with a Qt built UI, now called Harmatten. It's too late to kill Linux Nokia, Mr. Elop. It already exists and sells itself. You have to first show that WP can be a success and that's impossible. No one needs and no one wants a Windows phone. Ha ha to you and yours Mr. Elop. Lots of people want and think they need a Linux phone with a consumer ready UI. Nokia makes that now. A few bug fixes and some faster hardware and the N10 is ready to go in a few months time at the end of 2012. The same body can be reused, just as the iPhone reused its first iconic form. Don't let the door hit you on the way out, Mr. Elop. Be sure to take your leadership team with you. By by.

PERUS

Let's hope that Nokia WP device will be public soon, this war will become more interesting and harder esp. since Google bought Motorola Mobility.

PERUS

And please stop the whole elop story, will you? Don't you all get bored with that stuff since Feb 11? Just talking non sense and do nothing? Isn't better e.g. to share your mind regarding the future technology and next strategy?

symbianlover

I think Elop and Nokia board knew more or less that this Google-Motorola acquisition might happened. In fact that Nokia didn't sue any Android hardware manufactures in case of IPs so far (they could if they want to) and sue only Apple instead.

In other side this is a good news for Nokia and Microsoft since the others hardware manufactures will probably commit themselves more into WP.

If Nokia didn't sell WP devices pretty well, then Microsoft might buy either RIM, HTC or even Nokia as next step.

LeeBase

@khim - There are differences in the scenario (Elop vs. Jobs) for sure. But there are similarities. Jobs shows how it should be done. AND YET -- Jobs was saying that PowerPC was crap, not his own products. Elop didn't have that luxury as Symbian was his own product.

Going from PowerPC to Intel for the Mac is nothing like dumping Symbian/Meego and going for Windows. Imagine if Jobs had to convince his company that their future lay in Windows and that they were ceasing the development of MacOS.

That surely accounts for SOME of the difference and that Elop had a situation of much more drastic change to sell to his own employees -- not to mention huge layoffs coming.

@MIPS - The previews of every Nokia failure of a phone where fantastic. I'm not moved by reviews of non-shipping products. Wasn't the Adam supposed to be an "iPad Killer" based on early reviews of a non shipping product?

Meego has much more promise than Nokia is going to give it. On that, we have no debate. Why do I think Nokia's plan makes sense? Because I believe Nokia when they say to the effect "we realized that Meego wasn't going to be done in time to be competitive". I also see so little room for Meego in light of Android no matter how good Meego turned out to be.

Once Nokia made the decision that Symbian couldn't be maintained and that Meego wouldn't be ready in time -- there were only two options: Android or Windows.

Of the two, Microsoft made them the deal they couldn't pass up. Take billions in Msft "advertising support" and commit to Windows for the cost of dumping Symbian AND Meego. Do that, and Msft will allow Nokia to make whatever changes to Windows to include Nokia technology that Nokia wants.

At that point -- it did not matter how good the preview reviews of the N9 were going to turn out to be. The cost of Microsoft's money and ability to make changes to Windows Phone was commitment to Windows phone.

My main fault is why tell the world publicly a year before products could be produced. That seems like a blunder. The cost saving of dumping Symbian a year earlier are not going to make up for the last marketshare.

Lee

Peter

Clearly after google to buy motorola, apple is pressed to buy nokia at 70% premium as I predicted moths before. In this way, apple can destroy the circus game of microsoft on nokia and the so called the third ecosystem dream of mango,
plus royalties paying to nokia
plus free built-in maps with various ad services besides turn-by-turn gps guidance.

Yes, as nokia investers and consumers, I welcome the move of google and apple in the short future. anyone who are tired of these clowns: Steven Elop, Weber, Jorma Ollila should support apple's action now.

darwinphish

There is a little more to the Osborne story than just announcing a new and improved version of their product while still trying to sell the old and lesser one. Osborne went bankrupt because they kept building more of the original Osbornes. That is, it was not the announcement that killed them but that they burned through all their much money before they could deliver the new product. If they had deeper pockets and stayed a float until the new version was ready, the story would have been much different. I am willing to bet Elop et al knew all of this and assumed they had the reserves to make it until their first WP7 phones were ready.

That is not to say I think they handled all of this well. They have made a number of moves, most of which were unnecessary, which have alienated both their existing customers and the carriers (including the Ratner effect comments). These are what are going to hurt, if not kill Nokia.

MIP

@Lee
I appreciate the rather long explanation but note that you did not really answer my two simple questions, instead you gave a blurry answer one might expect from a politician.

Whether *you* are impressed or not by the N9 does not matter: the web and many potential consumers *are*, yet Elop is killing all the hype. *That's* what's relevant here.

You instead tried to give the reasons for him doing so, when I asked about your *personal* opinion, in the form of two simple yes/no questions.

Obviously your opinion is in itself irrelevant for this discussion, but I am trying to understand where you are coming from.

peter

here is a chinese proverb:
a beggar who holding a gold bowl asks for food

is it for nokia and its management ?

you donot need microsoft crap money in the first place, period. get rid of the illegal exclusive agreement with microsoft. or investors will get rid of you: Elop,Weber, Jorma soon.

Jan

I remember when I heard about the speech for the first time. I was thinking what the hell is Elop saying there! It was completely stupid and self-destructive.

I just could not understand why he didn't understand that image is everything (almost), that means trustworthiness and credibility. Every good brand have a trusted brand but also good products.

Nokia had actually still both until Elop gave his speech! It was just that competition became harder and obviously changes needed to be made to product strategy.

But why this speech? We perfectly well know that in consumer goods business, brand value is really big share of the stock price (70-90%). So, Elop's speech actually took the trust and credibility away, increased risk of failing and therefore we lost all the value in the company too. It is really hard to get that trust back because it is difficult to change people's beliefs and attitudes when it is once lost.

It is such a shame because products are good and there so much innovation them that most do not even understand it. Now, for instance, I have to explain on a daily basis what happened to Nokia! Like that everything would have already be gone...I also try to explain why the products are good but I am really tired of doing it. Now I only say that you just choose the product you feel most comfortable with.

We very well know that choise is often based only on word-of-mouth and brand perceptions than facts. Consumer cannot process all the product information and therefore marketing has an quite easy task to manipulate our perceptions. Apple did this very well. They also simplified the message that it is easy to choose the product among other alternatives. We need something nice to talk about because mobile phone is such an important personal status object that we want to be SURE we can be proud of it (especially in the category of lead users). When your phone is on the table, everyone sees it. It reflects parts of your personality, I don't want to look fool among my friends!

I have a PhD. in product branding. Product branding is a complex matter but you can be smart when talking about products that face challenges in the market and Elop -way was not the way...Now there is a damage control and I am sure they will fix this but it will take years...Who wants to sell a "good product" if it consumers cannot trust its brand image?

Anyways, I am not going to leave Nokia products because they made mistakes. It is like being a fan of a sports club. Will you immediately abandon your favourite sports club if they don't do well? Well, the sad fact (in a wider perspective, statistically) is that actually people prefer to follow the winning club than losers.

jus wondering

N9, best ever and company itself is doing all possible to destroy it !!!!! what a clever plan ha ha haa

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