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September 07, 2011



"RIM is mysteriously unable to capitalize on the Nokia collapse..."

Actually this isn't mysterious at all. RIM, like Nokia, had a non-competitive OS as compared to iOS and Android. What is plaguing RIM is what hurt Nokia. RIM is benefiting from the enterprise mail hooks and BBM which is preventing it from utter collapse a la Nokia, otherwise it would have a sharper downfall much like Nokia. RIM's OS, like Symbian^3 and MeeGo, are not up to snuff when compared to to Android and iOS and customers know this and are voting with their wallets.

I do have to say though, that the Nokia MeeGo phone that they released is beautiful. Nokia is the only company that can make hardware like Apple in terms of quality and design aesthetic. It is too bad that they couldn't compete on software and had to go the MSFT route. I do expect that the upcoming Nokia/MSFT phones to be outstanding and better than Android and nearly on level with iOS assuming that MSFT can get the WP7 Mango version up to snuff in time this fall. Am looking forward to seeing it.

I don't blame Elop. If he had stuck with Symbianm or MeeGo, the nearly the exact same predicament would have befell Nokia. Nokia's software just isn't up to snuff post iPhone and neither is the software development ecosystem for third party developers as compared to the quality of tools and ease of development as compared to iOS and Android.


tomi, you underestimated Symbian Belle in Q4, underestimated Meego N9 in Q3/Q4, overestimate WP7.5.
My guess is
Meego N9 Q3 1M,Q4 3M
Symbian Anna Q3 5M
Symbian Belle Q4 5M
WP7.5 Q4 1M
Feature Phones Q3 10M, Q4 12 M
Total Q3 16M, Q4 21M

Tomi T Ahonen

Hi Vikram, LeeBase and Peter

Vikram - I hear you, but the 'mystery' part is, that Nokia's E-Series (all Symbian and all in utter collapse) was created by Nokia to be Nokia's clone of the Blackberry, from similar QWERTY-keypad Blackberry look-alike phones, to the business services with the E-Series unit. So when Nokia's E-Series collapses with Symbian, the likely replacement for someone addicted to messaging and demanding a full QWERTY phone is not an iPhone haha.. That is what I mean, for the E-Series the typical customer is exactly Blackberry, both enterprise users (Blackberry and E-Series had two thirds of the world's enterprise/corporate phone accounts, Blackberry owning most of North America and E-Series most of rest of world) and the youth heavily texting-crazy segments were the second target for E-Series exactly like it was for the Blackberry.

And if you say Blackberry is failing - it is only failing in the USA, it is GROWING sales in many European, Asian, Latin American and African markets. Just the latest survey by Kantar of UK consumers for example found Blackberry now ahead of the iPhone in that market. Similarly stats from this week by Gartner of Middle Eastern smartphone market have Blackberry at number 2 with Android at 3 and iPhone at 4. But Blackberry international sales are not growing fast enough to match the heavy declines in the USA. If what you wrote was true. Blackberry would be declining.

On Nokia software not 'up to snuff' sorry - evidence says contrary. Nokia Symbian S^3 since Q4 of last year was good enough. Not as good as iPhone but good enough. Windows was never as good as the Mac, but after Windows 3.0 became 'good enough', Windows flew past the Mac. Nokia had good enough software from Q4 of last year and the stats I have posted here on the Nokia Q4 numbers I crunched during my summer vacation prove it clearly.

And on the user-friendliness of the Nokia software, if you say was Symbian a pain to develop for, I totally agree yes. That is why Nokia bought Qt and adapted it to provide one simple set of easy-to-use tools that allow you to create apps for Symbian, MeeGo and S40 (and Android) - and users of Qt say it is BY FAR the fastest, easiest-to-use development environment. I am no longer a programmer haha (my last languages were Fortran, Cobol, C - not C+ haha, first edition C etc) and cannot comment from personal view, but that is what programmers familiar with Symbian, iOS, Android and Qt - say - Qt is by far the best. Sorry. Your point was once true, it is no longer true. Today an OS strategy and ecosystem strategy built on Symbian and MeeGo and Qt (and Ovi) would be the best, and the shift to Windows Phone is an utterly dumb move by Nokia that will kill Nokia before mass market WP7 phones reach the market. I expect Nokia to be sold before the year is done.

LeeBase - nothing changed. Apple delayed its iPhone 5 launch. I predicted very clearly last year for Q2, that the iPhone sales would benefit from iPhone 4 launch and then have a monster quarter for Q3. This year that is likely one quarter shifted back, so like I said, assuming the iPhone 5 launches last week of September, we'll see people standing in lines to buy it, and Apple's next quarter - this time Q4 not Q3 - will be the monster. The jump is the same level as I had last year and the year before. Nothing changed.

Don't you agree, Lee, that IF there was a parallel QWERTY iPhone 5, more expensive and yes, more thick - it would sell to many who refuse the pure touch type of phone? Maybe it would add 5% more sales or maybe 50% more sales, but there DEFINITELY are more people like me, who want the iPhone but who need the ability (or think they need the ability) to type texts blindly.. hence we need a real QWERTY. And as long as Apple refuses to serve that segment, they are abandoning sales. As this QWERTY keyboard version of the iPhone would add a modest cost component whose manufacturing costs would be of the order of 5 dollars or 10 dollars max, but would allow 50 dollar higher price, there is MASSIVE profit that Apple is now leaving for customers to eat. Don't you agree that SOME sales are not coming to Apple simply because there is no QWERTY version? And the intelligent company would take that profit too?

As to 600 dollar limit, I keep telling that I am amazed how Apple keeps pushing that envelope and all the data we had, including a recent Morgan Stanley survey of handset price pyramid - have been proven wrong by Apple. I salute Apple for that. I trust you are not arguing the poor African who earns a dollar a day and has a 25 dollar basic phone, will buy a 600 dollar phone in this decade? So if Apple stretches the market now, there is certainly an absolute limit where the iPhone cannot go? Or do you disagree?

Peter - THANKS ! That is EXACTLY what I always hope for when I post something with a scenario for the future, to hear someone else's view, in this case someone brave enough to post some numbers... Good thinking.

Now, where we disagree.. I see you think MeeGo N9 will sell far better than me. Did you remember that none of the big countries get the N9. When the N8 sold in all Nokia markets, it did about 3.5 to 4 million units according to some analyst who had dug into Nokia S^3 sales, I forget who it was. Total S^3 was 5M. So if the N8 can only do at best 4M then I think your estimate is way too optimistic with Elop in charge. Yes, if there was a sane CEO who blanketed the world with the N9 as long as its the hot Nokia phone (and especially - especially as Apple seems to be delaying the iPhone 5) - then yes, I agree, 4M total and 3M in Q4 would be very reasonable - we just heard today the pricing for SIM-free (unsubsidised) N9 pricing from Singapore - will be 799 Singapore Dollars ie about 469 Euros or what was it, 669 US dollars. Very competitive. If the N9 was released broadly, with those specs, it should do well - even more so, with the Symbian sales boycott, the N9 would feed a hungry Nokia client base..

But you suggest only 1M WP7 phones. It may be that haha, we won't know. It depends very much on the early reception of the phone, certainly the buzz on 'Sea Ray' (the 'leaked' prototype WP7 phone by Nokia) has not been anything as stong as for the N9. But remember, Nokia will oversaturate the world with the launch marketing for that phone, its Elop's baby, he needs it to be a hit. It may 'fizzle' in Q1 of next year, if there are problems, but the early sales should be huge, with a big Nokia and Microsoft marketing push. I am sure Elop has an internal target saying they have to ship more than 4M so he can say its better than the N8 and is the best launch of a new Nokia phone ever.. Whether they reach that, who knows but I am sure the WP7 phone will outsell the MeeGo phone, that is too easy for Nokia to 'arrange' (shipment problems with N9 etc)

But we'll see soon enough. Thanks Peter

Thank you all for the comments

Tomi Ahonen :-)


Regarding RIM, what I am seeing here in Canada in a business context is that people are dropping their Blackberries like hot potatoes and switching to iPhones. These same people are also considering the Samsung Galaxy S2 but many have already bought an iPad or iPad2 and want to "stick with the same ecosystem", so they buy an iPhone in the end.

Personally, I continue to buy Nokia for their travel-friendly 5-band GSM capability that no other manufacturer seems to have but everywhere around me it is iPhone, iPhone, iPhone. There is still lots of growth left for Apple.


@Joe - everywhere around you it is "iPhone, iPhone, iPhone" so you conclude that there is still lots of growth left for Apple? I'm confused.....


Speaking about Nokia,

Tomi you miss to comment the IPR shift from Nokia to MOSAID.

I can understand the agreement between Nokia and MODAID ... what it is totally incomprehensible , it is why in the agreement for Nokia IPR, given as a "gift" to MOSAID, Microsoft is going to take 1/3 of the possible revenues that MOSAID can generate using the gifted IPR.

Why Microsoft should get money from Nokia IPR ????

Sound Elop forgot again that Ballmer is not anymore his boss.




@Tomi, my numbers are for those sold to consumers (directly and indirectly)
If it is talking about the units sold to carriers/retailers/distributors, Meego N9 could be much higher, 2M in Q3, 6M in Q4, and 2M for WP7.5.

Flying off the shelf for Meego N9 is a surely thing. Consumers/carriers/distributors/retailers are all loading up to pank the rude criminal Steven Elop and Chris Weber.


@virgil, I'm referring to purchasing plans, not what people already own.


@LeeBase I agree with @Baron95 - it's not that the QWERTY loving users are switching from touch-only to kbd-iphones, it's that you will split your total set of iPhones amongst QWERTY loving users and traditional touch fans. Still sell the same number of phones because you are demand constrained but sell them to different populations and hence shifting sales from one model to another.

In addition to @Baron95 concerns about the impacts of the additional SKU I think it will increase the inventory you have to keep and make it harder to predict supply chain based on actual preferences. Real impact is that it dilutes what the Apple engineering team can focus on.

Earendli Star

I agree with Peter on Symbian. I think that Belle might be capturing some extra market share, also considering the new (cheap!) phones coming out (600, 700, 701) and the appeal (free maps, last Symbian phones, etc.) they could have with Nokia users looking to update their phones (e.g. outdated 5800s, etc.).

Feel reassured, this latest move on Symbian is only to keep the ailing OS for a couple o months more, thus avoiding Nokia's total collapse and wider repercussions on the migration to WP.

Instead, I believe that the N9 will not sell that much, not because it is not worth it, but rather because it's being boycotted by TH Elop. Supply will be much lower than demand, although I believe many people from major countries -where N9 will not sell- will try to get it by buying it online, e.g. Germans from Switzerland. Summarising: its success or not will depend on supply, not demand.

Finally, regarding iPhone, its success over BB is that iPhone is now cool, much more than BB. So, unless BB is able to revert this trend and change this aura, iPhone success will continue increasing.


@Earendli Star , "Supply will be much lower than demand"
thats my main concerning too. The criminal-prone Elop can do anything to destroy nokia.

funny t-shirts

I heard a rumor that the iphone5 will have a shashaint relay system that interfaces directly to a raz a9 z9ff processor. That will be more common in touch screens in 2012 I think in the 200+ price points.


Hi Tomi, thanks for another interesting analysis. One thing I would like to add that we all might underestimate WP7. I also don't think it will have significant jump in market share next year, but in long run it might get comfortable 10% to 20%. If I may quote you: "users of Qt say it is BY FAR the fastest, easiest-to-use development environment" - totally agree with this statement, except when it comes to WP7. Some developers are literally shocked how fast is WP7 development. In our company we see 2 to 3 times increase of speed of development, comparing to Qt/QML. And we are very experienced Qt dev. house. Very interesting to see if it will help advancing WP7 market share.


Great comments as usual. I believe WP may yet prevail against Android, the consequence of being made by a world-class OS software shop. Microsoft can go toe-to-toe with Apple on anything: cloud, programming tools, communications, applications, languages, etc. Google develops Android, but it is a web services / advertising shop at its core - not an OS/applications shop.

I also see parallels in the HP predicament to Nokia: a company that sells hardware and is dependent on another for its software loses profitability. It seems longterm survival means you have to control both the hardware and the software.

Apple certainly is supply constrained today and they will grow to a point. But there are limits to how far Apple will succeed in the smartphone market as their offerings begin to overserve what their customers really need. Good voice and internet with passable A/V/GPS is the basic need. Lower cost rivals will begin to meet this while Apple will continue pushing the high end like cloud services, home audio/video integration, etc.


Steve jobs has already replied to the issue you talked, Tomi. This is what he said, "Its either my way, or the highway." Clearly Apple doesnt need to do anything silly, as its leading in most aspects of the mobile ecosystem.

I feel the 2012 will be a huge year for blackberry. It has started making smartphones with the QNX based OS, which we have seen in its tablets. This platform could just act as a saviour for RIM's declining sales in the U.S. Also Nokia will be back with the MS Win OS based phones. So the then leaders in smartphones, BB and Nokia have changed their platforms to compete with Apple and Android. They promise a lot. Can they deliver something extraordinary?


@LeeBase, you said:

"I just think that WERE Apple to add a keyboard model, there would be a net sales increase and not just a spreading out of sales over two different models.

That is -- assuming they could manufacture enough."

I don't disagree, but if Apple could manufacture enough in the first place, why not just manufacture touch-only phones ?

Until we have truly hit a point where Apple is no longer supply constrained I see no reason for them to add an additional SKU.


The QWERTY keyboard comments indicate that there's an opportunity for someone to create an add-on plastic iphone skin with a keyboard built in to add that functionality.


@Peter: I also want to thank you for making ballsy predictions for Nokia Q4. Except I'm not sure Nokia can ramp up production of N9 too much given what I read everywhere that Nokia plans to make 100K N9s to start. If the N9 gets so hot that Swiss and Singapore people can buy one and sell it tomorrow on eBay for $300 mark-up that would be almost as cool as selling 2M, wouldn't it, and would certainly get some press attention. I too think WP phones will flop big time, there is just no demand for them and advertising can't do anything about that. Symbian looks great with Belle and that was always the issue, wasn't it, that the UX of Symbian needed to get up to date. So Symbian could do better than anyone expects since it tends to be attached to phones which work well as phones, which is a selling point. Peter, I like your bold predictions and will be watching the next four months with excitement.


@Baron95, bluetooth keypad is not new. nokia had this kind of staff long time ago.

Bob,Boulder, Colorado

Both Apple and Google are going to be very happy with the projections if they come true. But I suspect Google has more reasons to be happier than Apple.


iPhone with QWERTY? Why? The paradox of Apple is that they have become no.1 consumer electronic software/hardare company with minimal number of products available. And those minimal number of products available are more expensive than those of competition.

All those numbers may show one side of the story. The other side of the story is: don't sell crap products and markets will reward you!


the main reason why Apple has become no.1 is because of Steve Jobs who has studied microsoft ecosystem closely and then devised elegant solutions which surprassed microsoft products(windows 0S, windows mobile, lack of centralized app stores, the horrid regedit etc), now that he is off the picture, equation changes dramatically. An operations guy like Tim Cook does not inspire much confidence to bring about future disruptions. Sure he is a good optimizer and can run stuff efficiently and all, but that is a job which any reasonably smart guy can do. Tim Cook just happened to be lucky and to be in the right team at the right time. So for Apple's sake, I hope Steve Jobs health improves and comes back as CEO. Else all bets are off and we cannot predict the future.

Tomi T Ahonen

Second set of replies, from Sept 7

Hi LeeBase, Baron, Joe, virgil, elmo and peter

LeeBase - first, Lee, you've been here on this blog for years. I was here when Q2 results came out in 2010, and Q3 and Q4. I said when others called it that Apple had peaked, that it was not how I defined it, and that we had to wait to Q4 results available at January 2011 to know if 2009 was a peak and 2010 had started to decline. And I very clearly ON THIS BLOG said that I had been wrong. It is not 'belated' admission in September of 2011. I was here right when the Apple numbers came out saying so. Don't put words into my mouth, and don't distort what I say or you know what happens to your postings, Lee. I won't put up with that. You can disagree with me, but don't make statememnts about me on this blog which are not true. You KNOW I was the first to say so here on this blog when the Apple numbers came out.

But yes, we agree clearly that Apple could sell more with a Nano variant and a QWERTY variant. And you know my position, I am 100% certain Apple will sooner or later release the Nano cheaper but new, fully cellphone (not iPod Touch or iPad) version of the iPhone to sell as a new model alongside the newest 'main' iPhone. I am also hoping but not expecting a QWERTY version and that might not happen until Steve Jobs steps aside from Chairing Apple, I do believe its Jobs's obsession which prevents Apple from giving us the QWERTY version.

But we also agree, yes this is typical Apple, as you put it 'leaving money on the table'. Fine. I think thats stupid and I will say so time and again. In mobile phones this is a war of a decade to rule all the major industries of the planet, not just telecoms but internet, media, advertising, retail.. money! and you need scale. Apple has easy wins now that it is abandoning, its long-term viability is hurt because of short-range thinking. I have been saying so in the past, I have not changed my mind on it, I think its stupid and short-sighted by Apple. Any iPhone Nano buyer today, would be a good candidate to buy future iProducts from Apple into perpetuity. Why not take them now, before every major smartphone maker has its act together.

On the Nokia implosion. The N8 was the 'best thing yet' by Nokia to try to match the iPhone. I am not claiming its as good, but it was also cheaper. And it had the best launch of Nokia's new premium smartphones ever. It was well on its way to far exceed that level of sales in Q2 when Elop caused the Elop Effect. When paired with the E7 - the best QWERTY and touch-screen phone on the planet - and a phone costing more than the iPhone, Nokia had the pair to do serious damage to the iPhone in Q1 and Q2. If there was no Elop Effect, I do think iPhone sales in Q1 and Q2 would have declined, not grown. But this is something that can never be proven.

You think there is unmet demand for the iPhone. Maybe. I think most of that is customers who would not under normal circumstances have considered the iPhone, but went there because the sales guy in the store asked 'what phone did you have' and heard Nokia. Then the sales guy thinks, this customer needs to learn a new phone to use, the easiest phone to learn is the iPhone, it has the highest satisfaction, and has a nice high price - hence good margin - and pushed the iPhone at the customer who under normal circumstances would have asked for a Nokia and left the store with a Nokia. Any other change - teach the Nokia user to switch to Blackberry or Windows Mobile or Android - would be a bigger chance of failure and unsatisfied customer. As long as the Nokia customer had had a premium Nokia phone before (N-Series, E-Series) then they could probably be upsold to the iPhone, in most markets..

But again, its my guess, this is something that can't be proven one way or the other. Clearly I expected RIM to pick up a lot of E-Series users to the Blackberry and that didn't happen. But Apple had a phenomenal time (as did Samsung, I think they split it so, that Apple got most of hte top-end and Samsung most of the mid and bottom end of Nokia customers, including featurephones to Samsung featurephones)

But we agree, when the next iPhone is coming, it will be a HUGE quarter for Apple. I am hoping, and increasingly we hear no word from Apple so this seems more and more unlikely - to see the new iPhone released during the last days of September. Now it seems more like October. But yes, Apple will have a record Christmas period either way.

Baron - when you say you disagree.. so do you think, regardless of what constrains Apple, that it would not benefit Apple's unit sales, its market share, Apple's revenues, and its profits - to offer a Nano and QWERTY variant of the iPhone?

I hear you on the components for the QWERTY variant, but the Nano variant would use essentially last year's guts and a smaller screen and form factor (but some new bits like a reasonably modern camera resolution). None of those are resource constrained today. I am not saying do a Retina Display screen for the Nano. So even if you're right, the QWERTY would cut into current main iPhone manufacturing, the Nano variant would not.

But at least we do, Baron, agree on the principle, you just think its not today's issue, you think the right timing is 5 years from now. Fine, I see your point. My counter-argument is what I told Lee in the above, its not the battle this year, its the war that runs this decade. Every point of market share abandoned this year is far more costly to try to grab in 2015 or 2020. Look at how Coke and Pepsi fight for literally fractions of a point in market share. That is what the smartphone market will be like in 2020. Now, in 2011, is the time to build your base and do the 'land grab' in the biggest economic opportunity of the decade certainly, of the century very likely. And that is why I say Nano specifically but also the QWERTY is needed sooner, even if there is some cost to profits. Apple has such an overabundance of profit, it is now prioritizing over-profit to under-market-share. Wrong choice. It should balance out some of that excessive profit to grab more of hte long term viability of the iPhone and iOS. In my opinion haha.

Then on the detachable bluetooth keyboard. That is a dead idea. Its been tried a million times and suffers same fate as detachable cameras did too. It sounds technically nice, and some geeks will love it, but the mass market consumer will not carry any extra bulky gear in their pockets that they don't need. And thus, when they suddenly have the need, the device is not there. The consumer finds no utility out of the gadget, its sales are a tiny fraction of what was expected (or of early sales) and soon discontinued as not viable. No, it has to be integrated...

Joe, thanks for the Canadian angle, very interesting.

virgil - be nice. Obviously Joe is seeing growth in the iPhone in Canada and if so, yes there is growth left.

elmo - thanks yes. I am so disgusted by just about everything I see about Nokia. What I think is in the patents they shifted to the patent troll company - I cannot see any other possible reason except that Nokia wants those patents to be used in patent wars, and decided the patent troll company is better suited to fight those with Nokia taking its gains as a share. But yes, this is not Nokia as we knew it. This is Nokia wanting to be Microsoft the new Evil Empire. Lawsuits included.

peter - thanks. You know I will be here to celebrate with you for every million that the N9 sells, I am hoping you are 100% right and I am 100% wrong and will cheer very loudly if so... At this point, however, I think the only chance of that happening is if Elop is fired. He is restricting the sales of the N9 to such marginal countries, Australia is probably the biggest which only is one tenth the size of the USA haha.. So yeah, I am hoping you're right.

Thank you all, keep the discussion going

Tomi Ahonen :-)

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Happy to see your blog as it is just what I’ve looking for and excited to read all the posts. I am looking forward to another great article from you


The QWERTY keyboard comments indicate that there's an opportunity for someone to create an add-on plastic iphone skin with a keyboard built in to add that functionality.

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