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January 04, 2012

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Sitaram Shastri

Tomi - only 1 comment, re:

"
...dirty tricks (sending Nokia and Microsoft employees to post aggressive comments at tech blogs who review the Lumia).
"

You've been away from Nokia too long, if you think this is sponsored by the company or Elop. He's changed many things since he came, but this is below the belt.

incognito

While I do agree with most of your points, I asked before and I'll ask again - how do you reconcile the statements that Nokia's failure is largely due to the carriers protest (because they hate Skype, and Microsoft have bought Skype) and that their savior might be in the form of Maemo/MeeGo. Windows Phone doesn't even have the basic Skype client. Maemo/MeeGo on the other hand have the best and tightest implemented Skype support out of all platforms out there - so much that one cannot even differentiate between regular cellular calls and Skype VoIP calls without carefully looking at the screen.

If carriers do hate Skype that much, they ought to despise Maemo/MeeGo. Nothing even touches Skype experience on those platforms.

access 2010

Now. Any reasonably sane CEO, who witnesses that his company has produced a HIGHLY DESIRABLE product, that is beating the most feared rival (the iPhone) in head-on comparisons - that is a high price and high profit product - would have to be mad not to sell that product in every country in every market on every carrier and every store. The chance of a global hit product is so rare in mobile (Motorola's Razr, Apple's iPhone) that Nokia has actually never had a global hit product. Here it is. The N9. Only a total moron would refuse to sell the N9 everywhere, while it is hot.

guest

Let us assume that Nokia is split with the smartphones going to Microsoft and the feature phones remaining as an independent Nokia. What would prevent this latter entity to re-enter the smartphone market by relying upon Qt, the manufacturing infrastructure, and its knowledge of mobile phone technology? The crucial point would be how the patent portfolio would be divided up -- or shared. If the feature phones do not get Nokia patents on mobile technology, then they are DOA. Otherwise, what would prevent the rebirth of a smaller, leaner and more aggressive Nokia?

Carlos

Hello Tomi, just a couple of things. S40 can not be programmed with Qt (maybe Nokia can internally) only with J2ME. Nokia suggest that the successor of S40 (Meltemi) will use Qt, but now there is nothing announced.

When you say that carriers hate Skype and they boycott WP7, it's possible that this may change depending on country? I live in Spain and the three main operators (Movistar, Vodadone and Orange) are heavily promoting Lumia on TV, cartels...


If you want a comment on Lumia 800, I am a Symbian user and recently Nokia gave me a Lumia (I'm a registered developer). I can tell you that the phone is really pretty, the look and feel is really fantastic, very fluid and smooth. Internet and mail is very nice, but is shocking how restricted this device is. It's multitasking is very limited and you can not do GPS tracking programs for example, Whatsup does not update real time... it is not possible to use as alarm clock (it will not switch on the phone)...

For me the biggest problem is the contacts. I prefer to have the contacts of my phone independent of my gmail or windows live accounts and this is really difficult (I thinks that is impossible).

KPOM

You ignore a 5th possibility. Nokia might switch to Android (or add it to its portfolio).

gzost

Just a few comments about particular parts of your post. Concerning the entire situation at Nokia - there's little to left to be done at this point but pray.

Regarding the reception of the Symbian^3 Nokia smartphones: You and I truly must have been reading different reviews for all of them.
Reviews of the hardware could conceivably be called "warm", even though they were generally considered to be a bit underpowered (yes, Symbian can make do with less, but for some tasks, like rendering webpages, raw computing power is essential) and, with the exception of build quality, the camera on the N8 and the keyboard on the E7, nobody found anything exciting about them.
On the software side, the general assessment was much less than warm. Symbian^3 was generally considered old-fashioned, clunky, and difficult to get to grips with. It came out as a net negative compared to iOS and Android in almost all reviews - and there was hardly a review that didn't mention this expressly. This is not to say that all reviews saw Symbian as completely bad - but in the marketplace, it's the comparison that counts. In addition to the perceived failings of the OS, the third-party apps situation was never all that great, and got progressively worse over the year. The fact that the Ovi store client was one of the worst pieces of software ever written certainly didn't help there either.

"typical Europeans are on their 5th smartphone on average" - Just a side statement, but keep it factual, please. With replacement cycles of 2 years, this would mean they have been using smartphones for the past 10 years. Nothing of the sort is the case. In fact, the rapid growth of the smartphone segment means that the majority of current smartphone users are new users, added during the past 24 months, i.e. they are on their first or second smartphone.

Qt and S40: There certainly has been talk about adapting Qt for S40, but this hasn't happened yet. If Meltemi is to replace S40, then Qt on S40 may never happen. And, as any software developer will tell you, the mantra of "write once, run anywhere" has never translated to any real-world successes. This is not to say that a common development environment doesn't bring with it huge advantages, but just that it's not a cure-all.

Desirability of the N9: The reviews certainly were better than for any Nokia product in recent memory. The hardware is gorgeous, the UI is different, and there's a whole lot of love for Nokia out there still. Reviewers love different (easy to understand after having to review the 53rd Android phone of the year), and the N9 was the first Nokia device in a while worthy of focussing this love out there. There was also a good bit of sympathy for the underdog in there. At the same time it is about as unfinished as Windows Phone, and there are no apps for it. If the reviewers and the public are finding fault with the apps situation for Symbian already, then this is a killer argument against the N9.
Qt was supposed to ease the transition, but then Nokia, delivered too little, too late here. By the time the Qt toolchain was truly complete and up to speed, Symbian had already been ditched, and developers had started to move away from Symbian. All those Qt applications running on Symbian that could easily have been adapted for MeeGo just weren't there (not the 10s of thousands that the market demands nowadays). So imagine the return rates for the N9/N950 once the customer comes home, goes to the app store - and doesn't find any of the apps that he was used to, sees his friends use, or really needs.

gzost

and also: @incognito nailed it on the head regarding Skype and WP vs. MeeGo. It is also worth noting that while WP doesn't have a Skype client, iOS, Android and Symbian all do. Why carriers should boycott a platform for a potential future ability when all the competition has this ability in the now is beyond me.

David

Hello and thanks for the blog.
Any comment about the success of Symbian in the end of 2011? http://www.webpronews.com/nokia%E2%80%99s-symbian-finishes-as-2011%E2%80%99s-top-mobile-os-2011-12

Baron95

Tomi, your comment "The iPhone was released in 2007 and the Samsung Galaxy in 2010" continues to miss the point.

The iPhone 4 and the Galaxy II line were for FIRST TIME EVER launched in major global markets were Nokia had substantial sales in 2011.

I don't understand why you insist on ignoring that. The iPhone, at the beginning, was on sale just in the US, just on one (the worst) carrier, with weird pricing, in a market where Nokia did not compete.

Similarly, Android, at first, was for sale basically only in the US, on only one network, the smallest, in a Market where Nokia did not compete.

The ONLY milestone that counts is when iPhone and Android phones became widely available in Europe, Asia, Africa and Latin America. Those where the markets where Nokia had 95%+ of their sales.

And that happened in 2011. And that is why Nokia sales cratered in 2011.

If the iPhone and Android were only for sale on AT&T and T-Mobile-USA respectively, Nokia sales would still be great today - no matter how crappy Symbian was.

Please, do your readers a favor, and look at the country-time-line of iPhone/Android introductions. As they became widely available (not supply constrained) in Nokia markets, sales cratered.

If/when iPhone becomes widely available on operator like China Mobile, Nokia will suffer further. Nokia retreated from the US market, the hotspot of iPhone/Android competition. Therefore there was no canary in the mine. Then the international iPhone 4 Android 2.3 wave hit, it was a Tsunami for Nokia. 2011.

n900lover

Baron95:

"The ONLY milestone that counts is when iPhone and Android phones became widely available in Europe, Asia, Africa and Latin America. Those where the markets where Nokia had 95%+ of their sales. And that happened in 2011."

The quality of Elop apologistas seems to be dropping a lot lately. Lets pretend your last post just didn't happen and in the meantime you can try to invent something that will survive one google search or at least usage of old fashioned brain memory.

karlim

Tomi, you insist that Nokia had a great sales team in U.S. that managed to put X7 on AT&T last year, but then Elop came and screwed it all up.

You/we've covered a lot. You even (methinks) deleted "Disruption pt2" stuff. Fair enough, maybe, your sites your comments. My answer legit to yours, but not to original post...

The actual facts, and things we think we do know about the whole thing look very different. At least to me.

About the quality of U.S. sales team. Can't say anything about the whole team, and how long they've been aroound. But we do have some hard facts about the head of Nokia U.S sales team leader Mark Louison.

He became the head of Nokia USA sales in July 2007. Was fired in February 2011. Total tenure - 3 and a half years. His accomplishments during that time:

-one flagship level device on U.S. carrier -AT&T. Canceled by Nokia due to "insufficient marketing and subsidy support from AT&T".
-a bunch of low priced dumb phones throughout various carriers
-a few mid level smartphones like E61, E71 on T-Mobile and AT&T
-cheap Nokia 5230 (Nuron) on T-Mobile

That's it, more or less, I think. I may have missed a few models, but overall the achievements of Nokia's U.S head of sales over 3.5 years on the job are beyond pale. Especially at the time when Nokia CEO's (OPK) main stated goal all through his tenure was getting back into U.S. market.

And when U.S. head of sales had such blockbuster phones as Nokia N95 and N95 8GB, Nokia 5800XM to work with. All of them way before the first above prototype level Android even shipped.

Btw - Nokia N97 also looked great on paper/when the new devices are considered by U.S. carriers. They (Nokia) admitted learned about the problems with it only when it started shipping. Nokia U.S. sales team wasn't able to interest a single U.S. carrier to even consider N97.

Now lets look at the X7 itself. The deal for AT&T to sell it was most likely made sometime in early 2010. Probably even earlier since Symbian3 was delayed by at least 6 months, and U.S. operators start considering new devices 10-18 months before they ship.

Here's a good description of how the whole process of getting the phone on AT&T network works: http://www.engadget.com/2011/11/15/how-an-atandt-smartphone-comes-to-life-behind-the-scenes-part-on/

Back then, when the deal was struck, Android was at the stage of the first Droid, or, Nexus One, at best. And AT&T probably already knew that their iPhone exclusivity is coming to the end in early 2011. So it was searching for anything that can replace it. Android, Nokia, WebOS, Windows Phone - whatever. (Btw - did you notice that Nokia ws the main/best promoter among of Windows Phone when it launched?)

Back then, when AT&T agreed to carry X7-early 2010/late 2009- Nokia was also still feeling strong about Symbian and was planing to have Symbian Belle like version of OS running on its early 2011 flagships. Which could have been competitive with Android Gingerbread handsets in spring 2011.

By the time X7 was ready to ship - February/March 2011 - Nokia had already lost their confidence in Symbian, and made a decision to phase it out. Most likely, the decision about Feb.11th was already made by then. And it was clear that the best Nokia X7 can ship with, will be Symbian Anna. An OS that didn't have a chance in U.S. against similarly priced Android Gingerbread phones like Motorola Atrix, HTC Inspire and the rest. And the iPhone 4, of course. Did Nokia really need the X7 vs Android Gingerbread vs iPhone 4 comparisons in already hostile U.S. press? And the ridicule of the first Nokia flagship device in U.S after years of absence? When the decision for the strategy shift was already made? I'd say the cancellation of X7 was a smart decision.

And there is one more data point about cancellation of X7. Back when it was cancelled, at first, there were no reports on who - AT&T or Nokia did the cancellation. And most who first published the leak about the cancellation, assumed it was AT&T who did it.

The only place that said in no uncertain terms that it was Nokia who decided to cancel X7 on AT&T, was The Wall Street Journal. Now, WSJ is as close as it comes to gold standard of reporting rumors that are true in this industry. So I fully believe that the final decision to cancel X7 on AT&T was Nokia's.

But it was nowhere close as what you describe what happened, or imply what could have happened. The new Nokia flagship best or at least good seller on AT&T. And glorious start of Nokia's return to U.S. on the wings of it.

Because that same WSJ article that said Nokia canceled X7 also named the reasons why they did it. It wasn't Elop's whim, fear of Symbian resurgence or anything like that. It was because Nokia "feared it wouldn’t get enough marketing and subsidy support from AT&T."

Which means that by the time X7 was ready to launch - AT&T also lost faith in it, and refused to subsidize and/or market it to the tune it subsidized/marketed iPhone or Motorola Atrix or some other Android flagships of early 2011. And was probably happy that Nokia read direct or indirect hints and withdrew X7 from the launch docket.

As for disparaging/ridiculing current Nokia U.S. sales team/efforts, and dismissing them as clueless Microsoft muppets, let's wait and see what happens at CES, MWC and CTIA Spring.

We already know the former, pre-Elop Nokia U.S. sales team's achievements under Mark Louison, don't we? 1 flagship level smartphone on 1 major U.S. network in 3.5 years. Which was canceled because, let's admit it - AT&T didn't want it and decided not to provide adequate "marketing and subsidy support.

After less then 1 year on the job your Microsoft Muppets Nokia team already have Lumia 710 on T-Mobile. Next week they'll announce Lumia 900 on AT&T and we'll see what's next. Every way you look at it - can you tell any former "Hero" Nokia sales team achievements and tell us current Microsoft Muppets did worse?

karlim

As for you @Earendil and your last reply on Lumia stuff few posts ago... Since Tomy is "busy" can't reply to anti post which has at least some good contrary stuff, without ignoring the comment at best...

Your answer to the last one was - it should be 7 Mil Lumias sold to compete in success with N8. Your only reason was - market is 60% bigger.

Can I just ask 1 question? Which market it is?

eduardo

Good post, Tomi, but I want to ask you a question.

You spend much of your time talking with people in the mobile industry. So have people at the major carriers, preferably top level executives, told you directly that they are boycotting Windows Mobile, and that it is because of Skype? Or is you evidence all more indirect?

zlutor

Tomi: do you see any immediate effect on Elop if Risto Siilasmaa replaces Jorma Ollila?
http://www.bloomberg.com/news/2012-01-05/nokia-may-name-risto-siilasmaa-to-follow-jorma-ollila-as-chairman-hs-says.html

What about rumors from Eldar Murtazin related to selling Nokia to M$?

Twitter: Eldar Murtazin

(1) Steve Balmer, Andy Lees and Stephen Elop, Kai Ostamo will meet in Las Vegas to finalize agreement about Nokia smartphone unit. Bye Nokia

(2) Stephen Elop will be resign as Nokia CEO in 2012

Tomi T Ahonen

Hi Everybody!

Happy New Year to the regulars who so often comment on this blog.

Excellent and very intelligent commentary again, thank you so much.

I'll respond to everybody and will do it in small sets.

Keep the comments coming

Tomi Ahonen :-)

Tomi T Ahonen

(first set of replies)

Hi Sitaram, incognito, access and guest

Sitaram - ok, I accept that was a nasty comment by me, but its not a story invented by me. Its been widely circulated in the blogosphere and broke into mainstream news that both Nokia and Microsoft employees had been caught posting hostile comments on blogs reviewing Lumia in a negative light. This was not invented by me. Am only reporting what is already out there and the story broke before Christmas so its not exactly news anymore haha.

incognito - good point and I think I was not clear enough on this posting (I have written a long blog here last summer explaining exactly why carriers hate Skype overall, and why Microsoft upgrades that hatered to a new level). The main point is not that the Skype app is on a smartphone. Thats been possible for years. Its that through Microsoft Windows - Skype suddenly has the added reach of one billion PCs running Windows OS. That suddenly more than doubles the total reach of Skype (whenever Microsoft bothers to do that integration). Skype currently has if I remember correctly, about 600 million users (vs 1.2 Billion total fixed landline users to put it in context. One could argue that Skype has already cannibalised half of the fixed landline telephone user base).

There is a communication law called 'Metcalfe's Law' which says that the utility of any network increases in the square of the increase of its users. So when you double the number of users in any network - the benefit to all users is not doubled, it is quadrupled (two squared ie two times two). So Skype with 1.2 Billion users is not twice as dangerous as Skype with 600 million, it is four times as dangerous. And the old 'small' Skype already killed most of the profits out of the traditional telecoms carriers in the fixed landline industry.

It doesn't matter that Skype isn't on the current Windows Phone 7 platform. Of course it will come there as Microsoft owns Skype. But any WP7 owner today is potentially a Skype client 'automatically' in the near future. The carriers will not have that. That is why I promise you, the carriers will sabotage WP7 at every chance they can. Just look at the sales numbers for Lumia in Europe. We just heard today the IDC early calculation for Europe - not 2 million handsets as was expected (or nowhere near the 3 million like the N8 sold in Europe this time last year) but IDC calculates European Lumia total sales at 500,000 only. If the same carriers who sold the Nokia N8 last year now do one sixth the success - where Nokia and Microsoft have given FAR more marketing support and the Lumia800 is sold at a lower price point - and last year the N8 had tons of rivals from Nokia but now there are almost no new Nokia smartphones to compare - why so low sales? Its that the carriers are taking Microsoft's money, and then giving the Lumia lip service. I promise you that in markets where Lumia and N9 go side-by-side, the N9 will outsell the Lumia dramatically, on the same carriers/networks.

access - yes, we agree, thanks

guest - good points. I think the obvious split of patents would be that Nokia would not relinquish them ie Nokia would be given the patent rights into perpetuity but also so would Microsoft. I think this alone is a crime of the century, that Microsoft implants its agent as CEO to Nokia, then steals its patents portfolio at a tiny fraction of the price they are worth - because that CEO bankrupted the company. Obviously if anyone wanted to buy Nokia's patent portfolio this time last year it would be worth many times more when Nokia was growing smartphone sales, increasing average prices, growing sales and growing profits.

Thank you all for comments

Tomi Ahonen :-)

Earendil Star

@karlim, apparently Tomi is present and perfectly able to comment... where appropriate.

As for you, if you had just cared to read his Lumia post, you would have noticed that I just quoted what Tomi himself had said on the *smartphone* market. Lol.

KPOM

Also, AT&T didn't take the Lumia 800 because reportedly they are waiting for the LTE-equipped Lumia 900. My guess is that the iPhone 4S is the last 3G-only flagship smartphone either AT&T or Verizon ever release. All future non-LTE phones will be low-end devices.

Peter

Tomi,

I''ll vote you into CEO position of nokia in the next meeting.

Cheers,
Peter

EK


Tomi,
there is quite many stories and analysis about telcos wanting a number 3. Which makes perfect sense if you are a telco. Why don't you acknowledge this fact ? The Skype argument simply does not hold.

Here is another example of these articles http://blogs.barrons.com/techtraderdaily/2012/01/05/nokia-credit-suisse-says-buy-telcos-want-a-no-3/?mod=yahoobarrons

Just wishfull thinking ?

Weave

I went from Symbian to iPhone back to Symbian, although Symbian feels clunky compared to iOS I couldn't live with the missing functionality of the iPhone. I suspect that is the difference between a user with a history of smartphones and a new user to the market, the new user wont miss functionality they never had.

As a Symbian user it seems to me, as a result of Elop's actions, the only way forward for me is Android. iOS and WP7 are still too far behind in the functionality stakes and now MeeGo is a dead-end.

gzost commented above:
"And, as any software developer will tell you, the mantra of 'write once, run anywhere' has never translated to any real-world successes."

As a software developer I have two words to say to gzost: "the Internet"
Being able to run HTML/JavaScript anywhere has been such a great success it has changed the world.

I also use Python a lot - on Linux, Windows, Mac, Android and of course Symbian. Code portability rocks!

Less than a year ago, in my view, NOKIA were the coolest large corporation on the planet. They had open sourced Symbian, they had bought Qt and released it to very grateful developers under the LGPL, they had created QML/QtQuick which was a very interesting project and they were sponsoring the creation of Pyside - Python bindings to run everywhere Qt would. All the most exciting stuff for the near future of mobile development was going to come from NOKIA. Many developers loved NOKIA then and were eager to get started developing for MeeGo and a new improved Symbian.

If you asked those same developers what they think of NOKIA now many of them would feel let down because just as all that work reached the level of maturity that it could start bearing fruit, just as the fabulous MeeGo started to appear on the Horizon what happens? Elop throws it all away and Lumbers NOKIA with a low-functioning, single-tasking, proven failure of an OS that is incompatible with it all.

I'm not an activist or even a political person but on the day Elop made his announcement concerning the killing of Symbian I wrote a letter to the competition department of the EU expressing my fear that this was a deliberate ploy to destroy the market value of NOKIA so M$ could pick up NOKIA's IPR at a fraction of its true value. Unbridled corporate greed - stuff NOKIA, stuff Finland's economy, stuff the livelihood of thousands of Europeans, it's all just money in Ballmer's and Elop's pockets. To have NOKIA's patents to bash Google and Apple with because M$ can't compete on merit.

If some of the submissions in the Barnes & Noble v Microsoft case are correct it seems Elop has already transferred thousands of NOKIA's patents into a third party Canadian company where they are now being used to the benefit of M$.

gzost

@weave - Well, "the internet", or, better to be specific here: the WWW.
Only this doesn't exist in the abstract, but as rendered by different browsers, on different platforms, across different screen sizes, and using different interaction models. Anything beyond the most basic markup and functionality needs to take these factors into consideration, and requires testing.
The toolset to address all of the variants is the same, and there lies great value in that. Graceful degradation, progressive enhancement, responsive design and many other principles and mechanisms are there to cope with the fact that there's no one size fits all solution.
This is the point I wanted to make about Qt: it was a great vision, the best grand strategy in all of mobile, but it would never have been as easy as just having run a Qt application written and tested on one platform work satisfactorily on all other platforms.

n900lover

EK:

If operators want wp7 as third os then why it still has around 2 % after more than year? What you are ignoring is that ms wants to have total control over the wp platform and reduce operators to providers of dumb wireless pipes. So even if operators want to have third option, they would be foolish to the maximum to promote anything from ms.

EK


@n900lover

It's a different issue whether telcos are actively promoting something, or if they are indifferent or if they are hostile. I'm not buying this hostility argument, that was my main point. From telcos point of view I assume that each of the three parties are as scary but in different ways. The more there are choices the better for them.

WP has been slow to ramp up. I guess quite many reasons for that like it has been a sidejob for other Android-manufacturers, OS has been only catching up to Android and iOs, lack of apps etc. Now with Nokia it will be get at least both manufacturer priority and volume for the first time. Which may engage other manufacturers and create a positive loop around WP. I hope this happens but who knows ? It's for sure that MS is not going to give up easily, their very existence is threatened if they don't become relevant in mobile.


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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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