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« Nokia Profit Warning (again) - Here is what you need to know why it is actually far worse | Main | Was That 007 at Shanghai GP this past weekend? »

April 12, 2012



Hi Tomi!
As usual, great post. I'm very sorry that you are taking things that are happening to Nokia so personaly.
I've got one idea reading your posts about MS's assault on Nokia.
What if real target was not to make crappy WP7 a success, but to kill THE PLATFORM nokia was developing, especially Qt? Let's not forget, as someone mentioned in the comments, Nokia was MS's big enemy. Nokia was a champion of Open source, with Symbian, Maemo, Meego, Qt. Thay had a strategic partnerships with Intel and China Mobile. They were building a software platform with much more devices sold every year than with MS software.
The problem with Qt, for MS, was that, if Nokia's strategy became successful, Qt would have been used for developing software for practically all computing platforms in the world - all that you have mentioned, plus OSX, plus Linux and plus MS Windows. That was something that had to be stoped. And to push them your own bs os, that was a move of a genius.

So Vatar

@ David Oliver: (Cross post from MyNokiaBlog)

What is the number of Luminas sold?
What was the expectation?

I expected Nokia shares to close below $4 today. But at $4.23 it exceeded my expectations. By far!

Flavio Noschese

Some guys are talking about a takeover.
Today, I really don't see any possible takeover of Nokia.
As you listed so well, there were enough big and competent companies that failed in cell business.
Today is very clear that “mobile” isn’t for amateurs and perhaps even for most of people in business.
At that point, no lucid company will even think to put money in Nokia.
Nokia is like Titanic sinking. Of course, nobody would have bought the ship after the accident (even at a price of tenth).
Nokia is too big and problematic now. It isn’t a bargain. It is like Chrysler failing after “Daimler affair”. It is a sinking anvil.
The Nokia rescue will not come outside the company.
At this time, even Microsoft can find better ways to spend its money.
From the beginning you didn’t bet on WP7 and the things you say about Nokia always make sense.
Nokia should hear you and stop “betting on fast women and slow horses”.
I bet on your steps.

So Vatar

@ Flavio:
There is still some value in Nokia.

With today's close the market values Nokia at about $ 15.7B.

A number that is quoted but I would be careful: Nokia's cash and short term investments are said to be around $15 B for October 2011. It is now certainly lower, but by how much? (I would be grateful if someone can point me to a reliable source to get this number right as I also doubt this high number, I got it from here )

Nokia owns Navteq, bought for over $7B. It is for sure less worth today, but should easily bring in $2 to $3 B.

Then there is the patent portfolio. MS just paid $1B for AOL's patents. Nokia's patents are worth much more.

Then there is still some value in the Nokia brand, less so in the Western world, but more so in emerging markets and 3rd world.

Then you have operations:
- Feature phone division
- Smart phone division
- 50% of Nokia - Siemems Networks.

If we just add up cash on hand, Navteq and patents, we get a number close to or above today's market value. So, if an outside investor plans to purchase Nokia today without being forced to pay a premium, he can sell off all operations (phones, smart phones and networks) for almost nothing, keeps the cash, sells off Navteq to the high bidder, and sells off patents to MS, Google or Apple.

The outside investor will for sure make a ton on money on that if he can pull it off to purchase Nokia.

I fear this solution becomes increasingly probable. I just hope that the outside investor needs to pay a nice premium to current share price, so that shareholders get a little money back from their investment.


Hi Tomi,

I think you are right in the most things said above.
But maybe there is a future for Nokia in combination with Microsoft.
Not with Windows Phone 7 but in the near future with Windows Phone 8 and Windows 8 that will share a lot for example applications.
Smartphones and desktops will be closer than ever and also important for Microsoft they will enter the market of tablets with Windows 8 , Nokia can make the tablets with Windows 8.
Tomi how do you see this?

Greetings , janzeeschuimers

Tomi T Ahonen

Hi everybody !

Yeah, was a rough 36 hours or so, those two blogs. Am now at airport heading to digital oblivion so am expecting not to be able to post or comment until Monday (hope to, but afraid probably not)

I will work the regional part 2 into the story on the plane now, and will post soonest I again have a reasonable web connection.

Meanwhile to some comments in this thread in general - I am NOT suggesting, please READ the article - I am NOT suggesting Nokia 'go back to Symbian' nor am I suggesting Symbian was 'fine' before Elop Effect. I AM suggesting today, Nokia has no handset to sell to the 300 million who WILL BUY a smartphone this year under $100 if Nokia uses Windows Phone. That was verified both by MS and Nokia. It can't be done. But Nokia ALREADY HAS cheap Symbian phones in the 100 Euro range and can bring those into the sub $100 dollar range - ONLY USING Symbian today (until Meltemi is available). That is what Nokia needs to do partly to survive, partly to convince the sales boycott that the random sales dude can once again safely recommend to his/her customer to buy a Nokia Symbian device, that the platform is not dead. I did not suggest Nokia return to living with Symbian forever

Tomi Ahonen :-)


1) I must rejoin other commentators on the impossibility to return to Meego. Forget it, it was stillborn. Never had any life in it.

2) Conversely, Symbian still has life in it, and a few good products in the next 18 months (longer is unrealistic) would be helpful -- but with the transfer of people to Accenture the corporate know-how is gone.

3) Nokia is stuck with WP for its smartphones, and must hope that Windows 8 will become a computing ecosystem across phones, PC and tablets.

4) Retaking the Qt path is probably a good option -- but I have difficulties to clearly see the advantages, shortcomings and maturity level of that environment.

5) The extremely worrying tidings is the marked reduction in the sales of Nokia feature phones. Very bad omen, and an aspect that Tomi did not handle much in his post.

6) In any case, fire Elop, as suggested. His performance is simply mind-boggling.


@michael you are an idiot. You completely ignored Symbian's new UI overhaul and next 2 overhauls and the highly praised success of the N9's UI and speed. The HW error of Nokia's past was using slowest possible processors and also GPU. That was it. Your whole post can be summed up by over emphasizing Nokia's failure in the past by using slow processors and GPU and then generalizing that to spread it out to all aspects of the devices software etc.. all to praise little fat waddling microsoft trojan horse Elop. OMG "he did almost everything right" .....NOT Understand QT? OM......G you need to shut up.

@don_afrim Wrong I'm holding on to an N9 and it got awesome reviews (with many saying WTH? why is this not the new OS) along with the new Belle UI of Symbian (did you even read the article) something you just conveniently ignored. Do you just post a comment that is the opposite of whatever the article says and ignore it. Deetduhdee!

I bought the N95 8gb, the N810, the N900, the N8 and then the N9. Elop is an *** that ruined our future. The number one failure of Nokia devices up to N8 was slowest possible processor and GPU and second UI of symbian devices sucked. That has a big impact. Belle was a good overhaul and we have more in the works and N9 was a good UI. CPU and GPU, they only partially made progress. They seem to be slightly increasing the CPU relatively compared to the past but the thing is both OS's don't need fast dual cores.
ELOP is the worst thing that has ever happened to Nokia. He is destroying jobs, Finland's tax revenue, our future cross platform apps market by killing QT, copying the N9 HW for windows blows - he is basically a MS trojan horse meant to take out competing OS's that compete with Microsoft's future. Why was Nokia an easy target for MS and why did ANYONE IN NOKIA PUT HIM IN THE DRIVERS SEAT? WHO GOT BRIBED/BLACKMAILED/COERCED?



I think it would be very difficult for nokia to make a U turn.
First, I agree with you that the trouble maker must be banished into Timbuktu.
If Elop is not kicked 100,000 miles away, nokia would end up even worse. That guy is a pest.

I also don't know how much damage has elop done to nokia.
He has fired most of the guy in Symbian/Maemo.
So it would be very difficult for nokia to fix Symbian/Maemo and make the OS to support faster CPU.

Just FYI,
Nokia can't sell symbian device with very big price anymore.
Symbian can only work on Arm 11 CPU, and right now this is the US$ 100 Samsung Galaxy Y price bracket.
Symbian can't compete on US$ 200+ that have Arm Cortex A8 with higher resolution than nHD.
That's mean, Symbian is super low end.
(hint, download angry bird on your E7, and do the same on samsung galaxy S, and see how long it take to install the app).

The good news is,
N9 support Arm Cortex A8, so it can compete with the low-mid end Android Single core.

Bad news,
Nokia don't have anything to fight back in Dual core (mid-high end), and Quad core (high-end)

Yes I know,
N9 is great, I also have one, the black color.
But regular customer will ask, how many apps does it have....
how many cores does it have....
(and it would take a great time for the apps, and also for the support of multiple cores)

Which mean,
Nokia is screwed big times.
Nokia could re-hire the engineer to transition Symbian to Arm Cortex A8, and Meego to dual/quad core but it would take a long time to accomplish this. The arsonist, Elop, have burn the platform.

I don't know if nokia able to re-hire the engineer to make Meego able to compete with Android and iOS, but time is running out. If the cancer is not taken as soon as possible, it will be too late.


Many good points in the Nokia failure analysis, but I cannot agree with your logic on the saving maneuvers.

First of all, consistency is also important -- for both developers and for carriers.

Also, Symbian still is an effin nightmare to develop for, very slow and the whole talk about superior battery performance and speed matter nothing (and they are proven wrong by objective benchmarks at any rate).

Symbian, or Belle or whatever Nokia changes it's name to is a laughing stock.

Yes, getting carriers to push it would recover some sales from past quarter, but it is still on a life support and will die. It's not the future, not even a stop-gap imho.

As for alternatives, how about taking the giant by the proverbial balls. Nokia is in a position of leverage. They could (if they wanted, and if Elop was not the CEO) negotiate extra special priviliges for WP7/8 phone versions. Take out Skype, move over from Metro to N9 swipe UI, whatever they wanted. MS would have to buckle in, because if Nokia pulled out, WP would be just dead. Utterly dead.

That's the leverage.

And I'd be very surprised if Nokia isn't already doing extra negotiations with MS on how to solve the current issues.

Personally I think that if they can limp along till WP8 ships, when they actually have their own production phones (in 2013) and IF they care solve the aforementioned carrier sales channel issues, they have a fighting chance. If not, ah well, good riddance Nokia.

BTW, you didn't touch some of the core issues Nokia / WP / MS - combo still has (which are hurting Nokia now, albeit less than the practical boycott, and will hurt Nokia a lot in the future):

- Nokia's product cycle time is c. 2.2 years. If you compare it with the staggered release cycle of iOS/Android competitors, then it's twice too long. They have to *RADICALLY* shorten and streamline it. Otherwise they can't survive with the basic "proud to copy" strategy. Copying requires faster cycle times than the competition, because you are in a reactionary mode (re: Boyd on strategy).

- Nokia is still shipping 2-3 year old hardware (sansy Pureview cam module) and cannot price their phones anywhere near where the competition is (subsidized or un-subsidized) and are very uncompetitive to the consumer. No amount of WP/Symbian lies will make those old phones faster, less laggy or nicer to play with. The fact that UI on WP7.x is fast, doesn't mean that the SoC doesn't choke on web rendering due to lack of speed (it does). It's just all. The hardware is old. And overpriced.

- Nokias trust and brand are diluted by a series of fiascos from the Elop effect to the limping Symbian variants (they are still naming Belle upgrade fp1, probably breaking compatibility as they go along, didn't they learn anything from OS60v3 series, idiots!), Compal crap phones, MS lies and constant lack of new exciting phones (sans pureview's cam module). Nokia needs to cut the crap, stop lying that "competition is not as good, WP smokes (crack") and accept the facts. To the carriers, to the developers and to the consumers. And then find a solution from those.

However all in all I think the solution is still (for now) WP. Even if it kills the company. With Symbian they can't succeed (they got rid of 90% of the coders, for chrissakes). The same goes for Qt (my friends who did that, are no longer around there), it's gone. The horses have left the barn. There's no Qt to go back to (and the shambles they had at that point, was nothing more than a pipe dream, it was a bad fiasco when they abandoned it -- ask any outsider, and not the Nokia kool-aid drinkers). Meego, perhaps, but that would make another "breaking of promises" and "turning the slow ship around", besides they've also let out most of the Meego people.

So WP it is. Come hell or high water.

This is Nokia's trial by fire.

Yes, in terms of cash buffers, they can still bleed a few more quarters.

But they *need* to fix the issues with hd, execution speed, structural costs, carrier boycott, brand-loyalty, sexiness of products and pricing.

Then, perhaps, are they in shape to fight back.

If not, like I said, good riddance. There are better companies now. Everything that is born and grows, eventually dies. Perhaps Nokia's time is drawing closer.


The 'killing qt' argument is persuasive. MS only seem to partner to remove competitors from the market place.

qt is really the 'other' eco-system apart from android (linux/java) and apple with objective-c, not symbian or meego on their own. Apart from those it's also used on desktop software and other mobile/embedded devices (like e-books).

C#/.net is nowhere in the mobile picture and MS must be desperate to make a player of a platform they control.


Sorry, it seems there are Chinese apps now in WP7...
But, that said, I still think WP7 will be a flop in China.

Also, not too sure about the whole Qt thing... I read what you write, but I happen to disagree. 80% of smartphones, maybe. But no matter how good the framework, catering to different screen sizes, processor speeds, resolutions, etc., is not easy. Even worse when it is across different OSes. Just look at Android (where they generally did a good job, IMO).

I think you are right, first of all Nokia needs to re-build trust. They will never be what they were before. But they can become profitable again, maybe not challenge Samsung anymore, but at least slow their decline and maybe rise a little :)

I like tl;dr versions, and mine is
0) Replace Elop. Seriously, he has done enough damage (just look at the stock). New CEO, as Tomi said, travels around apologizing personally to carriers.
1) Announce gently that they are moving towards a dual-smartphone platform strategy (like Samsung, HTC, and many others). Play a slightly different message privately to carriers ("we know we made a mistake, we were stupid, we will sell more non-WP7 smartphones in the future").
2a) Move towards Meego/Meltemi in smartphones. Hire a top-notch developer team. Make sure the developer tools are as good as other modern platforms. Integrate with Ovi. Make the programming environment similar to iOS and Android, so developers can port apps easily.
2b) Alternatively, move towards Android in smartphones. Make sure Nokia can differentiate with software and hardware from other Android OEMs (Nokia Maps, battery life, etc.). Build Ovi Payment Platform that integrates with Google Play; leverage carrier relations and take x% of earnings from payments.
3) Formulate a low-end smartphone and dumbphone strategy, most likely based on Symbian. (Or sth like bada, for low-end smartphones.)

This is just my 5 cents...

Also, just to add insult to injury, Elop today went out publicly and said that nobody needs multi-core in smartphones. I think now he is just rambling... sure, for many many apps and tasks, single-core is enough. In general, more cores will need more battery (which is already being addressed by bigger battery). But certain high-end games and complex applications (VPN + remote desktop) are only possible with multi-core. Proper multi-tasking is only possible with multi-core. But read for yourself:


@Tomi, what do you think about the CEO of NSN to be replacing Elop? He is from India, ex-nokian, having good relationship with network operators - perfect match? :-)


QT - although it is not perfect, just like all other environments - is really good thing.

Even me is able to make some simple applications with it after moderate time is spent with playing with it. Just for fun and to show my daughters how capable father they have...:-)

It really helps cross-platform development _a lot_...


That is not a good translation:
"Der Stern concluded its review thus, saying the phone is so fantastic, that while it is not sold in Germany, German citizens should travel to another country like Switzerland or Austria to go buy that phone!"

Fazit: Meego ist minimalistisch aufgebaut, intuitiv zu bedienen und gut durchdacht. Wem Individualismus über alles geht und Apps nicht so wichtig sind, sollte sich das Gerät definitiv anschauen - zum Beispiel beim nächsten Urlaub in Österreich oder der Schweiz, wo es offiziell erhältlich ist.

Btw Der Stern is not the equivalent to Time/Newsweek or Economist. That would be Spiegel/Focus.
Stern is a bit more on the yellow press side.


@Nokia longterm: there is life outside of USA...

No problem with Nokia's strategy in USA but WP devices are simply of capable of doing many things being important/attractive/deal breaker outside of North America/Western Europe (especially in developing countries): personalized ringtones from any source, etc.

One solution just simple does not fit all...


Indeed the operators wield incredible control over the destiny of handset manufacturers. But how long will this last? Are the sources of their power eroding?

One has to wonder if and when such a move away from operators as main sales channels will be seen as an innovation and not a blunder. Sadly, right now for Nokia it is definitely the latter.


@Nokia longterm WP8 could easily take a 20 % market share in the US

No, just no. There are literally no facts to support this. IF Lumia 900 sells well, they could get maybe high single digits. They below 4% now, remember.


When Nokia decided to migrate to WP, they outsourced all Symbian maintenance and development to Accenture. That way they got rid of some 3000 headcount, but all technology knowledge of the platform was sold off. Further, they have laid off massive numbers of developers. In Denmark, more than 1000 IT people have been laid off. Many of them are in other jobs now... These are the people that developed many of the most successful Nokia phones launched.

Having to "restart" Symbian I would assume would mean they (Nokia) would have to insource development of the platform, as a company should/would not wish to outsource such a strategic assett. This would imply major cost and risk (end the contract with Accenture - it doesn't come for free) and result in a transition from Accenture to Nokia, that would involve substantial risk. When you do these kind of transfers (transitions) you always risk loosing key staff and knowledge. It takes years for the "receiving" part to rebuild that knowledge. This is what Accenture is in the process of doing right now, and it is what Nokia would have to do if they insourced from Accenture.

It would delay competitive development of the Symbian platform for a very long time, and thus Nokia would continue to loose competitiveness in the market.

Further, who of the Symbian developers would wish to work for Nokia with the track record Nokia has shown in recent years?


I agree with what Rune said.

But I think Symbian could make an interesting platform for feature phone. Just kill the S40, and use the new name, i.e. S50 (between S40 & S60). The S50 would be feature phone with only 2 or 3 apps for multitask (so it won't be a burdern on CPU/RAM) or remove the multitask completely. It would be priced from US$ 50 - US$ 120 (The Asha Family is using 1GHz CPU now on this price range)........... suddenly nokia HAVE the best feature phone OS.
But that's only part of the equation.

I don't know if Meego team is still intact or already butchered by the algoz.


My plan to save Nokia:

- Fire CEO
- Board reorganization
- New strategy: multiplatform, based on target groups (Symbian, Maemo7, Meltemi, Android, WP8, Qt)
- Buy Sony Smartphone division for very fast access to Android markets. Sony is in so bad shape that they might sell it for right price


@cycnus: Meego team is anything but intact... :-(


Morning Tomi,

did you read what Elop did today yet? Announced that multicore processors are undesirable in smartphones.

Well, I'd tell him a little secret: top model cell phone buyers disagree.


@volt: Actually "Elop thinks that dual-core and quad-core processors are just a waste of battery, and that to the consumers they aren’t all that useful"

In fact it is most probably true but communication, communication, communication... :-(

Of course, in case of demanding 3D apps, etc, more power is more useful but in daily usage single core must be enough...


*Investors losing faith that Nokia can stop the rot*

Ailing cellphone maker Nokia has the cash to survive seven quarters like the last, but investors are losing faith that it can break the vicious circle that keeps customers and in turn application developers from its new phones.

Chief executive Stephen Elop, who joined from Microsoft in 2010, gambled last year that ditching Nokia’s homegrown Symbian phone software in favour of a largely untried version from his old employer would put the company back in the driving seat.

On Wednesday, it warned that it would make losses in the first two quarters of this year, after demand for the moribund Symbian phones collapsed, while sales of its new Windows Phone models are a long way short of compensating.

The market took fright when Elop made the decision, and tumbled again on the loss warnings. Any investors still holding the stock after a year-long white-knuckle ride have lost two-thirds of their investment. On Thursday, the stock was down about seven per cent after a 15-per-cent fall a day earlier.

Despite getting the new Windows Phone models out at breakneck speed, it has sold fewer than expected, as consumers remain wedded to Apple’s iPhones or Samsung models running Google’s Android system, both of which come with a bigger range of applications supported by a much larger population of developers.

“It is too early to write Nokia off,” said analyst Peter Cunningham at Canalys. “It is still in the middle of its transition to Windows Phone, but it doesn’t have the luxury of time. The next six months will be critical in the company’s long-term future. The Lumia 610 needs to be a success, and it needs some hit products in the market in time for Christmas.”

Nokia burned through 700 million euros of cash in the first quarter, leaving 4.9 billion euros ($6.4 billion) at the end of March, but as its share price tumbles, it might run out of time before it runs out of cash.

Its market value, about one-10th of its recent peak in 2007, the year the iPhone stormed the market, is just 11.3 billion euros, making it increasingly attractive as a takeover target, though industry followers said predators would probably move only after some evidence that the Windows Phone strategy was working.

A Reuters poll showed Nokia likely lost its position as the world’s largest cellphone maker in the first quarter to rival Samsung Electronics, after dominating the market for 14 years.

“At the moment, it seems that the strategic decisions were not correct,” said Timo Rothovius, chairman of the Finnish Shareholders Union, which represents small-cap local investors who have increased their holdings during the free fall.

“It might be that the Windows phones still take off, but at the moment it is hard to see any light at the end of the tunnel. Something radical has to be done. The company’s credibility in the market is weak, and it suggests that maybe betting everything on one card wasn’t a good thing,” Rothovius said.

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