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May 01, 2012


So Vatar

you really are a strong Microsoft believer. But you seem to be unable to see the disaster Windows Phone is for Nokia. A year ago it was said when Nokia just starts to deliver WP, then many many WP phones will be sold, and everything will be gravy for MS and Nokia. Didn't work out that way, did it?

Now we hear that we just have to wait for W8, and everything will be gravy for MS and Nokia. Unless it will not.

I also hear very often that MS has the stamina and is therefore able to make WP successful. Like their gaming console. Also it is mentioned that MS understands Software and online services and such.

Well, here are some news for you: According to CNN Money MS's Bing service has been losing $1B per quarter. No change in sight. MS's online division lost $9B from 2007 to 2011.
And did not MS release these ill fated Kin phones just to take them off the market after a few days?

Yes, MS is able to subsidize their poor phone and online services performance with profits coming from desktop software. But there is just no guarantee, not even the likelihood, that MS will be a major player in mobile. Windows 8, 9 or 10, they are stuck on the desktop, you will see.

Now Nokia does not have a business subsidizing their money losing phone operations. They will be out of business faster than you think, Nokia won't last 7 to 8 quarters given their current trajectory.

And there is no plan b in sight. WP7 failed already. WP8 will be the savior. Fine, believe it. It still won't happen. It will be Kin all over again. MS will live. Nokia will be gone.


@So Vatar Happy to see at least you read my comment. Somehow I can't see it myself and already thought Tomi had not allowed it.

You are very correct to question everything. I myself do the same. You are also right about Bing, I even read they might want to get rid of it.

However I remember Nokia saying that 'it will be a long a painful road' and heard nobody say 'it will all be gravy'. The gravy was in Symbian in the past and it sadly failed to hold it's own position. Once you realise that as a company you have to face the facts. And you can't put all your eggs in one basket which is why Nokia started Maemo. Maemo wasn't getting the industry support it needed, and so Nokia teamed up with Intel and it became MeeGo. That too was such a long shot way before the N9 was launched something had to be done. Until the time of the decision, the N900 was the last Maemo device and there was no MeeGo Device at all. Let alone that either Symbian or MeeGo could have done proper mobile/PC convergence.

So Nokia needed a good software strategy, one that was future proof. Android clearly was not it. Maybe earlier it could have been, but how could it go along with Android. For years we have seen tireless bashing of Symbian. Clearly to stay with symbian would have meant having to throw ever more money onto a sinking ship. So, something had to be done.

Would Nokia in 2011 opted for android, it would have presented it's customers with yet again another forked OS. This is something I believe will be a huge issue in the future, if not already.

So, then, an OS that is future resistant, has a predictable cost, is not riddled with IPR issues (android), and working with a strong partner, MS WP is actually a rational decision to make all things considered.

Save for all the anti-MS retoric that was popular 10 years ago. It's time to get over that and look at what future potential nokia has in differentiating itself. Skype may very well be an example of such an innovation, the one that Tomi say the operators hate the most. This may or may not be the case. Fact is that conusmers love it and use it often to meet their telephony needs from a computer. This is a fact.

But then lets look at the role of the operator, past present and future. Their role is diminishing and their services are more and more moving over the internet, and they look at their operators for fixed rates. Meanwhile they use Whatsapp instead of SMS :D

Let me put it shortly, if Nokia and Microsoft can't have a compelling story for the operators going forward, certainly android and iOS will continue to diminish the operator role anyways as their customers are using VoIP, whatsapp and whatnot. MS and Nokia have a rock solid patent portfolio and product portfolio together and it is, in fact, future fool proof, at least from a technical perspective. That perspective promises convergence between phone and PC and living room (TV, Xbox) like no other player can offer.

Also, to make money, you have to spend money. Both companies have pledged to so and are doing so andwill be able to continue to do so for at least several quarters, possibly even a year or two. So it is simply too early to tell how many of these Lumia's will get sold. Like with the iPhone, once AT&T decides it wants to make it a success it will snowball all around the world. Andearly signals are that Nokia WP is better received than any other Windows Mobile phone, ever. Even Steve Wozniak, co-founder of Apple is reportedly really really fond of it. Go figure.

So sales, market shares, it's all historical information already. What matters is what happens going forward. And since technology development moves at such high speed, I actually believe it's a very positive thing that Nokia developers and MS developers, combined millions of people, would start to learn how to work together for the greater good in this upcoming technology convergence.

So yes, in any ecosystem developers are in essence the enablers. Symbian had a huge community, but it lacked younger, new developers. MeeGo had a promising start, but this did not have a ripple effect and it remained small. Now, developing for Nokia smartphones can all be done through MS. The same software most of us have used for years, save for apple and linux users, who represent the minority.

I am in fact not a believer in MS, but I have learned about their profits, operating margins and balance sheet, and that makes 2 healthy balance sheets (war chests) going boldly after the market leaders.

Surely that is a preferable position to be in for Nokia going forward looking at the future, than to wither away slowly as it's fate was too closely aligned with Symbian.

Then about ecosystems. Look at the google ecosystem that is android. CTR's are declining every year and mobile CTR's are even lower and declining even faster. Targeted ads income is threatened by the success of facebook. How long can google afford to pour it's billions into the not-so-profitable development of Android? What if the ad revenue dries up? What about the many, many privacy advocates fiercely protesting the activities of the company? This does not bode well for an integrated converged consumer experience. In fact, it's damning for your ecosystem if yor customers don't even trust you as the provider of a service. No wonder so much of what the company tried to do with social has failed flat on it's face. ultimately, Google is not a technology company but a marketing company. And that flies straight in the face of the average Joe,who has already learned to ignore Google ads like a second nature.

Meanwhile, 70% + of the developed world is using windows/Office applications on a daily basis. Kids can not get through highschool without at some point having used MS software. hundreds of millions of people have hotmail accounts. I have had one myself since 1997, so for about the past 15 (1) years. What better ecosystem could you have for me? Apple you say? Allright, fine I give you that. But it requires a financial commitment from my side of thousands and thousands more than what it would cost to invest in my own computing needs to simply use windows. Google for that matter is not even an option, as the android OS does not run on your desktop computer, which is what the majority of the people use at work on an everyday basis.

So believer no. If anything I believe people are pretty much slaves of their habits, and they will go with what's easiest for them. It explains the success of samsung with android, because it was in a way simpler than symbian at the time, even when symbian was superior in its features. But Windows Phone is much more sophisticated user centric UI design than android these days, and if you think otherwise, I would love to hear your arguments.


I think Tomi's estimates are pretty good.

Nokia and MS have been caught with their pants down by the speed that the mobile commuting space is moving, mainly driven by Apple and Google.

One needs to look at adoption curves for new technology. Horace Deidu at has done some good analysis of this issue.

Basically, by the end of 2012, when MS *finally* has a complete product (WP8) for the market, it is going to be too late. Between 60-75% of the addressable market will have chosen a solution in the wealthy, developed markets of Europe and North America, choosing either iOS or Android. The laggards left, although 25% of the market will be the most difficult to convert, and the poorest. Not a good target group.

Since MS does NOT have a good name with consumers (MS=Vista, bloatware, viruses, stodgy software at work), there is basically no one left who is going to look at their products.

MS and Nokia have been caught out by the speed of developments in the mobile space. Whilst their roadmap looked good in the middle of 2010, when their plans were hatched, things have gone too fast for them. Both MS and Nokia are slow and bloated.

I would also add that I believe Apple has totally wrong footed MS with the iPad, and that within a couple of years MS's dominance as a OS-supplier will be greatly reduced in the movement to mobile computing. Again, asymco have cove covered these issues:


I meant to write 'mobile computing space' in the first sentence of the previous post!


Last year in May I had a chance for a 1-on-1 with Carolina Milanesi, who effectively is leading Gartner's global consumer devices research (the one doing their reports, forecasts etc I worked in a corporate function at a global corporation, and when you do that, you get the chance to meet people like her.

Gartner had just published an updated 2011-2016 forecast, predicting Nokia smartphone share of 20% after end migrating to WP. I questioned her forecast, knowing I knew no one who used WP phones (they had been out for a while in my country), and in my 100K+ corporation the mobile strategy was all iPhone/iPad with Android and BB as backup. While I am no mobile expert, but knowing that in my world, no one considers Nokia to be competitive, and I see practically no one using new Nokia phones, I thought the numbers were optimistic.

My sceptism on the 20% forecast lead me to ask her, why she believed Nokia could achieve a 1-1 migration ratio. Her response was, that Nokia customers would buy Nokia because of the name (the brand), not the software. I guess, either she was wrong or Nokia has destroyed most of their brand value in the past 1-2 years?

While I personally believe Nokia is near dead in water in the global smartphone war, I think the 3% is too pessimistic. I can't say why, but it feels like total, utter destruction, and I really have a hard time believing that...

Btw when Lumia 800 launched here we saw a massive marketing blitz. After a few weeks the marketing ended, and it's done through carriers now, but nothing more than iPhone/Android is being marketed. I see very few people with Lumia's. I have friends working for large retailers. They say that Nokia Lumias are selling, but nowhere near the level of iPhone and Android (Samsung/HTC). Perhaps 1/10th is their guestimate with iPhone at more than 50% total share.


Hi Tomi,

While it is true that now it's the operators that make or break handset businesses, operators will have lesser impact in the future. When all things &-everything can be commodotized in due course, they will no more than the one selling dumb pipes and related service. Internet technologies, availability of hot-spots, wiifi everywhere will affect operators businesses too.

Case: Free Mobile in France already causing headache to operators.

The question is how long can they (operators) continue to subsidize phones? When you find it difficult to make money with text, sms, and data services, would you then subsidize the handsets?

With the change in customers business model, the handset makers too have to think about adapting to a change in their own business model.

Game is wide open for handset makers (even for new players).


Tomi is such a rockstar! He is my hero :D


Nokia should have hedged their bets by going with Android and Windows Phone. I'm sure the $1 billion from Microsoft was tempting, but in retrospect it wasn't enough to offset the risks of going with a brand new platform.

Mind you, Tomi's insistence that Nokia would still be #1 if they had stuck with Symbian is mistaken. Instead of 8% share, they might have had 10% share, tops. Samsung's meteoric rise was fueled by the fact that they aggressively built up their Android portfolio and aimed at the high end where the real money is, and not just at the low end, where Nokia channel-stuffed their way to market share towards the end of the OPK era. The N9 stood no chance against the Galaxy S2, and whatever MeeGo phone might have been ready likely would pale in comparison to tomorrow's Galaxy S3. Meanwhile, Apple's juggernaut would still have continued almost unabated, particularly in markets like the US. Really, it's become a 2 player game now, and I don't see how sticking with Symbian would have prevented it. Going with Android might have (and only might, since look at HTC, Motorola Mobility, LG, and Sony).


If operators are to be commoditized and selling just an internet access who will pump money into infrastructure?
- There are only 2 outcomes possible: the level of investment will break down due to missing revenues, meaning the evolution of mobile internet accessibility will halt
- The cost of data packages will skyrocket, given that consumers are not willing to pay that much for data (as opposed to voice and sms), the market will quickly saturate and stagnate at higher levels. The evolution of mobile internet accessibility will halt
Current projections of smartphone migration rates and siginificance of ecosystems is wholly based on assumptions that free lunch (LTE rollup witout paying carriers more) exists.


My previous comments aside, I do think 3% is underestimating Nokia's share. The Lumia 900 is actually selling decently in the US. A WP for North America strategy might have been a decent "test" for Nokia last year, given that they had nothing to lose in North America in the first place. It would have let them experiment with Android and/or Qt while avoiding the Osbourne effect in the rest of the world (i.e. they could have given a public face that they would continue to support Symbian (which would have likely continued the gradual decline of Symbian) until such time that they were ready with new devices.


I think Nokia could well do without North America. The population is just 200 million so its not worth selling your soul like Nokia has now done.

Its tough market with hidden operator interests and behind-the-curtains actions coupled with capricious consumer behaviour.

1 Bn Microsoft money is like a fart in Sahara, i.e. it disappers veeery quickly. Why Nokia is slaughtering the whole company for peanuts ?!?

Microsoft is not hip. Android is. iPhone even more is.



7N Lumia on Q4 2012? That's optimistic, but why not...

it will cost a lot, but as Nokia is selling everything it can (Vertu, which by the way will switch to Android), there will be some fresh money for indecent marketing... that + the help of Elop's "Nokia Army" ;) (what a ridiculous concept)

There still will be problems:
- Samsung isn't really a sleeping giant, it's a very active one, and they will release several devices, including WP8 if it's available on time. And Samsung is not the only competitor in the game.

- The silly WP8 development will cost a lot, for only few revenue; let's face it, iPad and Kindle are popular thanks to the amazing and unbeatable amount of media available for it, WP7/8 just can't beat it.

- MS reputation is bad

- Nokia reputation is bad too now; it's like a car that was involved in a crash; one can repair it, repaint it, make it look brand new, it will always have this accident in its history, then potential buyers will always be suspicious (and then the value will always be low)

Elop is just making Nokia's death slower.

P.S. Sellers are not very motivated in selling WP: The most important Rogers store in Quebec doesn't even have fake lumia demos to show they have in stock.

When I asked the seller if they sell the 900, the seller told me they have few in stock, but they haven't received yet the fake plastic one to put on store's display (almost one month after its release!)

A former Android owner

@ Jagdish Chandra
I've never heard about Tomi before he was quoted on Finnish TV as a leading mobile analyst. Now after reading his past and present ideas, I don't think Tomi is much into constructive criticism or objectivity regarding Nokia. It rather seems like tabloid tactics; smell blood, and kick those already on the ground.


@Former Android owner:

Can you please explain us on what Tomi (and not only Tomi actually) was wrong in his predictions?

It's not about kicking someone on the ground... that's about someone (head of Nokia) who doesn't listen to common sense and keeps on repeating same mistakes again and again; there is no need in kicking Nokia as it harms by itself.


Skype may be disliked by mobile providers, it still has a good influence (from customer's point of view) on them:

In France, two operators Free and B&you (Bouygues Telecom) offer unlimited calls to over 40 destinations plans and Russian Bee-line and Megafon reduced significantly prices for roaming.


Let's assume Tomi has correct numbers there. That's a predictionof what will happen if nothing is done. Good.
Now let's assume Nokia BoD is not blind, they see this coming and take actions. Fortunately those actions will not be the ones that Tomi wants (the ones that are good for Symbian and MeeGo) but those that benefit Nokia in long run.
Actions will be taken and after each Quarter, Tomi will correct his numbers. We'll see the truth at end of year, not before.


People have always hated Microsoft but they just had to use MS products in PC. Apart from Apple, it was practically the only choise you can have. In smartphones there are now other choises and people have showed how much they really love Microsoft...


Consumers don't care about operating systems. Why would they? They want lifestyle statements, huggable brands, something that confirms their self-belief. They want RELIGION! Apple does that. Windows and Nokia don't. Come to think of it, neither does Elop.


Tomorrow the day will come: annual meeting of shareholders. I'm excited... Tomi, do you expect something interesting? :-)



Don't you think you were over optimistic?
There were lots of second hand / barely use lumia on the ebay and other second hand market sell at a very low price.


I don't know why so many people are disturbed with low conversion rate from Symbian to WP. Those OSes are simply from different worlds. Symbian (S40 esp.) used to be clunky and unintuitive, but there's a tradeoff (as with everything). Once user invests time to master it s/he gains access to infinite range of features and customizations that over time allow to align the device with unique personal work-flow. There's no way in s/he could switch to WP which doesn't provide many improvements (better usability/discoverability is of no use once you wrapped your head around something a lot more complex) while taking away most features s/he have grown to dependent on. So the closest approximation for former Symbian (and Windows CE for that matter) owners is Android. There's also another segment of former Symbian users (mostly in Europe / Latin countries) that used to treat the phones like luxry feature devices. These users have happily swithed to IPhones.

ice cream-sandwich

@Baron95 Oh my god! Now that was a Full salvo! And right on the money!

@Ian Yes, Yes and Yes ! I definitely agree. Let's start with Android Robot. It's cute and people like it. Why it is so hard for Nokia to understand the psychology of consumer products. Once they were promoting usability and UI design.. Where has that attitude towards design gone..?? Guess they have lost it. But even more important are those things you said.


There are two different market shares.

1. Windows Phone share of Smart Phone markets
2. Nokia share of Smart Phone markets.

Windows Phone success is in Windows 8 what is forced to every new PC (in reality, even if you can order few models without pre-installed windows, it is still monopoly) and so on people will get familiar with it.

At least at that time Windows Phone success is guaranteed as people get familiar with Metro GUI and Windows Phone phones starts look familiar.

Can Nokia get biggest share among Windows Phone manufacturers? Samsung, LG, HTC, ZTE....? All big names today in global Smart Phone markets...


Tomi, I don't agree with your prediction that sales of Lumia will increase and peak at Q4. I think Lumia sales will tail off towards Q4 due to one very important factor - it cannot be upgraded to WP8.

Poor Nokia. With Symbian sales crashing, MeeGo suppressed, Meltemi not ready and dumb phones being junked Nokia will have nothing to sell until its WP8 phones come out and that may be Q1 2013. By then Nokia will be in intensive care if not already insolvent.


Am curious, what're your comments about Nokia board of Directors ?

Why didnt they see things when Elop caused Nokia's credit rating to fall-- aparent even last year before Nokia got junk rating ?

Why didnt they react when he got rid of Tero Ojanpera and before that Anssi Vanjoki and now Colin Giles ?

Why didnt they see the light when Elop makes dumb statements like "dual cores are a waste of battery" ?

Why dont they see the light in face of the extreme collapse last year itself ?

Why do they let Elop dismantle brands like N-Series and E-Series-- on which millions of dollars are spent-- and take dictation from Microsoft ?

I would love to hear your thoughts abt what board of directors may be thinking to allow Elop continue soo loong...


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