So now we have more twists and turns in the Elop Skype admission from the Shareholders' Meeting. That original blog posting of mine from May 3, analyzing a few short news clippings from the Nokia Annual Shareholders' Meeting, sparked a lot of debate and controversy, not just here on this blog and on Twitter, but also on My Nokia blog, All About Symbian blog etc.
PART 1 - (the most serious matter, do we need to call the Truth Police?)
WAS TOMI LYING ABOUT ELOP STATEMENT
My only directly attributed quotation to Stephen Elop from that meeting about the Skype situation came from a news story by Helsingin Sanomat, the biggest newspaper of Finland, a very highly reputable major European newspaper, and of all stories about the Shareholder's Meeting on that day, it was the only one that included Elop's comments about Skype. I did not somehow invent words for Elop. What I posted, was my own translation of four short sentences by Elop, directly from that news article (in Finnish). After we received a ton of comments, among the comments was one of the regular visitors to this blog, Asko, who had been at the Shareholders' Meeting. Because there was no other reporting on what Elop had said about Skype (so far, later there would be on My Nokia Blog, but significantly after my blog), I used Asko's reporting here in on this blog, and clearly indicated this was Asko's recollection, I did not put it in quotation marks and italics as directly said by Elop, to show it was from this blog's point of view, an honest attempt to report what he seems to have said, to follow those four sentences he clearly did say.
This is the total part I wrote about Elop and Skype on May 3 with the update on May 4:
SKYPE IS CAUSING LOST SALES
The second big news that came from the Shareholders' Meeting is the issue about Skype. Elop was asked by a shareholder "Nokia seems to be having a problem with the distribution channel due to Skype" asking how will Nokia deal with this problem. Elop answered "If the operator doesn't want us, it doesn't want us. We will appeal to them with other arguments. We have more to offer to them. It is a good point to start the discussion from Skype." (source HS website. Text in Finnish, translation is mine).
UPDATE May 4 - again our reader Asko who says he was personally present at that meeting, adds that Elop had explained, that Nokia, together with Microsoft, is now attempting to convince carriers/operators to accept Skype against their wills, by marketing/pricing/sales gimmicks.
(Italics and bold are exactly as in the original blog posting). Note - the only parts in quotation marks are what Helsingin Sanomat reported, including the original question, and what Elop had answered. We do know, already from what was on my blog, that what Helsingin Sanomat had reported, was not the complete response by Elop. And obviously, our reader Asko had added valuable parts to what Elop had said. I could not in any way judge if there had been even more that Elop perhaps had said, because, as I already said, I did not attend the meeting myself, and there was no full transcript of the full response. The Helsingin Sanomat story was the only one that included the question and answer about Skype, and we can see that Elop's reply was not fully printed into the story.
After that blog posting, the story has spread a lot worldwide and it seems to have spooked Nokia. Nokia has now gone to the extraordinary step of releasing the video of the actual reply by Elop to the Skype question. They did not offer me the video or the full transcript of what Elop had said, but they went to a friendly blogsite, My Nokia Blog, and offered Jay Montano the full video of what Elop had said. Jay has kindly transcribed the exact response. This is how My Nokia Blog reports Elop's complete reply had been (on May 7), in a blog article entitled "Part 1: Transcript Nokia AGM: Stephen Elop on Skype"
Stephen Elop: So, thank you for your question about Skype. Indeed, Microsoft did buy the Skype company as part of the ecosystem that comes with Windows Phone and Windows and so forth, so that’s quite correct. The feedback from operators is they don’t like Skype, of course, because for those operators who have a traditional wire-line business, traditional telephone business, it could take away from revenues.
And, so what MSFT has done – and we’ve been part of these conversations as well with operators – is as you correctly say, if operator doesn’t want Skype installed on a Windows Phone from Nokia or any other company, then the operator can make that decision.
Now, you’re right: it can be circumvented. But of course it’s on all Android devices, it’s on iPhone devices, it’s on iPad, it’s on all of those devices. So in fact what we’re doing with the operators is turning it around into an advantage. Instead of them just complaining about Skype on Android or Skype on iPhone, with Microsoft and Nokia, we can have a conversation that says “ok there, is this Skype thing, is there a different type of partnership we can do that recognizes that voice over IP like Skype is coming no matter what, but maybe we can do something creative that generates incremental revenue for you.” Some operators are looking at bundling Lumia, Skype and their own services with higher-bandwidth allotments to actually charge the consumer more and generate more revenue for them. So by actually controlling the Skype asset, we can begin a conversation about how we can have a better Skype-based relationship, which was impossible for operators to do before. So it’s actually quite a bit more advanced than whether operators like or don’t like Skype; they actually want to engage in a conversation about what does this mean and how could we do something that we couldn’t do before. Thank you.
Thank you to Jay Montano for transcribing that. Thank you to Nokia and its PR boss, John Q Pope for releasing that video to My Nokia blog. Now we can see the full story. And first, lets see how accurately or misleadingly did my blog report on Elop's statement. I wrote that Elop was quoted as saying:
"If the operator doesn't want us, it doesn't want us. We will appeal to them with other arguments. We have more to offer to them. It is a good point to start the discussion from Skype."
This was my translation of what Helsingin Sanomat had reported. What did Elop actually say?
"...if operator doesn’t want Skype installed on a Windows Phone from Nokia or any other company, then the operator can make that decision."
And Elop said also:
So in fact what we’re doing with the operators is turning it around into an advantage.
And Elop said
we can begin a conversation about how we can have a better Skype-based relationship, which was impossible for operators to do before.
Was the Helsingin Sanomat quote attributed to Elop accurate, in that Elop did say something like that - bearing in mind, the Finnish journalist translated Elop from English to Finnish, and I have since translated it back from Finnish to English. Yes. Take the Helsingin Sanomat quotation, that is very reasonably accurate - not perfect but reasonably accurate - depiction of what Elop did say, explicitly on the point about Skype. It is not complete, in everything Elop said, but journalists are tasked to tell us the main points of news. I think that was the relevant main points of the news story. I think Helsingin Sanomat cannot be accused of putting words into Elop's mouth, he did say something very similar to what I reported here, when translated from English, to Finnish, and back to English.
Those who have been here on this blog, and on My Nokia Blog and on All About Symbian (and other sites) complaining that Tomi is lying about what Elop said - I did not attend the meeting, I never suggested my blog was the full account of what Elop said - but I reported what was at that time the longest published passage of what Elop had said, published in any media. And with hindsight, as we can compare it to the original, when I reported that Elop said
"If the operator doesn't want us, it doesn't want us. We will appeal to them with other arguments. We have more to offer to them. It is a good point to start the discussion from Skype."
And his actual words were:
"...if operator doesn’t want Skype installed on a Windows Phone from Nokia or any other company, then the operator can make that decision... So in fact what we’re doing with the operators is turning it around into an advantage.... we can begin a conversation about how we can have a better Skype-based relationship, which was impossible for operators to do before.
My blog did not put words into Elop's mouth that are in conflict with what he said. The journalist had shortened what was said, and there was something lost in translation, obviously, but the meaning of my quote, and the original quote, are reasonably similar. For anyone to suggest there was foul play here, is simply being petty. I was not attending the meeting, I reported what the biggest Finnish newspaper had written, and what it did, was the longest passage of what anyone had said about Elop's comment on Skype. And just to be SUPERBLY precise about the translation. Why don't you go and put the exact Helsingin Sanomat Finnish language into Google Translate. See was Tomi accurate or not? This is what Google Translate tells us Elop's Finnish words would mean in English:
If the operator does not want us, so it does not want to. We appeal to operators, however, contrary arguments. We have to offer them more. Skype conversation is a good starting point.
If you want to believe that Tomi is twisting Elop's words, you are beyond help. Feel free to go join a religious cult or something. That quote I used, is by any reasonable mind, a fair cross-translation of what was actually said by Stephen Elop to the Nokia shareholders. The meaning has held very well through two levels of translations. Don't blame me for reporting what Elop said.
PART 2
NOW LETS DIG INTO WHAT ELOP ADMITTED
After My Nokia Blog made the transcript, but as it did not include the actual question by Nokia shareholder Mika Hasanen, we can now go and see the actual Elop video too. It is on ZD Net blog. The question was in Finnish, this translation is by Nokia (shown on the screen in the video):
I believe Nokia has a problem with product distribution. Operators do not want to sell Windows Phone smartphones, because Microsoft has acquired Skype, who offers free Internet calls. Skype calls are eating operator revenue. There may be ways to block Skype, but there will always be ways to get around it. What will you (Nokia) do to get over this problem.
Lets examine what Elop said, and what Tomi claimed Elop had said. I said on my blog that "Elop clearly admits there is a reseller problem with Skype." Did Elop admit that? Elop was asked explicitly in a question stating Nokia has a problem with distribution because "Operators do not want to sell Windows Phone smartphones, because Microsoft has acquired Skype" and to that Elop has the following 3 relevant replies: "The feedback from operators is they don’t like Skype, of course" and "as you correctly say, if operator doesn’t want Skype installed on a Windows Phone from Nokia or any other company, then the operator can make that decision" and "Instead of them just complaining about Skype".
Elop was asked explicitly if there was a reseller problem relating to Skype. Elop says "as you correctly say" - what is it that the person asking the question correctly said? That there IS a problem. The person asking the question was asking Elop to confirm. He DID. And he not only confirmed it "as you correctly say" Elop also said "feedback from operators is they don't like Skype - of course." To Elop this is not a matter of any kind of debate or discussion. It is in his own words ''of course" operators don't like Skype. And do they live by it or do they complain to Nokia? Elop tells us what the situation is now, in what he is trying to change: "instead of them just complaining about Skype".
I wrote that at the Shareholder's Meeting, Elop had "clearly admitted that there is a reseller problem relating to Skype." If Elop confirms the question "as you correctly say" and says "of course" operators don't like Skype and that they are "Just complaining about Skype" - any fair-minded person will take these comments as yes, Elop did admit that some operators/carriers do have a problem relating to Skype.
3 TIMES CONFIRMS - AND NEVER DENIES
Elop was asked explicitly about Skype. He admits three different ways that yes, the carriers do not like Skype. And Elop never denies that this problem exists. Elop gives 12 sentences in his reply about Skype. Never once does he say there is "no problem" with carriers refusing to sell Lumia because of Skype. It was explicit in the question. Compare for example to the question Elop got about how Nokia can differentiate against other Windows Phone manufacturers, and Elop went immediately to refute the premises of the question itself. He then explicitly responded against the question. But in the Skype question, instead of denying the problem existing, Elop admits saying "as you correctly say". Yes, undeniably, Elop says that the person asking the question, Mr Mika Hasanen, correctly said "Nokia seems to have problems with distribution due to Skype." These are not my words, the words of Tomi Ahonen. These are the explicit words of Stephen Elop. "As you correctly say". It is correct that Nokia has a problem with its distribution, related to Skype.
This is exactly how I summarized it. I said Elop "Clearly admits that there is a reseller problem relating to Skype." This transcript confirms beyond any doubt, it is exactly what Elop said, three different ways, in a span of only 12 sentences. This absurd criticism of Tomi Ahonen somehow inventing words that Elop never said, is bizarre. Read the exact transcript and see how many times and how many ways Elop admits Mika Hasanen was "of course" correct in stating "operators do not want to sell Windows Phone smartphones, because Microsoft has acquired Skype." Elop: "that is quite correct, the feedback from the operators is that they don't like Skype - of course."
THIS MATTER IS CLOSED
Elop DID admit operators do not want Skype. Elop admits the problem is explicit to Microsoft being the owner of Skype. This issue has nothing to do with who installs Skype on what phone. In fact, current Lumia phones do NOT have Skype on them, but this problem is admitted by Elop to exist and to be significant. So significant that Nokia joins Microsoft in meetings to try to end this. Elop did admit some operators (I never said all) have refused to sell Lumia because of Skype. When I wrote here on May 3 after the direct quote attributed to Elop, and I added this summary of what had happened (these are my words about Elop): "Elop clearly admits that there is a reseller problem relating explicitly to Skype. He furthermore admits, the Skype issue has resulted in some carriers actually refusing to carry Lumia." I was 100% correct. Elop said that, many times over and in many ways, in those 12 sentences!
PART 3:
LETS DIG DEEPER INTO WHAT ALL ELOP SAID (AND MEANT)
So now it is established, beyond any reasonable doubt, that Nokia CEO himself admits - no less than three times - that Skype is a problem to operators. What else do we learn. Lets take Elop's statements individually and study them in detail
Elop said: "Indeed, Microsoft did buy the Skype company as part of the ecosystem that comes with Windows Phone and Windows." We know this obviously, it is no secret but the relevant part is the ending of the sentence. Elop points out that Skype is supposed to be part of the overall (non phone) Windows (ie PC) based ecosystem. That means a Billion desktops. That means that yes, obviously, before Microsoft, Skype alone was far less a threat to operators, than today, when Skype is now part of Microsoft's world-domination plans is clearly intended to cover the full 1 Billion desktop environment, in addition to the Windows Phone part of Microsoft's ecosystem. For whatever degree operators hated Skype as a stand-alone rival to mobile operator voice call revenues and profits, SMS text messaging revenues and profits, and the video call related revenues and profits - that all became vastly more dangerous and threatening when Microsoft bundles Skype with Windows on the desktop.
Then Elop gives a clear explanation of why operators hate Skype, when he explained why they don't like Skype: "The feedback from operators is they don’t like Skype, of course, because for those operators who have a traditional wire-line business, traditional telephone business, it could take away from revenues."
First, obviously, Elop knows and admits that the operators hate Skype not because it enables new data services like VOIP calls or instant messaging, it is because Skype threatens revenues. Secondly, that response is typical of how cleverly Elop tries to spin the story. He takes elements of the truth, ignores part of it, and tries to spin it to his advantage. From that response you would think it is 'only' those operators who have traditional wireline business who hate Skype. That is not true. First of all, traditional wireline telecoms service does not operate SMS text messaging, so the Skype instant messenger is not even a threat to that business, but is one of the most used 'OTT' services on mobile networks only. Video calling, a highly popular service on Skype, is not available in most homes through the fixed landline business, but most 3G mobile phones do videocalls. So much of Skype's real threat addresses mobile operators and does not touch the fixed landline business. Elop's answer is 'the truth but not the whole truth'. Yes, Elop admits those operators who have landline business, will feel even greater threat from Skype, but all operators, fixed or mobile, feel the threat from Skype and do not like it. Don't let Elop's response get away from the truth.
Note, Elop's first part of that answer was not explicit to operators with landline business. He clearly admits "the feedback from operatos is they don't like Skype, of course." This is not limited to those operators with landline business. Elop only goes on to explain why one part of all operators, those with landline business, would feel some pain from Skype. His reply is consistent with 'the whole truth' but is only part of the truth. If Elop was testifying in court, this would be the same as witholding evidence. Elop knows the full truth and deliberately witholds part of it. This is not the whole truth. Therefore, Elop has clearly practised his response, so he can give an honest, but incomplete answer, to try to spin the story.
ONE YEAR OF FUTILITY AGAINST CARRIER COMMUNITY UNITED
Next Elop says "And, so what Microsoft has done – and we’ve been part of these conversations as well with operators – is as you correctly say, if operator doesn’t want Skype installed on a Windows Phone from Nokia or any other company, then the operator can make that decision."
This is a very revealing passage. First, is that Microsoft has been having these conversations with operators. Its not just that Elop admits Nokia has a problem with operators due to Skype. Clearly Microsoft has that problem with all makers of smartphones using Microsoft software. Elop tells the audience, Microsoft has been having conversations with operators (and that Nokia is often part of those as well). Microsoft caused this problem one year ago. Microsoft's Windows based smartphone sales fell by half in six months after the Skype purchase. Microsoft has been feeling the heat and pain from operators from the day they announced the Skype deal. And one year later, there are ongoing discussions with no breakthrough? Even not, with Nokia's smartphone future at stake. While Microsoft caused this problem to its 'strategic partner' Nokia under expensive difficult transition, Microsoft has not been able to resolve the issue in one year. In one year.
Secondly clearly many opertors do select not to offer Microsoft based smartphones. Thirdly, Nokia has been sitting in conversations with Nokia's operator customers, where the owner of highly hated Skype - Microsoft - has been brought into those conversations. So whatever level of Nokia customer relationship existed with carriers, prior to May of 2011, no matter how good or bad the carrier relationship had been, either with Symbian, or headed to MeeGo, or after a carrier may have liked the initial discussions about Nokia with Microsoft using Windows Phone. After May of 2011, that all changed, and Nokia needed to bring the hated Microsoft - new owner of the most hated Skype - into the discussions with the operators. This means any previously positive Nokia customer relationships have now become far more hostile and contentious. We hear more about it as Elop explains further.
As Elop explains: "Now, you’re right: it can be circumvented. But of course it’s on all Android devices, it’s on iPhone devices, it’s on iPad, it’s on all of those devices. So in fact what we’re doing with the operators is turning it around into an advantage. Instead of them just complaining about Skype on Android or Skype on iPhone, with Microsoft and Nokia, we can have a conversation..."
That Skype exists on some other smartphone platforms (but not nearly all, Android and iPhone added together account for about 30% of the installed base of smartphones in use worldwide today) is an irrelevant point to the fact, that Elop has admitted operators hate Skype and hate Nokia Lumia because of the Microsoft Skype connection.
Then Elop gives yet another confirmation of operators hating Skype by talking of "turning it around into an advantage". If you are trying to turn something 'into an advantage' means that it currently is a disadvantage. Obviously. And in the full response, we see that after a year of trying to do that, Microsoft and Nokia have zero successes, not one case where an operator has accepted this offer of the Frankenstein's Monster who is trying to promise not to destroy its master. Whatever the state of those negotiations, with Microsoft and with or without Nokia, the problem continues. If it is being attempted to turn into an advantage means it currently is a disadvantage. What is this now, the fourth time Elop admits to the problem?
Then the part about "Instead of them just complaining about Skype on Android or Skype on iPhone, with Microsoft and Nokia, we can have a conversation..." So, again Elop admits explicitly that operators are complaining about Skype. Yes, Nokia now tries to have a conversation. That has so far gone nowhere. But Elop admits operators complaining - one year after the fact, still complaining about Skype. This is now, what the fifth independent confirmation by Elop that operators don't like Skype.
BIGGEST BULLY AND ITS LITTLE BULLYING PARTNER
The next part is explicit acknowledgement by Elop of how rudely, arrogantly and abusively both Microsoft and now Nokia, are approaching the operators about the Skype situation. Read what Elop tells us about those conversations that Microsoft is having with operators, and where often Nokia is participating. This is how Microsoft and Nokia bully their operator-customers in the 'conversation' "Ok there, is this Skype thing, is there a different type of partnership we can do that recognizes that voice over IP like Skype is coming no matter what, but maybe we can do something creative that generates incremental revenue for you."
First. Nokia and Microsoft tell operators, Skype is here, take it or leave it. Read what they say: "Skype is coming no matter what, but maybe we can do something creative." This is no negotiation. This is a threat. Elop tells the Nokia shareholders, that even as Nokia faces a global sales boycott and angry resellers, and that Nokia's strategic partner has caused a reseller revolt due to its purchase of Skype, both Nokia and Microsoft come together to the carriers/operators, and threaten them promising "Skype is coming no matter what."
No wonder operators now hate Nokia too. I would walk out of such a meeting (and I am pretty sure, Nokia sales people have seen that happen countless times). Why have so many senior Nokia sales people quit 'for personal reasons' after the Skype purchase by Microsoft and the operators have told them what they think.
This is exactly what Microsoft - and Steve Ballmer - are known for, in how they have been dealing with any of their developers, resellers and even governments that have sued Microsoft. Microsoft is known as the Evil Empire for good reason. Their natural instinct is to threaten and bully. And Elop admits to the Nokia shareholders, that even as Nokia has seen a global carrier revolt now for a year, Microsoft still uses these bullying tactics against Nokia's customers. The smart move by Nokia, if Elop was looking after Nokia shareholder interests, would be in every one of those negotiations, to promise the carriers/operators, that as Nokia supports currently 3 separate operating systems, Nokia can of course provide smartphones running on MeeGo or on Symbian, which do not come from Microsoft, and thus the Skype problem is circumvented. That would be 'negotiation'. What Nokia now does with Microsoft is only a theat. "Skype is coming no matter what." Elop's exact words. If the operators feared Skype before Microsoft bought it, now Elop has told them that Skype is an integral part of the PC Windows world - adding another one billion users, and will be an integral part of Windows Phone - and now, operators must deal with Microsoft as a global giant rival in voice calls, text messages and videocalls - because Microsoft and Nokia CEO even promise in public "Skype will come no matter what."
WHO WANTS TO BE SLAVE TO MICROSOFT
Then comes the clear indication of Microsoft's vision of the end-game. Total Microsoft world domination, with operators/carriers as slaves to Microsoft, as much puppets of the Microsoft Ballmer dictatorship, as Stephen Elop is currently the Microsoft Muppet. Look what Elop next tells the Nokia shareholders: "Some operators are looking at bundling Lumia, Skype and their own services with higher-bandwidth allotments to actually charge the consumer more and generate more revenue for them. So by actually controlling the Skype asset, we can begin a conversation about how we can have a better Skype-based relationship, which was impossible for operators to do before."
One. Elop tries to spin their desperate attempts to push Skype down the throats of operators/carriers with what amounts to cash bribes and one year later, out of 600 operators/carriers in the world, not one has even taken this to any kind of pilot project. Total rejection so far, but Nokia wants to continue this discussion. Elop tries to spin it that operators might want to do this (some operators - not even all or most - are 'looking' at bundling Skype with their packages). Now look at the second part of that passage: "by actually controlling the Skype asset, we can begin a conversation about how we can have a better Skype-based relationship, which was impossible for operators to do before."
First, who controls the Skype asset? That is not Nokia and that is not the operator, that is Microsoft. So once again, Elop is confusing whose CEO he is. He is suggesting 'we' control Skype as in Nokia, when it is Microsoft and only Microsoft who control Skype the asset. Secondly look at the middle part "we can have a better Skype-based relationship". So Nokia's vision is that the smartphone ecosystem world, where Microsoft Windows based software is the basis, will be a "Skype-based relationship" and one that Microsoft can be "actually controlling the Skype asset.". Nokia threatens its carrier partners that Skype is inevitable, and that Skype based world is one where the operator-relationship is based on Skype, and the one controlling Skype is Microsoft. What a horrible world view. Elop tells Nokia shareholders that Nokia's CEO is part of discussion to threaten the global carriers to join a slave army subject to Microsoft's whims. No wonder after a year of these negotiations, not one carrier/operators has even agreed in princple to try it. This is a certain recipe for death by the carrier community! Even if Elop was dumb enough to sign Nokia's future to being a slave of Microsoft, the 600 CEOs of the big telecoms operators are not that dumb.
Finally Elop finishes with the passage: "So it’s actually quite a bit more advanced than whether operators like or don’t like Skype; they actually want to engage in a conversation about what does this mean and how could we do something that we couldn’t do before." Here Elop tries to spin the story again. Even in his closing, Elop reminds the shareholders that operators don't like Skype, but that in Elop's view, there is more to this matter from Nokia's view, than just the fact, that operators "don't like Skype". This is now what, the 6th separate time in 12 sentences, that Elop admits carriers/operators in the world don't like Skype. It can't be more clear. And Elop claims that operators "want to engage in a conversation about what does this mean" - I don't doubt that. The operators must have been flabbergastered when this happened a year ago. I think today that is no longer true, the operators know precisely what this means. Elop has stated already in public that he is indeed of the view, that Skype is inevitable, the carriers have to submit to a relationship formed around Skype, the whole Windows ecosystem will be making Microsoft the master of that world and the operators have to take what Dictator Ballmer insists. Yeah. I think we can see where this is going.
As to Elop's ending that the operators want to discuss "how could we do something that we couldn't do before" would be for example, operators telling Nokia: lets eliminate Microsoft from this mess and use Nokia's own MeeGo instead. It is winning in all side-by-side comparisons as the better OS and MeeGo's owners, Nokia and Intel, are not owners of Skype, but operators such as China Mobile are part of the MeeGo alliance. Yes, this I can totally believe the operators are telling Nokia. They want to engage Nokia in a conversation of doing "something that we couldn't do before" as long as it gets rid of Skype and especially gets rid of the ultimate threat to operator voice revenues on fixed AND mobile networks, gets rid of operator SMS text message revenues only on mobile networks,and gets rid of consumer videocalls only on mobile networks.
IN THE END, WHAT DID ELOP ADMIT?
He was asked explicitly about is there "a problem with product distribution" because the "Operators do not want to sell Windows Phone" and that was thus due to not, that Skype was pre-installed on some smartphones, but because of the fact, that "because Microsoft has acquired Skype". To this point, not once, not twice, not three or even five times - in twelve sentences, Nokia CEO admits directly or indirectly, six separate times that the operators hate Skype. They have complained about it for a year and it is so well known as a problem, the whole industry knows it, that Elop uses the words "of course." This is not a matter of the slightest bit of uncertainty or unclarity. I thought in my original posting here on this blog after the Nokia shareholders' meeting, that Elop had once admitted that Skype is a problem with carriers. If I was wrong in anything reporting on this blog, was not that Elop admitted carriers are reluctant to sell Lumia because of Microsoft and Skype - but that Elop went out of his way, to explain in six different ways, that yes there is a continuing global problem with all operators about the Skype issue. That operators do hate Microsoft, but that Nokia joins in those discussions, not on the side of the operators - giving for example a Nokia alternative without Skype - but rather Nokia's CEO taking the side of the hated Microsoft and the distrusted Ballmer.
Six times he admitted there is a problem with distribution, that operators do notwant to sell Windows Phone based Nokia smarpthones and this is due to not that they might have Skype on some smartphones, but it is due explicitly because Microsoft now owns Skype. Yes. Six times Elop talks about how real that problem is. And separate from those six explicit or implied admissions, Elop further states three times that the question itself was correctly posed saying "thats quite correct" and "as you correctly say" and "you're right". Not once in twelve sentences did Elop say "there is no problem with distribution channel refusing to sell Lumia" nor did Elop say the problem is not due to Microsoft now being the deep-pocketed owner of the much-hated Skype.
AXIS OF EVIL
Instead Elop revealed that the discussions ongoing with carriers/operators today worldwide are centered around threats by Microsoft that Skype is inevitable, and while today operators have no inherent business relationship with Microsoft to share their core business, voice calls and text messages - where 85% of their revenues and 95% of their profits are made - now Microsoft thinks it can bully itself into the situation, to make Skype central to the relationship and force operators to be 'controlled' by Microsoft.
Here Nokia's position, which in the past was known for being operator-friendly and looking at open platforms, sharing and co-creation, now is joining with Microsoft's bullying and sitting in those same meetings taking Microsoft's side. And while Nokia has two other smartphone platforms currently in production, when operators ask for solutions, Nokia refuses to even put MeeGo or Symbian on the table, saying 'its Skype, take it or leave it.' That Skype is going to be part of the ecosystem on any Windows based solution.
No wonder operators globally, uniformly united, all reject this Axis of Evil.
NOKIA EVEN SPINS THE QUESTION POSED
I want to point out a further minor detail. Nokia has now on Tuesday taken an even more extreme step to try to control the story, by releasing a video of what Nokia CEO said. It includes the voice recording of the exact question as asked by Nokia shareholder Mika Hasanen (in Finnish) and translated onto the screen. Elop's reply is on video and in English.
So, the translated text as shown in the video is as follows (see screen shot of Nokia video taken on 9 May 2012).
(screen shot of official released Nokia video of Elop reply to Skype question at Shareholders' Meeting, retrieved on 9 May)
There is a clear difference in meaning - and severity of the issue for any company in discussing 'revenue' or 'profit'. The Finnish question clearly talks about "tulosta" which is a form of the Finnish word for "tulos". Tulos has many meanings in Finnish including result but in financial terms, business terms, there is only one meaning, it is not "revenue" it is "profit". Thus the Nokia officially released video of the Skype matter, starts with clear translation error that distorts and dimishes the question as asked by Nokia shareholder. The question did not pose the situation that "Skype calls are eating operator revenues" (which would be - and is - bad) but was "Skype calls are eating operator profits" (which is far worse). Thus the actual point was far more severe for operator financial performance and actual economic health - profits. And Nokia illustrates how much it is trying to spin this story, by again changing the clear dictionary defintion of 'tulosta' (ie a form of the basic Finnish word 'tulos') which in accounting and business terminology means 'profit' not 'revenue'.
Elop has admitted that the question posed did express a real problem, very validly, Elop says in his reply three separate times that the question, its facts as stated were correct: "so that's quite correct" and "as you correctly say" and "you're right". On the very explicit question part relating to operator business reasoning (where the question was posed as one of profit) Elop answers "as you correctly say". Yes. Elop knows and acknowledges the questioner was correct to say Skype eats operator profits. Elop's answer only deals with one part of Skype which threatens the revenues from voice calls for some operators with landline business. He ignores the whole issue about SMS text messaging being the most proftable part of mobile operator business and voice calls the second most profitable part, together contributing over 95% of total operator profit for mobile operators - and Skype is the biggest threat on the planet for both of those.
PART 4
WHO HAD THIS STORY?
The Nokia Annual Shareholders' Meeting had a question, posed by a shareholder, that caused a long 12 sentence reply. It dealt with the retail channel boycott, and dealt with Nokia's strategic partner Microsoft. It dealt with threat and damage to Nokia's direct customers, the carriers/operators. Where was this story reported? We can see from the video and read from the transcript, this was a long, considered reply of a problem so severe the CEO admits it is damaging Nokia smartphone sales. We had dozens of news sources and tech bloggers reporting live from the event. Only Helsingin Sanomat, the biggest Finnish newspaper picked up on this story. Where was everybody else? I studied all feeds I could find from the event, and found this one of the two biggest most significant stories coming out of the three hour meeting (the other being the other carrier boycott of all Nokia phones, not just Skype and Microsoft based Windows smartphones, but we knew that story from before and Elop had admitted it many times before, and Nokia has not in any way tried to deny the general carrier boycott of Nokia overall exists and damages Nokia today, ever since the Elop Effect of February 2011. My third big news from that day was just prior to the Meeting, when outgoing Chairman Ollila confirmed Nokia's mad strategy to launch tablets now in this financial crisis and amidsts global reseller boycotts).
First, thank you to Nokia concerned shareholder Mika Hasanen who is clearly enlightened about the real world of carrier relations, for asking that pointed question about Skype. At least we do have Nokia CEO now on record. If it was not for Mika, this issue might still be muddled.
Secondly, thank you to Helsingin Sanomat for noticing the story and reporting on it. If it were not for that case, nobody else talked about Skype after the Meeting. Bizarre. For such a huge story, only HS picked it up initially. Were the other Finnish journalists and tech bloggers asleep? But this was a 'scoop' by HS. Congratulations!
Thirdly, was I right to report it on my blog? The Helsingin Sanomat story was in Finnish. I think I provided a good service for my readers and followers, to translate that story from the Finnish version to English, and to provide this story in English. It was then picked up by several English-language news and business sources such as Business Insider. Since that story broke, now the Nokia and Microsoft Skype problem has been reported, and independently verified in various sources such as Finland's biggest business newspaper Kauppalehti which ran the Skype admission as a cover story yesterday.
Fourthly, was the reaction by My Nokia Blog and All About Symbian and other Nokia-apologists accurate and fair? They jumped on my blog claiming I distorted the story. They were at the meeting, I was not. They had heard the full story, not that Elop said once that yes, Skype is hurting Nokia sales with carriers. He said it explicitly three times, implied it three more times, and furthermore said three times that the question was completely correct in its premise. Yes. Operators are suppressing Nokia Lumia sales, due to a global reseller boycott by carriers, against Microsoft and all Windows based smartphones by any brand. I said that was what Elop had said, based on the short quote that Helsingin Sanomat quoted in Finnish. I was 100% correct in my translation. Helsingin Sanomat was 100% correct in its summary of what Elop had said about Skype hurting Lumia sales. That Helsingin Sanomat did not go into detail about what Elop is telling shareholders how he is desperately trying to resolve the matter - because clearly the professional Helsingin Sanomat journalist saw through that marketing bullshit, there was no 'news' in the 'talks' that Nokia is continuing to have with clearly hostile operators, the journalist did the right thing not reporting on this spin by Elop. The news was, that Nokia CEO admitted that Skype hurts Nokia Lumia sales. Not the Skype on smartphones, that has existed for many years. The fact that Nokia's partner Microsoft bought Skype and now gives deep pockets for hated Skype to be a thorn in the side of the carrier community.
I can understand if a tech blogger friendly to Nokia wants to point out that Elop is working to try to resolve the issue. That is fine, if they want to believe in bedtime stories that have no correlation with reality, such as Santa Claus and the Easter Bunny and the Tooth Fairy and Stephen Elop. I do think, the tech bloggers should have acknowledged that for whatever gripes Tomi Ahonen has with Stephen Elop's Microsoft strategy, when Tomi reported on Communities Dominate blog that Nokia admits Skype problems with carriers - that was in fact 100% true, it happened at the Nokia Annual Shareholders' Meeting and the Communities Dominate blog was 100% accurate in reporting it in English (translated from the original HS story in Finnish)
Fifthly and finally, Nokia's reaction. I was stunned to find that a Nokia PR person, James Etheridge appeared on Twitter suddenly to demand that I change my blog. James claimed I was untruthful about Elop. When I demanded from James to indicated which passage attributed to Elop was inaccurate, he disappeared but sent in his boss, Douglas Dawson who joined in to attack me on Twitter - and Doug demanded an apology from me. I repeated asking the question, what passage attributed to Elop was inaccurate on my blog, and he could not show any. But this bizarre incident was noticed by Finnish IT paper, Tietoviikko who gave it the headline (in Finnish): "Strange Twitter play: Nokia demanding an apology from a past executive." And last but not least, after I had agreed to a truce with Nokia PR people, after they were unable to show any statement here that was not accurate of what Elop had said, we have Douglas's boss, John Pope, the Director of Communications at Nokia sent me a Tweet on Tuesday, informing me that Nokia had released the full video and text to My Nokia Blog, and asking me to "Would you correct yours" adding the hashtag #factsvsfiction. Well, here John Pope Director of Communications Nokia, is your update to the story. Did you really want this mess? How much worse is it what your boss said on 3 May, than what I reported originally? I was completely correct, 100% correct, your two subordinates were not able to show one word by Elop that was not correctly quoted. But now, we have this whole mess, where Elop actually said tons more damaging stuff about Skype, about Microsoft and about Nokia's utter inability to resolve the matter, even one year later.
Is this argument over? I don't know. I stand by my words. You can go see Elop's full video reply and listen to his yourself. Elop admits clearly, many times, yes, carriers hate Skype, and now they hate Microsoft, because of Skype. The astonishing part, in the second half of that video, is how intensely rude Nokia and Microsoft are now, bullying arrogantly the carrier community threatening them that Skype will be there, no matter what. And worse - threatening the future is one where Microsoft controls the Skype based communication environment, where perhaps - perhaps if they play nicely, some carriers might get some pennies of shared revenues from Microsoft. Perhaps.
WHO TOLD YOU - FIRST?
Now that the matter is clearly resolved. Yes. I was 100% correct on this blog to report on May 3 that Elop has admitted Skype is hurting Nokia Lumia sales. Now lets go back to history. Who told you first? Back in May of 2011, there were no Lumia smartphones. While Elop announced his Microsoft based Windows strategy on February 11, 2011, Nokia had no Microsoft based phones to sell. So when Microsoft bought Skype in May, that damaged Microsoft's reputation with existing Windows Mobile and Windows Phone based smartphone sales ie those by Samsung, HTC, LG etc.
Where did you read about that first? I reported here on my next update to the "bloodbath" series of blogs, which was on June 7, 2011, when I wrote that Skype was the "ultimate death-nail" to Microsoft:
"The thing carriers/operators hate the most, is Skype. They hate Skype with a vengeance. Why? Because the carriers witnessed how easily Skype destroyed their fixed-landline telecoms cousins, and where Skype might not take all traffic, it devastated the revenues and profits of that robust industry."
Who told you this in June of 2011, that Skype would devastate Microsofts already dwindling market share in smartphones? I wrote "To offer Skype for carriers is tantamount to offering them a drink labeled as poison" and I warned specifically how badly Microsoft was handling the situation, bullying the carrier community when I wrote on 7 June: "Steve Ballmer is proudly crowing about how Microsoft will use Skype to build its eco-system." I wrote further that "the carriers will not let Skype replace the carriers' cash cow - voice calls. Won't happen." I added: "The carriers will not allow Nokia and Microsoft to do this. Not with the brand they hate the most, Skype." In that blog, I called it "poisoning the well".
Was this blog of value to my readers? Did I understand correctly the attitude of the carrier community and their hostility towards Skype. And did I correctly foresee the results of what this would do to Microsoft Windows based smartphone sales (which collapsed after June, falling by half in six months) and how Nokia would be damaged by Skype - so much so, that CEO Elop admits it multiple times and with the statement "of course" to the Shareholder's Meeting almost exactly a year later.
At the time I received a lot of hostile comments and many Nokia and Microsoft fanboy sites ridiculed me. I did not budge. I kept reporting what I learned from my contacts and my own analysis and reported stories from the industry.
BOYCOTT AGAINST MICROSOFT
Then as I warned operators/carriers will not have this from Microsoft, I did not suggest there would be an actual boycott. But I warned carriers won't let it happen. I did not have to wait long to see the carrier reaction. On June 10, just three days after my blog I posted the next blog about this issue as we heard first evidence of a study of retail stores in the USA, reported in the San Francisco Chronicle and other press, that US handset stores had pulled Microsoft based smartphones from their shelves and refused to sell the smartphones. Who told you about this? Was this newsworthy? Was this truly a major development for the world's largest software maker who wants to establish a 'third ecosystem' for mobile?
I didn't have to wait long for more news. A second, independent survey of US retail reported out of Boston was in the news by June 24 and I reported that then on my blog of cousre. Who told you? Who told you eleven MONTHS ago, that Microsoft's mobile mission was imploding. That Nokia's fantasy of a Microsoft comeback was backfiring. What of all those smartphone bloggers and Nokia tech sites who try to tell you of the news. Did they tell you this story? It was happening, the world was reacting to Microsoft buying Skype. I was on the story here on the CDB blog. Did you read about it on your fave smartphone blog? Not many covered the story back then. Now Nokia CEO admits they are losing carriers and all operators hate Microsoft because of Skype. Did this blog bring you value last summer?
ELOP MAKES MATTERS WORSE
And I have reported on how much Elop is damaging carrier relationships by his own actions. I have repeatedly pointed out that Elop himself is making the wrong choices. So I want to go back to June 2. This is exactly what Elop said about Microsoft and Skype. Now that you have read from the above, that Elop admits now, a year later, that carriers still hate Skype, look what the moron said on June 2, about Microsoft: "You will have heard of the acquisition of Skype ten days ago. Clearly that will be part of the Microsoft Phone ecosystem. The acquisition of Skype by Microsoft is a great way to bring all pieces together."
That was a year ago! Now in May of 2012, Elop is still threatening operators that Skype will come no matter what, and Skype will be central to the business relationship and Microsoft will control the whole system. Now today, you the fair-minded reader, can see that Elop himself has admitted operators still hate Skype, still refuse to support Lumia and still fear Microsoft. What kind of confidence did that statement one year ago, say about where Nokia's new CEO stood in the industry. He did not stand with the operators. He moved Nokia to side with Microsoft. The Evil Empire had become the Axis of Evil on June 2, 2011.
That is why I wrote on June 24: "When Microsoft bought Skype, that sealed the fate of any Microsoft-powered smartphones. Suddenly all Microsoft phones disappeared from stores." I added explicitly about Elop taking Microsoft's side in this issue to be "Wrong move, Chester". I continued: "That is why Stephen Elop will not survive as CEO of Nokia. He has now heard from all the major carriers, that after statements like that, there will be no happy ending to the Microsoft-Nokia saga with Elop in charge. Even if the carriers/operators fell in love with Nokia-Microsoft-Skype phones, they will not support them, simply because of Elop's ridiculously arrogant and abrasive statements. He who embraces my enemy - becomes my enemy. You want to quote Sun Tzu, Stephen Elop? You should have learned to study the terrain before you move. To understand your position, where you are at strength and where at weakness. And not to launch an attack against superior numbers. One Nokia will not ever survive, even with a Microsoft by its 'side' (See Sendo, Motorola, Nortel etc above) - if it faces 600 carriers/mobile operators of the world, united, against Nokia. Stephen Elop did the cardinal sin, he actually said his Nokia phones would indeed have that poisonous 'ecosystem' run by Microsoft, that included Skype."
I wrote that on 24 June. Was I correct? Was that significantly foresighted one year ago, about how badly Microsoft will fail in smartphones, and how severely Lumia will disappoint when Nokia launches it. And I explained clearly how Microsoft was proceeding the totally wrong way on this path arrogantly bullying and angering the carrier community. I wrote: "Ballmer doesn't enjoy winning nearly as much as he enjoys crushing his victims. So he added the ultimate salt into the wound. Skype. The carriers/mobile operators hate Skype more than anything else on the planet. There will never be carrier-supported (for example subsidised) smartphones that run Microsoft, even if those phones have Skype crippled - the carriers hate Skype and will not trust Microsoft (they have long memories, they remember Microsoft and Sendo, Microsoft and Ericsson, Microsoft and Nortel, Microsoft and Palm, Microsoft and Motorola, Microsoft and LG.. need I go on? There is a reason its called the Evil Empire)."
Since then Ballmer has admitted Microsoft Windows Phone sales are disappointing. He has stopped giving the breakdown between obsolete Windows Mobile sales compared to newer Windows Phone sales (and independent analysis such as from the US market still in Q4 of 2011, said Windows Phone sales had fallen so badly, older Windows Mobile still outsold them by a wide margin). Microsoft's top Windows Phone guy was demoted. Microsoft's departed Windows Phone guy admitted that Microsoft had bad carrier relationships when Windows Phone was launched, but during 2011, Microsoft itself made matters worse. This is obviously due to the purchase of Skype and Microsoft's arrogant attitude ever since.
After Lumia was launched, Nokia has admitted time and again, that carriers are not fully supporting Lumia sales. Independent surveys of in-store sales staff preferences, from Finland to France, from China to USA, have verified, that Nokia retail sales is indeed reluctant to sell Lumia. Part is that the phones are designed to disappoint existing Nokia owners, while not being competitive with modern rivals from Apple and Samsung. Part of the problem is the biggest return rates by Nokia consumers ever seen by Nokia smartphones as we heard from Russia for example. And part of the problem is the previously existing carrier boycott against all Nokia handsets, Symbian, MeeGo and Windows based smartphones, as well as basic 'featurephones' as Elop admitted in the Annual Shareholder Meeting. But the biggest part why Lumia sales are severely disappointing, is the carrier revolt against Microsoft and Windows. It is destroying Nokia Lumia sales today, when Windows Phone does not even include Skype as pre-installed. Imagine how much worse this problem becomes towards the end of this year, when Windows 8 comes to Nokia Lumia phones - and Windows 8 has Skype integrated!
Nokia's top USA sales guy left a long term successful Nokia sales job 'for personal reasons' after this Skype boycott emerged. Nokia's top China sales guy left 'for personal reasons' this Spring. Microsoft's top Windows Phone global marketing head just left 'for personal reasons' this Spring. Motorola, one of Microsoft's longest-standing partners with Windows Mobile had already grown fed up with Microsoft bullying tactics, and decided not to launch Windows Phone smartphones (this was before Google bought Motorola). Sony another long-term Windows partner through SonyEricsson, said it doesn't see any reason to bring Windows Phone smarpthones to the market now. LG, one of the three bestselling Windows Phone manufacturers currently, has decided its not worth continuing on Windows Phone. Samsung, the biggest Windows Phone maker, is developing not one, but two rival smartphone operating systems to replace Windows Phone - bada and Tizen. HTC, the oldest Windows partner for Microsoft is lukewarm at best, and severely disappointed in Windows Phone sales. What am I not seeing?
Windows Phone might have become the 'third ecosystem'. Some analyst houses last year this time promised 20% market shares for Windows Phone. Now Windows Phone has 2% market share globally, even when we add Nokia Lumia sales to the mix. At one point Microsoft had 12% of the global smartphone market. At the start of last year, Nokia had 29% of the worldwide smartphone market, being bigger than Apple iPhone and all Samsung smarpthones, combined. Today Nokia has fallen to 8% and will be 3% by end of this year.
The Windows Phone vision was a nice fairy-tale in early 2011. Maybe the world's largest handset maker, when joining the world's largest software maker, could create the 'third ecosystem'. But when Microsoft bought Skype, that house of cards fell apart. Now the two have turned from an Evil Empire and Gentle Giant, to the Axis of Evil. There will never be a third ecosystem in mobile around Windows Phone. I told you last June that it was the Skype purchase which sunk Microsoft's ambitions in mobile. And I warned that if Nokia put all its eggs in that Windows basket, Nokia would be doomed as well. One year ago the mirage of a Nokia recovery through Microsoft was shattered. Today the more rapidly Nokia's management accept the inevitable, this is a certain road to ruin - the better for what remains of Nokia. And yes, I have to say this here now elven months later when even Nokia CEO admits the catastrophy he is facing of a global reseller boycott of his announced strategy - I told you so.
Now the Nokia CEO openly admits to the facts. A year later, Nokia's CEO arrives at the same prognosis I gave you a year ago. Did this blog serve you any value? Oh, and Nokia PR people? Isn't it about time YOU issued ME and this blog a public apology?
FOLLOW UP 10 May 2012 - There are many questions among the comments about confusion relating to Skype and other OTT providers. Why would Skype be different from iMessage or BBM etc. And that Skype is already available on many smartphones etc. I have written a blog explaining OTT providers now, entilted: Understanding OTT: Why carriers dislike BBM, hate iMessage and fear Skype.
Tomi, you are currently attributing Elop's statement as an admission to everything what you have to say about the matter. He only said that "operators do not like Skype". That does not have anything to do about your speculations of Skype influence between operator-Nokia relations.
Posted by: Peter | May 09, 2012 at 07:33 PM
There is currently a fight going on on Twitter between Tomi and John Pope, apparently Director of Communications of Nokia. Funny stuff if you ask me.
It shows a couple of things:
- Nokia starts to take notice of Tomi and this Blog
- They do not like what is written by Tomi and say he misquotes.
You can saw what you want about Tomi and his (lack of) objectivity, but he is an influencer and his writings about Skype hit a nerve at Nokia HQ.
Posted by: So Vatar | May 09, 2012 at 07:46 PM
I needed clean pants after reading this, I just soiled myself laughing.
This post wil no doubt get deleted anyway, but what the heck I'll just give it a try. Eventhough you have some facts and figures going Tomi, you are still making assumptions about what is happening.
Especially this paragraph; Nokia's top USA sales guy left a long term successful Nokia sales job 'for personal reasons' after this Skype boycott...
Nothing but speculation on your end. It seems this blog is similar to Fox News in the US. Just spin all the info in such a way that is seems to contribute to your point.
Right now, WP has no integration of Skype. It has the worst app of all platforms even. iOS has facetime, a feature that works on 30 to 50% of phones in the US alone. Yet Sprint has done a billion dollar investment into getting that VoIP phone on their network. Am I missing something here this time?
And what to think about your lovechild Symbian? That has been able to do VoIP for ages. One of the features you have even been championing ever since the Lumia line came out.
And regarding Elop saying there was a boycott; it was only a real issue for those carriers with a landline business. Implying there is an allout boycott going is just falsified information. Maybe you need to be convicted just liek you suggest for Elop ;)
Posted by: DEKRA | May 09, 2012 at 07:57 PM
@Tomi
Rather good writeup, but one thing bothered me: you bashed Elop for not telling the whole truth, yet you quote him and leave out a very prominent part of what he actually said: "voice over IP like Skype is coming no matter what." And I don't think anyone can honestly argue that VoIP is not coming, and the carriers can only drag their feet and slow down the adoption, nothing more.
@Stephen Reed
Apple has the advantage that iPhone user tend to have higher ARPU than other phone users, and combined with fewer returns and less churn, it makes the iPhone more attractive. However, as iMessage grows and the operators really feel the effect, things might change.
Posted by: Mikko Martikainen | May 09, 2012 at 07:57 PM
To all in this thread
I have been attacked without warning by John S Pope the Director of Communications at Nokia HQ (he's an Elop crony, who joined at the same time). This is after I agreed to the truce with his underlings about not continuing the Twitter debate before. I think this is pretty nasty of Nokia's Director of Communications. And obviously he is not a man of honor. Anyway, if you are interested, the battle is now fully on at Twitter...
I am demanding he show exactly where I misquoted Elop or else issue me public apology. And I have already called him a chicken shit for being such a coward to make baseless general accusations and refusing to be specific
Its a shame, I was fully ok to end the Twitter debate we had previously, I did not re-open this. And I was hoping to spend more time with you who post comments here.. Sorry. Gotta rush back to TW now..
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | May 09, 2012 at 07:58 PM
The "Attack" is happening because of the point I was trying to make in my previous comment. It's not about misquoting. And you can't expect people from Nokia being pissed if you make a blog post like this one.
Posted by: Peter | May 09, 2012 at 08:07 PM
@Stephan Reed
That plus Apple does consumer-products only. They do not offer enterprise, office, business solutions like Microsoft. Microsofts cash-cows are Windows, including server, and office. They span consumer (end-user), business, enterprise and governments.
Skpe in the Microsoft is nowhere near a Jabner, google talk, msn messaging application. Its integral part of the whole workflow from the consumers desktop, over the windows server, the office suite, sharepoint, the cloud, data-centers, xbox and phones. Imagine what kind of amazing things can be done that way. Things you cannot do today with regular phones, with special hard- and software, without expensive service-agreements and not for completely free, zero money. Surely at the end its not really free. You will need to buy per-user licenses, support, hatd- and software, services but from Microsoft and from Microsoft alone.
That brings me to the next topic: It is Microsoft that profits and Microsoft alone. Microsoft expands its market, extends the lockin, improves influence anf makes more money. How does Nokia profit?
Remember that Microsoft keeps full control over Windows, Skype and Winfows Phone. Nokia is just one of many Microsoft-partners.Nokia does not have that much left that is from huge interest for Microsoft once Windows Phone succeeded (or not). Latest then Nokia has a real problem cause they do not have anything from value left nobody else could do mucj cheaper. When Nokia doest die soon cause Windows Pjone fails it will die later cause Windows Phone succeeded. All that is so suicidal strategy.z
Posted by: Spawn | May 09, 2012 at 08:18 PM
What's amazing is that they're still obsessed with this Skype story.
I'm reading this blog since I tried (and finally succeeded in) to buy a N9, and there is much more to debate about than just what Elop admitted about Skype.
What about N9 sales?
What about high return rate of Lumia range?
What about cash bleeding? What about engineers, who were moved to Accenture and are their a** kicked out of the company as Symbian has no future?
How is Nokia managing issue with Romanian government and the EU about factory closure, that is still not resolved?
What do they think about Vertu, which will use Android as soon as it will be freed?
There is so much I'd like to hear/read them about. Please Tomi, ask them if you can (I don't have twitter, and I'm not ready to create an account).
I understand it's easier to pour gas on one single fire to divert people from the rest of problems, but honestly, I'm a bit fed up about this Skype story as everything has been said about it.
I'll end with a popular saying:
Someone who makes one mistake, is human
Someone who repeats a mistake is stupid
Someone who repeats a mistake and doesn't admit it is an a**hole.
Sorry for being rude.
Posted by: vladkr | May 09, 2012 at 08:33 PM
@Spawn Great explanation. This explain why operators hate so much Microsoft: due to skype but also due to Microsoft itself
@Tomi Great article, I think it has opened many eyes and this explain the activation of Nokia PR.
Posted by: Titanium | May 09, 2012 at 08:37 PM
@DEKRA
"it was only a real issue for those carriers with a landline business"
Only? Only? Did you write this with straight face or what?
China Mobile - 650M mobile subscribers (mob) - also 3rd largest provider of fixed lines in China
Airtel - 250M mob - 2nd largest provider of fixed lines in India
Telefonica - 230M mob - biggest operator of fixed land lines in countries like Spain, Argentina, Brazil
Orange - 220M mob - Orange equals France Telecom, 'nuff said
T-Mobile - over 300M mob - T-Mobile equals Deutsche Telekom, see above
Posted by: vvaz | May 09, 2012 at 08:40 PM
You did a good job here Tomi!
Now, instead of spending money on developing good devices, Nokia, which is already spending indecent money on PR and commercial actions will spend even more just to fight against you.
These guys who are directors - paid slightly more than Finland's minimum salary I guess - will spend their days on Twitter to insult you instead of working efficiently*. That will cost a lot to the company, think about it.
*nah, I'm just kidding about this one.
Posted by: vladkr | May 09, 2012 at 08:41 PM
@vladkr
very good points, and I agree, Skype is only a side show. However, personal egos are involved.
Re N9: There is a report on TMO that N9 is discontinued in Finland as of today. And of course there is no successor for this kind of smartphone, at least not from Nokia.
So, does this happen because lack of demand? We know that the Finns buy Lumias, does this mean they prefer WP to Maemo / MeeGo? What does this mean for other markets? Will Nokia cease to offer N9 in China too and go full out with Lumia? What are Nokia's expectations for Lumia sales in regions? Especially China, India, and the US? Western Europe?
So much more I'd like to know. Guess we have to wait and see until thye next numbers come out, and the we can start to speculate all over again what does it mean and what are the reasons for it.
Posted by: So Vatar | May 09, 2012 at 08:46 PM
Oh well, this is actually quite funny. Tomi read the story in Helsingin Sanomat, which really is the biggest newspaper in Finland. But Tomi knows perfectly well that the story was just a quickly written sideline in a bigger story. And of course couple of translations does not help, especially when Tomi sees only what he wants to see. Tomis original post was a typical blog post – but it’s a far cry from accurate news.
But let’s get to the point. Tomi describes quite well why the carriers could hate the Skype and maybe some of them even still hate it. But they have known for quite a while that Skype and other similar solutions are here to stay – the carriers are not stupid, neither are they living in the past.
And the carriers/operators do not hate Microsoft in general. Actually many of them see both Microsoft business and consumer solutions as a very potential new revenue stream for them. I give you one example. Microsoft launched Office 365 in June 2011. The launch partners included over 20 operators like Bell Canada, Intuit, NTT Communications, Telefonica, Telstra and Vodafone. And Office 365 does include Lync. Which will soon include VOIP calls in the cloud versions and already has clients for WP, iOS, Android etc. And most people guess Lync and Skype will be integrated. And yes, the launch partner did know where the roadmaps are going.
For example here in Finland both two big operators (Elisa and Sonera) are selling Office 365. Actually Elisa just released a press release (http://www.elisa.fi/ir/pressi/index.cfm?t=100&o=5120&did=18016, in Finnish – but guess who is a pro translator now :)) on their success and commitment in Office 365 sales.
So please remember things are not as black and white as Tomi likes to write. We all know how quickly (mobile) world moves. Oh yes, it hurts when you have to adapt your business. But tt least Nokia, Microsoft and the carriers are trying to move forward. And the Skype is actually something the consumers love – before the Nokia / Microsoft co-op it was years ago when Nokia had something like that in their offering. And now that Microsoft owns the Skype, it’ll be something to business users will love, too. And the carriers - there is quite a lot happening already…
Posted by: Aki Antman | May 09, 2012 at 09:02 PM
@all
Tomi is correct about skype but under a condition: Nokia/MS do not have a killer phone that every users want to buy.
If Nokia promotes Nokia N9 last year, even if nokia supports whole skype integration, it won't be issue for carriers, because n9 would be the coolest smartphone at that time.
Unfortunately Lumia n900 is a disaster as Tomi revealed, looks cool in shop, turns into disaster at home within one week.
Nokia's plight in Q1 is the returned lumia phones and warranty repair cost. The more lumia sold, the more loss nokia is incurring.
Nokia whole boards and new chairman knows it well, however, they continue claiming it is the right team right strategy right product.
Yeah, right things for WS short sellers for sure.
Time to bring all board members into justice.
Peter
Posted by: Peter | May 09, 2012 at 09:02 PM
Tomi have understand not only the whole situation since the beginning, he understand what point need to be pointed out to make the shareholders realize the devastating end of Nokia. The emphasis on the Skype problem is en entry point because, from the exact wording of Elop on that question, he assumed he was talking to Microsoft shareholders as a Microsoft executive, not to Nokia shareholders as a Nokia CEO. I don't known how to put it strongly enough; there is no more alarming signal of deaf for all the shareholder's money. I really can't get how there can actually sleep at night. Seem to be unthinkable that a destruction of that scale can exists without any reaction. There are all under drug or what ?
Posted by: jcamdr | May 09, 2012 at 09:06 PM
I'm no John Pope, but I can easily give them all the answers you ask for.
Elop's full comment is there so I don't include it here. In brief he says:
-Operators don’t like Skype because for those operators it could take away from revenues.
-If operator doesn’t want Skype installed on a Windows Phone from Nokia or any other company, then the operator can make that decision.
and in addition to that (what you seem to take as "admits it"):
-Instead of them just complaining about Skype on Android or Skype on iPhone, with Microsoft and Nokia, we can have a conversation
So Elop admits that operators don't like Skype. WOW! BREAKING NEWS! For heaven's sake. If he would say anything else he would sound as stupid as half-year old puppy with brain damage. It's so blinding obvious I have trouble walking outside after reading your blog where you repeat it.
And now all the mistakes you made and Nokia is furious about:
Tomi: Elop did admit that some operators/carriers do have a problem relating to Skype.
Tomi: He admits three different ways that yes, the carriers do not like Skype. And Elop never denies that this problem exists.
Tomi:
Reality:
Tomi: "Elop clearly admits that there is a reseller problem relating explicitly to Skype. He furthermore admits, the Skype issue has resulted in some carriers actually refusing to carry Lumia."
Mika Hasanen: I believe Nokia has a problem with product distribution. Operators do not want to sell Windows Phone smartphones, because Microsoft has acquired Skype, who offers free Internet calls.
Elop - never said that. Sorry.
Tomi: operators don't like Skype and that they are "Just complaining about Skype"
Elop: Instead of operators complaining about Skype on ANDROID or Skype on IPHONE...
(Microsoft as owner of skype can offer options Google and Apple can't.)
Is this somehow unclear?!? But of course cutting the sentence at that point falsifies it totally and serves your purpose, doesn't it? I have to assume you don'tcount this as "misquote" since you claim you did none.
Tomi: Elop admits the problem is explicit to Microsoft being the owner of Skype.
Tomi: Elop did admit some operators (I never said all) have refused to sell Lumia because of Skype.
Elop: Indeed, Microsoft did buy the Skype company as part of the ecosystem that comes with Windows Phone and Windows and so forth, so that’s quite correct.
I guess I need to point it out:
Operators don't like Skype - Check.
Microsoft owns Skype - Check.
Nokia having problems because Microsoft owns Skype - not there. Sorry.
Tomi: Elop admits Mika Hasanen was "of course" correct in stating "operators do not want to sell Windows Phone smartphones, because Microsoft has acquired Skype."
Reality: The feedback from operators is they don’t like Skype, of course,...
I think I said this once already: IS IT NEWS that it's "of course" for operators not liking Skype? That "of course" was mid-sentence in middle of that long reply and you claim it responds to specific sentence in the question?!?
Naturally, it's not misquoting as you picked the "of course" from his response.
...and then you move to speculation and accusations. Not going down to your level, sorry.
Posted by: Tomifan | May 09, 2012 at 09:22 PM
Assuming the fight is still going on on Twitter between Tomi and John Pope, would someone care to point those two to here and tell them to read my comment before Tomi deletes it?
Posted by: Tomifan | May 09, 2012 at 09:28 PM
@Tomifan Do you realize that you have done copy/cut/paste of pieces of Tomi article's to claim that with pieces of articles you can't make any claim?
A blog is by definition an expression of a personal opinion, we don't need you to remind us.
Concerning the content of the article, after having read the whole transcription I must say that I agree with Tomi's conclusions even if sometimes it is visible that he is a little bit biased by heart.
Posted by: Titanium | May 09, 2012 at 09:40 PM
@Tomifan:
I tried to read your comment but I am unable to comprehend what you mean.
I just guess you mean something like this:
1) Tomi picks parts of quotes he likes in order to make a point.
2) Tomi paints it black or white disregarding the wide shades of gray in between.
3) Nokia does not like what Tomi writes or concludes.
4) They say Tomi misquotes but fail to find a "misquoted" quote.
5) They call on him publicly but come out looking stupid in the debate.
Maybe I don't react so strongly to these techniques as I have to endure it every day watching political infights between Dems and Reps, Obama and Romney, NBC and Fox, etc.
No time for intellectual discussion, just looking for soundbites to make the opponent look bad.
I do have a serious question though:
Do you feel Elop has answered the question presented by the shareholder regarding Skype and impact on Nokia in a straight and unambiguous manner? Maybe Elop's double speak is part of the "He said - she said" problem?
Was Elop asked about number of N9 sold? Did he reply? Did he reply in a manner that was clearly understood by people attending the AGM? I don't know, I was not there. But this lack of clear information opens up a huge space for speculation. And I do not think this is in Nokia's best interest.
Posted by: So Vatar | May 09, 2012 at 09:44 PM
@Peter
> speculations of Skype influence between operator-Nokia relations.
Please read the article again. Especially the question asked and.the answer given by Elop.
> The "Attack" is happening because of the point I was trying to make in my previous comment. It's not about misquoting
Then you seem to read a different article then me.
I mean its not like Tomi build up a thesis about that. There was a question asked that got answered by Elop. You think Elop did not confirm the statement formulated on th question?
Question: Is there a problem with x?
Answer: Yes. We to solve x with y and turn it from a disadvantage to an advantage.
Did you understand it different? Really? Seriously?
@DEKRA
> Nokia's top USA sales guy left a long term successful Nokia sales job 'for personal reasons' after this Skype boycott...
> Nothing but speculation on your end.
So articles like
http://articles.economictimes.indiatimes.com/2012-04-20/news/31373992_1_nokia-siemens-networks-stephen-elop-microsoft-s-windows-phone
and the other 135000 that covered the story are also all written by Tomi? I am impressed :)
Posted by: Spawn | May 09, 2012 at 10:24 PM
I think more relevant question in the share holders meeting would have been "why Nokia's strategy is to put all eggs into WP basket while competitors like Samsung invest in Android as well as WP?" I suspect that it is related to Nokia's badly failed chipset strategy i.e. Nokia cannot compete against Samsung in chipsets so it is desperately trying to create a 3rd ecosystem that it could lead by other means than chipsets. Ollila admited himself that Nokia has chosen "high risk strategy with potentially higher profits" but looking at the development in the share price it seems like less and less people in the market believe in that strategy.
Posted by: PlatformWarrior | May 09, 2012 at 10:41 PM
@all
Tomi is correct about skype but under a condition: Nokia/MS do not have a killer phone that every users want to buy so that nokia can overcome operators opposition of skype.
If Nokia promotes Nokia N9 last year, even if nokia supports whole skype integration, it won't be issue for carriers, because n9 would be the coolest smartphone at that time which would overcome operators opposition of skype.
Unfortunately Lumia 900 is a disaster as Tomi revealed: looks cool in shop, turns into disaster at home within one week.
why operators bother to touch lumia series not to mention the pending skype stuff ?!
Nokia's plight in Q1 is greatly aggragated by the returned lumia phones and lumia warranty repair cost.
The more lumia sold, the more loss nokia is incurring. Now the Noth Amecia Head of Nokia Chris Weber has to promote Nokia 808 pureview which he just declared "won't come to usa weeks ago".
Nokia whole boards and new chairman know it well, however, they continue claiming it is the right team right strategy right product.
Yeah, right things for WS short sellers for sure and even right things to dismantle nokia for sure. Thats exactly road to certain death as Tomi portrayed.
It is time to bring all board members into justice if they do not promote nokia n9/n950 in all markets.
Regards,
Peter
Posted by: Peter | May 09, 2012 at 10:55 PM
@Titanium
Good taunt. You get this score. But fact is I can't quote the whole blog here. And I won't do the cut-and-comment "autopsy" Tomi did for Burning platform memo where he actually took 6 words from the original text and commented it by 74 words before picking up the REST of that sentence. Won't do.
@So Vatar
I merely pointed out that Tomi repeatedly says he did not misquote and his text is exact words from Elop's response. Now Tomi's words:
operators don't like Skype and that they are "Just complaining about Skype"
And he is 100% correct, the part between quotes is exactly the words Elop said. Too bad the whole sentence was:
"Instead of them just complaining about Skype on Android or Skype on iPhone, with Microsoft and Nokia, we can have a conversation that says 'ok there, is this Skype thing, is there a different type of partnership we can do that recognizes that voice over IP like Skype is coming no matter what, but maybe we can do something creative that generates incremental revenue for you.'"
..which is TOTALLY different since he's talking about Windows Phone platform offering option to operators that complain about Skype on other platforms. But, of course, quoting that would not serve Tomi's purpose. So he did not misquote per se... ...but I don't still count that a good level of using someones words.
In addition, there was unfortunate mistake in my post. That happens when you write fast and don't double check. Here's the correct version (and will be used if I need to repost that comment. Which I will if it gets deleted.):
Tomi: "Elop did admit that some operators/carriers do have a problem relating to Skype."
Tomi: "He admits three different ways that yes, the carriers do not like Skype. And Elop never denies that this problem exists."
...so Elop admits that operators don't like Skype? WOW! BREAKING NEWS! For heaven's sake. If he would say anything else he would sound as stupid as half-year old puppy with brain damage. Operators don't like free Internet calls - that's known by ANY person with a little piece of common sense! It's so blinding obvious I have trouble walking outside after reading your blog where you repeat that fact over and over again.
I guess this is the one place where we can agree Elop DID clearly say operators don't like skype. Unfortunately he did nothing to verify your theory of operator boycott (which is really weird as you claim it only applies to Nokia (S40, S60, MeeGo, WP7) and not to any other manufacturer that is making Windows Phones. Apparently I can't see the deep-rooted conspiracy you see.
Posted by: Tomifan | May 09, 2012 at 11:05 PM
@Peter
> Nokia whole boards and new chairman knows it well, however, they continue claiming it is the right team right strategy right product.
Yes, they are aware that the Windows Phone srategy is failing but they will keep the course.
The problem is those of responsibily. A failing strategy is not uncommon and usually its in max the CEO being responsible and changed. Not in this case.
The whole board did multiple huge mistakes that will have bad effects on Noki for years if it survives at all.
The huge mistake is NOT the windows phone strategy. Its a mistake but not the reason for the current situation.
The reason for the current situation and the huge mistake was to kill the cash-cow, that was Symbian.
Nokia made all its money with Symbiab ob so called Featurephones. It was decreasong but could have still bring enough cash in to finance a new strategy.
That was a board-decision. Killing the cash-cow before there the new strategy was even in place. Long before.
That was not only not needed but os going to kill now. Elop and the board killed Nokoas cash-cow and burned all bridges down to ever turn back.
I repeat: this was not needed. They could just have put Symbian and Meego on hold, investing only the peanuts needed to keep them alive and give the Windows Phone strategy a try.
Hell, Samsung has 3 os's too and all 3 are actively improved and pushed and not in a cheap hold-and-keep-alive mode.
But no, Nokia killed and burned all its other platforms down so it can never ever return.
As Elop sayed it: There is no plan B.
Posted by: Spawn | May 09, 2012 at 11:14 PM
Tomifan,
"which is really weird as you claim it only applies to Nokia (S40, S60, MeeGo, WP7) and not to any other manufacturer that is making Windows Phones"
1. other manufacturers do not sleep with microsoft.
2. other manufacturers do not bully and arrogant like Steven Elop to carriers and end consumers.
3. other manufacturers do have overwhelming products to overcome the opposition of carriers to skype.
obviously you simply have no reasoning logic. you need to stop your comments cause your brain is severely damaged and stay in infant age for ever.
Peter
Posted by: Peter | May 09, 2012 at 11:20 PM