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« What Happens Now to Nokia Lumia and Windows Phone, After Microsoft Throws Nokia Under the Bus? (Updated) | Main | Congratulations Mike Short for CBE Honours at Queens Birthday in UK - here his Foreword to my 3rd book »

June 27, 2012

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Aikon

cycnus,
it's an old (pre N9 video) showing what Nokia could be with it's own MeeGo/Meltemi.
It's just a concept from 2010/2011.
But, the ideas was good! Beautiful UI.

cycnus

Can Windows 8 PC Partners Trust Microsoft?
http://www.forbes.com/sites/patrickmoorhead/2012/06/25/can-windows-8-pc-partners-trust-microsoft-in-the-future/

foo

@KPOM "Symbian was unsustainable, and MeeGo wasn't ready. I think it was worth a shot to try Windows Phone in the US, where Nokia had nothing to lose. However, it shouldn't have been an all-or-nothing affair. Android also would have been the safer bet."

I completely agree with you.

Elop could have made an experiment with Windows Phone; but putting all the eggs in Microsoft's basket was a big mistake. At least he should have left options open. But he closed all the doors and put fire on all the bridges, so Nokia couldn't go back.

As a Nokia executive said months ago: "Plan B is that Plan A must work". Except it didn't work.

P

@KPOM, @foo

What is not ready with MeeGo?

If Meego wasn't ready, what about WP?

Aikon

@foo
putting all the eggs in Microsoft's basket was definitely NOT a big mistake.
It was an initial plan.

@P MeeGo Nokia N9 was kind of still wet when it was released. Now when it's PR1.2 it's pretty good.

SaloGuy

Jim Collins
How the Mighty Fall
Phase 5: Capitulation to irrelevance or death

Nokia: Check

Martin von Willebrand

To my understanding, the biggest shareholders are closely listened to when the committee makes its proposal on new board members. There is a tradition that the biggest ones propose members. Interesting is that the biggest shareholders hold 5-10 (now with NOK tumbling, probably 20x) times more MSFT than NOK.
It's even more sad that, if there was an MSFT owner strategy to populate NOK board and CEO, it failed in many respects, but not in destroying NOK and most of its assets.

So Vatar

@Zacharia Smith:

You ask the right question, why does the board allow Elop to destroy Nokia? As there is no rational answer a lot of conspiracy theories are woven.

For the record, this is Nokia's current BOD and the people currently responsible to keep Elop in his job:

Chairman
Jorma Ollila

Vice Chairman
Dame Marjorie Scardino

Members:
Stephen Elop
Dr. Bengt Holmström
Dr. Henning Kagermann
Per Karlsson
Jouko Karvinen
Helge Lund
Isabel Marey-Semper
Risto Siilasmaa
Kari Stadigh

I believe there are other former board members that share responsibility for this unmitigated disaster Nokia is in. It would be nice if other better informed readers would complete the list of BOD members (current and former) who backed Elop's devastating decisions.

For me it would be a good list of people to stay away as an investor if one of the shows up in a company I am interested in to invest.

Elop is the front man and and either an awful manager or a MS mole. But it is the BOD that allows this to happen.

Ninvestor

For the board to replace Elop and the Windows Phone + Asha + Cost Cutting + find a way to unload NSN strategy, they'd need to have a new CEO candidate with a better strategy. Who is that and what is that strategy?

Tomi is fixated on what Nokia was 2 years ago. That is irrelevant. Nokia has no birth right to be the leader in Mobile. Their lead with a temporary aberration that ended.

Where they are now, with $8B market cap, $5B in net cash, having would down native SW, with a market that does not want NSN at any price, with at least 70,000 excess personnel, and a brand that is not cool. What do you want them to do differently than Elop is doing?

Hire more people instead of firing? Open more factories instead of closing? Start yet another internal OS project after all the proven failures? What?

The *only* thing that can be argued about - going forward, not looking back - is if it makes more sense to continue with MS till Windows 8 (which was always the plan) or to switch to Android (a space crowded with Samsung, Moto, HTC, LG, Sony, ZTE, etc). That is it. That is the only decision open for debate. All else is imply common sense.

So your questions should be: Why doesn't the board fire Elop (paying his golden parachute and admitting they were wrong), pay another hiring bonus, pay Microsoft about $5B in liquidated damages for breach of contract, confuse customers even more by abandoning Windows Phone, have yet another 1 year with no sales as you retool to Android?

Seriously? Do you think that is something easy for the board to do?

You must be in high-school still.

The current investors own the stock now, at $2, and they care about what the stock will do from now. Not how it got from $40 to $2. You don't seem to understand that the stock got from $40 to $2 because the investors then were SELLING.

For people who own the stock at $2, ditching NSN and selling the patents for $8B and selling the smartphone division to Microsoft for $8B represents a 100% stock gain. They'd love to see it happen. A quick pay-off.

The investors that own Nokia today at $2 are happy. There will be no revolt. Except for some clueless retail investors that are emotional and want to make noise at annual meetings. i.e. the losers.

gorrilla

Of course it would not be easy for the board to exchange Elop for someone who understands hitech strategy, the board being senile, walking dead has-beens who have aeons ago lost their ambition and ability to think out of the box, marinated, dulled and disillusioned in corporative administration jobs.

Those kind of people do no harm in such industry that moves s.l.o.w.l.y., in consumer electronics it either means death or takeover.

WP is a double edged sword. On the other hand it is crippled windows, a disappoinment for someone wanting a pc-experience, on the other hand it is utterly boring, not offering anything for the consumers thirsty for something new, hip and likeable.

Asko

@So Vatar

You have the old list of board members. For example the current chair is Risto Siilasmaa.

Tomi T Ahonen

(Will do responses in short groups)

Hi JO, Spawn, Dipankar, Jujim, Lasko and Kenny

JO - bada is actually selling pretty well in Emerging World markets and is (currently) targeting low end of smarpthones vs Tizen at the top end. They may converge, we don't know yet. But my vibe is that bada is underperforming to Samsung's management expectations.

Spawn - yeah.. Elop should have been fired long ago..

Dipankar - the Q2 sales levels have mostly already happened and the early AT&T sales suggest perhaps a million in Lumia 900 in USA alone. If rest of Nokia's Lumia grew from 2M to 3M, the 4M number is reasonable but we'll know in about a month. The carnage will happen in Q3..

Jujim - haha, yeah.. but there is regular business for Nokia to replace old handsets and there is precious else to offer in mid-price smartphones than Lumia 710 and 610. I think the Lumia 800 & 900 are pretty dead but mid-price will sell and the top line will have a fire sale. Yes, the 3.1M is still optimistic haha..

Lasko - likely true..

Kenny - thanks. Lets come back and compare with the results come out. Cheers!

Thank you all for the comments, keep them coming

Tomi Ahonen :-)

N9

@Ninvestor you are absolutely right, NOkia is long past time to do what ever, its toast dead kaput finito, Elop made sure of that, board as well.
All I expect is the future litigation against all of this, Nokia is headed for well disaster, and we are all prety sure they will be no more NOKIA as we know it by the end of the year...

I agree with you time to do something is long gone, we are just on the side watching the boat sink and witnessing the pillage of the silverware...

cheers

So Vatar

Thanks, Asko, I definitely got a previous list of the BOD, this is the current one:


Chairman Risto Siilasmaa
b. 1966
Chairman of the Board of Directors of Nokia Corporation. Member since 2008. Chairman since 2012. Chairman of the Corporate Governance and Nomination Committee.

Vice Chairman Dame Marjorie Scardino
b. 1947
Chief Executive and member of the Board of Directors of Pearson plc. Board member since 2001. Vice Chairman since 2007. Member of the Corporate Governance and Nomination Committee. Member of the Personnel Committee.

Bruce Brown
b. 1958
Chief Technology Officer of The Procter & Gamble Company. Board member since May 3, 2012. Member of the Personnel Committee.

Stephen Elop
b. 1963
President and CEO of Nokia Corporation. Chairman of the Nokia Leadership Team. Board member since May 3, 2011.

Henning Kagermann
b. 1947
Board member since 2007. Chairman of the Personnel Committee. Member of the Corporate Governance and Nomination Committee.

Jouko Karvinen
b. 1957
CEO of Stora Enso Oyj. Board member since May 3, 2011. Chairman of the Audit Committee. Member of the Corporate Governance and Nomination Committee.

Helge Lund
b. 1962
President and CEO of Statoil ASA. Board member since May 3, 2011. Member of the Personnel Committee.

Isabel Marey-Semper
b. 1967
Director of Advanced Research of L’Oréal Group. Board member since 2009. Member of the Audit Committee.

Mårten Mickos
b. 1962
Chief Executive Officer of Eucalyptus Systems, Inc. Board member since May 3, 2012.

Elizabeth Nelson
b. 1960
Independent Corporate Advisor. Board member since May 3, 2012. Member of the Audit Committee.

Kari Stadigh
b. 1955
Group CEO and President of Sampo plc. Board member since May 3, 2011. Member of the Personnel Committee.

Btw, I agree that the former Nokia cannot be reinstated, too much has happened. I do not agree that nothing can be done, nothing should be tried.
Honestly, at this point only a leader like Steve Jobs could save Nokia from irrelevancy and make back a few bucks for shareholders. Not many JObs around, and if so they are hard to lure. But this is why the BOD gets paid, to do something for Nokia and its shareholders. If they just plan to watch how this catastrophe goes on, then they are on the wrong prosition and should have the decency to resign.

Or the BOD recognizes Nokia's failure, and starts to actively sell the parts to get back $$$ for shareholders. But every week they continue on this path means a further loss for investors, wastes cash, and brings then just closer to bankruptcy (the worst outcome for shareholders).

Earendil Star

I see some not intelligent investors are posting.

First, forgetting what happened over the past two years to Nokia is fine for those who caused the mess and want to come out clean from their doings. Not ok for those who were on board from the start and saw the THT Elop suicidal mission take place after hijacking the Nokia "plane".

Second, compared to what has happened, it would have been better to just wind down the company two years ago. Not so much value destruction would have taken place in such a scenario. The reason is that leeches à la MS would have had to pay a hefty price to get what they got for free in the meantime.

Third, a possible future strategy would not mean to renounce WP immediately. What should happen is that Nokia should denounce the agreement with MS as fraudulent and void. Take back gifts given to MS for free. Go on with the WP strategy, especially in the US (where it might work a bit with WP8) while reinstating alternative routes (e.g. Symbian / Maemo-Meego / Meltemi). Android would be nice, but I'm afraid that would be too much given the current state of Nokia. Topmost talent has already left the company. Money coming in in the form of reparations and patent licence fees from MS would allow to survive during the transition stage.

In any case, this will not happen. It is now too late and the company is under an imperius curse from Redmond. Regulators are blind. A legal suit would take ages. Only attritional litigation will go on, further causing Nokia to bleed and suffer.

And all of us who said from inception (February 2011) that this course of action by Nokia was crazy now feel vindicated. But being right does not means happier in this case.

oncemaemodeveloper

@tomi You are right about Samsung being dissatisfied with bada. I talked with Samsung's head of R&D in April and he was quite frank in that "bada is not very good". While it still outsells WP, Tizen is where most of their money seems to be in. Although they never make the mistake of putting all the eggs in the same basket. Oriental mindset I guess.

Another thing I want to set straight. N950 is basically the same HW as N9, only a bit better, with a proper keyboard and a slightly better chipset. Outdated by now for sure but would have been very competitive when it was new two years ago. N950 (codename dali) was the main development platform for Harmattan for a long time. It was obsoleted only when the developers were told to disable the landscape mode in their applications, which pretty much crippled the user experience for such a phone. It was a shame because it would have been cool.

When people talk about the late delivery and outdated HW they should know that Harmattan was destined to launch late 2010. It just happened that about that time there were major changes in the design (like dropping the landscape mode) which delayed it some eight months more. Many thought it only got worse since then.

I know these things for fact because I was there, doing the development in Ruoholahti. Which is also why I have to hide behind a pseudonym here. Sorry for that, and sorry I cannot back up what I say with my true name. I guess you all know why that is.

Roy

I bet Stepehen Elop will no longer be Nokia's CEO by February 11th 2013.
(The problem is maybe Nokia will be bankrupt by then...)

On a side comment, could some please help me verify this:

It appears that Nokia Conversations has not only begun begun censoring comments that don't support the Windows Phone agenda, but as of today June 27th they are tampering with the voting system in their own site, to try to control all the negative comments when you click like", it appears that comments from posters which are negative to Windows Phone are flagged by their moderating team and if you press "like" on that message instead of increasing the "like" count it actually decreases, I just realized this, and I'm baffled they are actually trying to steer opinions in this way, And guess what? if you press like on a positive comment to windows phone the "like" count does increase.

Could somebody else please confirm if this is really happening at Nokia Conversations?

This is the thread: (Comments 21 to 30) Nokia at Windows Phone 8 unveiling.
http://conversations.nokia.com/2012/06/20/nokia-at-the-windows-phone-8-unveiling/#disqus_thread

Check these not so good posts about WP8 form the posters below, if you click on "like" it will actually decrease the (it just did it as of 20:30 GMT -6)

John Kowalski
Spyinthesky
TechInsane

Can anyone confirm please?

nnine

@KPOM @foo @Aikon

Pr 1.1 and Pr 1.2 brought some nice features and improvements, but I was happy with my N9 even before that. It was also released before the Lumia phones, which also had more problems at launch time. So I do not believe that "Meego was not ready".

Another argument was that Meego could not made to run on enough devices fast enough. This has been debunked by one of Nokia's own engineers:

http://felipec.wordpress.com/2011/06/21/my-disagreement-with-elop-on-meego/

Hoista

Most likely explanation for the board of directors behaviour is Groupthink.

examples -
Bay of Pigs invasion
Challenger Space Shuttle Disaster
Invasion of Iraq

The desire of a collective agreement to go windows phone has led them to reject all other alternatives. Look at some of the close-mindedness that is happening. Very rarely is there any talk about other platforms, Elop even refuses to mention Meego in any of his talks anymore. They are rationalizing their strategy, windows phone will work because the 'next version', the 'next phone' will be better / backed with a big corporation in Microsoft. To me, there is clear selection bias in the decision making and projection of fault. It's not my fault the phone isn't selling, it's the carriers fault. etc.

GoneIn60Seconds

@Hoista,

Great that you mentioned the term. I agree with your analysis.

It is terrible really what happens when any group starts to rationalize own behaviour and starts to aim at consensus, instead of thinking about the situation like they would if they would be making the decision on their own!

aikoN

@Roy,
Nokia Conversations is pretty boring now. It's just an advertizing channel roe Lumia/WP.
There was much more comments from people who really care about Nokia before real Nokia stuff was cleaned away and replaced by WP.
Sometimes it looks like the only people responsible for "Conversations" comment each others "news" in a overexcited, overoptimistic manner.
Really sad place now.

aikoN

Skype was mentioned many times as a reason for operators to hate Nokia.
My personal experience is that Skype works best on both iPhone and Android handsets. When we come to Nokia, at least with Symbian, Skype performs not so good, it's a kind of unstable (imho) and lacks video calling. I don't have any experience with Skype on WinPhone. Nokia N9 lacks video calling too. What I'm trying to say is that Nokia is the last one I will come to when I need good Skype experience.
I just can't understand.
Can someone explain me that?

Strtxi

@Hoista, GoneIN60seconds - thank you:

"It is terrible really what happens when any group starts to rationalize own behaviour and starts to aim at consensus, instead of thinking about the situation like they would if they would be making the decision on their own!"

Instead of seething with fury over past mistakes, which ( quite understandably) seems to be the groupthinking prevalent here - what would be the correct ( realistic ) course of action for Nokia Board now?

imho: Elop is executing a drastic change strategy accepted by the Board. All his major actions are actually slowed down by the same Board. Someone already said Nokia has probably tens of thousands too many people. And, most of them have a quickly waning or even obsolete set of skills which could NOT produce a Symbian / Meego / whatever based product to make any significant entry into the U.S. market. And claiming that U.S. market does not matter is burying your head in sand - Apple has recently reported HUGE sales increases in China ( despite not really having a proper presence there and there product being tens of times more pricey in relative terms for any regular consumer, even for the upper middle class earners ), with product and service mainly created for the individualistic american and "western style" consumers.

GoneIn60Seconds

Yeah, thats really a conversation killer when everything must be really excited and optimistic. Well, it aint that way in the real world. The apps in the Nokia Conversation look like a pile of shit.

GoneIn60Seconds

@Strtxi, groupthink does not mean any common opinion. It means striving for a consensus at a price of suppressing individual opinions and thoughts. It is a survival instinct for humans.

Nokia phones division has about 40 000 workers and it is true that 99 % of them have now obsolete skills or are just administration doing nothing every day.

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