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June 14, 2012

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jjj

You are wrong about the Burning platform memo causing the damage,it wasn't something that reached most consumers.What broke Nokia's back was the way the transition to WP7 was announced. That was when Symbian was confirmed as dead and Elop told us that Nokia will put all its eggs in one bascket many months before Nokia had an actual WP7 phone. Knowing that Symbian is dead is much worse than being told it is no good (we all knew that anyway but many still had hope that it will get better).
What was done is incredibly idiotic or ... intentional.
Elop is a disaster and the board has to share the blame,they had to OK certain decisions.

eah

The company is irrelevant now, a decline I would guess is, for speed and depth, unmatched in corporate history (excepting cases where fraud existed, e.g. Enron). Everyone still employed by Nokia ought to be looking for another job. The inevitable is coming sooner than they think.

Ville Kerälä

Yes it will come much sooner... Liquidity exhaustion ETA 20/8/2012.... run.....RUN !!

Dan Morel

A counter argument would be to compare RIM. RIM had no "platform burning" memo.

If you compare 2010 earnings, they were also fantastic with lots of analysts predicting the future looked bright!

But now, they are similarly headed for disaster. Mismgmt?

Or did both Nokia & RIM miss the market changing tidal wave?

In Nokia's case they missed both the high-end of the market (iPhone,Android) as well as the low-end market - getting CRUSHED by Chinese manufacturers on dumb phones in India, Indonesia, etc.

JJ

*** This is a very common approach that Microsoft takes with companies. Embrace, extend, extinguish. ***

Wow, that's really dumb. That's a strategy they've used on their competitors. Nokia is not their competitor, Einstein. They are the only manufacturer who actually seems to want to use Winblows phone.

SiliconValley

@JJ
**Wow, that's really dumb.**

There's an informative comment. Thanks for participating. Isn't it time for your nap?
OK, Enough of that.

How long have you been following Microsoft?
I've been using their stuff since MS-DOS times.

**That's a strategy they've used on their competitors.**

Not true. Microsoft partners with companies, forces them to change their operations and then assimilates what parts they want and vomits the rest into the trash.

**Nokia is not their competitor, Einstein.**

Oh really? You make assumptions about there being a difference between a competitor and a partner. They are all just grist for Microsoft's mill. Nothing more, nothing less.

**They are the only manufacturer who actually seems to want to use Winblows phone.**

You really think that without a former Microsoft executive in charge that any reasonably competent technical review would have made the recommendation to use that platform?
Not done.
Bloated BOM requirements(RAM, Flash, CPU).
No existing installations to compare to.
A history of delivering bad software.

This was a hit job, pure and simple.
Nokia has 11000 patents, primarily related to the mobile phone technology.
I'll bet that within a year, Microsoft buys them and starts patent trolling Apple and Google.

MarcoAustria

With the burning memo Nokias downturn started. A month after it this article was written on March 15, 2011(!) and with what's happening at Nokia I have to wonder how much truth is in it.
Excerpt from (http://semiaccurate.com/2011/03/15/microsoft-gutted-nokia-and-runs-off-with-ip/):

“Unless MS places a person at a competitor to essentially bring that other company in to the MS fold there is a very public war. [...] With Elop going to Nokia, a high level defection to a direct competitor, one that is pushing Linux hard no less, you would have expected fireworks. The reaction from Redmond was shocking in it’s silence. [...] The silence was truly deafening.

This can mean only one thing, Elop was sent to Nokia by Ballmer.
[...]
This is the long way of saying that Microsoft is making a phone chip. There are two things that point to that fact, the first is MS’s taking an ARM architecture license. This is not the normal core license, this is a very specific type of license that very few companies have
[...]
By taking this type of license, MS is saying in no uncertain terms that they are going to enter the phone hardware market
[...]
The second reason that MS phone hardware is inevitable is that the author personally knows at least two people working on the project.
[...]
Elop is doing exactly what he was sent to do, secure the crown jewels at Nokia for MS to plunder, nullify internal resistance, spin to the dumb sheep in the press, provide Wall Street with palatable numbers, and keep Nokia alive long enough for MS to get their hardware out.
[...]
MS could not buy the company, so they destroyed it from within with the blessing of the board. Ironically, it was cheaper that way. Nokia is dead, MS has no more chance than they did a year ago, and the only losers are the loyal employees of a once great company and it’s stockholders. The only thing left to do at this point is to watch it unfold.”

khim

@Dan Morel: A counter argument would be to compare RIM.

Absolutely. It's much harder to do, but it CAN be done. BlackBerry does not have anything except smartphones thus we'll need to compare Nokia's smartphone unit with BlackBerry, but yes, it'll be fair.

Similarities: trajectory before 2011.

Differences:

Replacement transitional platforms:
Nokia - was ready last year.
Blackberry - still is not ready.

Profits:
Nokia - negative since last year.
BlackBerry - negative for a single quarter.

IOW: Nokia had viable strategy and executed it decently while BlackBerry was (and is) in deep trouble. Yet Nokia Smartphone unit is dead while BlackBerry still has decent chances.

tony

Thanks for the very insightful, sobering and, ultimately, sombre commentary. I really benefited from your article, Tomi! (Sorry but just gotta add this though, because i am a tad OCD, but you need to use the apostrophe on certain words e.g. let's)

Ex-12yrnokian

As a former 12 yr. Nokian, who left in Q4 of 2011, I can say clearly that Mr. Elop is an IDIOT! I sat through his big acceptance tour speeches when he was hired and knew we were all doomed. The guy just likes to hear himself talk. The only thing going through my mind at the time was, "This is the best the Board of Directors of the number one mobile company in world can come up with? What a joke! A lame ass former Mr. Softy Exec.? We are screwed! A half ass software guy, whose big claim to moblie phone fame is putting flash on DOCOMO phones, is going to run a multinational group that derives is profits from manufacturing, sales and marketing? Not Bloody likely." I could not believe the burning platform memo. Intentionally leaked in my opinion. We all watched as 10's of thousands got laid off and sites closed while the market share, share price, credit ratings continued to drop while Elop and the Leadership Team rewarded themselves with muli-million euro compensation packages. A leadership team in my opinion that is just as incompetent as it's CEO. The internal spin at Nokia while I was still there was all a bunch of smoke and mirrors to keep us working until you quit or they just fired you, unbelievable! While I hate to see a company founded in 1865 that has done so many great things and enriched so many lives go down in flames, Nokia deserves it. If the fins still want Nokia they have one chance. Fire Elop and the entire leadership team today! Get rid of Mr. Softy, hire back the people who knew what the hell they we're doing before Elop ran them off and get back to work! Take back your software position make kickass hardware and do what Nokia did better than anyone else in the world for almost a decade and a half.

Frank MacGill

Pardon me. Did you not notice? The full Nokia board appointed Mr. Elop. Don't talk to me. Talk to them.

Para bellum

Siilasmaa is an eunuch who does not know anything about telco.

BOD is a bunch of ball-less sheeps who follow the order.

Lets gather a 1000-head strong mob and lets go to Elops house in Helsinki Katajanokka to drag the criminal out and bring him in the front of justice of the people! Lets also smash his apartment to pieces!!

It is time to take the justice in our hands!!!!

Angry mob can smash the police and security guards that can be summoned at the place!

Elop, your time has come! You will be judged and punished by the citizens of the state of Finland for your crimes!!

Mike Cane

You have made a compelling case with solid evidence that clearly contradicts the prevailing perception of Nokia. Good work.

As for this:

>>>Nokia's best-loved handset ever, the N9 which runs on MeeGo

Yes. That phone looked so good that I was actually looking forward to buying it over an iPhone! Then Elop went and pulled the plug in what had to have been the biggest tech blunder ever. THAT is the device he should have bet the company on. It was right there to compete with Apple and really dent Android too. A gorgeous piece of hardware and software. What a shame.

Jonas

Hi, quite an article I have to say. What I'd really like to see Is a comparison between what is happening To Nokia now and what happend to Motorola and Ericsson when Nokia stormed the field with the 2110 model (I hope my memory serves me right). Because I see a bit of history repeating itself here. With the 2110 model Nokia came in as an underdog and redefined the market with all the right moves and a pretty high fab factor,much like the Iphone has done now. They also fairly quickly moved to a dominant market position outing both Motorola and Ericsson who were very slow to adapt to the tech that consumers suddenly demanded. So we all know that Ericsson and Motorola never bounced back. Now I think Nokia is trying to adapt, in a way, at great cost. And I sure hope that history will not repeat itself and that Nokia is able reinvent itself.

Foluso

Elop focused on devices being as functional as the iPhone or Android but forgot that some of these smartphones aren't well accepted in emerging markets where you don't have strong internet connections or constant electricity to always charge the "ever-dying android batteries". Elop focused on what device is powerful not what devices are needed.

As far as I'm concerned, Nokia gave what was needed in a lot of emerging markets through its Symbian smartphones. Maps were extremely useful, good email client...not good enough browser but was complimented by browser apps like Opera Mini, Bolt and UC browser.. which were fast and consumed less data. Ovi music should've been worked on for local content (local artistes) and Nokia would've encouraged developers with the Qt tools to develop apps for the Nokia Store.

The "stupid" thing Elop has done was to completely write off symbian...which was selling the most among all the smartphones. If he needed to transit to better OS, he should have continued with the symbian line, add Meego as well as Windows Phone. Nokia would've been unbeatable, building phones on different platforms- S40, Symbian, Meego, Windows Phone. Then Nokia could've seen the market movement and increase or reduce the sales of the phones...then you would've allowed Symbian die a natural death...that is if it wasn't being accepted anymore.

What Elop did was to murder symbian, he murdered symbian and its developers... murdered its workforce...murdered it's desirous customers...and finally is murdering Nokia. Mr. Stephen Elop should learn that not everybody wants a phone as powerful as the iPhone or Android... some just need phones with important functionalities...whose got time spending hours to search through 600,000+ apps?

Ed Austin

Elop managed however to place Microsoft in a win-win situation. If Nokia go under so what, we lost a few million or so? If they don't (and they achieve minor success) we will still hold the OS rights and Nokia are one of many mere licensees which we'll screw for all we can. But we need Nokia as no other major player is desperate enough to touch us.

Microsoft are petrified of iOS and Android - so they sent in Elop to stop the logical and profitable decison - Nokia to go with Android and layer Nokia Mapping and other stuff on top. Heck it would only take a small team of developers and a few million dollars maximum to do that! THAT LITTLE.

Nokia superb Hardware + Base Android + Nokia Layered Software = a Killer combination.

That is all it would have taken to move Nokia into serious play and a strong competitor to Samsung.

And now be Billions $$$ in profits.

Elop I am afraid still takes orders from Ballmer.

It's so self-evident its embarrassing.

Seppo Nikkilä

The figures and the arguments are right but this is just the tip of the iceberg.

Jorma Ollila hired Stephen Elop as the CEO.
Jorma Ollila was the Chair during the catastrophic fiscal 2011.
Jorma Ollila earlier hired OPK.
Jorma Ollila smoked out Ala-Huhta and Pertti Korhonen.
Jorma Ollila gave the power to run a great engineering company to lawyers, politicians, and bean counters.
And this is not all...

So who is the guilty one?

John Anderson

Elop should admit what we already know: Windows phones aren't selling.
A new tactic Nokia will be trying is lowering the price of the Lumia 610, to try and break into the price conscious Chinese market. Elop has already admitted that Microsoft was giving Nokia "specific support" to lower the price.

peter woo

I like the tile interface.
Windows 8 look is very bold beautiful and fluid.
is a newcomer, young and attractive
it's perfectly suited for tablets thanks to the low power drain and low heat generated by systems running on ARM processor !!;)
im so happy for codename:Windows 8 and i think Windows 95 was a big deal for users and developers alike.
Overall, this release feels smoother, faster, snappier, and more stable.
Metro does rock on desktop and laptop!
with this your luck can be perfect.
now with touch you can have all your requirements plus even more.
My prediction is clear and I know that there will be a much perfect luck for the whole W(P)8(RT) universe than Microsoft can imagine.I respect Microsoft for doing that. My opinion on these metro hating freaks is that they are all people who don't like to change

and dont forget Thank for feedback mark as answer and log uri

Adrian

I seriously think Elop is a MOLE, sent by Microsoft to kill Nokia. He is a puppet at the hands of Ballmer, why else would one kill the hand that feeds you. Let alone a WP8, I even hate a Win7 PC to work on, it crashes a million times a day. I am sure Ballmer has other plans like buying over Nokia at dirt cheap price & all its invaluable patents.
What Nokia should do is - split the company into 3, (1) exclusively for the WP (2) tieup with Google & launch 7 to 8 Android phones to combat Samsung & the likes (3) develop the new & existing opportunities like TABLETS & develop Symbian and MeeGo OS. Well then in a years time look at which company has given the maximum profits, close down/re-develop the loss making unit.
At the end I only hope Nokia to survive else we will loose a great mobile player with awesome hardware capability.

Alex

Loving your blog, Great job!!


cheap nike jerseys

Like Bjarneh said he roper kill more potential profit, through the kill N9. An interesting point to consider is that profit margins also (so I heard) much higher N9 and it sold more than lumia (with its low profit margin) in the first quarter. So this itself that elvis roper inability in running a company (the company = a company profits of the company and its shareholders)
In view of elvis roper obviously misleading shareholders and his burning platform - and our memorandum prove here, this may make court nokia/elvis roper is very interesting!

Essay Writing Help

I want to check all the good information available here but alas! Time is very limited for this as I’m very busy in work these days. I hope to check out all the information in free time.

Conspiracy Theory

I actually think that Nokia 51% stock already owned by Microsoft under different company name, even before Elop was hired.

Shareholders are bunch of people that only care about profit and loss. Normally Nokia stock in the past, during good time, around $13-14, then drop to around $11, Nokia CEO OPK replaced by Elop. What if, during the drop, Microsoft thru other company name offering the 51% shareholders an extra money, i.e. 50 cents more, will you sell? I think they will sell.

I think.. with 51% stocks, if Microsoft really have it, they can easily replace the CEO, change OPK with their guy.., ELOP.

I believe all the signs are there, easy to read.

1. Within few months as CEO, release a destructive memo and announcement that kills symbian & Meego, put WM as the only OS that Nokia Smartphone will use in the near future, while almost everyone (except microsoft people) think that is very stupid moves.

2. Very honest announcement that customer will not appreciate anyway, why.. Nokia WM still a year later release after announcement, but before Nokia WM being release, hey.. Nokia still need to sell Symbian phone, why you have to tell people? Did RIM tell people that their company is in deep trouble? Will you buy Nokia Symbian phone, if you know that one day the support will stop? No, then.. Nokia start cutting people, because business is not as big as before, easy thing to do, just playing with numbers.

3. Good deal huh? Microsoft bring money back to Nokia? hm.. Nokia can only use WM, but Microsoft can sell WM to anyone, even.. they are start making their own products. Still thinking is a good deal?

4. Now, the big question, why Elop is not being replaced, even though Nokia stock price went down to $1? Nokia Stock drop $2-$3, share holders already replaced OPK straight away.. Now, Elop? $10 drop still CEO?

Ok.. Imagine, if 51% Nokia stock is actually belong to Microsoft.
1. Nokia use WM as the only OS? Excellent, that is what Microsoft want
2. Kills Symbian and Meego? yes, very good, so.. Nokia can focus only on Microsoft Windows Mobile
3. Good deal? yes, to Microsoft
4. Replace Elop? why? his mission in Nokia is to sell as much as Windows Mobile phone, even though the stock price is less that a dollar, So.. Microsoft just said.. continue what you do


Wow.. Why Microsoft want to do that?
My assumption, Apple Vs. Microsoft, Apple getting bigger and bigger, thru their mobile device. Microsoft think that they need to do something, but their WM is very weak, need a vehicle.. sadly, Nokia was chosen.

So, Microsoft want to kill Nokia? No, they want their WM success too, but their product is suck, so even Nokia great product can not help that much, but for Microsoft, its just a WM department, but for Nokia, its a life and dead.

my2cents

Robert Waters

Have you analyzed the impact of this on Microsoft, and WP7 in particular? It would be interesting to see. And if the theories about MS placing Elop at Nokia are correct, the analysis might help provide evidence. If some of the wilder theories are correct, this could be the business world's equivalent of Watergate. Alternatively, there might be no conspiracy, and this is just an example of a perfect storm where a poor CEO meets an inflection point in the market. The fact that Nokia collapsed is not evidence that MS is involved.

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