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« Digging Deeper into Nokia Q2 Results - and exactly how many 'awesome' sales was AT&T and China... (Updated) | Main | Nokia Can You Hear Me? The Tale of the Deaf CEO and every single downgrade with only one message to the company »

July 23, 2012

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Comments

Ravi

Impressively, this isn't even a move that's good for Microsoft, as far as I can tell. It's just... dumb.

peter

The worst thing to do!! Elop has done it... RIP Nokia

Earendil Star

Tomi, I was amused (just understating... :-) to read this as well.

When the iPhone came out, Apple chose this strategy because it was a newcomer (i.e. no carrier relations to preserve) and it added to the "exclusivity" feeling associated to the iPhone. This worked because the iPhone was an instant success with people, who fell in love with it at first sight. Furthermore, Apple was always able to capitalize their brand strength with carriers, forcing carriers to do what they pleased.

On the contrary, this is totally insane for a (former) incumbent like Nokia, which already had the widest carrier relation network globally. Furthermore, Windows Phones are not iPhones. They do NOT attract customers. They are NOT considered status symbol gadgets. And the WP7 debacle + no upgradeability path has just added insult to injury. And with MS/Nokia, it's carriers who have the upper hand, just the opposite of what happens with the iPhone. Well, sounds logic: who wants WPs anyway?

Even if WP8 will finally (supposedly) allow MS to partially catch up to Android and iOS from a technological standpoint, the WP7 experiment demonstrated that people DO NOT LIKE METRO. This is proven by the lacklustre sales of WP7 worldwide despite the huge campaigns. So, consumers, which most of the time ignore what's under the hood, won't suddenly buy WP8s.

Furthermore, the partnership with AT&T (which already mimicked the initial iPhone launch... with the crippled Lumia 900) was an utter failure (300-400k sales in Q2!). Again another reason why this strategy sounds flawed.

Finally, not all countries rely on sales through operators. So what should the strategy there be?

Yes, another absurd move for Nokia, which is being steered as if it were a newcomer to the mobile market.
Uh, oh, yes, now I get it! It is MS that is the newcomer... in havng direct relationships with carriers: but they are doing it through Nokia... as if Nokia was a newcomer! Lol!

Although I am not as pessimistic as you Tomi in your future predictions for WP8, especially considering the formidable MS muscle behind it, I must say these strategies are now really starting to look like desperation moves on MS' side. They are realizing that the competition is way ahead, and time to remedy the situation is becoming less and less. Interesting times ahead...

Meanwhile the press is pushing on unbelievable stories on Nokia and WP.
The misinformation campaign is raging on unabated.

As for Nokia? It's in the dust. In MS hands (which are strangling its neck).
Too late to salvage it, even if regulators were to suddenly wake up.

A huge Elop for Nokia. An additional chance to survival for MS.

ds

Apparently Elop believes he's got uber desireable God phone that would dwarf anything Apple has up in the sleeves and that carriers will rush to support it. Either he's seriously fixated on MS self confidence about Windows absolute superiority (do they brainwash everybody in Redmont? ) or this is a preparation to decimate Nokia sales organization before it's prepackaged to be easily swallowed by MS.

Jens

Even at the keynote that introduced the first iPhone, the crowd startet boooing as Steve Jobs announced its exclusive to AT&T

Its on video.

TimoT

Elop is an "ugly Canadian", stupid busybody besserwisser trying to conquer the American markets and nothing else matters. He is culturally totally ignorant, big elephant in a china shop.

I can imagine how this turd behaves for example in China or Japan during negotiations. Loud mouthed asshole, totally blind to subtle signals coming from Asian carrier negotiators that they are mad as hell and to hell with Nokia.

A lot of Canadians really think Canada is the world's best nation and everybody else are inferior people and thus, their advices should be ignored. Ship him back to Canada ASAP!

jcamdr

Information from Switzerland: Nokia Lumia have now practically vanished from some phone vendor shop. For example, Interdiscount list only 4 Lumia phones out of almost 40 phones from 3 operators. There is a few others Nokia phones but there are Symbian one for the low price range in concurrence with cheap Samsung phones. Interesting to note that the 4 Lumia are the only WP phones of the whole prospectus. Android presence is massive. Ref: http://www.interdiscount.ch/idshop/pages/prospect.jsf?utm_source=sidebar&utm_medium=banner&utm_campaign=prospekt

EmmanuelM

An interesting thing also is that such exclusive deals are not legal in some countries, like France for example...

Still wondering why the finish government is not doing anything ?

zlutor

@ds: "Apparently Elop believes he's got uber desireable God phone that would dwarf anything" - well if, IF they - with some miracle - were able to port PureView to WP8 then they would have something unbeatable by their rivals...

In this case that strategy might work to some extent - even though it would be quite an ugly approach.

Anyway, Nokia should go for mass market - having 'the king of the hill' phone as well...

AtTheBottomOfTheHilton

Isn't it obvious, this is just another step to dismantle Nokia further. I see this move as a way to shift away from the dumb phones as Microsoft doesn't need those.

Now, on the lighter side. The death of Nokia could increase the probability that RIM will make it through. If RIM can deliver a product within reasonable time, they could steal some of the customers from Nokia. RIM could still be that third player instead of Windows Phone which already failed.

KM

>> I see this move as a way to shift away from the dumb phones as Microsoft doesn't need those.


They still need a functioning Nokia to sell their operating system but with this they'll lose even more sales which will reflect very badly on MS. So if they call the shots (quite likely) it merely shows that they don't have the faintest clue how this business works.

vladkr

@Tomi:

I remember when Stephen Elop was hired by Nokia, you used to say that he got a dream job. Indeed it is!
When he arrived, he got 6M Euros "Welcome" bonus atop his 1M Euro salary, some say he was paid over $10,5M for the whole year 2011 + all little attentions to make his life in Finland easier and sweeter.

All this money and advantages to do... nothing good. Yes, it is really a dream job. If only I was offered the place...

(just to compare, these guys who developed inception and ported Android on the N9 were paid... nothing)

@TimoT: Unfortunately, I have to agree with you about the fact Canadian mass is quite arrogant. That's a pity because it shadows some exceptional Canadian individuals who deserve to be better represented.

DS

> If RIM can deliver a product within reasonable time
RIM time to steal Nokia customers is now, not in a year. There are not many left. When Nokia is gone, there will be none.

DS

> They still need a functioning Nokia to sell their operating system
Unless they have already decided that pushing it through OEMS is no longer a viable approach (or at least with Nokia) and are determined to go long term Apple play.
They need Nokia patents and maybe HW design for that.

geektech

Just hope govs and corps dont let MS charge more in the smartphone area and locked development because of MS aquire patents from Nokia, it's likely what they are looking for, so they can strangle Apple and Google; Didn't MS declared war already?
Really sad seeing Nokia die like this, my great condolence to the people who build Nokia for what it was! Welcome Jolla, the new Nokia, you got my support.

Jamie

This is Elop's final attempt to raise the profile of Lumia and clinch some operators after poor sales. Probably offer Lumias to these operators at throw away prices. The problem is, if anyone has the cash to cutdown prices it is Apple and Samsung. Further, operators that are left out will be antagonised and strategy could backfire but then Elop is running out of options. Without carrier support (T-Mobile and other carriers), he is between a rock and a hard place - dwindling cash reserves, need for new handsets for windows phone 8. At this rate, there maybe no cash for Risto's plan B

vladkr

this new strategy will give a good excuse for poor Q4-2012/Q1-2012 sales (if Nokia will still exist). Apparently Elop is ready for a new fail.

Will Highlander

A Canadian takes over Nokia and destroys it, RIM gets saved? Hmmmm....

Spawn

Apple back then with the iphone an amazing product, the first of its kind. There was no competition and Apple was ahead in time. Also Apppe was and still is the only one offering iOS.
Nokia is just one of many WP8 resellers, they are very late and under heavy pressure from competition (Android, iPhone but ALSO Samsung and HTC doing WP8).
If Nokia Lumia with WP8 is not for sell at my carrier while I like to have a WP8 phone I woupd pick a Samsung (known for its quality with Android) or a HTC Hthe Titan was and is way more polished then Lumia).
Nokia has a fraction of thr money, R&D, market share, partners and healthy connections then WP8 competition and now they will not even offer Lumia with WP8 as competitor.

This is not madness. This is not the action for a single guy, the mad Elop. The BOD is in it too. A madhouse or do we see a plan behind the Nokia kill?

Spawn

@Earendil Star

> Even if WP8 will finally (supposedly) allow MS to partially catch up

Even if it says nothing about Nokia. There are lot of other players who have a good carrier-relationship, money, partners, R&D and who will offer WP8 too.
Both, Samsung and HTC, announced WP8 devices for Q4. Nokia is.neither an exclusive WP8 partner nor the best. That makes this move even more stupid.
And whatever single door to the market is picked, either they choose a small one or have to arrange with the idea that the same door is going to offer competing WP8 devices too.
Or do we believe a giant like AT&T would risk to not be able to offer other WP8 devices? After the Lumia WP7 sales disaster? With compitors.like Samsung and HTC? Here we know why they HAVE to go with smaller ones like Orange.

> Finally, not all countries rely on sales through operators. So what should the strategy there be?

Not sell to customers? That seems to be a method that becomes more common at Nokia once it was started with the N9 and N950.
Is the plan maybe to not make Lumia a compitor to plan B in the same way they did with MeeGo?

> It is MS that is the newcomer...

I do not thing that the other WP8 device makers will do something similar. If they do then its a requirement pushed by Microsoft. If not, its Elop's madhouse.

> desperation moves on MS' side

Microsoft has other WP8 partners. It hits Nokia foremost and only.
Maybe it was a condition Microsoft pushed onto Nokia to continue provide cash-infusion? If that was the case then Microsoft may do the same to others. Maybe to protect partners when the news hits like a bomb that Microsoft.will have a Surface Phone.but exclusive to one carrier too.
Idea would be to prevent competition of Lumia with Surface Phone...

JSAA

Question to Tomi: When did Samsung pass Nokia in dumbphones?

Samsung delivered 95 million phones in Q2 2012, of which ~50 million was smartphones. So they delivered less than 50 million dumbphones.

Nokia delivered over 70 million dumbphones in Q2.

So Nokia is still the clear leader in dumbphones

AA

It is very hard to spot the winning strategy behind the moves Nokia has made in the last 18 months. Also, when sensing Nokia's best interest, and not Microsoft's, it is hard to have a positive gut feeling about the same strategic decisions.

Not seeing any reasonable plan, one opts for conspiracy theories:-) Which company collects where Nokia drops? Samsung. Which country now controls near 100% of future-proof mobile OSes? USA. Where and when did the competition meet to devise their Elop weapon of mass destruction?

m

I don't get it. If Nokia's previous strategy with carriers was so bad, what choice do they have but to change it? Nokia can't rely on carriers who aren't going to push WP, who instead will only wait to see if it takes off first. By restricting carriers, the other carriers can't "wait and see". A carrier has to commit up front to push WP8. Elop is hoping that at least one of them will bet on WP8 enough to want exclusivity.

I think that one carrier agreeing to push WP8 even if no one buys it, is better for Nokia than WP8 available on all carriers, with no one pushing it, and no one buying it.

They gotta push on that turd till it makes a splash.

m

Nokia's not a mass market company. Microsoft shut that down. They only killed a competitor, they never took over its abilities. They killed it.

Using Nokia to make WPs was never intended at full Nokia strength. Yes, they hoped that killing Nokia's user base would free up some market space for WP (even for some reason thinking that Nokia users would remain loyal to the dead company's name and migrate to WP). But no, MS didn't intend to use Nokia as a company to build WP... instead they build WP in China and Argentina while closing Nokia's factories.

So it doesn't matter what the old Nokia did, or how big it was. That is dead now. WP with Nokia is once again "a startup", trying yet again to make an entry into the market. MS wanted to kill Nokia's market share more than it really expected to migrate them to WP.

MIP

I wrote way back in Jan 2011 about Palm's refusal to sell their phones in other markets/carriers:

http://www.mobileinfoplanet.com/blog/blog1.php/what-is-wrong-with-palm

It didn't work for Palm nor will it work for Nokia.

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