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« On The Twelfth Day of Christmas My Elop Gave To Me.. The Classic Christmas Carol Updated for Nokia | Main | Picture Tells it Better - first in series of Nokia Strategy Analysis diagrams, how Nokia smartphone sales collapsed »

January 02, 2013

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Listed below are links to weblogs that reference How Do You Know If Your Strategy Has Failed - The Nokia Form 20-F Submitted to the NY Stock Exchange - Elop, your two-year experiment has failed and so have you:

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Spawn

What those Form 20-F shows most is the amazing failure in risk-management. They where aware what it means if that strategy fails but still went all-in, why???

It was not needed. It never was needed to only do WP and kill off everything else. From Microsoft's view there is a "ear of ecosystems" and Microsoft fights on one side exclusive. But not for Nokia. They compete with Samsung, with HTC, eith Apple, etc. and not on any ecosystem front. They compete for sold devices, for services, for customers. It just does hot matter on ehat ecosystem cause rg Samsung is also on WP. O, why woul you turn that into a "war of ecosystems" cause Samsung is on Android but not if they are on WP? It just makes no sense.

That means from the very beginning, from the moment the strategyvwas selected and that form F-20 was written something was faulty.

I repeat: Why would you let your Symbian fight against your WP if you could join them? Like Symbian/Meego was one ecosystem through Qt. How and ehen did it turn from an "extension of our offered ecosystem" and a "ecosystem-merger" into a "fight"?

I think part of the answer can be seen in Elop... he names himself "The General", givea wrong citates of Sun Tzu's Art of War ehn asked about Nokia, talks about burning/jumping as if only drastical actions, like wars, can help. Sure he lost *his* war but *how* was he able to get Nokia into *his* a war the first place?

foo

@Tomi: "When this strategy was announced, Nokia had 29% market share on its own operating systems. They are now down to 2%. So Nokia has sacrificed 27% of its own smartphone customers."

I think the correct sentence would be: "Nokia has sacrificed 93% of market share" (27/29 = 93%).

Putting it in another way -- when the number reaches zero, we'll say Nokia sacrificed all (100%) of its market share.

J.O. Aho

I don't think we can blame everything on Elop, other board members like Esko Aho are to blame too as major stock owners, they should have stopped the madness of the mad "generalissimo".

The big question is, will Nokai try to jump on board Andriod or Tizen after microsoft kills off WP, there was some rumours at Tomshardware that it would be Android, but I guess Nokia is just looking for people pushing out Nokia Maps App for Android and nothing else.

Firecracker

Ohh well what should I say besides that Elop is making the Nokia founder roll around in his grave. And how goddamn stupid is the Finnish government by the way I mean how can they let this dong cracker Elop ruin Nokia? When Nokia is/was about 33% of the GDP. When before Nokia or perhaps Microsoft modified the Nokia article on Wikipedia it was stating that no one wants a windows phone.

Skender

Why this obsession with Skype? In 2009, the N900 already came with Skype integrated in the OS, just like the N9 in 2011. Skype was running on Symbian, Android and iOS, long before it was available for WP7. I can understand that operators don't like Skype, but when Nokia launched the Lumia 800, it was one of the few smartphones on the market that could not even run Skype.

John Waclawsky

Another truly excellent post that backs up what we all see as is the elephant in the room and what the market has known for a very long time:

NO ONE WANTS A WINDOWS PHONE ...and the market is now learning that NO ONE WANTS A WINDOWS TABLET either.

Happy New Years to all the Microsoft Atroturfers .. guess what? ...it is still true in the New Year that NO ONE WANTS A WINDOWS PHONE ...windows phones and tablets are going down LOL :-)

m

Spawn: "They where aware what it means if that strategy fails but still went all-in, why???"

1. Elop doesn't care about Nokia. He still gets paid millions as they lose billions. The only personal risk is the hatred people would have for him. But Elop was hired to downsize Nokia, so he would be hated by some no matter what. So why not risk an entire company you're planning to dismantle anyway, and bet it all on his true love, MS? He's not from Finland, he doesn't know the employees he's hurting. No need to even meet them.

2. Many share holders got out when the WP strategy was announced, and obviously didn't support the plan. So who did? Who pushed it through? Was it lead by fools, who knew this long list of risks but thought they knew better, thought it would succeed by magic and will power alone? Or has Nokia been fully controlled by MS investors for the past 2 years? The plan was not well received by shareholders, and yet somehow it was pushed through, and Elop was put in power, and the Nokia board was rearranged to consolidate power to the pro-MS side.

So the answer to "why?!" is: Because it was good for Microsoft, and Nokia is controlled by Microsoft.

rino

Read in Forbes:

"2013 in mobile"

"Nokia abandons the mobile business:..."

http://www.forbes.com/sites/tristanlouis/2012/12/30/2013-in-mobile/

Tester

@Baron95:

Yes, all well known, but that wasn't the point.

The point is that the strategy failed on every single account that had been laid out in that verbose document. They knew all the risks, laid them out in text and didn't succeed on even one single point! - and that they didn't even consider a backup plan, just in case, is just the icing on the cake.
The entire Windows Phone adventure would have been a lot less risky if they had outlined clearly that they still want to continue to pursue MeeGo. But they didn't even give that a chance. They killed it outright, before it even had a chance of making profits.
I'd call that a complete and utter failure.


Even swallowing their pride and going Android would have been a better option. At the point the decision was made, Nokia was still the largest smartphone manufacturer. They would have been the only company able to compete with Samsung, had they been able to migrate their Symbian customers to their own Android phones.

Sure, they probably wouldn't have 25% market share now, but even 15 or 10% is still better than what they currently have.

But no, Google didn't bow to their demands, Nokia said no and went on a wild goose chase for success with a platform that already had lost when the decision was made.

Regarding Elop, sure he's to blame. If a strategy shows signs of complete and utter failure, as the MS adventure did over a year ago, you pull the plug and search for alternatives. What you don't do is continuing this insane game and waste even more money on it.

But what did he do?
Did he ever consider his strategy a failure? No. 'Next time it will be better'.
Did he ever even think about an alternative? Clearly, no. He's deadlocked on Windows Phone. Anything else just doesn't exist for him.

Interested to know

The people who read this blog all have a good idea what is happening. The "Microsoft Muppet" moniker sums up the actual reality quite well.

You've covered this before but I would recommend revisiting the topic of how and why Nokia was used to further Microsoft's goals. It's clear that everything that Elop has done at Nokia has been for the benefit of Microsoft.

Everything at Nokia that could be potentially valuable to one of Microsoft's competitors been destroyed or put out of reach. Everything that didn't directly benefit Microsoft has been sold for a song. The few remaining bits that could still be valuable to Microsoft (like the mapping division) will undoubtedly be transferred to Microsoft soon.

In the past, Microsoft's astroturfers (aka 50-cent-army) were able to keep most of the dissent obscured but even they are now failing as the damage becomes so great. Even the general public are now seeing that the emperor has no clothes.

Dan Thornton

How about instead of moving to Android - owning Ubuntu for smartphones?

The thing is that Window Phone is actually rather good, it's just the way that Nokia has gone about throwing everything behind it that's been the problem. Speaking as someone who used about 3 pre-Windows Nokias and was willing to persevere due to the hardware, I'm now on Android with a HTC, and my next handset will probably be an Android Samsung...

John Waclawsky

I see what has to be some humor to start the year. Someone said wp "...is actually rather good"...??? ...really??? ...Yeah, just like poison. Tomi's post is right on! Clearly the market has spoken and NO ONE WANTS A WINDOWS PHONE. The fact that NO ONE WANTS A WINDOWS PHONE was never really in doubt. The WINDOWS P(OS) SUCKS ...and WINDOWS 8 SUCKS EVEN MORE.

As the Phablet category grows windows phone will be left further in the dust:

http://news.investors.com/technology/010213-639003-samsung-galaxy-s4-seen-gaining-share-on-iphone.htm

It will be fun to watch the Microsoft Astroturfers futile attempts to blame the increasing obvious windows (p)os problems on others ...for example going back and beating the drum that it is all Nokia's fault is truly laughable. The root cause is simply NO ONE WANTS A WINDOWS PHONE

Tomi T Ahonen

Hi all

Just a comment. Many regular readers may remember Ex Nokian who was once allowed to post here and was banned. He/she also runs the anti-Tomi 'Dominies Communicate' blog with hyper-critical arguments against much of what I blog here.

I had blocked Ex Nokian from my Twitter feed and routinely deleted any Ex Nokian comments to this blog. Ex Nokian wrote a surprising - and very warm - blog over Christmas, and mentioned that while he/she and I disagree on a lot, Ex Nokian does consider me the most accurate forecaster for Lumia smartphone sales per quarter (thanks).

I read the blog - you may want to too its at

http://dominiescommunicate.wordpress.com/2012/12/24/merry-christmas-tomiahonen/

And decided, that if Ex Nokian is able to see this level of 'honesty' and fairness in the analysis, then yes, even if we disagree with 90% of the matters but can find 10% in agreement, I should allow Ex Nokian also to resume to post comments here on the blog (and I unblocked him/her on TW and followed back).

So, with the proviso, that Ex Nokian has to still conform to our normal rules and not behave like a total Microsoft troll for example, if the comments are reasonable, Ex Nokian is welcome back to post comments here at CDB.

You don't have to agree with me, as long as you deal with the arguments in a fair and reasonable, or well-argued manner...

Tomi Ahonen :-)

A

Great words. We all see prophecy come true. Now tell as what happens NEXT two years. You really think (or hope?) same as Forbes?

Sander van der Wal

The Form clearly proves that everybody at the top management level was very aware of the risks being taken moving from Symbian/MeeGo/Qt to Microsoft.

What is missing in the Form and here is a good analysis of the reasons moving away from Symbian and MeeGo.

Consider, if management was competent enough to clearly see the risks they were taking, they were competent enough to see that their old Qt/MeeGo/Symbian strategy was going nowhere, it had to be even worse than going with Microsoft.

So, why did they believe their old strategy was not working? Why did they think they had no choice in following the very dangerous strategy of going with Microsoft?

CN

@A

You mean this one?

http://www.forbes.com/sites/greatspeculations/2013/01/02/rim-settlement-shows-there-is-value-in-nokias-patents/?partner=yahootix

No, just kidding. ;-)

But before making conclusions that it is the opinion of Forbes, make sure you know if it really is Forbes who says it or someone in their blog.

vladkr

Hi Tomi, Happy New Year (and Happy New Year to you too, folks)

You should know by now; as we say in France, Nokia is like shrimps (prawns) : everything is good except for the head.

geektech

@Dan,
Have you used a N900, it is basicaly Ubuntu, Debian phone-tablet.
As we saw and many said it was conspiracy to kill linux , but now it
Is more obious, maybe they have other reason but, what i dont understans is: If Ms have full control of Nokia shares, wasnt that better to profit from it? Or kill the company and keep the IP generate more profit on the long run?

pwh

Anyone know whether the MS / Nok contract forbids developing / marketing non Windows smart phones? Has anyone able to speak seen the contract? If so when do the restrictions end? If the contract does preclude non Windows phones, there must be some kind of termination clause...

Louis

@Sander: "So, why did they believe their old strategy was not working?"

Clearly it wasn't. This writeup seems to hit on the major points:

http://taskumuro.com/artikkelit/the-story-of-nokia-meego

"Why did they think they had no choice in following the very dangerous strategy of going with Microsoft?"

It's still a little confusing. Remember that a naive argument at the time would be that Nokia isn't a small, software and mapping oriented company, but a big one with manufacturing and hardware competence. Thus scale is required and exploitable, so why not use Android and sell off mapping, which Google wasn't going to take? (About 2/3 of the risks are that Windows won't get the necessary scale.)

Against this is the intuition that WP was new, distinctive, and liked by reviewers. Plus a feeling that there was better synergy with MS on the services side and the idea that a huge marketing budget from MS could get sufficient visibility to bring the platform to critical mass.

It all seems a bit speculative when put this way, even without knowing what happened.

In any event, nobody can say this strategy worked. The huge bet was that Symbian had died on the high-end, so exchanging a bit of market share to get back into the high-priced segment was worth it. But, even after huge launches, Lumias seem only to move in modest numbers in the prepaid segment in Italy or something. (Certainly nobody would take a Lumia 920 over an "obsolete" iPhone 4s, given the choice.) The rest is a total market share and price fiasco.

What's interesting is that we will see a bunch of QT/HTML5-based platforms soon: BB10, Unbuntu, Jolla, and Tizen. I suspect they will do as well as WebOS and MeeGo but, hey, you can never tell.

Vladkr

I have few more remarks besides the shrimps stuff :
- Nokia cannot differentiate, despite strong partnership with MS; surprizingly, HTC managed to release a 12Mpix Windows Phone (HTC Titan II, running wp 7.5). How come Nokia couldn't do better with wp8, and the help of both MS (supposed), and Zeiss ?

- Skype may have been seen as a threat by operators. I won't comment this fact/hypothesis, as I'm not competent for that, but I can comment as a heavy Skype user. I'm quite sure in the middle term, Skype will fail. Why ?
* service quality is worse and worse (especially Skype out and skype number)
* operators already offer very competitive rates, which make Skype less competitive and less convenient to use. Of course I don't include North American operators, which still offer cavemen age rates (intercity, no unlimited internet, no unlimited calls, charged incomming calls, etc.)

That's only two issues besides many more, not to mention the aggressivity Nokia's strategy generated in the media, but I don't see anything positive in Nokia's and even Microsoft's futures... At least not while Dumb and Dumber will be in the cockpit.

Louis

Aside: to see how unimportant WP is, Google abruptly dropped ActiveSync from its free service as a way to transition its iOS users to the Gmail App:

http://www.theverge.com/2012/12/14/3767626/google-dropping-google-sync-exchange-support-for-gmail-calendar-and

That WP8 depends totally on ActiveSync for Gmail and there is no App apparently wasn't a serious consideration. Since Google has a decent idea of who actually uses its services, this suggests WP was really tiny.

Wayne Borean


One point I have to pick on you about Tomi - the SEC Disclosure form is standard. All companies have to state what dangers might impact their business. Microsoft for example always lists Apple, Linux, OpenOffice/LibreOffice as dangers, every year. This requirement was implemented to protect investors, so that they could look at the filing, and decide whether the company was safe to invest in.

Where Nokia is unique, is that they are the only company that has been accurate about the dangers!

Seriously. No other company that I can think of has ever listed potential problems, and then actually been hit by this many of those problems. From that point of view you could consider Elop and Crew to be very talented.

Of course it is a level of talent that no one would ever want...

Wayne

dansus

Stop it, your making me cry!

Buratino_vn

@Wayne Borean

It's like you foretold your misfortune (says, 20 kinds of misfortune) and then all of them happened to you. What magic is that?

I did love Nokia but having gone to bed with the evil Microsoft is obviously the fastest and most effective way to destroy thoroughly your once upon a time famous brand name.

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