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« New Twitter Contest - to Guess What Date Elop Will Be Fired (or otherwise removed from office as Nokia CEO) | Main | Q4 Results and other notes from Smartphone Bloodbath - LG, Lenovo, RIM, ZTE, Jolla, Vertu, etc »

January 30, 2013

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ejvictor

Tomi what about accessories... Nokia use to make great gear - looking to replace my BH-905i's and now Nokia makes Zero, nada, zilch all outsourced to other vendors -Monster, JBL, etc. Has it been a strategic decision to stop being a "hardware company".

Confused Star

I've read every single thing Tomi has written since the Elopcalypse and every single comment too, but I've never seen this posted here regarding Elop:

http://mobile.slashdot.org/comments.pl?sid=1992208&cid=35184470

I'll reproduce the comment here for your convenience:

************ Begin quote ************

I can't recall another time I've posted anonymously.

I worked with Stephen Elop back in the Macromedia days, starting with him being my boss^2, in the late 90's. I've always found him a fascinating exec to watch. In the four years or so I saw him at Macromedia, I watched him:
1. Come into IT, get the existing CIO kicked out, become the CIO, and fuck IT up[0]; so they promoted him and
2. He came into the Andromedia purchase, ran that business group for about a week which was long enough to fuck it up; so they promoted him and
3. He started a brand new business group (Internal name ... Whirlwind, I think?) for about three months which was long enough to fuck it up; so they promoted him ...

The pattern reached its logical conclusion when he became CEO of the company and then ... sold it to Adobe.

Stephen is the most perfect example I've ever seen of the sometimes-mythic "failing upward" tendency. He turns everything he touches to shit, and ... then gets rewarded for it. It's like magic. I look forward to Nokia failing miserably, being sold to Microsoft, Stephen making billions out of the deal, and getting elected President of the United States, which he will drive into the ground, formally make into a Chinese colony like Hong Kong, and finally get promoted to God.

[0] Favorite story from that time: At the beginning of my time at Macromedia, our website was running on four servers, and I remember one time for a stupid reason three were not taking traffic. The first reason we found out about this was because someone mentioned the website was "a little slow." And we were taking tons of traffic. So Stephen came in and forced us to have a dynamic website. Hey, that's a GOOD idea. And then he decided we should use Broadvision for this. Which was a steaming pile of shit which BV recommended we reboot "as often as you can" because it was unstable. Which required horrific investments of money (we were buying Sun E4500s like there was no tomorrow and putting in 14GB of RAM in each -- back when Sun RAM was at around $7000 per GB). Which Stephen brought in KPMG to "help us" implement, which had the predictably hilarious results that anyone here who's worked with a big consulting shop has likely seen for themselves.

************ End quote ************

Astounding. Oh, and re: that Slashdot article, I was one of those who walked out (and promptly got drunk)...

Interested to know

It really is sad to see what Elop has thrown away. Nokia shouldn't run for Microsoft's benefit.

For myself, I've never been a fan of Symbian. But as someone from the relatively affluent west, I recognize that Symbian devices are very capable and reliable for their low cost and that they have been tailored for people in "third world countries". While Symbian probably doesn't have much of a technological future, Nokia could have ridden that platform for mega profits for many years. Instead Elop gives us this Windows Phone disaster.

It's scary to realize that Elop is the Fortune 500 CEO who trashed the enormous marketshare in China that Symbian gave him.

glonq

You know how CNN writes obituaries for politicians and celebrities even before they're dead, so that they can publish it asap? Well I'd like to believe that Tomi has pre-written a 300-page book on the demise of Nokia under Elop, and he's just waiting for him to get fired so that he can write the final chapter. It'll be on store shelves within a month.

Trust me Tomi, based on the material in this blog you could assemble a print-ready 300-page book with little effort ;)

If your book tour stops in Vancouver, can I get an autographed copy?

Harsh but fair

I don't disagree that Elop has been a disaster (if for no other reason than he did not adopt Android over WP) but you should still plot the launch of iOS and Android as key competitive events in the (smart) phone market so as to reflect a more complete and accurate story. Elop accelerated a decline but Nokia's platform would have burned regardless albeit at a slower pace than what it has (maybe).

Tomi T Ahonen

Harsh

I hear you, and that makes very much sense on first view. But not, when you examine the facts. I addressed that EXPLICIT issue in part 2 of these 7 pictures and blog articles. Please go to the top of this blog article, pick the second link to Picture 2 - Nokia vs Apple and Samsung - you will see what happened with the competition. Nokia did NOT lose to the iPhone before Elop. Look at the facts, please follow that link. Do come back here to discuss it if you want, after you've seen that picture (or continue the discussion there in the thread, we have a lot of discussion there)

Tomi Ahonen :-)

vladkr

@Tomi,

Answering to Hans Hellström yesterday in your other article, I figured out Elop is in fact a genius.

I'm sorry, I'll copy-paste the demonstration as I twisted my arm last week, and it's hard for me to write long messages :

--->
If one buys Nokia shares just after Elop Osbourns Lumia 710/800/900 at 1.32 Euro each, can sell them when Nokia announces a new Pureview Device (Lumia 920), when the share reaches 2.7 Euros but before Nokia informs the 920 will be released only 3 months later, in some countries (1.92 Euros - buy) and then sell again when Nokia announces Q4 results are not as bad as expected.

So, if one invested 132,000 Euros in July (100,000 shares), (s)he doubled the pot in the end of August : 270,000 euros (that's 138KEuros earned in 1.5 month, doing nothing).

If the same person invested again these 270KEuros in the beginning of September - 1.82Euros/share, (s)he would have bought 148,352 shares, which in mid January (not that bad Q4 press release) were valued at 3.5 Euros = a total of 519,230 Euros.

So in less than 6 months, a trader who invested 132,000 Euros earned 387,230 Euros, doing absolutely nothing.

Imagine that people like Elop and friends can invest 10x, 100x these values (through ghost-companies), you can imagine easily how much they could earn in just 6 months with this little game.

--->

Elop created a brilliant cash-machine for the ones who are well informed. I wouldn't be surprised to see Nokia's share to rise just before MWC, and then dive again after before new announcements in the end of August/September.

So does he need a healthy Nokia ? Sure he doesn't... he just needs to have the share to roll-coast as long as possible.

ejvictor

But...But...But...

Reality is we are, where we are, with ELOP -FACT! Nokia "invented" the mobile space and to think that collectively the company would go brain dead if Elop wasn't hired is as far fetched as Windows Phone being the Third Ecosystem. The history of the great Symbian foundation re-wite is there for all to read, Harmaaatatataan and the swipe UX were created in 9 months - Fact. QT 5 has been delivered- Fact. Jolla is delivering on the promise of Meego/Mer - Fact.

SO nothing that Elop ranted about as impossible , actually was impossible since they have come to exist. CEO's must be multitaskers, visonary, big picture... Elop seems to be a "Short bus" CEO who can only think of one track at once. Retail closed-Fact. Accessories business killed -Fact. Services killed (with exception of maps)-Fact. R&D Killed -Fact. Design works killed-Fact Product development killed-Fact.

cycnus

Tomi,

Great article as usual...

about the picture...
I'm LOL seeing you use clown as elop, but I think clown is not delusional
the man behind this mask were: http://fnacpantherimage.toutlecine.com/photos/s/c/r/scream-04-g.jpg

cycnus

@glong

LOL. I'm also looking forward for Tomi book about Nokia....... I also believe Eldar Murtazin will also have 1 book about nokia.

dies felices

Hi Tomi,

I'm not trying to be a troll honestly, but perhaps you're not looking at the right details (THE small PICTURE) to see what Elop is seeing? If you were to do your analysis for Nokia focusing on North America, would you see a smart phone maker with twice the sales of Apple (in 2010)? And, what of Windows Phone in that market, how was it performing? Hence what difference did Nokia make to Windows Phone? Moving forwards, how have Nokia and Widows Phone performed up to now?

While I agree with you wholly, I don't understand how the Nokia board and Elop can continue with their baseless and damaging strategy without some concoction of evidence to support themselves.

Disclaimer: I don't have all the facts, my opinions are based on conjecture and other peoples reports and my own opinion of Lumia smart phones.


Oh and my prediction on Elop's departure, he will leave claiming to have made good deal when Nokia is bought up for a fraction of what it should be worth.

Tomi T Ahonen

dies

No worries! thats a legit question.. :-)

So USA? USA is 4% of the world's mobile subscriber count. If you have choice of owning 'the rest of the world' where 96% of phones are sold, or the USA where 4% are, you know which is the right strategy, don't you? And on the 4 of the other 6 inhabited continents apart from North America, Nokia was bestselling smartphone and in Australia (smallest of the six) Nokia was 2nd biggest in 2010. Even in North America, Nokia was bestselling smartphone in Mexico, and second bestselling behind only domestic maker RIM/Blackberry, in Canada.

USA/North America is only continent where Nokia as outsider faced 6 domestic manufacturers, supporting 5 domestic smartphone OS platforms in 2010. Even then, Nokia on Symbian was not ranked 7th, it was ranked 4th or 5th bestselling smartphone depending on quarter.

Even so, Nokia sold 11.1 million handsets in North America in 2010, before Elop changed his strategy. Now powered by Windows Phone and a year of Lumia sales, having launched on T-Mobile USA, AT&T and Verizon - Nokia sold.. 2.2 million phones in 2012. The Windows experiment is a total comprehensive failure, also in the USA. Windows smartphones once had a third of the US market, they now have about 4% to 5%.

What is worst is that Elop admitted in press interviews, that his first Lumia phones were not designed in Finland, they were designed in California - the graveyard for global handset failure, remember Palm, Dell, Compaq, HP, Motorola, Microsoft Kin etc... These phones - if perhaps agreeable to US consumers - are utterly unsellable to rest of the world where customers are far more demanding - like European carriers said of the Lumia - they are not suited for European consumers. Same for China.. Windows Phone sells a few hundred thousand per quarter in China, total failure.

So yeah, it is a thought worth going through, does this Lumia / Windows Phone strategy make sense for Nokia in attempt to make a 'come back' in USA, but even if that was the intention, it has totally failed. And as to its cost - if the cost of attempting USA come-back was at the cost of destroying Nokia's dominant positions in China, Europe, Latin America, Africa.. that is utter madness.

Cheers

Tomi Ahonen :-)

dies felices

Hi Tomi,

Thank you.

I believe that Nokia probably saved WP and MS with such a public launch of their Lumia line. Without the 'Burning Platforms Memo' Microsoft would have hyped it up everywhere and no one would have given it a second glance. In my opinion what ever strategy Nokia follows should they acknowledge of the failure of the Lumia line, Elop will have to go, principally because of his connection to the 'Burning Platforms Memo' but also his adherence to Windows Phone. It would be hard (near impossible) for him to appear (and probably to be) as confident and passionate about a new change in direction (as he has with the 'Burning Platforms Memo', Lumias and Windows Phone) and be taken seriously.

Michael Cox

I believe Elop thought he was solving the execution problem. He thought that we (Symbian and Meego employees) were the problem. So he looked for what he saw as the only option, another supply of OS. What I heard at the time was that Elop had decided that Meego was not in a good state and wouldn't scale to the different devices as would be needed.

He's quite a good orateur and talks in that confident american (Canadian..) way. He seems to believe the things he says.

I hope Nokia can turn things around, they still occupy a place in my heart.

Tom Gorr

Elop is doing what he was hired to do. In minimum, to make sure Nokia patents do not fall to the wrong hands. The best case, getting traction for WP did not work out.

Sander van der Wal

I have been looking at Nokia's own yearly statements (Google "Nokia xxx statement", with xxxx a year. Early in this document is a bit: 10 major markets, net sales, million euro's. The order is from the net revenue in 2006.

2005 2006 2007 2008 2009 2010 2011
China 3403 4913 5898 5916 5990 7149 6130
USA 2743 2815 2124 1907 1731 1630 1405
India 2022 2713 3684 3719 2809 2952 2923
UK 2405 2425 2574 2382 1916 1470 996
Germany 1982 2060 2641 2294 1773 2019 1606
Russia 1410 1518 2012 2083 1528 1744 1843
Italy 1160 1394 1792 1774 1252 1266 982
Spain 923 1139 1830 1497 1408 1313 907
Indonesia 727 1069 1754 2046 1458 1157 no mention
Brazil 614 1044 1257 1902 1333 1506 1901

These numbers are not just smartphones, they include S40 phones too, and other stuff.

Now for some observations.

1) Nokia's biggest market by country is remarkably stable. In 2011 Japan replaced Indonesia. Apart from that, all these countries are always in the top 10, making up about half Nokia's net sales.

2) The USA is a very important market to Nokia, and it has been in decline since 2006.

3) China kept growing until 2010. Western European markets started their decline in in 2008, Indonesia in 2008. In India and Brazil Nokia was able to fend of the attack on their market share.

Would I be scared as Nokia's board? You bet. Nokia's Board was scared too: From the 2010 statement

[QUOTE]
» During the summer 2010, the Board searched for and identified a new CEO with a strong background in software and a proven record in change management, who replaced the previous CEO in September 2010.

» During the fourth quarter of 2010 and ending in early 2011, an in-depth review of the challenges of the company, both operational and strategic, was undertaken by the CEO with the full support and close involvement of the Board.
[/QUOTE]

So, the Board explicitly choose Elop because he knew about software and how to turn around companies.

[QUOTE]
» Based on the review, a new strategy was established, and approved and disclosed in February 2011. The strategy is built around three “pillars”: regaining leadership in the smartphone market, reinforcing our leadership position in mobile phones and investing in future disruptive technologies.
[/QUOTE]

Nokia clearly thinks it has lost smartphone leadership, otherwise, why regain it?

Basically, in all but three of their most important markets Nokia is loosing market share. They waited a year or two to see if the loss was permanent, and then they took action.

The massive market share increase in China is hiding a lot of the troubles, it is clear that looking at global market share is not good enough to see what was going wrong with Nokia.

Eric Cartman

Hi Tomi,

What do you think about new Blackberry devices?

Tomi T Ahonen

Sander

Good point but you miss a few relevant issues. The change from 2008 to 2009 is primarily the global economic downturn. So you are misinterpreting the primary cause for the fall in year 2009. The relevant number is not what happens in 2011 when obviously there is huge crash. The relevant number is change from 2009 to 2010, ie when the 'decision' is being made whether Nokia is in trouble or not. Of the Top 10 countries - half grew from 2009 to 2010, half declined. So it truly evens out. No, you can't say that based on these numbers there was any systematic problem, and definitely not one that suggests Nokia's global massively dominating position was somehow an illusion. If Toyota sold twice as many cars as GM, and was biggest in Germany, second biggest in Britain, biggest in China, second biggest in the USA.. that would be roughly in line with this picture. If then in some markets like India it grew, and other markets like Spain it shrunk, thats typical national fluctuation.

But the Toyota shareholders would be furious if Toyota suddenly announced that these cars that it sells are not succeeding, lets start to sell bicycles instead...

Meanwhile, Nokia statement clearly sets out the fact, that the strategy change was initiated by Elop in the Winter of 2010-2011 - so Elop looked at explicitly these facts I show in this blog today, that Nokia's smartphones were increasing their lead over Apple, that Nokia had the highest loyalty of any handset brand, that the Ovi store was closing in on Apple, etc - and Elop took all that as his reason to end the current strategy and substitute his mad Microsoftian misadventture.

Tomi Ahonen :-)

Tester

@Sander van der Wal:

Since you state yourself >> These numbers are not just smartphones, they include S40 phones too, and other stuff.

I think any conclusion derived from these numbers is worthless by default.

The development of dumbphone sales grossly distort the effects of the smartphone business.

Sander van der Wal

@Tomi

Germany has been doing well economically, and the German market also declined. And why are Apple and Samsung growing during this economic downturn? If people stopped buying smartphones they would have stopped buying Apple and Samsung smartphones too. Apple and Samsung however grew sales during the downturn. People stopped buying Symbian smartphones in particular in the Western European key markets, amd that started happening in 2008.

And Nokia's own board admits that Nokia has lost leadership in smartphones. Their figures are much better that the ones we see in these statements. They see the split in smartphones, dumb phones, maps and networks. We do not.

So, it is reasonable to assume that the decline in net sales is mainly due to the decline in Symbian smartphones. No sane business person would chang the smartphone strategy if it was the dumb phones segment that was crashing.

But lets assume that Symbian smartphone sales in Germany, the UK and so on also grew. That would mean that all their other businesses there cratered. There is simply no room in declining sales revenue for a growing smartphone segment and steady dumb phone segment.

And again, the Nokia board states that they still have leadership in dumb phones. This is an official statement for the shareholders. They would not lie in such a statement. That would make then personally liable. Nobody is that mad.

Tomi T Ahonen

Sander

Listen to yourself "No sane business person would change the smartphone strategy if it was the dumb phones segment that was crashing."

Nokia smartphone sales grew - GREW - from 67.8 million in 2009 to 103.4 million in 2010. This IS SMARTPHONES. Nokia SMARTPHONES. That is GROWTH of 35.8 million smartphone unit sales. Those smartphones were generating an 11% profit margin and 2 Billion dollars of PROFITS in 2010.

From 2009 to 2010, Apple's iPhone grew 22.4 million units and Samsung's smartphone sales grew 17.0 million units. Nokia's growth was nearly as big, as Apple's and Samsung's growth - COMBINED. Nokia was INCREASING its massive lead over both of these rivals.

Sander, listen to what you said. You wrote 'No sane business person would change the smartphone strategy if it was the dumb phones segment that was crashing.' - the operative word being 'sane'. The FACTS are, that Nokia's smartphone sales were utterly crushing the competition in 2010. No sane Board member would ever agree to this lunacy that Elop was selling. But clearly, the Board is either senile or incompetent, or wasn't paying attention or was in collusion with Elop. The decision IS NOT SANE

Thanks

Tomi Ahonen :-)

SMP

Tomi - you keep reminding us that Elop is a complete idiot, and complete incompetent, a complete failure etc. which is of course correct, and obvious to anyone who has even half a brain.

I can understand Elop fine - there are plenty of other incompetents everywhere, although few have the chance to demonstrate total incompetence as well as Elop. What really puzzles me is why he is allowed to remain in place. Why doesn't the Nokia board do something about him? Why doesn't the Finnish government investigate whether there is collusion and breaching of the corporate veil by Elop and Microsoft? Nokia's Elop orchestrated suicide is severely damaging the Finnish economy. Surely the Finnish government has a duty to investigate. Surely everyone in Finland can't be an idiot like Elop.

Harald Panzeraabe

Have watched this Elop clown and Microsoft trojan horse destroy Nokia and am amazed that the Finns have allowed this idiot to rape the pride of Finland for 3 years now. I can only conclude that the Finns have no balls or are all sadomasochists or suffer from Stockholm syndrome (Tomi Ahonen is the exception- seems to have some Cantonese fire in him). Where is the anger and the outrage ? This Elop clown should be deported immediately and banned from Finland forever; this is a national emergency. Where are the politicians and the army on this issue ?

Wayne Borean


Got interested. Looked up the 808 Pureview. I want one.

Wayne

cycnus

@Harald Panzeraabe

Elop should NOT be deported... he should be BEHEADED.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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