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January 10, 2013




All figures announced today are non-IFRS figures. That tells the operative results without positive or negative one-time costs or gains.

You need to wait until Jan 24 until you see the actual net profit/loss analysis.


@P.Bokkelman "Tomi was 75% OFF with his Lumia predictions. Even I was closer (12%). He still tries to praise himself."

Someone commented that obsolete Lumia 800/900 phones are being sold for 150 euros in Europe... that may have helped Nokia to inflate the Lumia figures, while they loose money.

And how did they make a break-even? Selling their HQ, patents... that would give Nokia $250 million dollars to burn in the next quarter.

If this is true, it's not a real break-even. They are still loosing money.


@CN - thanks for the clarification!


@Tomi: I bet nobody in Nokia -- not even Elop -- would be as precise as Tomi.

No. They will be significantly more precise from that point on. I've worked for the company which had ~3% of market at some point and ~20% or market at another point.

When we had ~20% everyone was able to predict the results pretty precisely. At ~3% estimates and predictions had no relation to reality whatsoever.

Why? Cross-checking. When you go below certain threshold you can not cross-check results with competitors.

Think about it: mistake of 1M more or less will affect Samsung's result by about 2%. Not a big deal: if you make a mistake of 2% per quarter error for two-year prediction is about 15%. Pretty good. But the same mistake for Nokia now means 15% per quarter which means 300% error in two years!

Also random factors: it's hard to imagine that some large customer will buy 1% of Samsung's smartphone production (that's over 500'000 smartphones!), but for Nokia 1% is just about 70'000 smartphones - and there are quite a few companies which can buy similar quantities. This introduces additional noise.

But internally all that data is still available!

When you go below certain threshold people (even extremely knowledgeable people like Tomi!) lose the ability to accurately predict your fate till you grow back (if that'll ever happen).

That's why there are discussion only about Top10 (or Top5, or Top20): not only minnows are less interesting, it's almost impossible to predict how they'll grow or shrink!


Hi Tomi,

this is offtopic so feel free to delete after reading, but could you please start removing the post from John Waclawsky (and Duke I believe is same person). It's getting really annoying to read the comments with his 2 sentences all caps in every single post he does and in general feels much more trolling/spamming and most of the time it has nothing to do with anything regarding the topic at hand.

Duke in 'Second picture in the Nokia Destruction Saga' comments e.g.


I think we are in for a negative surprise when we will see the profits for there Smartphone Devices.

The Average price for a Lumia 800 in Denmark in Q4/12 was about 240€(with Taxes), The Launch was price 530€ (with Taxes in Q4/11)...

This week Aldi supermarket in Belgium has the Lumia 800 for 189€
(I don't know how the Aldi supermarkets are in other countries, besides Denmark, but if you haven't tried buying stuff in an East European supermarket during the cold war period, then you will get a feeling of how it was at that time)

The Average price for a Lumia 900 in Q4/12 was 330€ (with Taxes), Launch Price 530€ in June 2012 (with Taxes).

The average price for a Samsung Galaxy S2 in Q4/12 was 330€, Launch Price 530€ in June 2011.

So Nokia has alot of Discount going on, that I foresee will reflect the there result on the 24 januar 2013...



Well, we saw the profits already. Or at least I did. What more do you expect than what Nokia announced today?


The question is, what is genuine profit and what is just clearance of obsolete stock?

The numbers clearly show that WP7 doesn't sell well. So this quarter we have a modest increase and we also see profits. So I wouldn't count out the possibility that they just got rid of their old phones by heavily discounting them. Of course most costs associated with these phones was in past quarters so now they miraculously show up as profit.

Mika Peltokorpi

"They didn't give a split of how many of the new Lumia 920 running Windows Phone 8, and how many of the older obsolete Lumia series, hopefully we will have that split in the official Q4 results". Apple does not do it either on iPhones, so why Nokia should bother? Most likely 90% of iPhones sales is from legacy (or as you put it: obsolete) iPhones and this has been clear tactics from Apple. It would be hard to sell to US analysts that iPhone 3GS is part of smartphone marketshare. The US does not count latest Symbian as smartphones, so why they would iPhone 3 gen? (In general the both device categories are considered as smartphones, but quite an often esp. US analysts disregard Symbian in this respect).

And Lumia sales has around 4x YoY making WP probably the fastest growing smartphone platform in history. In this phase iPhone had very similar growth numbers YoY after 12 months since market entry. WP is actually most likely outperforming iPhone at least by 1,5x for the first five quarters (if Nokia has not increased it's market share in the WP ecosystem) And this happens when WP component constraints are wildly speculated.

There is, of course some negatives also, but these were major positives you failed IMHO to mention.

You seem to have quite a high smartphone market volume estimate for 4Q (+87% YoY) amid global recession, though at least Nokia and Samsung have given positive warning for 4Q already.


Just noticed this sentence: "What of Windows Phone? Nokia has been shipping about 75% of all Windows Phone smartphones recently and there is no reason to think this would have changed for Q4."

Don't you talk ALL THE TIME about the reason for why this change MUST happen? Previously Nokia pushed all these hundreds of millions of Symbian users to Windows Phone (all these talks about "9 out of 10 lost in transtition", etc). But now we have Nokia after TWO years of rapid decline in the industry where handsets are exchanged in 18 months in average! This means that as time goes on Nokia has smaller and smaller army or loyal customers to punish! SIGNIFICANLY SMALLER (it basically shrinks 15-20% every quarter). Which means that it's advantage over other manufacturers goes down (it's still an "advantage" because former Nokia users must pick Windows Phone or go to someone else while with Samsung or HTC they have a choice of Windows Phone or Android).

And that, in turn, means that percentage of Windows Phones sold by Nokia should come down, too! It's hard to predict if Nokia will be at 65% or 50% in Q4 (Tomi is master of numbers, not me), but we should not expect the same 75% as in Q3, that's for sure!

Which means that Windows Phone is in smaller trouble then what Tomi is painting, but Nokia is in EVEN BIGGER trouble!

Tomi T Ahonen

Hi elm, Emmanuel, foo, Firecracker and Cyan

elm - thanks! Yeah, it was even more difficult, as there was no precedent in ANY industry to try this forecast. As we have now witnessed a world record collapse, there was literally no place for any of us forecasters to go to find some model of what might happen and how. Any such previous models, Motorola, Palm, etc would have given far too rosy a picture for Nokia forecasts in 2011 or earlier 2012.

As to 2013, I think the sales will 'stabilize' as the last remaining Symbians are expelled. And there are so few left now, that it won't matter. Then Nokia will have some natural organic growth as the industry grows, so for this year my immediate gut check number is that Nokia now stabilizes into the scale of 6.5 million to 7.5 million for at least the next 3 quarters (Q1, Q2, Q3) and then perhaps slight growth into Q4. The resulting sales means Nokia still falls from the current annual level of 35 million to nearer 25M-30M and the market share falls from 3% now to 2% for 2013. That will be by Q2 almost all Lumias. I'll do a better forecast when we have all data in from the full market, after we have the full Q4 analysis done, but it won't be better or worse than 2%, it won't be as bad as 1%, it won't get to be as good as 3% for the full year. Nokia for the future, is what we now see, as the transition from Symbian to Lumia is nearly complete. This is what Elop delivered on his one-to-one transition. Ten-into-one was the actual result...

Emmanuel - I see Eldar on Twitter, my Russian is so rusty, I tend not to read him in Russian, I wait until some of his blogs are translated into English, so I haven't noticed that he'd gone silent on the blog? Maybe he moved to another blog site?

foo - hey, I meant to write already earlier, I love those pictures, please keep them coming. I have to post about them separately and do you happen to have any place where they are in one place? I'd love to send readers to you. Please everybody, click on the links foo has been providing on the pictures, they are far better than mine

Firecracker - yeah haha, thats what we all want, eh?

Cyan - great point, which is why I really studied that part back in my MBA studies, and worked very deeply with Nokia's econometric modelling team (that was part of my Consulting Department) to build tools and methodologies to specifically anticipate shifts in the trend. Anyone can plot a straight line, that does not require intelligence. But to anticipate the change in the curve, when a growth rate turns into decline, or a decline suddenly reverses back into growth, that is the most challenging part for forecasters. I did of course ace those courses back in the day, and my team back in the Nokia days probably felt the boss was too 'hands on' in their work from time to time but I really did want to learn and help develop very accurate tools - my insights here now, all stem from the work done by Hannu Tarkkanen and all the mathematicians, statisticians, forecasters and modellers at Nokia's econometric modelling staff. So yeah - if you've been following my forecasts over the years, I have both been promising such transition points when they came (usually the most accurate to predict that) and have rejected 'consensus views' of the ending of some trends that some of my colleagues have suggested like the 'saturation myth' that I exposed to the forecasting community back in the day haha..

Keep the discussion going, will return with more comments soon

Tomi Ahonen :-)


Can you get information on returns? In California, consumers have the right to return a cellphone within 30 days and cancel the contract. Are there any numbers on how many cellphones are returned by manufacturer?


@all the WP proponents:

Please answer one, only one simple question:

Why is it always 'the coming year' that Windows Phone will take off? Where's the data? Any indicators? I for sure can't find any.

I heard this 2 years ago. I heard this one year ago. I hear this now. And the only explanation I get is 'It's Microsoft, they'll make it succeed'.

The strange thing is, when I ask people about this matter, they all clearly say they wouldn't voluntarily buy a Microsoft product if there is an alternative. They mock Metro as the most stupid interface ever devised. Most already have Android phones, a few an iPhone. I don't know anybody who owns or plans to own a Windows phone.

So why is such an unpouplar system destined to succeed? They only sell stuff due to insane amounts of marketing and sponsoring pumped into the system.

So, aside from the fanboys, who should buy it unless duped into it by false advertising?

Tomi T Ahonen

Hi foo, CN, khim, tm and Pedling

foo - lets see what the full Q4 results tell us

CN - thanks for the clarification

khim - totally true, the big boys are 'reasonably' easy to analyze and estimate but the tiny players - and if Nokia falls out of the Top 10 smartphones, it is as irrelevant as Motorola has become - they are nearly impossible to estimate accurately by outsiders, unless they serve a very specific market for that analyst to see, like a purely national player, like in China, if that analyst then also is in China and has access to that info.

tm - I hear you, but John makes good points and he has a valid point, totally accurate, the evidence is clear that (most) don't want a Windows Phone. That John perhaps puts it .. strongly .. in his commentary is no reason to remove his comments. I don't mind views from given angles, nothing wrong with that - like for example Baron95's often strong views, as long as you stick to the topic at hand and don't break our normal rules here. So no, I won't delete John's comments

Pedling - yes, we'll see when the Q4 results are out

Thanks, keep the discussion going, I'll return with more soon

Tomi Ahonen :-)



"Elop's strategy to compete again low cost Android (which are used primarily as feature phones) is spot on with Asha"

Yeah, after the failure of the Lumia 610,that was to expensive for the developing countries, bringing a $200 phone to a $100 market and without Bluetooth file sharing, which are very important.

Haven't seen the cheaper WP model yet?

Thats why Asha... But I don't hope thats Elop's Cash cow?

Buttface Elop

So after all, Lumia/Windows Phone, and I am clearly stressing this out, all Lumia models with Windows Phone 7 and 8 both together, had a global marketshare of 0.83% in the fourth quarter of 2012. How can Elop say that this "exceeded their expectations". What expectations? Did he expect to sell no Windows Phone devices at all?

So he also said there might be some profit for the first time with Windows Phone. Well, did he say that the profit will be mainly due to the payments that are coming from RIM?

Sorry, Mr Elop, you're a fool!


Meego is not near dead, maybe it does not have Nothing in the market now but I think it will and it will be kind of compatible with android, Bb10, Tizen, Firefox and Ubuntu.
That is what Nokia discard and just is a matter of time to see if that was the right way to go, as for now the way Nokia took was the wrong.



Varmasti, Tomi, suomalaisena tiedät että Nokia on tärkeä yritys suomalaisille sekä työnantajana, että yhä enemmän sijoituskohteena. Eikö olisikin hyödyllisempää että Nokian ongelmista keskuteltaisiin rakentavasti ja kannustavasti?

Uudet Lumiat on hienoja ja täysin kilpailukykyisiä laitteita. Uskon että positiivisella ilmapiirillä Nokia saisi yhä enemmän tuulta purjeisiin. Tiedäthän sanonnan: "Hyvä kello kauas kuuluu, paha vielä kauemmas". Siksi ihmettelenkin suomalaisten pahan kellon soittoa. Onhan Nokia on edelleen tärkeä yritys suomalaisille.

Uudet WP8 puhelimet lienee myynyt hyvin, koska Lumioiden keskihinta nousi huomattavasti, vaikka vanhat Lumiat meni hurjaan alennusmyyntiin heti Q4:n alussa ja halpaan päähän tuli vielä Lumia 510. Oletko kanssani samaa mieltä?

Kirjoitin tämän siksi suomenkielellä, koska englanniksi en osaa kovin monisanaisesti kirjoittaa.

Sander van der Wal

It will be interesting to track windows phone 8 compared to blackberry os 10.

Tomi T Ahonen

To all

We have here just above this comment, a comment in Finnish, from reader 'osakkeenomistaja' (literally shareholder). It is a heartfelt comment which I want to translate first into English, then respond to. I am sure there are others especially in Finland who share the sentiments by that reader. My translation of the comment:


Certainly as a Finn, Tomi you know that Nokia is an important company for Finns both as an employer and an investment. Wouldn't it be more useful that Nokia problems be discussed in a constructive and supportive way?

The new Lumia series are fine and competitive devices. I believe that with a more positive atmosphere Nokia could achieve ever more wind in its sails. You know the (Finnish) saying "a good bell is heard far, a bad bell is heard even further". That is why I am wondering about the ringing of the bad bells by Finns. Nokia is still an important company for Finns.

New Windows Phone 8 phones seem to have sold well, as the average sales prices for Lumia have risen considerably, even as older Lumias were discounted greatly right at the start of Q4 and the low end then got the Lumia 510. Do you agree with me?

I wrote this in Finnish because I am not that capable in writing English at this extent.

(Signed) shareholder


Thank you osakkeenomistaja. I appreciate the comment, I hope you agree the translation is to my best ability accurate in depicting what you said, and if you feel I made some wrong impression, let me know, I will edit this English version to your satisfaction. I also would like the non-Finnish speakers to be able to join in and read our discussion, so obviously I will respond to you in English, next. But thank you for the deeply thoughtful comment.

Tomi Ahonen :-)


Well someone's still buying the things.

I was utterly mortified when my niece came home with a new lumia 820 that her mum got her for her birthday .... and it was her own choice to get it over a galaxy s3. Kids will be kids I guess, and she did it just on the brand-name, although the sales chick no doubt lied saying how well they were selling and how she was going to get one herself. Maybe they're getting big commissions here in AUS to shift them. And there's no returning a bad decision here once you sign up for a 2 year contract. It wont even connect to any computer in the house (free of apple and microsoft) - although she's still happy with it since at least it has an sd slot.

Either are totally overkill and a rather expensive way for the faecebook console, music player, and alarm clock she uses it for.

Tomi T Ahonen

Dear osakkeenomistaja

Thank you for your comment. I am pretty sure there are many more in Finland who share similar thoughts, so I wanted to write a sincere and considered reply to you.

I totally understand why you would feel that I am now saying very bad things about Nokia, perhaps unduly negative. I know what kind of press attention I have been getting recently, especially in Finland, and know at many forums like Kauppalehti Keskustelut, I am thought of as the crazy Anti-Christ who says nothing but hostile things about Nokia. Certainly most recent comments I have been quoted, and also, most recent Nokia-specific blog articles I have posted - seem to be exceptionally hostile about Nokia. Its easy to think that I have a mission to destroy Nokia or to harm it. Nothing could be further from the truth. I love Nokia.

I am an ex-Nokia exec. I joined Nokia to build digital gateways and help put the internet onto mobile networks. I then was Nokia's first Segmentation Manager, ie I led the team that studied Nokia customers deeply to then focus Nokia's offerings more accurately to those customer needs. I cannot discuss that work obviously, but the Economist wrote in 2002, that the Nokia Segmentation model was a major key to how Nokia grew past Motorola. My last job at Nokia Headquarters was to set up and lead the Global Consulting Department, where I often would then sit with the top strategic teams and top management of Nokia's carrier/operator customers around the world, in helping build their strategies. I know not only Nokia very deeply but I am rare in ex-Nokia staff to have sat at numerous Nokia clients - operators/carriers at their strategy level to understand their needs.

I left Nokia in 2001, ie almost a decade before Elop came to town. I moved here to Asia, so I haven't even been in Finland when he arrived. I have never met the man. As to 'being fired' or 'bearing a grudge' or being disgruntled in some way - again, nothing could be further from the truth. I am the most published author in mobile - 12 books including the fastest-selling telecoms book of all time. I've had Nokia colleagues contribute to my books, I've had one (ex) Nokia colleague write the Foreword to one of my books, Nokia ex President Pekka Ala-Pietila, and I've had one Nokia colleague co-edit one of my books. My first book, Services for UMTS was an official Nokia book, sold at the Nokia website and given to Nokia customers (operators/carriers) in large numbers.

Since I left, all through the 2000s decade, I was used by Nokia as their consultant, also often in public events, from major conferences where I was authorized to deliver official Nokia presentations on their behalf, to chairing Nokia conferences to presenting to Nokia customers (operators/carriers) on views of where the mobile industry is headed in deep executive seminars. Since I left Nokia, I have been seen in public at Nokia events from Finland to Egypt, from Colombia to Pakistan. I truly do love Nokia, if you cut me, I don't bleed red, I bleed Nokia blue.

I will pause here, following on in the next comment.

Tomi Ahonen :-)

Tomi T Ahonen

Dear osakkeenomistaja (part 2)

So I love Nokia eh? And why the hostility now? Have I become bitter or did Nokia somehow screw me or what is wrong? Again, you cannot possibly know this but let me explain. I wrote 'the' book on mobile industry business, literally, the first business/strategy book for the mobile telecoms industry (M-Profits, released in 2002). It is my deepest competence, how to win and lose in this industry. Because of that exceptional competence, I of course comment on whatever strategic business decisions any major company makes in this industry, from good decisions (like Sony buying out its partner Ericsson from the SonyEricsson partnership and then focusing on making smartphones a key to Sony corporate strategy, or how Samsung took over MeeGo after Nokia abandoned it) to bad ones (like Blackberry launching tablets or Microsoft suddenly announcing that the Windows Phone 7.5 smartphones could not be upgraded to Windows Phone 8).

When I see strategic blunders that threaten a company's future, I am very openly critical of them, such as when Motorola and Palm died, or when Sprint-Nextel was openly feuding with its consumers (the CEO was later fired for that mistake). So this, what you now see from Tomi Ahonen being 'negative' about Nokia, is not particular to Nokia, I was equally negative about past mistakes by other companies too. The only difference is, that Elop has made MORE mistakes than any others - after all, he has established a world record in management failure. You can't do such big damage by only one mistake. Elop has been a serial mistake-making machine. But you can go through the past years on this blog and my press interviews, and you'll see, I was very hostile for example about Sprint-Nextel and how it treated its customers, demanding that the CEO and Chief Marketing Officer be fired.

So while you now see me being negative about Nokia, in fact, it is my professional opinion, I am 'the' man for the industry, as I did write 'the' business book to explain how this industry works. I have been critical of strategy mistakes by others, and I have been critical of Nokia prior to Elop, for example very critical of the late stages of Olli-Pekka Kallasvuo the previous Nokia CEO and Nokia's problems at that time in 2009 and 2010.

But I have also been positive of Nokia recently, you will not have heard of that, it doesn't get the attention in the Finnish press haha.. I was VERY supportive of the launch of the N9 and MeeGo in 2011 and again, VERY supportive of the launch of the 808 Pureview in 2012. I was also expressly congratulating Elop for some of his decisions such as when he reversed his silly idea to make Nokia naming purely numbers, and introduced some names (Lumia, Asha, Pureview) into the Nokia naming scheme. I am not anti-Nokia, I am not anti-Elop, I am not anti-Finland. I am anti-stupidity. Its like if you ask Mika Hakkinen about how a current Formula 1 driver is performing, or ask Jari Kurri about how some hockey player is performing. They will tell you truthfully, its their professional opinion. I do that on this blog and in my books - and I am paid very well for offering that strategy consulting guidance by essentially all major companies of this industry, from Finnish familiars like Nokia, Sonera, Elia, Digita etc, to international giants like China Mobile, Vodafone, NTT DoCoMo, Ericsson, LG, RIM (Motorola), Hewlett-Packard, Intel, Google, etc etc etc. As I am the most published author in mobile - and my books are referenced in over 120 books by other authors, I am arguably THE most competent expert to comment on strategy matters in this industry. At least the most influential expert - so said Forbes when they surveyed all mobile industry experts a year ago.

I'll post this and continue..

Tomi Ahonen :-)

Tomi T Ahonen

Dear osakeenomistaja (part 3)

Now, about Elop and Nokia. I warmly welcomed Elop when he joined Nokia. I was fully supportive of his first 5 months, when you no doubt know, Nokia share price rose 11% after falling 55% under OPK's previous 3 years.

When Elop announced his Microsoft strategy, I immediately said on Twitter, and on this blog, that this was an excellent move by Microsoft, but catastrophic for Nokia. Then, after explaining why I saw it a big problem, I went through the systematic analysis to see, IF it could work. I came to the conclusion, that while it was unlikely, it was POSSIBLE for the Microsoft-Nokia partnership to succeed, and for Nokia to continue as a major smartphone giant even with Windows Phone as the operating system. Please go to February 2011 to read that blog. I did say, it was a high-risk venture, but it might succeed. I didn't think it would, but I did say it might. And I said we had to give Elop time to implement his strategy.

Then I prepared my professional opinion, my forecast, of how Nokia's market would develop under Elop and the best case scenario. I said that Nokia's market share would fall catastrophically during 2011, but stabilize during 2012. I was crucified on this blog for that forecast. It was the most negative and brutal forecast by any published analyst on the planet, there were others who promised Nokia and Microsoft would have 25% or better market share now. My first forecast said Nokia would end now, Q4 of 2012, with 7.0 million smartphones sold and 3% market share (as you know, Nokia ended with 6.6 million smartphones and yes, 3% market share). That was THE most negative forecast published in the spring of 2011, no other forecaster suggested Nokia to fall to single digits in 2012. Yet, while I was the most negative forecaster, my forecast turned out to be too optimistic !!

First, note, I DO KNOW this industry, arguably 'better than anyone else' haha, definitely the most accurate forecaster of this industry and BY FAR the most accurate forecaster of Nokia. Others promised you to now see 25% market share for Nokia smartphones. Would you, as shareholder, want that ridiculous guidance or would you prefer to know in May of 2011, that 19 months later, Nokia's market share would have fallen from what it was then, 24% to what it is now, 3%. I am sure that as a shareholder, your primary interest is to have accurate info about your investments, not lies and ridiculous promises? Please do feel free to search the internet and every single published forecast for Nokia during Spring 2011, to find if anyone else dared suggest Nokia to fall this low this year. Nobody else saw this collapse as I did. Thats not a fluke, I AM the most accurate forecaster of this industry.

If Elop had limited his damage to the Burning Platforms memo (that Elop himself admitted to the Nokia shareholders meeting in April 2012, that it caused damage to Nokia Symbian sales - what I loudly complained about here on this blog in early February 2011, when others thought the memo was actually a smart thing to do by the CEO) and the Microsoft strategy, then I would not have had much more to complain about. Except, that you know very well, Elop has continuously made unbelievable mistakes that are widely ridiculed and questioned.

Like when the N9 was announced, and Nokia saw the first jump in the collapse of the Nokia share price, you'll remember, suddenly everyone was falling in love with MeeGo and Nokia and the N9, Elop said the next day in Helsingin Sanomat interview, that Nokia will not release more MeeGo based phones, no matter how well the N9 would sell. What idiot CEO says that? If Apple release a new iPad, the CEO would never say, I don't care how well it sells, we won't do more of them. "I don't care how well it sells" is so ridiculous as a statement, Elop should have been fired on the spot. It killed the N9 momentum.

Or what of the Der Stern interview, again about the N9. Der Stern as you know is the weekly newsmagazine in Germany, like Time in English or in Finland, Talouselama. Der Stern wrote a magnificent review of the N9, ending it with the endorsement, that because the N9 was not being sold in Germany, Germans should fly to Austria or Switzerland to get one! This is totally unprecedented praise, something only Apple can get. If Toyota got this kind of praise for a car it isn't currently selling in Germany, Mr Toyoda would jump on the next plane and rush to Germany to pose on the cover of the next issue of Der Stern promising Germans, yes, this car is coming to Germany. But not Elop. He refuses to let the N9 be sold in Germany.

And one more, Meltemi. Nokia has said many times that the Windows Phone OS is not suitable for low-cost smartphones that are the mass market in Africa, India, etc. Nokia had been developing the Meltemi OS for years, it was weeks from launch, when Elop killed the project and fired the staff developing it. Meltemi could not have been any overlap or threat to Lumia and Windows Phone, as it was targeting only the low-end phones where Asha is now sold. Meltemi was Nokia's smartphone strategy for the next Billion people. Elop killed it, and within weeks of the first phones being show. This is a massive mistake again.

If Elop had only made one or two mistakes, I would have written one or two blogs about Nokia mistakes, and then perhaps, if the problems were really damaging, a follow-up blog a year later or so. But Elop makes strategic mistakes almost weekly. I do have to comment, if I see it is truly a strategic blunder

(continuing next)

Tomi Ahonen :-)

Tomi T Ahonen

Dear osakkeenomistaja (part 4)

Finally, about the strategic mistakes. Have you read the SEC Filing Form 20-F that Nokia published for the New York Stock Exchange in March 2011? Nokia identified several hundred risks to this strategy. Please go read that. Its not my words, it was Nokia's testimony. I have not invented these problems.

So. I looked at the new Nokia Microsoft strategy in 2011, and I saw massive problems with it. You've since seen, that whereas Nokia smartphones grew 53% in the last year before this strategy, Nokia has seen smartphone sales fall 25% in 2011 and fall 55% in 2012. Nokia's smartphone unit delivered one third of Nokia revenues and 40% of Nokia profits in 2010 when Elop took over. Since he announced the new strategy, the smartphone unit lost half its revenues and fell into losses and generated 48% loss per smartphone sold in Q3. You cannot like that as a shareholder.

The ratings agencies (Moody's, S&P and Fitch) liked Elop's first 5 months and upgraded Nokia from the OPK years to one notch below perfect. You know that all three ratings agencies have repeatedly downgraded Nokia due to Elop's strategy and now all three rate Nokia as junk. Its not that Tomi Ahonen somehow is bad-mouthing Nokia, it is the reality that the RATINGS AGENCIES see. I just saw it first. Is it not a value to you as a shareholder, that I report honestly what I see?

When Elop introduced his strategy in February 2011, you remember he promised that the transition from Symbian to Windows Phone would achieve 1-to-1 transition bringing ex-Symbian Nokia smartphone owners happily into the Windows Phone world. You know how that turned out. Out of every 20 loyal Nokia customers that were attempted to migrate to Lumia, 17 ran away and selected a competitor phone. Of the 3 that were willing to try the Lumia, two are so disgusted by the choice that they will not replace their current Windows Phone smartphone with another Windows Phone unit, they will leave Nokia. Only one in 20 Symbian customers has been migrated with satisfaction to Windows Phone. That means, that Elop is - at best - succeeding with 5% of his strategy and failing 95%. Do you want Nokia to be 1/20th the size it used to be? I don't. I love Nokia.

If Elop had made one or two mistakes, I would say, give the Canadian PC guy a chance to learn this industry. But as Elop keeps making massive mistakes almost weekly, plunging Nokia into ever deeper trouble, I have to yell about it here on this blog. Elop is a cancer, he is to winning what water is to fire. He must be replaced.

Thank you for writing, I really do feel for all who believed in Nokia. You were screwed. Please go read the Form 20-F. You will pull your eyes out, when you see what all risks Nokia saw on the horizon, and how utterly Elop has mismanaged his company to achieve all those risks.

Tomi Ahonen :-)

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Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    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 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

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati