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« 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 | Main | Second picture in the Nokia Destruction Saga - Greatest individual Management Mistake Ever Made - Nokia vs Competition in one picture »

January 03, 2013

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Tomi T Ahonen

Luis - I had to delete your comment on the basic rules here on this blog. You may disagree with me, but you have to illustrate you DID read the blog. You cannot come here, look at that diagram, and then post a blog claiming Nokia smartphone sales on Symbian were falling before Elop. The fact is, they were growing. You have to deal with reality on this blog. I deleted your comment(s). You had some good points, if you stick to the facts, or you have any evidence why these Nokia official Quarterly Results based numbers are somehow wrong - ie you have 'better' stats for us to share - with your sources, then please do.

Tomi Ahonen :-)

Tester

>> so the (relative) apps problem is only due to lack of promotion for the OS.


Wouldn't you rather say it's due to having no marketshare whatsoever?

Only geeks would be willing to develop for such a platform but honestly from a purely economic standpoint it's a waste of time to me, it doesn't matter what it can and what it can't do.

cycnus

@duke

the forbes and readwrite is a nice article
thank you for that article

duke

@cycnus You are most welcome. I have found extreme dislike for microsoft in many developer circles and they quietly relish at telling Microsoft how wonderful they are and then actively plot to abandon them. Microsoft is desperate and now alienating their partners. The shift is clearly towards Android and IOS for the future. It is is just a matter of time before the numerous holes in the Microsoft monopoly dike break it wide "open". It is truly amazing how Microsoft executives are so stupid. They were never respected because they were the only the only game in town ...but no longer.

it's the new year and I see reminders in the blog that I have forgotten that I should remind everyone that

NO ONE WANTS A WINDOWS PHONE OR TABLET ...OR PHABLET LOL

elm70

@Tomi

I'm surprise you believe in the 'story' that Elop was exploring Android and BB together with WP ... this is 100% a lie

Elop from CES 2011 announcing the new strategy , told us that Nokia engineers was sent to Microsoft since November 2010
As well, Elop was and is still nobody, he got a CEO position since the 15% power shareholders had already a plan with Microsoft.
The mission was to stop Nokia symbian and remove MeeGo thread ... the outcome was known already: mobile os will be fully in US (big return for the 15% owners) ... and Microsoft got a vital 2nd chance

Jorma was in a position that he did know very what was happening, so he is a criminal like Elop

Nokia,could have been what is Apple now, Finland could be much richer now .. but the money power of american funds decided that this should not happen

Amazing no criminal investigation has been open in Finland

Amazing that you, Tomi, can write openly that Elop is a criminal, and Elop does not try to bring you to a court for clean his name ... simply because for a criminal is better to avoid to call in a judge ...

Tchuss

E_lm_70

Ps: yes OPK was a weak manager, Nokia had executions problem, but no doubts Symbian ang MeeGo strategy was correct .. Symbian could have fight and win middle segment, with Meego challinging Android and iPhone on the premium market ... without Elop Microsoft Windows Phone would have been already dead now

Pps: Skype is an interesting story ... clearly for Microsoft Skype is more important then Windows Phone ... clearly Ballmer is 100% incompetent

Interested to know

@duke
I have to agree, the Forbes article is a refreshingly honest take on Microsoft. The author completely saw through all of the smoke and mirrors BS that Microsoft (and now Nokia) use to hide reality.

Tester

@Ninvestor:

I'd agree with most you say, except this bit:

>> Nokia could not EVER compete against iPhone and Galaxy/google with ... Meego.

I think giving it the right push at the right time with up to date hardware, they would have stood a chance.

Had they not prematurely destroyed Symbian their marketshare would still have been sufficient to have some power and convert their users if their new offering had been any good.

No, the N9 wasn't it. It was too little, too late, already running on outdated specs at the time of release - but most of it was due to lack of interest in pursuing this path seriously.


>> Tell us Tomi. What were Symbian Sales in the USA? In Japan? In the UK? In Germany? Weren't they declining already or had already collapsed in 2010?

I don't have any sales numbers ready but I had a quick look at statcounter's Mobile OS stats for some countries.

Symbian went from 17.19% to 8.62% from Dec 2009 to Dec 2010 in Germany,
from 10.59% to 6.82% in France, from 12.48% to 4.54% in the UK.

Ok, I know we have to consider overall market growth as well, but these kinds of declines in use do certainly not suggest a healthy system.
I'd say without Elop Symbian would still be there today, slowly fading into obscurity, just like it currently happens with the old Blackberry OS.

rich

So how long has elop got before the board vote him out?

duke

@Interested to know ...I personally like

http://readwrite.com/2013/01/03/googles-ftc-settlement-is-an-epic-fail-for-microsoft

The article clearly explains the true nature of a dying monopolist ...and the Internet gets the word out so much wider and faster than any Microsoft FUD trolls and these desperate activities by Microsoft only server to make them look truly pathetic. I really don't think Microsoft understands the Internet. The Internet never forgets!

NO ONE WANTS A WINDOWS PHONE OR TABLET ...OR PHABLET

Tomi T Ahonen

To Tester

You asked me explicitly. First, just so you know, you are truly borderline from that comment being deleted. The graph CLEARLY shows NOKIA smartphone sales GROWING. IF you want to argue it wasn't, you have to at least acknowledge you read the blog and why you find it relevant to quote other non-related stats (Statcounter) on non-related metrics (Symbian) on non-related subsets (individual countries) without at least acknowledging the big picture as fact - or that you have countering facts.

If it were to be true, that Nokia sales in Germany, Japan, UK and USA did fall, but correspondingly grew in China, France, Italy and Mexico - and the growth was greater than this decline, your point is already moot. The graph in the above is based on Nokia quarterly data. If you feel that is not trustworthy, tell us what is better data.

But I know you are here often, I will give you the benefit of the doubt, that you are simply curious why this 'discrepancy' on the data you found.

First, Symbian in 2009 was not equal to Nokia. Today Symbian = 100% Nokia. But in 2009, Symbian included handsets made by Fujitsu, LG, Panasonic, Samsung, Sharp, SonyEricsson, Toshiba, and many more. Many of those were shifting away from Symbian during 2009 and 2010, especially LG, Samsung and SonyEricsson, the biggest of this group. That is why Symbian sales fell, while Nokia smartphone sales grew. Don't confuse Symbian of 2009 being Nokia. It was much more. Nokia smartphone sales grew as you see in that graph, it is directly from Nokia Quarterly results, there is no better measure of the numbers.

Statcounter measures web page views. In 2009 the iPhone was hitting significant market presense (launched 2007 in USA, 2008 most of Europe, 2009 in Japan). Statcounter cannot tell difference between iPod Touch and iPhone, nor difference of WiFi or cellular access. Very much of iPhone/iOS traffic in this time was used by WiFi or 'all-you-can-eat' data plans, so iPhone users had FAR higher data usage, per device, than most other smartphones. In 2009 and most of 2010, Nokia had very few usable touch screens or large-screen non-touch screen smartphones in its portfolio and had a FAR lower usage level, per device. So the growth - as you can see in Statcounter - of iPhone use is FAR in excess of Apple's actual market share. With iPhone over-counted, it means others are under-counted. Statcounter is a good measure for short-term trends WITHIN one brand, but NOT a good measure to compare different platforms against each other.

I have some random metrics from some countries but they are not consistently reported and not enough to be representative to show any trends. But if Nokia total smartphone sales grew 53% in 2010 and grew more than the iPhone or Samsung - then Nokia was OUTPERFORMING its rivals in 2010. In some markets it may have been down in some quarter, and up in another. The big picture is in that diagram I drew.

If your contention is that Symbian was headed to a slow death decline like Blackberry today - then that argument is 100% against the facts - in the global smartphone market, Nokia's gap to its rivals was growing in 2010, not shrinking. Nokia was pulling away from Apple's iPhone and Samsung, not them catching up (up to the Elop Effect, obviously).

Tomi Ahonen :-)

Louis

Ironically, since Tomi thinks that Skype killed WP, apparently WP8 can't even run it properly:

http://www.theverge.com/2013/1/2/3829072/skype-people-hub-windows-phone-8-integration-disabled

Personally, I think this gives more credence to the "it's just not that good" theory of things. Skype works great on the iPhone. And probably there isn't even FB Messenger for WP8 at all

http://www.theverge.com/2013/1/3/3832250/facebook-messenger-voip-calling

Tomi T Ahonen

Second comment to Tester

MY BAD !! I am VERY Sorry. I meant to delete Ninvestor's comment (and did) but accidentially deleted your reply to him/her. I am VERY sorry, I didn't mean to delete that comment, it was fine. If you want to repost it, feel free (but as Ninvestor's silly comment is gone, you may not want to)

Sorry, its a bit late in the night, my time....

Tomi :-)

Interested to know

@duke
Thanks, I just read that article and thank you again.

But I do think Microsoft understands the internet to a large degree. They've been very successful in the past presenting a fake reality that people have really bought into. I think their problem is that they are becoming so unsuccessful now that the gap between actual reality and their projected reality is too large for their astroturfing and slander campaigns to bridge.

So much of journalism and blogs today consists of nothing more than simply reprinting press releases. It seems to me that Microsoft has understood, manipulated and exploited this "better" than most. In fact, contrary to what Microsoft asserts, most other tech companies won't engage in this type of deeply subversive PR.

It amazes me how many of the major tech blogs were praising Nate Silver's data driven analysis of the US presidential campaign while at the same time ignoring this type of analysis in relation to Windows Phone and Windows 8.

I hope Tomi's eventual book on the destruction of Nokia [I suggest "Zero Billion Dollars" as the title] examines some of the other recent wars Microsoft engaged in so he can show the atmosphere of manipulation that was prevalent in their culture.

Microsoft used these same tools in the Bluray vs Hd-Dvd war. They were really successful making huge groups of people *hate* Bluray and Sony. They even got movie studios and CE companies to sacrifice long term business for (extremely) short term payoffs. Hd-Dvd eventually lost but the long-term damage to Blu-ray was practically fatal as well, which was all Microsoft really cared about. And of course, the entire time Microsoft was waging this war, it took its eye off of Apple who was busy establishing iTunes as it's entertainment hub.

But in Nokia's case, I think Microsoft and Nokia have gone beyond the scope of a PR war and have engaged in illegal activities. The muppet CEO transferring valuable patents to help Microsoft at the expense of Nokia will eventually lead them to court unless they can find a way to bury this.

duke

@Interested to know.

I agree with "gap between actual reality and their projected reality is too large for their astroturfing and slander campaigns to bridge" and add that the resentment toward Microsoft is making the negative messages about Microsoft behavior spread faster and wider. Fewer are aiding their astroturfing and slander campaigns and more are now spreading the news about Microsoft lies and deceit.

Consider Gartner today vs 2009 which was brought up in a previous post @john http://www.roughlydrafted.com/2009/10/08/gartner-declares-android-a-second-place-winner-in-2012-why/ ...they have sacrificed their reputation by being a Microsoft lap dog. Even they have to deal with the crushing reality NO ONE WANTS A WINDOWS PHONE OR TABLET OR PHABLET or face outright ridicule.

I also believe we have reached an economics tipping point and the business users will finally (slowly but surely) say good riddance to Microsoft's abuse.

http://semiaccurate.com/2012/12/03/sales-down-microsoft-raises-prices-radically/#.UOW6h6xGcYo

and their partners are looking towards an Android and IOS future, with RIM being the most likely 3rd eco-system.

http://semiaccurate.com/2012/12/19/with-surface-tanking-microsoft-digs-faster/#.UOW3e6xGcYo

John Waclawsky

@Interested to know. I have been seeing some abandonment of Microsoft as people in my circles become more aware of that Microsoft is dying and look with disgust at Microsoft tactics attacking Google using questionable behavior as you correctly conclude "other tech companies won't engage in this type of deeply subversive PR".

Microsoft only controls the OS which is just an interface to use the hardware. The user wants the apps. When OS gets in the way trying to control too much such as the apps (DRM comes to mind right away and other Microsoft nonsense) then it gets buggy and becomes a kludge fast.

Android (actually Linux) offers a simpler and better alternative.

bjarneh

@duke: nice article :-)


Tester> No, the N9 wasn't it. It was too little, too late, already running on outdated specs at the time of release

this was not the case IMO, there is nothing outdated about this device apart from Nokia's leadership. it can run Android 4.1 just fine, and if you throw out the virtual machine (Dalvik) and run native apps on it (Meego), you get MUCH better performance, not to mention much less power-consumption, i.e. longer battery life or smaller devices; two very nice features. many of the apps i've downloaded for my 2 N9's use PySide, yes they are basically Python apps, still they run just fine (NOTE: this is an interpreted language which runs on a virtual machine, not exactly an optimal situation in terms of performance, much worse than running Java apps on the Dalvik virtual machine, i.e. Android).

dual/quad-core etc. makes a lot of difference when you have many applications running at once (especially if they behave badly as background jobs), but most programs written are standard single-threaded apps, if you ignore the rendering (GUI) which really boils down to the GPU (which is a separate issue). the N9 GPU does fine with very complex games, we are not talking angry birds only here..

breaking up problems into multi-threaded solutions is just never done, it's way to complex, there are no good tools for it. programming-languages has never been able to address this problem in a good manner, numerous attempts have been launched, pretty much all have failed. i.e. a dual-core CPU gives you very little performance gain unless you have background jobs going nuts. all these smart-phones (including the N9) have dedicated CPU's for heavy tasks such as screen input, signal processing and so on, for some reason these are never mentioned when phones are sold...

NOTE: i'm not saying that a dual/quad-core N9 would not be better, i'm just saying the this argument is less relevant than other issues, like for instance: DOES ANYONE WANT TO BUY YOUR PHONE?

==== back 2 topic ====

the problem that Tomi addresses (and many others as well), is that the Meego system never got a CHANCE, it was orphaned by its own parent in favor of Windows Phone. what kind of lunatic gives up his own child for adoption in order to adopt a stepchild? this does not make sense for Nokia, it only makes sense for Microsoft. Nokia employees had worked for several years on Meego/Meltini, and now all of a sudden they must be abandoned in favor of Nokia's new favorite stepson? Nokia did not even allow Meego to compete HEAD TO HEAD with Windows Phone; launching the N9 in "selected markets" at an insane price ($1000 in Norway, $100 more expensive than the iPhone at the time).

to those who say that there was no alternative, and that Symbian and Meego could not compete against Android/iOS, and that Microsoft gave Nokia a huge pile of cash to sweeten the deal.

1) there was no pile of cash, the money they got from Microsoft was basically "free" Windows Phone licenses, they could just as well have gotten fresh fruit, these licenses are worthless. and the "free" promotion did nothing as we have seen, the product was not competitive.

2) Nokia HAD Meego/Symbian devices, they had no Windows Phone devices; and even when they got Windows Phone devices these should be placed next to each other in the stores to let the best man win. this is a competition Nokia could not loose, i.e. finding out which of their platforms was most likely to sell, that kind of thing matters when you are trying to SELL products.


i do not always agree with Tomi but he certainly has told the truth regarding Nokia's failed Windows Phone adventure, Meego/Tizen had/has a chance to compete, Windows never will. the reason Windows can't compete is that the brand itself is tarnished, it's not that the Windows Phone devices sold now are horrible; it's that they have been horrible for so long nobody will ever trust that brand in cell-phones again, this CANNOT be fixed short term, it will take years to rebuild that trust, by then it may all be over..

vladkr

@Tester :

The lack of marketshare for Meego is only due to the fact it wasn't marketed at all... and considering that, the OS (and the device, aka the N9) did perform quite well.

I agree that it can be a waste of time developing for Meego (don't forget that many development tools for Meego can be used for other OSes... so it's not such a big waste of time), but it's not because of the OS or its performances. It's because it was killed in the eggs. You'll see with Tizen and Jolla that the OS is indeed competitive and attractive to developers.

Tomi T Ahonen

to all in this thread, Part 2 in this series is posted, you may like it, its about the competition and Nokia, with a nice picture :-)

Tomi Ahonen :-)

Sander van der Wal

@Tomi

In the Form Nokia managements states that they are switching strategy *because* they are loosing in *key markets*.

If Tester presents some evidence that Nokia was indeed loosing in key markets, then that is relevant to the discussion indeed.

If Nokia was only selling more smartphones in markets were iPhone and/or Android were absent, and if Nokia sales were collapsing as soon as iOS and/or Android were introduced in these markets, then that is a clear sign that Nokia had completely lost the smartphone platform war with Symbian.

Their global increase in sales were then only because there was nothing better, and as soon as something better would came along, their local market size would disappear immediately.

I am happy to entertain the theory that the Memo caused sales to collapse more than without it, but the notion of it being the sole cause of the collapse is simplistic, and it does not at all explain why Symbian market shares in certain countries were already in the single digits before the Memo.

Tester

@vladkr:

>> The lack of marketshare for Meego is only due to the fact it wasn't marketed at all... and considering that, the OS (and the device, aka the N9) did perform quite well.


Of course. I know that. But that's not the point. If I have to make decisions what platforms to support it's about potential customers, not favorizing the platforms I'd like to develop for.

I'll be honest: I hate developing for Android. Its tools are crap. Not as bad as old Symbian tools but certainly far inferior to Apple's and Microsoft's offerings.

But such considerations don't mean much when deciding what platform to target. It's obviously iOS and Android because that's where 95% of the money is.

I'm not in the charity business and can't afford to target a platform like MeeGo with currently no significant market share.

@Sander van der Wal:

There's 2 things that need to be considered:

- future performance of Symbian
- future performance of Nokia

For Symbian, yes, the decline was already showing in some key markets. And had Nokia stayed with Symbian alone I have no doubt that this would have been the end of growth. Maybe not immediately but 2 or 3 quarters later. This would have ended like Blackberry who are still stuck with their ancient OS and the successor still not ready.

But this wasn't the case for Nokia. They had MeeGo - and they were able to bring it out in time to replace Symbian before it had a chance to become toxic. It was competetive with the other OSs. Had they seriously pursued this route it would have put them back on the map in the high end market.

Yes, the mismanagement and execution failures delayed MeeGo for far too long - it should have been ready in 2010, but had they stuck to it instead of going Windows they would have only lost some marketshare in 2011 but after that would have stabilized again, once the new devices were out. Just from the overwhelmingly positive reaction to the N9 I just can't imagine that this system could have failed. It would still have had the big Nokia name behind it to give it credibility in the market.

Jagjit Dusanjh

Tomi, your estimate for nokia is 25 million smartphones for the year 2013. I think you're being kind dude. I'm challenging you right here, right now.

20 million.

P.S. I don't know if I want to be right or wrong.

Sander van der Wal

@Tester

MeeGo. Sigh.

Nokia have been working om Maemo since 2005. At some point in time they rebranded it as MeeGo. Released a couple of devices only hardcore linux geeks loved. They had plenty of changes to make it work, but the Maemo division was never run as a proper business unit. It was run as the playground of a bunch of hobbyists. Completely detached from the real world, the conversations I had at the developer forum we completely insane. People did not have a clue, basically, no understanding of what makes a succesfull, money-making software business at all, and no desire to even venture that way.

bjarneh

Sander van der Wal> Released a couple of devices only hardcore linux geeks loved.

the N9 got great reviews, this was by no means a hacker-phone for Linus Torvalds and a few of his close friends to play around with..


Sander van der Wal> the Maemo division was never run as a proper business unit.

there is no such thing as a "proper business unit". what would that even mean? as a company trying to make money? as opposed by companies trying to loose money? by that standard, Nokia has moved away from being a "proper business unit" by now i guess..


Sander van der Wal> It was run as the playground of a bunch of hobbyists.

a playground for hobbyists? sure, out of Nokia's 120.000 employees probably 3-4 hobbyists (hardcore Linux geeks) sat down and created the N9 and Meltini etc. this is exactly how it works.. the rest sat and waited for the long awaited Windows Phone 8..


Sander van der Wal> the conversations I had at the developer forum we completely insane

that i can believe, did you tell them how to build a proper business unit?


Sander van der Wal> People did not have a clue, basically, no understanding of what makes a succesfull, money-making software business at all

sure; there is only one way to do that. Rovio is exactly the same as Facebook, Google, SAP, Oracle; you name it. those fools were probably most interested in loosing as much money as possible, stupid hackers who did not understand proper business units!

Tester

@Sander van der Wal:

Yes, indeed, they had problems. Yes, it took far too long to develop Maemo/MeeGo. Yes, they made a catastrophic mistake when they decided not to pursue it seriously in 2005. Yes, the N9 was essentially a year too late.

However, these are all management problems, not indications of technological failure.

Any sane CEO would have cleaned house and weeded out the rotten parts of the affected departments, making sure they can again work efficiently.

A sane CEO would NOT close down departments that despite all the corporate infighting ultimately managed to show results, albeit delayed.

So where does that leave Elop? He's clearly not a sane CEO.

Lasve

Nokia consistently lost Market share since the end of 2008.

From Q4 2008 to Q42009 had achieved to keep its share, thanks to the mid/lower end devices
By Q3 2010 it was -6%:

It was going down EXPONENTIALLY (and those are data I collected from your site too a couple of years ago)

OF COURSE the numbers were up: the market was literally EXPLODING.
Nokia's sales grew roughly +30% in a Market that grew twice as much!!!
Ah, and of course Samsung was just getting started.

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