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« Second picture in the Nokia Destruction Saga - Greatest individual Management Mistake Ever Made - Nokia vs Competition in one picture | Main | Quick notes from the smartphones battlefield and announcements from CES »

January 07, 2013

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vladkr

Tomi,

Have you forgotten to mention Sagem, or wasn't its collapse that big ?

cycnus

Tomi,

a bit correction on RIM/BB.

ONE----
BB OS (pre BB10) were a simple OS that roughly comparable to Nokia S40 in Asha series. RIM understand that their OS limitation that can't be further upgraded and bought one of the BEST OS, QNX.

The playbook is the first BB product that use the QNX. and it wasn't success in developer mind because the API to build the apps/ecosystem on the QNX were very minimal. It even took RIM more than 1 year to create calender apps (with calender API). QNX kind of raw OS that don't have too much API to build the supporting apps/ecosystem.

RIM learn the tough lesson of producing half-baked product, and creating the API/SDK for this QNX then REBRAND this as BB10.

So, I don't think it's quite right to say that RIM lost 'manpower' from the Playbook. What is right is RIM lost their time/money for evangelising the playbook, but they didn't lost any "precious software development skills needed for the next generation Blackberry OS".


TWO-----
In the last 2 year, RIM lost lots of their big customer... the corporation/government customer. RIM lost it because two problem... (1) because it doesn't full touch device, BUT (2) the most important problem were there were too much problem in BIS (Black Berry Internet Service) such as BBM/push-mail/internet. This problem won't happened in android/iphone.

And since RIM can't sell their product to this market anymore, RIM were chasing the feature phone user who want to maximize their phone. RIM were targeting the user who want 'FREE' chatting. RIM were successful in the market that internet were not as popular as in the Europe/USA. The user that RIM say they were strong such as Indonesia, don't really know where to do research. They just know that RIM = CHEAP Messaging.

So, it would be hard for RIM to bounce back. If the USA/Europe customer won't switch back to RIM (from android/iOS), then RIM definitely die. Because the RIM user now don't buy RIM because it's cool, they buy RIM because it's CHEAP MESSAGING. In other word, they might not care about BB10.

Tom Gorr

I just cannot believe it is one man who dropped the ball. One rarely does something like this on this level. Memos "thought to remain internal.' There must have been an agreement to allow Nokia to fall in the trenches and Elop is just a captain of those soldiers, not the general. The man is taking orders and executing them, with little imagination in a very bad play, supported by all the mirrors and smoke that can be thrown to the eyes of patriotic finns, who would root for Nokia if they suddenly created colourful ice cubes for Greenland market.

The deals made, by whom, what and why would make very interesting reading. Elop would likely be forgotten quickly after reading such papers.

Interested to know

I was hoping Tomi would write the book on this subject.

Reinhard Haberfellner

As Cycnus already mentioned it is questionable to say that RIM lost because it decided to go for tablets too. Looking at the total mobile device market, it seems to be a must to accompany handsets ( mostly for "the road" ) with tablets ( used "home " or "doing business presentations" ). RIM would have a problem with their ecosystem, if they cant provide a fitting "bigger screen " device. But quality and complexity issues have been the real reason why customers started to change from BB to Android or iPhones . Its often overseen how many work Apple put into cooperation with IT departments of "Fortune 500 " members to make sure their iPhones are acceptable as business units too, connecting better with Exchange servers than any of the WinMo crap , enabling more VPN tunnels than even Cisco could think of a.s.o. And it definitely was a big hurdle from the beginning for the new Windows Mobile OS that it has been promoted as "not for business, but consumer use " .

Tester

Ugh... Blackberry.

Fortunately I never had to deal with them personally but the guy who was doing most of the development work was constantly cursing that they were:

- hard to program
- almost impossible to debug
- showing buggy and inconsistent behavior
- took too long to boot
- were a nightmare to use (shitty UI)

and so on and so on.

Application performance was also a joke and required constant fiddling with the code that cost more time than all other OSs combined. Even the last generation lost more than 50% of their calculating power somewhere between the CPU and the application code.

So my guess is that they simply lost because the devices were obsolete and they were unable to get the successor of that ancient operating system ready to ship.

Of course the Playbook was also a major waste of resources they had better invested elsewhere. On the other hand, imagine they had shipped a new phone with such an unfinished operating system...

Cyan

It reminds me of an historical event which might initially look completely irrelevant : the defeat of Byzantine army at Manzikert.

This defeat has been graded as one of the 10 most important battles of all time. And indeed, historically, it is a complete game changer : after the battle, in a matter of years, Byzantium lost almost completely its Anatolian territory (roughly speaking, the equivalent of today's Turkey), which basically meant it lost 2/3 of its land and manpower. This prompted the call for Christian Crusade, Byzance was basically on the brink of total collapse.

It also led to permanent settlement of Turkish nation into Anatolia, which would be later converted into full domination of the region by Turkey, becoming the largest muslim Empire ever. So it's definately significant. It must have been a terrible battle.

What happened in reality in Manzikert ?

Military speaking, it was in fact almost a minor battle.
Byzantium army lost because only the emperor fought with its small personal elite troops, while the rest of the army would simply betray him, letting him fall alone and abandonned against the vast turkish troops. Consequently, the human toll of the battle was not as large as one could expect.

The reality is that Byzance was into a bitter internal power struggle (as was often the case in that time). The betrayal general was in fact looking into becoming the next emperor. He ensured the defeat of the abandoned Emperor to prepare its own succession.

And it worked. The betrayer, Doukas, became Emperor (or Basileus as they were called in Byzance). He captured the now defenseless legitimate emperor, blinded him (effectively killing him due to injury infection). The success of this coup relied on the perception that the Manzikert was a total, complete, utter defeat, almost an annihiliation of Byzantine forces. Consequently, this vision of event was fabricated, dispensed and simply accepted by the population, leading to rapid and total ruin of defenseless Byzantine Anatolia.

Maybe now the analogy may become clearer. In order to become emperor, the usurpator fabricated a defeat which should never have happened, and made it look a complete annihilation, which it was not. The people in the street bought the believable (but forged) story, securing the usurpator's power, albeit at great cost for the Empire. But Doukas was a man to prefer being the Emperor of a wounded empire, than being no emperor at all.

Interested to know

LOL, is "anything possible" at this point for Nokia? Nokia ended up getting nothing substantive for choosing Microsoft but MS most likely got lifetime, royalty free access to Nokia's patents and they managed to weaponize large portions of Nokia's patents for use against MS's competitors.

winter

My biggest lesson from this article is a confirmation that MS have been a poison to progress in personal computing.

The mobile disasters precipitated by WinMob/Phone have also raged in desktops and laptops. However, due to the Windows monopoly, nobody noticed that there has been no technological progress in PC software since the 1990s. A mac of 1995 could essentially do everything a Win8 computer can do now, 2 decades later.

However, every other area of computing not dominated by MS has seen their equivalent of the smartphone revolution.

Microsoft are poison to progress

Tester

>> A mac of 1995 could essentially do everything a Win8 computer can do now, 2 decades later.

And? What should a modern PC be able to do straight out of a box that wasn't doable 17 years ago? Where's the progress in competing platforms? Had there been any wouldn't you think that it'd have caught on in some form or another? A PC has been and still is mostly a tool to perform a specific job. Since these jobs haven't changed much there hasn't been much large scale change. They got faster and more powerful but that's it mostly. But more wasn't really needed.

The PC business has been more evolutionary than revolutionary. This seems to be a field Microsoft can handle.

Mobile, on the other hand has been developing so fast with so many revolutionary changes that a slow moving company like MS can't keep up. The biggest revolution, of course, has been that mobile is taking over many places that were previously filled by desktop PCs.


winter

@Tester
Look at what the $100 OLPC laptop for the developing world can do in collaborative work. And sexurity. Look at the pogo plug. Goolgle docs is a kludge that could have been part and parcel of every PC. Why do I need the cloud, when I have several computers and terabytes online?

BSD was a better fileserver in 1995, and much safer, than anything ever produced by MS. It is rather straightforeward to link a bunch of Linux/BSD desktop into a working cluster while they are still used as desktops.

We could go on and on.

John Phamlore

The backstabbing of Symbian by certain factions in Nokia actually started at the turn of the millenium:

http://www.theregister.co.uk/2010/11/29/symbian_history_part_two_ui_wars/print.html

"Symbian’s operational board identified a company that could help. A Canadian outfit Metrowerks had helped saved Apple in its transition to Power PC chips a few years before, and had created a developer friendly IDE called CodeWarrior.

But the Symbian executive board, comprised of the shareholders, vetoed the idea. Former executives say Nokia wielded the veto. Metrowerks was snapped up by Motorola."

Symbian could have had a developer friendly IDE early in the 2000s at the latest. But top management at Nokia had already decided to go in the Linux direction by then.

Alex Kerr

What about Nokia buying Jolla, isn't that the best plan of all?
That appears to be EASILY the best strategy for Nokia's future, reasons:

1.) Sailfish more efficient on hardware than Android, so will go lower end
2.) Sailfish runs Android apps - that's the main reason you want Android
3.) Get to keep Nokia hardware - much better than Sailfish on anyone else's hardware, no?
4.) Meego lives on!
5.) Uses Qt!
5.) Resurrects the Symbian migration path because of Qt.

Symbian fans are happy - natural migration path again. MeeGo fans are happy - Sailfish is MeeGo v2. Qt fans are happy - Qt lives on as the primary SDK. Android fans are happy - (most) Android apps will run as is. Nokia fans are happy - their own OS back in house. Nokia hardware fans are happy - best OS, one of the best ecosystems (Android), on the best hardware.

Everyone's a winner!

Nokia need to buy Jolla now! (and make any management changes as appropriate).

Tester

@ukd:

Decline != collapse!

In 2010 marketshare shrank but that's not really surprising considering what was happening in that year. Lots and lots of competition.

What you should look at is at the amount of loss - and that's considerably larger in 2011. If you had read the blog entry you would have found all this info in there!

Earendil Star

THT Elop saying "anything is possible" mentioned Android only to disguise the truth:

"anything is possible" means Nokia's interesting bits will become MS smartphone division.

When this Surfaces is anybody's guess.

And past internal struggles at Nokia quoted by the usual MS astroturfing trolls have nothing to do with Nokia's current plight, which has one single cause: the decision of adopting the WP (P)OS as *exclusive* platform, while giving MS lots of goodies for free.

Jorma Ollila knows why this happened. Jorma Ollila must speak.

tz

It's worse. Far worse. I was using my N810 tablet - it was smaller than the galaxy note (1 or 2), but bigger than a phone. But I was using it to browse, navigate on my motorcycle, I could easily write apps (I had 3! bluetooth devices connected, my radar detector, my engine (OBD2) interface, and my better GPS connected on my harley with a Python dashboard!!!).

I also have an N810 with 4G WIMax! 4G (though only in Chicago or a few other places) until recently. 2008!

It started with the n770, but the n800 hit it, and the n810 - SUNLIGHT READABLE!!! - was like nothing else out there. You probably can't imagine it in 7 inch or 10 inch. Those I have are resistive, not capacitive, but remember they are 4-6 years old!

Elop had the basis of something that could blow away the iPad.

Elop should be fired and investigated for the equivalent of corporate treason. He is not Japanese, but instead of resigning, there should be an unfortunate accident where a katana severs his aorta.

Anyone else notice Google is playing hardball against WinFauxnAte?

khim

@ukd: This is about market share.

I think you are mixing two issues here:
1. market share
and
2. actual sales numbers.

When industry is growing like crazy these two pose significantly different problems:
1. Loss of market share means that you have strategic problem: after time of rapid growth there will be slowdown (nothing can grow with 50%+ rates for very long) and if you have tiny market share at this point - you'll be in big trouble.
2. Decline in actual sales means immediate and severe problems: you lose discounts, you need to fire workers (if you are producing stuff on your own factories), your may need to write-off unsold products, etc, etc.

Till the middle of 2010 Nokia was in first state: no immediate problems, but future hazards are brewing. And successful release of N8 made an impression that these hazards can be controlled and mitigated to some degree.

After Elop Effect they immediately went to collapse phase - without any hope in sight.

Tester

@Earendil Star:

>> And past internal struggles at Nokia quoted by the usual MS astroturfing trolls have nothing to do with Nokia's current plight, which has one single cause: the decision of adopting the WP (P)OS as *exclusive* platform, while giving MS lots of goodies for free.


Not quite correct. Those past mistakes paved the way for the Microsoft Mafia to take over the company. What need would Nokia have had to hire a foreign CEO if the previous management had done their job properly?

Syren Baran

"(These were the 2003 launch of the consumer-oriented smartphone Nokia N-Gage with its nasty concept of 'app store' that allowed apps to be sold and downloaded to N-Gage smartphones by 'sideloading' ie bypassing the carriers and their billing and traffic; plus the coincidentially timed Nokia push to the early version of Nokia's consumer marketing afforts around Club Nokia. The carrier community revolt caused Nokia to see global market share loss of a third in a two-year period)"

Oh, you mean Nokia Software Market?
If that joke of an appstore really caused a revolt among the providers that POS was possibly Nokia´s worst mistake.
I mean, they had the "link" for that appstore in every bloody handset they sold, but the only way to actually buy something was via credit card. Now, how many kids do you think have a credit card? Yeah, right. Not to mention the software market was never mentioned in a single commercial while Jamba et al were making big bucks.
And carrier community revolt? I mean, those 65% were better in practice than the 70% Apple decided to pay later (since sales tax was deducted on Nokias part, so real 65% net value), but come on, i don´t care if Digital River screws up or Nokia if i have a deal with Nokia. If you actually have to threaten to tramp to Finnland and throw the responsible people out of the window to even get the measly share, now thats not attractive to developers for sure.
And yes, i had a top 10 game in the software market for several months. If that doesnt even pay for third party certification services people sure as hell aint coming back.
Nokia sure had the potential to make apps really mainstream, years before Apple said "There´s an app for that!", but a half-hearted store which pisses off both developers and carriers...
Nah, Elop for sure was´nt the first person in Nokia to make critical mistakes.

Syren Baran
SCMAD (Sun certified mobile application developer).

Wayne Borean


Tomi,

I think you mis-worded this:

For Microsoft to suggest to carriers, let me put Skype on your smarpthones via Windows Phone, is like labeling a bottle of poison as 'tastest great' and asking carriers to drink it all. That is not about to happen.

It should be:

For Microsoft to suggest to carriers, let me put Skype on your smarpthones via Windows Phone, is like labeling a bottle of poison as 'tastes great' in front of the major carriers, and asking them to drink it all. That is not about to happen.

Otherwise, good, solid reasoning. I'm not saying I think you are totally right, because I think you are off on one point. RIM first started having problems when they introduced a Blackberry touch screen (no KB) phone. I don't remember the model for certain, think it might have been the Storm.

I have huge, powerfull hands. I always win handshake duels, even in my late fifties. Slide out keypads don't work for me, the keys are unusable, because my fingers are so thick.

But I needed a smartphone. I was damned tired of carrying:

1) Phone
2) MP3 Player
3) Palm Pilot
4) Camera

I wanted a single device to rule them all.

I'd found that I could use an iPhone's on-screen keyboard easily, but the damned things were expensive, so I looked at alternatives. At that time there weren't a lot of touch screen phones, I remember RIM, LG, and Apple only.

I don't remember why I didn't like the LG, but I do remember the RIM being a disaster. Shoddy looking, crappy touch screen, a phone you wouldn't buy your worst enemy. It was horrible.

But the Blackberry's with keyboards were fine.

They spent a lot of money on ads in Canada and the United States. No one liked that phone, and I know a lot of people looked at it. It was regularly discussed on boards I frequented, with the usual line being:

Are they nuts?

It was about this time that Blackberry's started to disappear. The Playbook with its advanced email system just sealed the deal.

Oh, and I still have my iPhone 3GS. It works, why replace it?

Wayne

PS: For those who missed the joke, RIM delivered the original Playbook without email support. Dumb, and dumber (dumbest goes to Elop)

cycnus

@Wayne

BB touch screen pre-10 is just like the Nokia S40 + touch support. crappy!!!

When I look at how long it take RIM to finally support email and calender on Playbook, I think RIM would not success with their BB10. Because when they finally 'catch up' with 2011 AndroidOS/iOS, the competition already way ahead. When Microsoft introduce THE ALL NEW WP8, Tomi said that the counter have been reset to ZERO again because it's new OS, new ecosystem. I think the same with RIM BB10. The counter have been reset again because the target market is now changing from (NOW) cheap-messaging user into advance real smartphone user in which android and iOS already have a very good ecosystem.


John Phamlore

Today is truly a monumental day. The first non-Microsoft (Bill Gates or Steve Ballmer) opening keynote speaker at CES is ... Qualcomm CEO Dr. Paul Jacobs.

http://www.forbes.com/sites/connieguglielmo/2013/01/07/qualcomm-ceo-paul-jacobs-delivers-opening-keynote-at-ces-live/

http://live.arstechnica.com/ces-2013-liveblog-dr-paul-jacobs-and-the-qualcomm-keynote/

This was the change that happened the last five years. This is the future Nokia missed out on.

"... one billion Android devices in use today... most are being powered by Qualcomm chips ..."

cycnus

@John Phamlore

AGREE!!!

The funny thing is (if you see the live streaming), Steve Balmer trying to steal android thunder, I wonder how much MS pay for Balmer to be able on the stage.... BIG LOL.

Balmer was on stage saying that 2012 christmas WP sold 5x better than last christmas. Unfortunately no one throw egg or pie at Balmer.

John Phamlore

@cycnus

Wasn't it hilarious Ballmer having to serve a secondary role to the CEO of a company no one would have guessed five years ago would take away the opening keynote at CES? This is why I have relentlessly hammered away at Qualcomm's role in things here--they are that important at least in the United States.

It's breathtaking to me the sure scope and scale at which companies working in the mobile space have to be at these days. In their CES address one can see all the things Qualcomm is trying to put their chips into, way beyond handsets, into entertainment, automobiles, etc. And it's the same way for companies such as Samsung and Huawei and Google.

That's why part of what I have been arguing is that to succeed now, a company has to both have a company mission beyond handsets and government help. Samsung the Korean chaebol basically is into making everything and owns its own fabs. Huawei is the Chinese national champion that is laser-focused on providing end to end networking. Google is the big data + artificial intelligence company that apparently has its own very powerful allies in US government.

It's unfair the necessity of government help, but that is an inherent part of being in telecommunications where the government by necessity picks winners and losers allocating spectrum. I'm not sold that Nokia had the same European government support watching its back, and I'm not sold that dependence on handsets was / is the right way to win in the mobile space except for a company such as Apple.

Winter

@ukd
Nokia's market share in smartphones was going down in 2009/2010 because the Smartphone market exploded. The real disaster was that the absolute number of sales was crashing from 1Q2011. That is, after Elop's presentation of his new WP only strategy.

http://communities-dominate.blogs.com/.a/6a00e0097e337c8833017ee44107c1970d-pi

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