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« Sherlock Holmes and the Hounds of the Basket Case: Clues on the trail of Elop, Ballmer and Nokia's Board | Main | Nokia Q2 Topline Numbers »

June 29, 2013

Comments

N9

@Hansu: Software development cost? Symbian/Meego/Meltemi were all fully developed systems when they were thrown away. This was simply insane. Sure, there would still be ongoing cost for development. But there is/was also a high cost for re-developing every Nokia app for Windows Phone 7 and then again for WP 8.

Bob,Boulder, Colorado

now ELop would still be making 10s of millions of dollars, if not 100s of millions of dollars. This is what galls me, since a CEO gets huge salary because he is directly and personally responsible for company's growth or so it is claimed, now if a company fails, why should the same CEO get 10s of millions of dollars.

Tester

@CN:

>> So, according to Tomi, Elop has been trying to sell NSN for three years.

Does this really come as a surprise? It perfectly fits into Elop's other actions since he became CEO. He's got complete and total tunnel vision with the sole focus being what Microsoft needs.

And he doesn't even succeed there.

N 900

Absolutely hilarious to see how this discussion becomes utter nonsense when Tomi is constantly deleting posts, but forgets to delete the answers to that posts. Why is there a comment section in this blog anyway?

You better read that fast and remember it well, because it won't stay long :-)

Tester

Yeah, the problem is obviously that Nokia's too unattractive a target to buy.
Maybe its state is even worse than what Tomi expected last year...?
It's so messed up, nobody wants it. It wouldn't surprise me the least that a potential buyer who looks into the books runs away in panic afterward. :D

nim

Now Nokia owns the whole unit it is way easier for it to sell it as a whole

(not that I expect it at this stage, at the rate Nokia has been destroying value, keeping one profitable unit as backup employer for management once the phone business is dead is just as possible)

Lauren B.

Nice to see that Sony's Bond campaign actually worked out. Must've cost a fortune. It's a good example for successful marketing. Not that the Xperia T adds that much value to the mobile phone market.. Maybe RIM should think about investing in a large campaign as soon as it can keep up with other smartphones.

Tester

@Sander van der Wal:

>> The Memo wasn't a very good idea IN HINDSIGHT either,

The memo wasn't a good idea PERIOD.
Even the dumbest idiot could see the consequences of badmouthing one's own products this badly. Yes, he was right, Symbian was in a very, very troubled position - but the first rule of business should always be to NOT TELL THE PUBLIC ABOUT IT!!! You still want to sell that stuff, no matter how crappy it is!

When the WP announcement was made it was clear to everybody with even half a brain that this was the fatal blow to Nokia's business. When I heard about it my first thought was 'Are they insane?'

As for what is wrong with Nokia now, it boils down to one thing, and one thing alone, and that is Windows Phone. Elop's idea of solving all the existing problems was to throw everything into the dumpster. So yes, as I see it, Nokia's current problems are mainly Elop's fault.

jj

So, Nokia follows Ericcson path and focuses networks and telecom services. Smartphones and maps are sold to Microsoft. I predict this will happen very soon.

vladkr

@Tomi :
"And there were also stories that a top Microsoft mobile guy was visiting Finland. Yeah, total accident of timing"

Come on Tomi... why do you think a US millionaire wouldn't spend his holidays in Espoo rather than in Bahamas, or any other Island ? You're underestimating tourism capacities of your homeland, Finland as a paradisiac destination for Summer Holidays ;)

alvi

@Sander van der Wal:

Regarding that memo: Elop must have read somewhere the expression "burn one's bridges" as there was no going back after releasing those. The one mistake he made is that you burn your bridges AFTER you, not before you.

If you need hindsight to know that this wasn't a good idea, then I suspect your chess playing skills aren't the best.

Hansu

In all fairness Elop inherited a way bigger mess than was ever let to belive and whatever his actions wrong or right you pick the side wouldn't have made much of difference in the end. As for the NSN deal I am waiting for Tomi's opinion on it and how Elop and the Board have destroyed the Last of Nokia's real assets on thing that has no future and is actually making a loss altough Nokia is claiming the other but they are and let's pretend they are not, altough they are not but whatever. The only thing that could cause some alarm is that Nkia has 300m less cash than previous quarter is that because the Lumias are not selling or have they made new investments if they were in real real real trouble the might consider dumping the phone business altogether but why would a company that is in trouble splash out 2,2 Billion USD on stake of company that they allready own

Tester

@Hansu:

>> the might consider dumping the phone business altogether

It would be smart indeed, but I don't expect it to happen.


>> but why would a company that is in trouble splash out 2,2 Billion USD on stake of company that they allready own

They owned only half of it. Siemens wanted to sell the other half, so it was a choice between buying it themselves or risk more problems in the future.

Hansu

@ Tester true it's very doubtful especially when they have gotten their act together with the current crop of Lumias compared to the previous gen phones. The one thing that is odd is that according to analysts Nokia got NSN dirt cheap from Siemens now NSN is profitable company and if Siemens wanted to sell it off cheaply then why not since it will only take 2-3 quarters for Nokia in the this current rate to get back the money from NSN on buying the other half

Sander van der Wal

@Tester

Companies who keep insisting that their products are fine, while the whole world sees that they are rubbish, are a thing of the past. Car companies now make public recalls when they find out there is a problem with their cars. Food companies make public recalls when there is a problem with their wares.

RIM did the opposite from what Nokia has been doing. RIM not in good shape either.

And then there's an element that is missing from the discussion: everybody here is assumimg that Nokia was capable of making any kind of phone they wanted, in any amount they wanted. There is no such thing as lack of components, or lack of production lines. Production lines would be able to make the most sophisticated smartphone as well as the simplest of feature phones with similar ease. Suppliers would be able to switch their production lines at one moments notice from producing components for feature phones to components for smartphones, without any extra cost at all.

Unfortunately, in the real world, that is impossible. Your capacity for producing a certain kind of phone is limited, and it is hellishly expensive to add more capacity. Your suppliers are not able to switch at a moments notice either.

You have to plan years in advance for the capacity and the components, having long term contracts with suppliers in place. If your planning for the future is wrong, then you end up with lots of phones nobody wants to buy, and not enough phones of the kind people are willing to buy.

So there's another reason why there were so little N9's, Nokia was not able to make them. They had planned for a few million and that they could make no more. All their suppliers were busy selling components to the competition, Samsung. Who had planned to enter the smartphome market in a big way and had contracts getting all the components they needed for that in abundance.

Tester

@Sander van der Wal:

>>Companies who keep insisting that their products are fine, while the whole world sees that they are rubbish, are a thing of the past.

Nonsense. There's still a major difference between an outdated and a defective product. Companies still sell outdated stuff and won't admit to it. Many companies even sell crap without admitting to it. As long as the brand name is strong there will be people who would buy it.
By developing a successor OS Nokia already admitted that Symbian might have reached the end of the line, but it wasn't loaded with negative implications.

By throwing away Symbian, along with MeeGo, Nokia basically admitted that they are incompetent. It was their home-developed products after all.

Back in 2011, despite declining sales, Symbian was still selling. In this context it's not relevant that most Symbian customers were rather clueless and missed recent development. But you still do not hammer into their heads to better steer clear of Nokia's product. That not only affected the old product - by the time the message has sunk in, it also affected their new WP phones as well. So instead of just fighting against the resistance against WP, they also had to fight against the negative image they gained in the public. By the time the first Lumia's came out, Nokia's brand had already taken a massive amount of damage. Utterly stupid, if you ask me.

In any case, phasing out Symbian was inevitable, but phasing it out while abandoning everyone invested into that system - and not having a replacement ready - was clearly not.


>> RIM did the opposite from what Nokia has been doing. RIM not in good shape either.

No, but they are in bad shape not because they did the opposite of Nokia but because they couldn't deliver a good replacement product in time. They had to sit out years with their outdated system. And if you compare Blackberry's numbers with Nokia's there's a major difference: Blackberry gradually eroded. It didn't crash immediately. So, had Nokia done it like Blackberry, with MeeGo set up as the successor, yes, they would have lost market share in the first half of 2011 - but it would all have been combined with a positive message:
"Yes, we know that Symbian is old. That's why we are preparing a successor. But look, we designed a development ecosystem that allows you to target both with the same code"
Such a message might have reassured many people that their phones won't become obsolete in no time.

As it went the message was more like
"Yes, we know that Symbian is bad. It got no future so we are switching to something completely different. If you want to develop software for Symbian, fine, but don't expect it to live on in the future."

Such a message is devastating to both developers and customers. To developers because it clearly tells them that it's pointless to invest work here and to customers because they know that their phone will fall more and more behind, as time goes on.

Kevin

Just a heads-up, those emergency Nokia Board meetings are not about firing Elop at all! You know what comes out as a result, Nokia owns NSN fully! Remember you've kept saying Nokia is trying to sell its NSN shares, is this fact a heavy blow to your mind?

winter

To all those crowing about Tomi getting the NSN deal wrong. There is a difference between predicting changes in a market of hundreds of millions of consumers, and predicting the actions of a few (desperate?) individuals.

The fact that you do not see this difference shows us that you really have not understood what this is all about. Or maybe, you do not want to understand it.

Also, this USA obsession with discrediting the messenger when you do not like the message is much less effective outside the USA.

AndThisWillBeToo

@winter
People here are just picking Tomi on the fact he said VERY clearly that:
1) Elop tries to sell NSN, not buy it.
2) Board meeting cannot be because of NSN due to 1).
So Tomi Ahonen who (by his own words) "knows Nokia very deeply" and is AFAWK going to write full analysis on Elop and his bad intentions could not figure out this even though all the writing was on the wall and people in Twitter were telling him it's about NSN strategy.
I'm sure his analysis on Elop and Elop's motives will be historical what comes to having all the facts straight.

...and that is why people here pick on Tomi.

Tester

@AndThisWillBeToo:

>> 1) Elop tries to sell NSN, not buy it.

The thing isn't over yet. Elop himself said right after the deal that he still hasn't ruled out selling NSN.
But in order to do something with it he had to get the other half first. Imagine someone else had bought it, someone with an ill will towards Nokia. That could really have created problems.

As for the design award, yes, everybody agrees that the design is great, just not the software that comes with it. Awards don't help in that matter. Most people still make their primary decision on other factors than design.
How else would you explain that Samsung's Galaxy 4 sold so much better than the HTC One? Yes, of course! If you look closely there's some factors concerning the HTC One that lower its attractiveness considerably (like non-replaceable battery, no SD card slot.) Who cares if it's the best designed Android phone out there if its usefulness is compromised? I'd rather buy something less well designed but better features - and I'm not alone.

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