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« Another Death in Smartphone Bloodbath - Windows Phone strategy so failed, now Nokia handset unit sold - to MIcrosoft | Main | Thank You For The Smartphone - Some Abba Lyrics Revisited on a Nokia Theme »

September 03, 2013

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AKX

"Nokia was 50% bigger in the total industry than its nearest rival"

I think you meant "100% bigger" (twice, *2).

AKX

Oh, never mind, I just understood you were speaking about the global handset industry and not the smartphone industry.

Ykä

Technically there was no reason for Nokia to fail.
But where Nokia completely failed after Apple came up with the iphone was the marketing and branding.
Apple and iphone was cool, Nokia something for the parents.
Even Apple came up with functionalities years after Nokia, their brilliant marketing machine managed to sell it as if they would have invented it.
This is one thing where Microsoft needs to improove a lot too in order to make this a success.

AtTheBottomOfTheHilton

Now when Nokia is destroyed, Microsoft is back at square one. Yes, they have killed one strong competitor but in this world, there will be new contenders rising up quickly so that killing Nokia looks like a waste of time.

Now, Microsoft controls what is left in Finland and now they can make same mistakes as before and even more mistakes.

Stephen Elop forced Nokia to sell their phones at an undercut price in order to destroy the company as one goal but now that advantage is gone. Now the Windows Phone price will increase and the HW will be mediocre again.

THE main strategy failure of Microsoft was infesting desktop with mobile limitations. Ubuntu/Asus is going the other way, http://www.indiegogo.com/projects/ubuntu-edge, that IS the right way to go. Put the power of the desktop into the phone and not limit the larger devices to the smallest devices.

Welcome Microsoft, to the real world again. How many Goldman Sachs type dirty tricks do you have do implement now to compete?

jj

R.I.P Mobile Nokia.
Can you die if you are annoyed too long?

Paulo Gomes

Weird times we live..
If Nokia had embraced Android for high end devices (smartphones) and also maintained Symbian on low end devices things would be quite different today, Samsung market share would be smaller for sure.

KilroyWasHere

its been a while since I have been here. Just had to drop by to see if you posted a eulogy for Nokia today. I immediately though of you when I read the news. However, before acted on that thought, I immediate went to my banking website to dump the NOK shares I had while the price was ticked up.


"Boy was I wrong. "


wow. that is a big admission for an ego of that magnitude. I wonder if you ever figured that out about your beliefs on American politics. Don't know. I didn't come back to check on your post-presidential-election thoughts. I told you that if Romney ran as a liberal republican that he would lose...and he did just that. But, I was just a "kook" as I recall.


ok. back to my "kook" activities. catch you another time.

The Recusant

Congrats Tomi for calling it as it is. Most of your critics here are apparently from the US and view all these through the US prism, which explains the irrational fanboyism for crApple iFruitcake products, etc. The phones and networks (Motorola flip-phones, CDMA & PCS networks that don't even support SMS & MMS or 3G videocalling) they use before 2007 was waay behind those in other parts of the world which explains how bedazzled they were with the 1st iPhone, which for the 1st few generations can't even be called smartphones.

The rest obviously own shares in Apple, Google, etc. so it's in their own interests to promote those companies at every turn. Seen that behavior in other other tech forums I frequent.

logic001

@ Paulo Gomes - Yes true however I do question if any company can compete long term against a vertically structured company. ie Samsung made so many parts themselves they must have had a much lower cost of production. Perhaps the only way a company can compete is by differentiating itself. It most cases this is best done via OS. Perhaps each manufacturer needs its own OS.

Boris

Tommi,

Yugo wasn't Yugoslav car manufacturer - it was Zastava and Yugo was just a model ;-).

Anyway, your analysis of gaming consoles' market is way off - Nintendo won last generation with Wii and especially DS which is the most succesfull handheld gaming console ever and the second best selling video game console of all time. They ripped almost all profit last generation.

Sony was the huge loser with PS3 which completely wiped Sony's profit from PS1 and 2 period just in the first two years! Sony is bleeding money like crazy and if Kaz didn't become real estate agent, Sony would be in deep red 5th year in the row.

MSFT lost huge money on Xbox and 360, but recoupled some money last years. Good news is XO is huge trainwreck and I hope it will stay.

If somebody thinks MSFT can do anything in smarphone market - no, they can't nothing especially because PR China manufacturers chose Android.

And btw Tommi, Lenovo is going to start sell LePhones in Europe from this month (excluding Russia) and they will start this from my country which is weird as Serbia is small market...

Tester

I'm not sure I'm buying all of this but the big question really is how the carriers will react to Microsoft owning Nokia now. If they really hold a grudge like Tomi says things will turn truly nasty - of course not now but after the deal is done. And if that happens there won't be a third ecosystem, there won't be any Windows Phone or any Microsoftian dream of mobile dominance.

So I guess we have to wait for 6 months or so to see if the boycott really exists or not.

khim

It's funny how you accuse others in US-centric view on phones, but still use US-centric view of XBox360 "success". Boris already pointed out that Nintendo won last round (seventh generation of game consoles), but this is not even the full truth!

Now, lookie here:
http://www.vgchartz.com/article/250980/playstation-3-lifetime-sales-overtakes-the-xbox-360/

XBox is *NOT* "bestselling gaming console platform". It's not even "*second* bestselling gaming console platform"! After all these years, after all these billions it's in *third* *place* *out* *of* *three* *possible*!

And if you'll actually go and check facts you'll find out (to you great astonishment, I'm sure) that "first-time failure of a console" (orginal XBox) was actually NUMBER TWO (PlayStation2 was number one and GameCube was number three) while "uber-successful comeback of second attempt" is NUMBER THREE today.

I applaud Microsoft PR guys: they are great. They can portray transition from second place to third one as some kind of achievement, but... we are guys of numbers here, right? Numbers don't lie: this time battle was much, *much*, *MUCH* less one-sided then previous one (back then you could have combined sales of number 2 and number 3 then TRIPLED the result and STILL it'll come short of number 1), but XBox360 is STILL a loser in this battle. Number three out three despite all the Microsoft's posturing and bravado.

P.S. It's also interesting to see that SONY was *MORE* dominant in consoles the Nokia was ever in smartphones. In fifth generation it was *THREE* times as big as number two. In sixth generation they were *SIX* times as big as number two. They had no Elop - yet in seventh generation they barely managed to outsell number three.

CoolmanBlues

Hi Tomi,

I think this is one of your best articles.

Awesome analysis and very true.

Congrats

Paulo Gomes

@ logic001 - but investing in a new OS is an huge effort in terms of time and resources that Nokia did not had, and differentiating only by the os is not enough in this business (look at blackberry).

Adopting Android would permit put on market devices at reasonable price in short time, without lacking apps, and at same time could invest on MeeGo as future replacement (also based on Linux so better interconnection with android apps).

ChrisG

In my view Tomi your sentimentality for Nokia blinds you to the board's full participation in this bloody self-flagellation that has been wreaked upon it by Elop. There was no danger he would ever be fired. The board lapped it up. He and they all ought to be before a court for corporate misconduct. And what is this nonsense that the trouble is over - those crooks and imbeciles are still in charge.

KilroyWasHere

It is a shame what has happened to Nokia. Back when I bought their stock, they had the technology portfolio (MeeGo, Qt, web services) to actually build an alternative platform to iOS and iCloud/MobileMe. Even though I own Apple stock, I bought Nokia stock to hedge my bets in case Apple stumbled. At the time, I figured Nokia was in the best position of all the companies to benefit if Apple stumbled because they had the technology and resources to do it. Then this Elop clown guts the company of all the interesting technology they had and makes the company the equivalent of a PC manufacturer making beige boxes for Microsoft. I figured the game was up then, but I was already in the toilet on my stock purchase so, I stuck with it hoping that MS would actually buy the company. What does MS finally do? Buy the only remotely interesting piece left. Time to ditch while I can...and cut my losses. Fortunately, I didn't lose much money and Apple is continuing to perform well so that I am still way ahead overall.

I have no idea why a board of directors would allow a CEO to gut the company of what made it valuable. I don't know what the law is governing these matters in Finland, but I have to wonder why there hasn't been an investor lawsuit against the board members for allowing Elop to destroy the company. I have to wonder if this wasn't an intentional strategy by MS to devalue the company enough to acquire it for its sales channel and carrier relationships. If it was, they even botched that effort as Nokia doesn't even have that asset anymore. Add one more disaster to Balmer's resume of disasters.

Its absolutely amazing to me how clowns get put in charge of major institutions.

So Vatar

I hope they get rid of Nokia's board members and the interim CEO Siilasmaa at once. Even more than Flop these actors should accept responsibility for Nokia's demise. And even at this stage they are not capable to get a decent price for the assets they sell. How much is it? EUR 3.6B for the full handset business?

I find sad that Nokia never seemed to fight to stay relevant and independent. For sure in 2010 they still had sufficient resources to compete against Samsungs and the like. Instead of competing they sold their soul to WP exclusivity, thinking that MS will be able to deliver competitive Software. Which they did not. And even if they thought that WP would be good for them, a company of the size of Nokia 2011 cannot put all their eggs into one nest only without hedging their bets.

But this is mute now. Nokia as a consumer oriented corporation is gone. They remains will or will not be able to compete in the infrastructure area. HERE (maps) are a niche business and will never be able to contribute profits in any meaningful magnitude.

For shareholders it is disappointing how little money it takes to purchase Nokia's handset business with all the assets therein (factories, inventories, contracts). There is no bidding war (yet?), no other suitor seemingly interested in purchasing Nokia handset assets.

It was fun for a long while, the fall was fast and abrupt, and totally avoidable.

Jan

I would maintain that biggest problem was Nokia board. They hired elop, they ok'ed his visions and his strategy, they oversaw complete destruction of Nokia brand, company value and jobs. At the end of the day, Elop did what he did best, pushing Microsoft interests and products. Board should be sacked. One who makes bad mistakes will continue to make bad mistakes. Yet they will still lead Nokia. Nokia sold for less than Skype, how does this sounds?

The Recusant

Nokia willfully ignored the lessons of past companies who have had the misfortune of "cooperating" with M$. They were either ruined outright due to grossly lopsided deals or M$ came up with products that shamelessly copied those of the company they teamed up with; they realized too late that M$ only wanted to get close to them in order to steal their secrets. I mean, no one in the Nokia board even managed to read one book about Bill Gates???

I don't know who was more criminal, the Trojan Horse Elop or the Nokia board that naively allowed him inside in the 1st place.

jcdr

Sadly Microsoft still have a large financial asset able to support and to push Windows Phone for many coming years. What's more interesting is the fact that Microsoft is again showing to the world that there is absolutely no way for an other company to have a profitable and sustainable contractual collaboration with them. The only two possible final outcomes are: destroyed by termination, or destroyed by digestion. With the coming CEO transition, Microsoft will face a market far more complex than it used to be at his glorious PC time. And the history have show many times that a complex market cannot be dominated by a single entity that want to keep control on everything. Microsoft will face big and irreversible decisions in the coming years. And the time is now against them as every decision not made today will be done by a concurrent tomorrow. In short term the next war is about the legality to have mass market devices open or close. The short technical response is that only open devices can reach every aspects of a complex market. Some company will do anything to prevent this, and to keep there position.

The Recusant

>Additionally, Android is not popular as a smart-phone OS. >Android is popular as an OS for cheap phones...the kind >you get on BOGO promotions and are successful in >3rd-world countries. Android has been a replacement for >Symbian and Java-based phone OSes. People who want actual >smartphones and have money to spend on them are buying >iOS devices.

Wow, that's just dead wrong on so many levels.

another ex-Nokian

same comment as few other above this one, You are blaming Elop for all that went wrong at Nokia, but what about the board? As per your suggestion, if Elop is investigated for this sale, then shouldn't the board members be treated the same way. After all, Elop did not have the power and authority to finalize this sale all by himself. If the existing Nokia board is so incompetent that they let this sale go through, and that also for such a low price, then they should be the first ones to get fired from the board, and should not have anything to do with 'new' Nokia.

Thomas

Thomas

Never used Symbian too long but saw that it was a lot like android. I have a 920 as an experiment and the major flaw I saw was definitely the decision to undermine and then show up with what was obviously not a flagship product. The 920 just came too damn late. If it came out without the anger over 8 by MSFT actually not rushing 7 out the door (they started 2 years too late by some estimates by thinking 6.5 was a good starting point and developing that for a while a full YEAR after the iPhone, THEN saying, oh no, and dumping for the more flexible? wp7. Then, they said, sure, we'll develop 8 to finally compete with ios and hope nobody will get mad. Well. Guess what. Nobody trusts MSFT anymore. Not developers o
r carriers. I think that is what killed Nokia and I'm sad to see it go. I love that Nokia at least tried design.

So Vatar

This is what I find funny:

On the day Nokia's handset sale became known Nokia's market cap gained $4.5 Billion.
However, the purchaser Microsoft lost more than $12 Billion market cap.

Is Microsoft already feeling the Elop effect?

vladkr

Tomi,

To be fair, we can note that Eldar Murtazin predicted Microsoft strategy few months before Elop was hired, and also predicted a resale to Microsoft, facing mocking from Nokia executives. I don't know where he got his information from, but he appears to be well informed. I won't meter who was right first, as the most important thing is that all this was predictable and predicted.

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

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