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« Elop 25 Million Dollar Golden Handshake for Destroying the Company - How Could This Happen at Nokia (analysis and speculation) - Tomi plays detective again | Main | Some News from Bloodbath Year 4: Smartphones Galore - Blackberry results, China market data »

October 01, 2013

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Karl

Nice work Tomi. Here is another take on the same story, The rise and fall of the Symbian empire: http://www.theverge.com/2013/9/18/4747002/the-rise-and-fall-of-the-symbian-empire

RottenApple

@Karl:

Ugh...

Now, that article reeks of warped perception of reality...

So, one can claim that the switch to WP was wrong (which it clearly was) but had Nokia continued with Symbian they'd have gone the same route as Blackberry (not a quick plunge into oblivion but a slow descent.) Granted, it would have given Nokia enough time to make a more controlled switch to any successor.

This article, though, treats Symbian as the Second Coming of God, and it clearly shows the attitude that made Nokia such a ripe target for utter destruction. If one has such a distorted view of one's own product it's obvious that wrong decisions are being made which ultimately lead to a shift into panic mode once they realize that it can't go on like this.

Olav

RottenApple, Symbian's days were certainly numbered but it was doing well. However, it was not the only or last option left. You have to take into account Meltemi and Meego, which Elop killed.

daz

Error: 2016 -> 2006
OPK became Nokia CEO in the Spring of 2016

foo

@RottenApple

I strongly agree with this point:

> had Nokia continued with Symbian they'd have gone the same route as Blackberry (not a quick plunge into oblivion but
> a slow descent.) Granted, it would have given Nokia enough time to make a more controlled switch to any successor.

This is the core of Elop's failed strategy.

He *killed* Symbian, replacing it with an unready version of an unpopular product.

Since the very beginning he talked not as Nokia's CEO, but Windows Phone's ambassador.

He didn't talk about how great Nokia's products were; he talked about "ecosystem wars", and invited competitors to join his (actually Microsoft's) ecosystem.

If Tomi ever writes the book, I hope he'll concentrate in 2011, when Elop destroyed Nokia's future. 2012 and 2013 were just consequences of the absurd decisions Elop took in 2011.

foo

@Tomi

> Every single rising statistic of vital Nokia performance was turned into catastrophic decline, next, by Elop. Why?
> Because he had 25 million dollars as a bonus to wreck Nokia rather than take a couple of million in performance
> incentives to continue this growth.

I still don't buy this theory.

I think that Elop wanted to help Nokia, but he also wanted -- in fact, was too eager -- to help Microsoft. The collapse was an unintended consequence of Elop's decisions (picking an unready version of an unpopular OS) and actions (pre-announcing the death of Symbian, trashing his own products, killing the alternatives, etc).

It is possible that sometime in 2012 he realized that Nokia was beyond salvation, and, for that reason, he started to make Nokia a better acquisition target. But I don't think this was his initial intention.

Tom Gorr

"Elop has been not just the worst Nokia CEO, he's been the worst CEO of any Fortune 500 sized company, ever."

If that is so, why is Microsoft taking him on? Surely they can see the figures?

They take him, because he did what was asked, and executed to the dot. For Nokia, he was a bad CEO. But it was all part of a plan and calling him stupid, is waste of breath. He is clever enough to get things done, and he managed most he set out to do.

zlutor

@Tomi: Any opinion on this: http://mynokiablog.com/2013/09/30/helsingin-sanomat-on-stephen-elop/comment-page-1/#comment-975601

“I base this on what professor Seppo Ikäheimo from Aalto University said in the YLE’s “A-studio: Talk” show this week. He said that after reading the public information about the original and revised CEO contract he cannot see any reason that the selling of Nokia’s feature and smartphone business would trigger the change of control clauses in the contracts. He says the only reason for paying Elop, based on the contracts, is that Nokia has some somehow breached the contracts. And I think the breach is that Nokia fired Elop.”

Spawn

@Tom Gorr

> If that is so, why is Microsoft taking him on? Surely they can see the figures?

Because at the end, with the cheap Nokia sell off to Microsoft, he saved WP and keeped a path forward alive.

There where and are alternate, better, bids on the table. There are still many alternate options. This chosen option, Elop spend many time on to make happen and cash the $25 millions, was saving a billion dollar investment. Microsoft says thanks and with taking him on (and even being as unrealistic as naming him a Microsoft CEO candidate) they also protect the dirty story behind.

> They take him, because he did what was asked, and executed to the dot.

Yes but he was asked to execute that plan B only after plan A - the Lumia disaster - failed thanks to him. At least he successfully applied plan B. Point is all his earlier dones are related to either plan A or plan B. So, those two options where on the table to begin with. Any alternate, any other option, was going against. He perfect combined them by moving Nokia all-in on WP and burning everything else along the way.

@zlutor

> after reading the public information

The public informations... What about for example all the MicroNokia-deal contracts which very likely contain all kind of extensions?

> And I think the breach is that Nokia fired Elop.

And no announcements? Possible that this, keeping silent, ismanother aspect of some of the secret contracts.

RottenApple

@Olav:

"RottenApple, Symbian's days were certainly numbered but it was doing well."

Isn't that a contradiction in terms? Either it's doing well and no actions are needed or it's not doing well enough which indicates that something needs to be done.

"However, it was not the only or last option left. You have to take into account Meltemi and Meego, which Elop killed."

I know. I was criticising the attitude of the linked article which clearly shows a delusional view of Symbian.

Had Symbian been such a great OS, all Nokia had needed was a UI facelift and some more modern hardware and they'd been set for the coming years.

Baron95

Comparing OPK's performance in the GSM-ETSI-ITU dictats bubble era of low and stable competition, to Elop's performance in the hyper competitive era, when iPhone and Android were exploding from a few countries and operators to global presence is ridiculous.

In OPK's era there were no deaths of smartphone of mobile phone makers. Palm, RIM, Windows Mobile, Nokia, DoCoMo forked Symbian OEMs, Ericsson, LG, Samsung, etc were all hoping along.

After iPhone started going global, and Android emerged as a viable alternative for the operators that couldn't get the iPhone, the world changed.

Since OPK left, Palm/WebOS, Rim/BBOS, Windows Mobile, Moblin, Bada, DoCoMo OEMs, Ericsson, etc all died, exited or are near death.

After the iPhone and Android OEMs came on the scene, the battle was not for a couple of points of share - it was for survivable.

Elop steered Nokia better than Palm (dead), RIM/BB (near death), Ericsson (exited), NEC, Fujitsu, Sharp (decimated), etc, etc, etc.

Nokia under Elop only had two choices. Become a Google OEM for Android and face massive execution pressure from Samsung, Huawei, HTC and the likes, or join Microsoft, at the ground level, with some incentives.

Nokia could *NOT* prosper under either option, as I said back in 2010 - Nokia was finished. They had been disrupted and had no way to recover, no matter what they did.

Elop was hired to downsize and re-emerge at a much lower volume level. That he did. The financial management of Nokia has been nothing less than outstanding. How many companies do you know that lose 50% of their revenue streams and still manage to maintain cash position and not increase debt?

Elop got the needed divorce from Siemens going, and is selling the mobile unit to the only company in the world desperate enough and with enough cash to pay anything for it.

Compared to its peers it is a decent outcome. Comparable to Moto's exit to Google. And much better than RIM/BB, Palm and the others.

Nothing to see here folks. Nokia's fate was sealed in 2009/2010 when the iPhone/Android duo broke out of the few countries they were in and chased Nokia and RIM around the world for extermination.

Henry

Hi to all, I would do some remarks from 'inside' regarding Symbian just before and after Elop's arrival. I was in the design team of Symbian products at that time. When he arrived Nokia had just launched the first Symbian3 capacitive touchscreen products (N8, C7,E7). The products were received well from an hardware point of view, but the sw resulted to be disappointing for the consumers, especially the Internet browser. The main problem of Symbian was simply that it was designed few years before Android, and resulted very difficult to modify (and debug)for multimedia applications. So the sales we had in the first months were decent, but inferior to the expectations. Nokia had obviously lost appeal respect to Apple and Google. Obviously Nokia knew it and were coming new OS, Meego in front of all. After the famous 'burning platform' speech we began to see a steep decline in the sale of our Symbian products, because the carriers didn't want them and the sw was not even liked too much. I remember that it was very frustrating for us, after a lot of effort and time spent in the lab. In my opinion one of the 'hidden' ways in which Elop steered forcedly Nokia towards Microsoft was not only dashing internal OS and refusing to try Android, but also making redundant 'in advance' thousands of skilled and experienced engineers. In the first round (end of April) just after the announcement of Windows for Nokia he fired 7000 people (about 3000 thousands were sofwarists, moved to Accenture, whose majority was anyway made quickly redundant by Accenture), and closed straight two big phone development centres (Copenhagen and Farnborough in UK). Most of the people made redundant were skilled and experienced designers, that could have easily diverted to other 'Plan B' projects. We had other redundancies during 2011, and there was another big round of redundancies (about 10000) in Spring 2012, when Elop cancelled Meltemi, shutting down also Ulm centre, that had a direct role in the development. In summary, the strong reduction of resources made in any case impossible for Nokia to develop serious product lines with OS different from the one in force (Windows), if not killing it, and made Nokia fate bound to Windows one. It would have been possible to do something different in parallel, it was not done and so we'll never know what would have been Nokia now with an Android or a Meego line on the market.

RottenApple

For god's sake, Baron, please stop spreading your anti European FUD!

When Elop took over, Nokia was still dominating the non-US market. Samsung was peanuts in comparison.

So, please, what on Earth made Nokia so much inferior to Samsung had they had to compete on even ground?

Nokia was out-executing Samsung easily for the previous decade, so please, why would they have stood no chance against Samsung? Nothing you said gives a good explanation for it.

Nokia already had the market, all they needed to do was stuff the channel with desirable products and they'd have won by default.
People were WAITING for Nokia to go Android - yes - imagine that! Most Europeans who were planning to upgrade would have eagerly waited a bit if they could get a Nokia phone instead od Samsung. Well, as Elop decided it wasn't to happen - and the result was an instant crash. With their past reputation they would have easily crushed Samsung who aren't really that popular, just considered the least of all evils.

But I guess that's something an American will never be able to understand.

winter

@RottenApple
Boron95 plays according to the book: Repeat lies until they have become "true" and never ever admit counter arguments and fact even deserve mentioning.

So Vatar

@RottenApple
Baron does not add any new insight to the discussion. He repeats the same stuff over and over again and hopes that something sticks. He is not open to an honest discussion, has his pre-determined picture of the world, and interprets everything using only his narrow frame.

He is sometimes funny and sometimes just over the top. But he is not to be taken seriously. I would just ignore him.

(And Tomi, as this post has really nothing to do with OPK vs Flop please delete it once you've read it. Thanks.)

RottenApple

"He is sometimes funny and sometimes just over the top. But he is not to be taken seriously. I would just ignore him."

I know, but I still believe that more casual readers have to be made aware that he's a plant intent on promoting American business interests. :D

Baron95

@Henry - OMG - Up until mid-2011 Android had less than 500 - FIVE HUNDRED - people working on it. You are telling me that Nokia had tens of thousands of people working on phone OS. My god man - don't you know how ridiculous this sounds.

Are you seriously suggesting that the reason Nokia could not develop a proper OS is because they ONLY had tens of thousands of people working on it?

If anything, I have been critical of Elop for not firing Nokia dead wood faster.

The company is bloated beyond all reason. Elop only scratched the surface. Nokia needs to let go another 20,000 people - at least.

Baron95

@Rotten "When Elop took over, Nokia was still dominating the non-US market."

Really? What market share did Nokia have in Japan - then the #2 market after the US?

ZERO - non competitive. So near ZERO in the US (#1 market), ZERO in Japan (#2 market).

And declining share in the EU market (#3).

You don't get it.

The ONLY share comparisons that matter were markets where the iPhone and Android were substantially rolled out.

When Elop took over, Apple was only for sale in about 40% of the operators that Nokia was on sale on. The writing was on the wall. Apple and Android were decimating Nokia and RIM carrier, by carrier, once they launched iPhone and Android.

Nokia and RIM circa 2011 ran out of places to hide.

To see what the impact of adding an operator. RIM, HTC, Moto, LG were nearly decimated in the US once Verizon and Sprint launched the iPHone and Samsung launched the GS3. Android share in Japan in the 3 months ending in August is already below 50%, and will crater now that DoCoMo has the iPhone. When China Mobile launches the iPhone it will be another discontinuity.

And I'm not sure what anti-European rhetoric you are talking about. Is there any company from continental Europe in the top 5 of any technology category related to smartphones, OS, ecosystem?

You should feel lucky that Microsoft is keeping the sole remaining European player in smartphones alive.

NW

Hi Tomi,

Is there any possibility that the Nokia board could reject the deal? If they do, presumably Mr Elop will be back at Microsoft and his successor will have to pick a new OS such as Jolla for the future :)

Henry

@Baron95
I've never written what you are saying, that is that Nokia had tens of thousands of people working on OS. Android had 500 people because they worked on the sw design of the OS alone.
From what you write, it's pretty clear that you don't understand so much of mobile communications and engineering in general. A phone is a very complicate product: the design implies not only sw for the OS, but also mechanics, electronics (platform design), IC design, radio frequency, audio and acoustics, digital signal processing, quality control and planning, platforms, integration (mechanical, sw and hw), production control, reliability test,also management, planning and marketing (that are not strictly engineering)..only a part of the people involved worked in sw for the OS. A phone is a very small product, but very complicate. You don't need thousands of people to design an OS, so didn't Android, you can need thousands when you develop a complete line of products around it, because are necessary all the functions I've just mentioned. Nokia had employed a lot of people also because they launched many products every year; obviously, if you launch less products, you'll need less people. To summarize, you have completely misunderstood my writing. I don't know how many people should leave now, if anyone has to leave, but you cannot claim that 'another 20k people now need to go', showing at the same time poor knowledge of technology processes.

Giacomo Di Giacomo

@NW
It is not the board that is going to decide about the sale, but the shareholders. Who are the controlling shareholders, though, I do not know. Most of Nokia stock is held by institutional investors, who usually do not vote. So, there is a fair chance that the controlling shareholders are the board members themselves, thanks to the stock options they got. Which means that they will sell Nokia D&S to M$ for a ridiculous price in return for personal profits, therefore robbing the other shareholders. Note that this is just speculation on my side and I do not have any source for this.

Patrick

@NW "Is there any possibility that the Nokia board could reject the deal? If they do, presumably Mr Elop will be back at Microsoft and his successor will have to pick a new OS such as Jolla for the future :)"

Giacomo is spot on but I'll also add that if the deal (although highly unlikely) doesn't come through, Elop will return to Nokia as CEO. Talk about a catch 22, eh? :D

The shareholders event might be quite interesting, I wonder if they will hold a decent Q&A? It seems like the Finnish people, albeit too late, kind of woke up and realized that Nokia alone stands for over 40% of Finland's total R&D.

Add some very dark clouds in the economy of Finland to the picture as well as the total wipe-out of Nokia market share & profits under Elops (and board) reign - Might be a really nice show.


e_lm_70

Disappointed.

Once again, my comment got deleted by Tomi.

I just wanted to make more visible the fact that judge a CEO alone is not enough.

The CEO and the board are elected by mayor share holders. This aspect has been too often minimized or not consider by Tomi.

If you miss to analyze who is behind Elop, the role of Jorma , etc ... you are missing the real actors and the real motivation.

On the other side the comment from Baron95 the Micro & Soft troll from West Cost that are totally off topic and off sense ... are abundant here.

Bye

e_lm_70

Thomas

After the burning platform, there was a fire sale. And here we are.

The road not taken -- betting less dramatically on multiple software product lines, such as Android, forked Android, WP, Symbian, Meego -- might have kept Nokia in the position where Samsung is today, possibly with better profitability and a stronger market leadership. But it is of course an open question whether hardware-oriented Nokia was ready to execute on such a software-heavy strategy. Arguably, the technical dithering prior to burning down their platform indicated that they were not.

Spawn

Gentlemen, Ladies, baron95,

Nokia is done,
the talent is gone,
left are failures,
assimilated by the falling empire,
talent moved on the sailors,
fullfiting our desire,
Jolla!

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