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« Compare Elop to his Predecessor Kallasvuo. One was Bad. One was The Worst Ever | Main | In Nokia Aftermath, Jorma Ollila Interview by Helsingin Sanomat »

October 02, 2013

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bjarneh

Jolla sports a dual-core I think

Blackberry has some issues; who tries to sell a device without any distribution at that price? For people to fork over $900 (the cost in Norway) for a phone they have to be able to hold the device and see it first hand, and even then it's perhaps too expensive.

Baron95

"So the largest Finnish handset maker now is Jolla"

Thanks for the laugh!!!! Zero devices shipped and it is the largest?!?!

So I guess Nokia is no longer Finish?

And I guess you don't know that Twig ships lots of handsets including smartphones with apps and GPS tracking apps. And it is based in Salo, which next time I checked was still in Finland.

Vikram

It isn't a coincidence that Nokia and Blackberry went down at almost the same time with the same patter, and that had everything to do with Android. Android hurt Nokia just as it hurt Blackberry.

Both companies had out of date OS's that did not feature full computing platforms with multi-touch standards-based browsers. That's what killed them. That is why there is no coincidence that the graph of Nokia and BB success and decline coincided. Both appeared to be very successful in 2010 and then went down together - put their performance side by side and it is eerily similar.

Of course, it was Android, but Android was a reaction to iPhone so it really is iPhone and rise of the modern smartphone that killed Nokia and BB since they were on antiquated platforms that couldn't compete. As Lazardis of RIM said when he opened up an iPhone, "if that thing catches on, we're competing against a Mac, not a Nokia..." and that's what happened.

Nokia and BB were unable to compete with a Mac that was in a Phone shape. That's what mosly killed them, not simply bad management alone.

winter

@Vikram
Both BB and Nokia could have released Android phones. It was a management decision to stick to an unwanted OS.

khim

In hindsight it's obvious. Apple could never kill neither RIM/Blackberry nor Nokia for one simple reason: it does not make cheap phones and thus could never kill a manufacturer who's willing to make them.

Android killed them. Or rather: finger-driven touch phones have killed them. Apple was not the sole inventor of such phones, BTW. There was LG Prada, HTC Touch and probably others. HTC Touch, in particular, was quite successful: it's sales were half of iPhone sales which is quite good if you'll recall that we are comparing high-profile US company with huge marketing budget and a lot of fans to a small Taiwanese manufacturer.

It's funny but I think that in alternate reality Nokia and RIM/Blackberry had another year or two but ultimately would have ended in even worse position. Why in a world without Apple Nokia and RIM/Blackberry would have had another year? Apple sharply raised the quality mark. Android was planned for Blackberry-like "Sooner" devices and while "Dream" was developed in parallel it was planned for later date. "Dream" was finger-diven from the start (it was done by the same company which started selling finger-driven touchphones in the same month as Apple, remember?), but "Soomer" was planned to go on sale first. After iPhone "Sooner" become "Never" and "Dream" became HTC G1. So yes, Apple speeded up the process by a year or two, but ultimately it have changed little in the grand scheme of things.

But iPhone *also* spurned RIM/Blackberry and Nokia efforts to produce a touch phone replacement! They ultimately failed, yes, but at least they have tried. Without such wakeup call they could have continued for a while with old paradigm till sudden collapse in about 2014-2015, but ultimately the effect would have been the same.

P.S. Actually I'm not so sure about Nokia in this alternate reality. RIM/Blackberry only started doing something after look on iPhone, but Nokia had Nokia 770 in 2005! Of course it was carefully positioned in the niche where it was basically useless (it was not even a phone!), but they kind of developed a replacement already. It's not easy to redesign an UI from stylus to finger and I'm not so sure Nokia with it's bureaucracy could have managed to do that in time, but hey in OUR reality that did it just one year too late! Perhaps without Apple they actually had a chance... but probably still not: till Apple's "wake-up call" development of Linux-based replacement happened at truly glacial speed in Nokia, I doubt they were ready to fight younger companies who operate at "Internet speed". Apple fastened up the whole story by a year or two but did nothing else.

Minna

@Baron95: "So I guess Nokia is no longer Finish?

Exactly. For me and probably for many other Finns Nokia phones division ceased to be Finnish the moment it was announced that it was sold to Microsoft. The only Finnish things left in Nokia phones division now are the logo colors and the people who still work in their Finland-based units (until those get surely shut down within the next 2 years). The last Nokia phones no matter what brand name is placed on the cover were produced in August 2013. There will be no more Nokia phones produced any more unless the Nokia divisions which are still independent do a re-entry into the handset business when they are contractually allowed to do that. Production of the phones was already for a large part outside Finland. R&D and headquarters were still in Finland and there was therefore plenty of Finnish know-how going into the Nokia phones. But under Microsoft all major decisions will be done in the US and the countdown to relocation of departments to the US has already started (even though they don't of course admit that publicly yet). So Tomi is right, Jolla is now the biggest Finnish mobile handset maker. Twig doesn't count, as they have only integrated a mobile phone into their personal alert devices. They are not in the phone business as such.

I'm now saving for a Jolla phone, as it's a bit above my budget, but I want a real Finnish "old Nokia" quality phone. My current phone is Lumia 620, which I bought for 4 reasons: it was in the right price class with decent specs, it was made by Nokia so I trusted it not to break from the first fall, my old 2nd hand N97 (which I liked due to qwerty) was starting to break and I hoped that if the new Lumia series became a hit, Nokia could turn their downfall and ditch Microsoft. Like I said to my colleagues the day the news broke, all that is good in my Lumia is made by Nokia and all that is bad is made by Microsoft. Now that Nokia phones are sold to Microsoft, I will have no reasons whatsoever to buy Lumia branded phones anymore. My phone had actually survived falling onto the ground about once every 2 days for 6 months without any problems. I don't think that it was just a coincidence that the day after the news it fell in a way that the screen broke and had to be replaced. I feel that my Lumia 620 was attempting suicide out of shame for the betrayal of its maker.

Our former President Urho Kaleva Kekkonen was surely turning in his grave when the sale of Nokia was announced on his birthday. He was a big believer in developing know-how and technology in Finland so we would have competitive export industries and also that we wouldn't be completely dependent on the fickle business interests of other countries. And on his birthday Nokia was donated to Microsoft with that Flop lying in our faces about how "Nokia and Lumia are still Finnish". We're not fooled that easily.

foo

> In the Elop saga itself, he's also stuck in a divorce, his wife wants half of the 25 million dollars Elop grabbed
> from Nokia after wrecking its main business. But that gets onto the side of soap opera, I won''t comment further
> on the divorce side.

Sometimes the divorce is performed to secure part of the money, in case of lawsuits.

Elop may be transferring a good part of his wealth to his wife, as part of the "divorce", so, when he faces a lawsuit, they don't loose all the money.

This is so common, and the timing so convenient...

Vikram

@winter (I had replied before but it didn't post)

I agree with you on that had BB or Nokia shifted to Android that they would have been much better off. That was clearly a decision that should have occurred years ago and that is at management's feet and their fault.

I meant to more clearly point out that given their actual strategy, neither company had a chance to succeed because iPhones and Android devices were true mobile computers and that they couldn't compete in that arena.

I disagree with Tomi a bit because he has in previous posts castigated Elop, but Tomi has never advocated that Android be he right strategy to follow. Instead, I get the impression (maybe I'm wrong) that he felt that if Nokia kept on their Symbian3 or MeeGo strategy that they would be better off somehow, when MeeGo was not ready and Symbian3 was a dead end.

My point is that had Nokia avoided Microsoft, that they would be in a worse position than they are in now. Symbian3 or MeeGo was no good option.

You can trot out a checklist of features and say that Nokia did everything before the iPhone but features isn't usability or utility. The fact is that the iPhone and Android devices were far better products than what Nokia (or BB) shipped because they were true mobile computers with multi-touch functionality and a developer ecosystem that was better to develop for than what Nokia had at the time, or were able to produce.

Nokia wasn't a computer OS or software maker in the class of Apple or Google. When phones became computers, Nokia didn't have the people and expertise to compete.

Elop went to MSFT as the only other company with the ability to develop such a platform in order to differentiate but the issue was that MSFT was too late and too slow...though interestingly the low end Nokia smartphones are getting some traction.

Elop's mistake was to go to MSFT. Nokia should have jumped onto Android and with the beautiful Nokia hardware I have no doubt that they would be the leading Android maker. Blackberry should have done the same thing and added BES on top of Android.

foo

@Vikram

> It isn't a coincidence that Nokia and Blackberry went down at almost the same time with the same patter,
> and that had everything to do with Android. Android hurt Nokia just as it hurt Blackberry.

First of all, the patterns were quite different: Blackberry died a slow death, whereas Nokia collapsed in almost one year, and lived in the support line, thanks to Microsoft's injection of $1B / year, for the next two years until acquisition.

Second, they took different approaches:

Blackberry bet in the next version of their tested and proven operating system to fight Android and iOS; Nokia (Elop) bet in a third-party OS.

Now,

Choosing a third-party OS wasn't a bad option per se; the problem is that Elop opted for the least popular OS available at the time.

Elop didn't talk and act as Nokia CEO, but as Windows Phone ambassador, going as far as inviting competitors to join the "ecosystem"!!! (Which wasn't owned by Nokia, but Microsoft).

If everything went according to the plan (best case scenario), Windows Phone would have by now 20% of market share, and Nokia would be disputing this market with Samsung, HTC, et al (because Microsoft and Elop wanted them).

So:

The decision to change the OS was not bad. The execution (picking WP, the burning platform memo, Elop Effect, etc) was terrible and destroyed Nokia.

Winter

@Vikram
I see your point. For BB, it might have been a rational bet to go for their own OS and not for Android. The odds and expected pay-off might have been good enough.

For Nokia, I cannot see how throwing away their independence for WP could have been a rational decision. Unless they got a large company bribe. With Android, they could have kept control over their models and specs. By going WP, they gave away every form of control to a company psychopath.

Herer

@vikram "when MeeGo was not ready"

Meego was more than ready, certainly much more ready that WP, and of course they could have sold it more actively, rather than burying it in emerging markets.

foo

@Winter

> For Nokia, I cannot see how throwing away their independence for WP could have been a rational decision.
> Unless they got a large company bribe. With Android, they could have kept control over their models and specs.
> By going WP, they gave away every form of control to a company psychopath.

Great point, which completes what I said before:

Choosing a third-party OS was not a bad decision per se; choosing Windows Phone was a *terrible* decision in many aspects.

WP7 was not popular, and when 7.5 was released it still had 101 flaws that made it worse than Symbian!

But, strategically speaking, Windows Phone was bad in two aspects: independence and differentiation.

According to Michael Porter, independence and differentiation are two key competitive advantages that any company should cultivate, not throw away.

But when Elop made the partnership with Microsoft, he basically turned Nokia into Microsoft's slave; even the hardware specs were controlled by Microsoft, reducing the differentiation among players.

Could this be any different with Android? Of course. Android manufacturers can choose their specs, and, if they feel Google is not a good partner, they can fork the OS. (Amazon did that with Kindle Fire).

Please read Michael Porter's Competitive Advantage (http://en.wikipedia.org/wiki/Competitive_advantage) and Five Forces analysis (http://en.wikipedia.org/wiki/Porter_five_forces_analysis). I consider these concepts key to understand why the partnership was wrong from the start.

RottenApple

@Leebase:

"To this day it is the iPhone that's driving the pace. "

Really? So why did they completely miss the phablet market then and left it to Samsung without a fight?

But sure, it's not Apple, doesn't fit into your view of things and needs to be ignored.

Apple claims to innovate - but the true innovation these days is coming from elsewhere. Like everything since the iPhone 4 the 5S is just lame. There's nothing ground breaking here for the user. Even 64 bit is merely a useless bullet point on the spec sheet. By itself it doesn't offer anything of value as even on PCs most software is still 32 bit.

Apple is just lucky to be able to sell incremental upgrades as innovations because its customers are too brainwashed. Let's be honest about the iPhone 5S. In what way is it better than its predecessor? It all boils down to one single point: 'It's faster!' That's not innovation in my book.

Bruno

Vikram,

Maybe meego wasn't enough to save Nokia, but now we see, that wp wasn't either. And this is one bad decision that a multibillion company CEO couldn't afford. Flop did it and boy he was wrong. Plan B? We'll sell Nokia(!?). Come on, who runs this big company like this? This is not a game of monopoly, if you go bankrupt, flip the board and go watch tv.
Nokia had it's options, meego, android, even wp, why not and after year or two see where it goes.
Partnership between Nokia and Microsoft was a big lose-lose for Nokia and a big win-win for MS. Why? If wp ecosystem succeeds MS will get money from ecosystem, from licenses on each sold phone. If not? Nokia stocks will fall and they'll buy them cheap. On the nokia side, if wp really do succeeded, they still have licenses to pay and more competitors in ecosystem and no alternative. Sad so, sad...

foo

@Tomi

> Sailfish will allow Android apps to be used, giving Jolla an interesting play, being kind of compatible with Android while not being Android.

Now,

What's the competitive advantage of Sailfish over Android?

It definitely had some advantages over Symbian, and even Windows Phone, and could have been successful if Nokia had put its weight behind it.

But what is its purpose now?

RottenApple

@foo:

The sad fact of the matter is that Sailfish's only reason for existence is to gobble up all those disgruntled ex-Nokia users who wouldn't dare switching to an Asian manufacturer. In the whole picture it will be an irrelevant non-factor. To become a surprise success it would have to outclass both iOS and Android by a wide margin - and have some powerful company backing it.


foo

@RottenApple

To quote again Michael Porter, there are two major ways to stay relevant: differentiation (outclassing the competitors) OR becoming a cost leader. The third alternative is to become a niche player -- if you have something unique to offer to a small part of the market -- or disappear.

Apple is in the differentiation camp; Android started in the cost leadership camp, but is quickly moving to cover all the bases. Windows Phone seems to be trapped between the two strategies -- which usually is an uncomfortable position to be.

And Sailfish? Unless they provide a huge cost advantage, they are condemned to disappear. Unfortunately.

Baron95

@Rotten "So why did they completely miss the phablet market then and left it to Samsung without a fight?"

OMG - You still don't get it, do you?

Apple will NEVER EVER try to be all things to all people. There ENTIRE strategy is to pick one category (e.g. High end super light notebooks), make them the best, make them desirable, make the buying and ownership experience great, and have the least number of SKUs (variations) possible to drive incredibly high margins. That is their business. END.

They are no in the market of low end PCs, fully expandable tower PCs. Yes - they gladly ceded that market to Dell and Lenovo, etc.

Similarly in smartphones (or more accurately smart portable/mobile computers that make calls).

Samsung has a different strategy. Their strategy is toe have multiple form factors, multiple OSes, multiple price points, blanket the market with advertising/promotions, etc. That is also a valid strategy.

Apple has its strategy. Samsung has theirs. So far, Apple, makes twice as much profit from mobile sales then Samsung.

So tell me again, why Apple needs to do something different and chase Samsung?

Every single time, you look a unit counts you will arrive at the wrong conclusion. Every single time. Chasing units killed Nokia just as it killed GM. Chasing profits instead, worked well for Apple, Prada, Porsche, etc.

Nokia and RIM could not EVER copy Samsung's strategy. Samsung's strategy works for Samsung. Not for others. Samsung makes money all around on the components (screen, memory, processor, etc) - driving volumes is good for them. For RIM and Nokia it would be a disaster.

Most people here forget that Apple completely cornered the market for flash memory and to a lesser extent capacitive touch screens in 2007-2009. That is part of the reason why Samsung took over the lead. Of all the smartphone vendors, they were the only ones that could get flash and screen capacity on line quickly at low enough cost.

Other than Samsung, all the other Android vendors have roughly the same western market share that Nokia has now. No one did much better with Android. Samsung is an outlier. And so is Lenovo, Huawei, ZTE (since they have been insulated in China).

The entire discussion on this blog is very high-schoolish. Actually - worse than that. My kids in high-school can do a lot better.

Karl

How many handsets has Jolla produced? 25? Has Nokia's devices already been sold?

Karl

@foo
WP was a bad choice, as Android is the king. Who has made money on Android except Samsung, who controls the components of all devices?

RottenApple

@Baron:

No, you are not correct. Apple missed the Phablet market like everybody else.

When Samsung released the first Note phone, the general attitude of the entire industry - including Apple! - was dismissive. The general consensus was 'nobody would buy such a huge brick.' and they happily went on their previous business.

And let's be clear about one other thing: Being profitable does not mean your business is healthy. Just look at Nokia in Q4/2010 for the opposite. The numbers tell that it was Nokia's most profitable quarter and look where they were just 3 months later. Any good business is not betting on a single product. Right now it works for Apple but there is no guarantee it will continue endlessly.

You can deny all you want, but Apple made a big mistake when they missed the large screen business. It wasn't a mistake that seriously harmed the company but it was a mistake nevertheless and even the post-release upgrade craze that currently runs rampant can't mask that. For that the numbers of recent quarters were too obvious with Apple having lost approx. 3% market share across the whole year.

Baron95

@Rotten - Apple is not merely profitable (and comparing it to Nokia barely profitable is ridiculous. Apple is by far the most profitable company in the industry. With more profits than all their competitors combined.

Your claim that Apple needs to change its strategy and copy others who are less profitable than Apple is, on its face, ridiculous.

It is like a super model going to have plastic surgery to look less pretty and more ugly like the average woman. Ridiculous.

winter

@Boron95
The time they are a changing, but your script is not it seems.

Anyhow, Apple has become like LVMH, hugely profitable but irrelevant to all but a minority of humans.

Baron95

@ WInter - Apple has become like LVMH, hugely profitable but irrelevant to all but a minority of humans.

And that is bad, why?

Has Apple EVER been relevant to a majority of the 7,000,000,000 billion humans on the planet?

Even in the US, Apple has only 40% of market share on phones. And it is at AN ALL TIME HIGH, not declining.

But whatever share Apple gets, is a by-product of their high end/desire strategy. Apple does not have a goal to achieve X% market share. They have a margin goal and they have a product/experience excellence goal. But no market share goal.

This is now a kindergarten blog - not even high school anymore.

Now Apple is "failing" because it is not longer relevant to the majority of humans or 3,500,000,000 individuals.

This Blog is the best comedy ever. Thanks.

AndThisWillBeToo

I do have to admit I visit this blog just to see Baron & leebase taunting others.
Entertaining.

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