Silly Silly Forbes: No its not Nokia's "Motorola Moment".. Very poor reporting

This is very incompetent reporting by Forbes. They get essentially all facts wrong on which they base their analysis. Very silly Forbes, reporting this sloppy will hurt the reputation of your magazine.

Lets examine the evidence shall we.

Parmy Olson wrote an article entitled "Nokia's Motorola Moment" today on 17 July 2009. In the article Forbes suggests that the "global champion is lagging behind an innovation shift spearheaded by Apple and even Toshiba". As evidence the magazine says that there is a "big shift happening in the mobile sector, with consumers more interested in easy Web browsing and applications than the look and feel of their phone."

Then Forbes quotes a clearly clueless analyst Lee Simson of Jeffries and Co, saying "All these guys who have nothing to do with mobile are coming into this space with better handsets than Nokia"

Of the trend to mobile phone and PC convergence, Forbes quotes the same Simpson who claims that Nokia doesn't offer details.Then Forbes suggests Nokia is in a position similar to Motorola a few years ago, and Nokia now is "failing to catch on to other innovations that are taking place in the handset space"

Forbes says Nokia was late to clam-shell phones, late to touch-screens and late to the applications store. Then they again quote clueless Simpson saying "there is nothing innovative about Nokia"

Forbes concludes observing that there is a trend in the West to smartphones, and mentions the iPhone and RIM's Blackberry as devices that Forbes thinks are successfully capturing this smartphone opportunity.

WHAT DO YOU THINK, TOMI?

What a load of crap. Rarely have I read a major publication get essentially all of its points so totally wrong. What is wrong with Forbes editors and Parmy Olson to not do the simplest, most basic research into the facts. Lets go through them one by one.

Lagging in innovation (vs who? Apple?). Forbes claims clearly that Nokia is lagging in innovation compared to Apple's iPhone. Now, the current iPhone 3GS is yes, a very impressive smartphone. Lets look at a few of the innovations we witnessed in this newest model, one month ago? Compared with the iPhone 3G from a year ago, the "innovative" 3GS upgraded its camera to 3 megapixels. Nokia is clearly not as innovative, as Nokia's first 3 megapixel cameraphone (and yes, smartphone) was released in 2006. The 3GS now added video recording ability to the camera feature of its phone. When did Nokia's (smartphone) cameraphones all incorporate this "innovative" ability? in 2004. Apple now offers video recording at 30 frames per second at so-called DVD quality. First Nokia smartphone to have 30 fps DVD quality video recording came out in 2006. The 3GS added MMS picture messaging support in 2009. Nokia's cameraphones have all been MMS compliant at least since 2003 (proabably 2002, I don't remember exactly). Apple added Autofocus in 2009. Nokia had autofocus early in 2007

Note that these all are improvements to Apple's "innovative" phone, after two changes, where each of these features existed on Nokia smartphones before the original 2G iPhone had even been launched. Who is innovative, if it took Apple two tries to get these features included. Who is following whom?

What of the previous edition of the iPhone? How innovative was the iPhone 3G in June of 2008? It offered three signifcicant changes to the handset (I'll talk about Apps store later), ie it added 3G, GPS and it added TV-out. Again, how does this innovative phone maker compare with the "follower"? Nokia's first smartphones with 3G high-speed connectivity were released in 2003. GPS? The other hot innovative feature of iPhone 3G? Nokia had it in the N95 more than a year before the iPhone 3G, in fact before the original iPhone 2G. And TV-out? Nokia offered TV out from 2006.

I can appreciate the admiration for Apple, and that its phones are sexy and extremely user-friendly and yes, its touch screen technology was quite innovative (back in 2007) but what have you done for me lately, Apple? Essentially every improvemnt to the iPhone has been a copy of Nokia innovations from years earlier. Not months, years. Six years in the case of MMS... Who is the innovative phone maker?

BUT WAIT, IT GETS WORSE

Really incompetent reporting, shame on you Forbes. Lets go on, it gets worse.  

Big shift to web browsing. Yes, there is a big shift to web browsing. But Parmy Olson, Apple did not invent this shift. Apple did not cause this shift. Apple did not originate this shift. Apple did not expose this shift. At best, in those markets where the iPhone is popular (mostly in lagging mobile telecoms markets like the USA), it has helped move this shift along. In Japan for example, where previous iPhone models have been total duds in the market (only now, the 3GS is finally accepted in Japan as an acceptable phone for that market), the existing internet usage has already shifted to mobile phones, and its not just the majority of users who now access the "real" full internet on their phones, but also the bulk of internet surfing time is on mobile phones. And this had happened by 2006, long before an iPhone. So no, this is not an Apple innovation. But yes, Apple did bring a smartphone to the market, that could access the real unrestricted full internet. And yes, Apple offered this on its iPhone already back in 2007. That is our "innovative" company.

Now, when did Nokia learn to offer the full unrestricted (non-WAP) internet on a cellular phone? How long did it take for Nokia to learn to do this amazing innovation? Not in 2007, not in 2008, not in 2009. In 1997 - exactly 10 years BEFORE the iPhone, Nokia released its first (pre)smartphone, that had full internet access, and yes, a similar width VGA screen 640 pixels across the screen, as Apple has today. Now yes, back in 1997 the Nokia 9000 Communicator did have a monochrome (black-and-white) screen, but hey, if you want to acknowledge a "big shift to web browsing" and then accuse Nokia of being less innovative than Apple - Nokia did not only do this before Apple, Nokia was the world's first phone to offer this, and yes, that was a decade before Apple. Who is the innovator? When the original iPhone launched, Nokia had about a dozen smartphone models that all featured the full internet. Not with the touch screens, but if the point was that somehow Nokia is not innovative because it missed the "big shfit" to web browsing, this is patently wrong. Nokia INVENTED this shfit. I personally wrote the first white paper when I was employed at Nokia, in 1999, on how to do the internet on cellular phones. Don't tell me Nokia has not seen this shfit coming - and done massive amount of education over the past decade before the iPhone, to teach the industry how to do it.

You know what, Parmy Olson. I have this nagging feeling that I've actually read abou this somewhere, quite a while back. Hmmm. Oh yes, a Richard C Morris wrote about the "tech-jammed" Nokia Communicator and how it gave access to email in 2001, for a publication called Forbes.

By the way, that 640 pixels wide Apple iPhone screen is VGA resolution. Now the latest Nokia E90 Communciator (from early 2008) has SVGA resolution ie 800 pixels wide. Makes internet surfing far more comfortable than having columns weirdly re-formated on the screen like on any iPhone that formats to basic VGA. But maybe thats "not innovative", eh? Apple didn't bother to add to its screen resolution in three models. Nokia's E90 is also wider - 4 inches vs iPhone's 3.5 inches, but again, whose counting.

IT GETS WORSE

Big shfit to applications. Yes, there is a shfit to applications. There is a lot of disagreement in the industry whether this is truly a "big shift" as today the "data services" side of the mobile industry (excluding SMS text messaging) is 10 times bigger than total applications sales; and 250 times bigger than total revenues of the Apple Apps Store, and many industry leaders, just yesterday Google's CEO for example, have said data services will  be bigger than data applications. But lets accept this shift. Yes, there is a shift to data applications, and yes, there are many experts who claim this is a "big shift", so lets not squabble about that issue. You can fairly report that such a shift is indeed going on, even if perhaps there is an even bigger shift as well. So apps? So apparently Apple is the big innovator with this "shift".

Apple's Apps Store is one year old. Nokia also has an apps store, it is called Ovi. Ovi launched its applications store in May of 2009. So how severly behind the times is Nokia? Its apps store was launched ten months after Apple's. So while Apple is six years behind Nokia, Apple is still innovative, but when Nokia is that quick-moving that it releases a rival service in ten months, Nokia is "failing to catch on" to innovations.

Yes, really? Apple took 12 months to build a portfolio of about 55,000 applications in its store. In two months, Nokia is already at 20,000 applications. Oh, just to see how impressive that is, Google's Android has 5,000 apps, RIM's Blackberry 2,000 Apps and Windows Mobile 600 Apps. But in 2 months, Nokia is already at 20,000. Is this really a slow-mover who is failing to move and take market opportunities? Really, Parmy Olson? Did you not bother to do the most basic Google search of your topic before writing this drivel?

But lets really look at the facts, who was the innovator in this? Nokia released its Ovi branded mobile services store in August of 2007, almost a year before Apple's Apps Store. Ovi was right from the start announced to be Nokia's all-inclusive store to deliver and to sell mobile services, applications and content. Note this is significantly more than Apple's Apps store in its scope - more innovative - and announced a year before the Apple "innovation". That Nokia did not rush apps to its store reflected its market presense and understanding of its customers - Ovi launched first in Europe and Asia - and it delivered such content and services as maps, screen savers, photos, music etc. And if you bothered to read that quarterly report from Nokia, you'd have seen that Nokia's "services business" (apps, services and content) earns to Nokia royalties in 2009 worth about half a billion dollars. Meanwhile just a week ago, the Wall Street Journal estimated that Apple earns about 80 million dollars this year as its royalty for apps sold at the Apps store. Who is following whom? Who is capturing the real opportunity and who is only pretending?

Even this is not the genesis of customizing your mobile phone with downloaded services, content and applications. The first phone maker to offer such as service did so back in 2000, first with downloadable ringing tones. And that company to offer a software/services store to download content 9 years ago was.. Nokia... This is years before Apple had launched the iTunes music store for the iPod, when the iPhone was not even a twinkle in the eye of Steve Jobs. Who's the real innovator?

And how far-sighted has this been? Nokia started in 2000, expanded the whole decade, then branded its store (as Ovi) as a supermarket for all content, services and apps, and added apps specifically to its store this May. Where are the other of the big 5 (remember, Apple only sells 1% of the world's phones, LG sells ten times that). Samsung released its Apps store in February of this year (and has about 10,000 apps). LG just released theirs now in June. SonyEricsson promises to open theirs in August. And Motorola is so far lost, they have not even announced an Apps Store. So who is really the innovator and how far ahead has Nokia been in this area? They had a dedicated "Mobile Internet Applications" division to the company as far back as 2000.

Now where was it that I read about Ovi a while back? Oh yeah, Parmy Olson, it was Forbes who was quoted about specifics of Ovi in November 2007. And Nokia's first step to allow customization of phones by downloads, in 2001, was actually singled out as being so innovative and exclusive to be for "Nokia customers alone" as reported by Forbes.

BUT IT DOES GET WORSE

(I really hate sloppy reporting, but this is one of the all-time worst and error-filled article I've ever read) Lets continue. Cue clueless analyst Lee Simpson (of Jeffries and Co). The statements by Lee Simpson are so ludicrous that one wonders what is his motivation. Has he bought Nokia stock options and now needs to push the stock price lower? Or is he just incompetent. Lee starts by saying "All these guys who have nothing to do with mobile are coming into this space with better handsets than Nokia."

Who is he talking about? Makers who were not phone makers? So he is talking about Dell? We don't have Dell's phones yet. Or Apple? Or who? HTC is a phone maker. ZTE is a phone maker, Huawei is a phone maker, Sendo is a phone maker. Google does not make phones. Toshiba is certainly not a newcomer to phones (but maybe they seem new to laggard markets like the USA). Panasonic? NEC? the Japanese makers have made Apple-magnitude amouts of handsets annually this whole decade, they are not newcomers (but they've focused on the far more demanding Japanese market recently). Microsoft doesn't make phones and their mobile phone OS has been around for years before the iPhone. Who are your "all these guys" Lee Simpson? If he means the new phone by watchmakers TAG Heuer, then again, that phone is not even launched yet. Who? The only oneof the "all these guys" with "nothing to do with mobile" making "handsets" with a phone on the market, is Apple. And they entered the phone market two years ago. Lee, you are seriously behind with your news about the industry. Perhaps time to get a Twitter acount? But yes, the only maker who was not a handset maker, who joined this industry, and has a phone already on the market, over the past several years, is Apple. The phone we have to consider then, when Apple truly did have "nothing to do with mobile" was the original iPhone, now known as iPhone 2G, back in June of 2007.

Yes, so Lee Simpson, you say these on-phone makers have brought phones that are "better than Nokia". Now was it really? Since the original iPhone launched, Apple has had to fix deficiencies ie add missing elements, of 3G, GPS and TV-out in 2008, and then even that was not enough to make it a full-featured normal smartphone, Apple had to add autofocus, MMS and video recording in 2009. So since Apple has voluntarily added these changes to the iPhone, it goes without saying, that Apple itself felt the original iPhone was not a complete phone.

But a Nokia smartphone released before the iPhone had all of those features in March of 2007, That phone, the N95, also included features that even the latest iPhone does not have, such as a 5 megapixel camera, a flash, a removable memory card expansion slot, an interchangable battery, stereo Bluetooth, Instant messaging, video calling, VOIP (Voice Over IP), 2D barcode reader and FM radio.

Well, maybe thats not fair, I mean, would this phone be covered in a magazine like Forbes? Or wait, Parmy Olson, The N95 phone was considered so relevant, that it actually was covered in Forbes well before the iPhone, in 2006. In addition to listing its main specs, and specifically four of those that the iPhone 2G would not later have - 5 megapixel, DVD video record, GPS and 3G - your collegue Bruce Upbin raved about it in these words, "the blogosphere is already drooling, and justifyably so."

The only recent "newcomer" who released a significant smartphone was computer-maker Apple. Yes, that phone had impressive innovations, in particular the size of its screen, touch-screen interface and accelerometers, all which have been since copied also (not touch-screen clearly yet as well) by Nokia. Three real innovations. But Nokia's equivalent model at the time had 6 major features that Apple has since copied, and 10 further features that the iPhone did not offer. When Lee Simpson says the non-phone-makers have come into the phone space and made "better" phones than Nokia, it is 100% totally not true. Apple itself had to fix the problems of its first iPhone. And obviously now, we can't even consider Apple as "guys who have nothing to do with mobile" when Apple has been selling phones for 2 years. No, this is totally bogus. Lee Simpson you are incompetent!

BUT IT GETS WORSE STILL

PC and phone convergence. So yes, this sounds so nice. There is a convergence trend happening. PCs are migrating via laptops and notebooks to netbooks. And the basic voice-only cellphones to basic data (SMS) phones to feature phones to smartphones. The current top-end smartphones are very close in abilities to the smallest of the netbooks. There is a renewed interest in "palmtop" computers like early PDAs from the last decade. And Apple's Steve Jobs is on record saying that the iPhone was Apple's entry into the netbooks market. A computer maker says that their smartphone is equivalent to a netbook computer. Yes, that sounds quite innovative. And where has Nokia been in this area? Two years before there was an iPhone, Nokia started to call its premium smartphone line of N-Series, not "mobile phones" but "multimedia computers." Sorry, Parmy Olson. If you did very basic journalistic research, and bothered to examine the facts, you'd see that Nokia was literally one of the first to suggest a smartphone is actually a small computer. Not only thinking that, Nokia was so obvious and vocal to communicate this, at the time radical view - that Nokia plastered that statement in all of their packaging and promtion for the N-Series. (isn't a radical view that is later adopted by your competitor, a sign of true innovation?)

Oh, Parmy Olson, have a guess who wrote about this in 2006? Yeah, your colleague Bruce Upbin at yes, Forbes. He actually used that Nokia marketing phase in the article "multimedia computer"

Failing to catch on to other innovations. Really? Why no examples? Lets turn to the evidence. I already mentioned the trend to services and applications. Most mobile telecoms experts (in advanced markets) feel that the services opportunity is far bigger than the applications opportunity. But Nokia has been innovating in both.

One of the big trends in the mobile industry is open systems. Using standards and with open APIs. With rivals collaborating. Apple's OS/X operating system, and the Apps store, is a tightly controlled monopoly by Apple. That is not the current trend, it is an archaic model from the time of mainframe computers of the 1970s. Apple is decidely against the current trend, totally anti-innovative in its operating system.

How is Nokia? It invited its most powerful rivals at the time, with Motorola (who was bigger than Nokia) and Ericsson as well as PDA-maker Psion. And to promote collaboration, even though Nokia was biggest shareholder, they expanded ownership to include Samsung, Panasonic and Sony. The Symbian operating system has since been turned into non-profit foundation, with fully Open Source Software. This is at the heart of all of Nokia's smartphones. And Nokia was a founding member of Symbian in 1998. Nokia was catching the trend eleven years ago, that still today Apple resists. Who is innovator? 

Hey, you know what, Parmy Olson, this very exact point, that Nokia is open source and Apple is a closed controlled environment, was reported by your colleague Bruce Upbin, in Forbes in 2006.

Another big trend is to embed full digital TV tuners into smartphones. Real crystal-clear broadcast digital TV, not streamed and jittery 3G TV. South Korea was the world's first country to launch these kinds of advanced superphones in 2005 and today 45% of Korean phone owners have them. 32% of Japanese phones are like this. Is Nokia involved? Nokia was creating a "European" digital TV standard called DVB-H at the start of this decade, and provided custom prototype phones for tests that were run for example in Helsinki and Oxford. And Nokia released DVB-H phones for sale in 2008. Where is your Apple, RIM/Blackberry or Palm with in-built digital TV tuners? Who is innovating?

And as to anyone really knowing this? Yes, Parmy Olson, your colleague there at Forbes, Elizabeth Woyke did report on Nokia's interests in mobile TV in 2008.

Then there is the trend to mobile advertising. While the global ad industry is experiencing unprecedented decline of TV ads, newspaper ads, radio, cinema, and even internet advertising, mobile advertising is experiencing phenomenal growth, most analysts suggest it will double this year. The Ad industry talks of this being the year of mobile advertising. Did Nokia notice? Nokia launched its Nokia Ad Service early in 2007 and expanded it to the Nokia Advertising Alliance last year - in line with open principles and collaboration again. Nokia not only has innovated in this area, it has again driven the innovation years before it broke into the mainstream. And while Google obviously does advertising for mobile, who else of the major players?

And there is the trend to full QWERTY keyboards. The article mentions RIM's Blackberries and Palm's Pre which illustrate this trend (as does the N97 also mentioned). The trend to QWERTY keyboards is far bigger than the trend to touch-screen phones. Touch-screens are not that new or innovative, as they originate from early in the previous decade, and even Apple had its touch-screen PDA, the Newton. (And incidentially, Nokia's first touch-screen phone was released 3 years before the iPhone, the 7700). But QWERTY keyboards are now the hot trend and have propelled for example RIM's Blackberries to outsell Apple iPhones by about 2 to 1. And yes, who invented this trend? Not RIM. Five years before the first Blackberry phone, there was the Nokia 9000 Communicator, the first mobile phone with a full QWERTY keyboard. Since then Nokia has expanded its range of QWERTY keyboard phone models and has always had more such models than any other maker. Who is the innovator?

What of 2D barcodes (aka QR codes)? Another invention from Asia, launched by NTT DoCoMo in Japan in 2005. Americans are now just starting to study this technology. In advanced markets it is revolutionizing how internet surfing is done on a phone, being far better than using a keypad or a touch-screen. Four out of five Japanese mobile internet users already use 2D barcodes. Europeans have been moving rapidly to 2D barcodes in countries such as Germany, Spain and the UK. Where is the 2D barcode reader on the iPhone 3GS or Palm Pre or Blackberry? Its not there. Apple will get you a 2D barcode reader software through its Apps Store. But Nokia started to ship phones with 2D barcode readers pre-installed and fully integrated, in 2006. Who is the innovator?

And there is the trend to "digital communities" or "social networking" or "user-generated content" best typified now by Twitter, Facebook and YouTube. Such a massive change in society, that Business Week wrote in its cover story in 2005, that this is the biggest change in mankinds's history, since the industrial revolution. Such a big change that the Economist wrote in 2005 in its cover issue that businesses which do not understand it, will not survive. Google's CEO Eric Shmidt said this March that this change is "the defining aspect of humanity over the next 10 or 20 years". So this shift is bigger than smartphones, bigger than mobile telecoms, bigger than the IT, telecoms and media industries. The biggest trend going.
And its interesting to see, that yes, RIM has just announced a Blackberry community and social network, for its users. This is clearly capitalizing on this trend and is truly yes, an innovation by RIM. There is no such social network by any other handset maker... except Nokia. Nokia started its path to capitalize on the social networking trend with the original Lifeblog .. in 2004. Now they offer for example Club Nokia to all Nokia phone owners.

And yes, this trend, and Nokia's interests in it has indeed been chronicled by Forbes, Parmy Olson, first in discussing Lifeblog in 2005, and then discussing the music recommendation community in Forbes in 2006.

It is irresponsible to print such rubbish with no evidence, claiming that Nokia is "failing to catch on the innovations happening in the handset market" when Nokia has invented several of the current strongest trends and been driving the industry to understand most of the others, and in almost every case, Nokia has been there long before its main rivals today, which truth be told, are not Apple or Palm or RIM, all tiny phone makers globally. The big five are Nokia, Samsung LG, SonyEricsson and Motorola. If Parmy Olson wants to write about a handset maker who is "failing to catch innovations" - then Nokia is definitely the least valid example to use, out of the top 5 biggest phone makers.

AND THE TREND TO SMARTPHONES

Finally, the biggest injustice. If the headline of this ridiculous article is "Nokia's Motorola Moment" and Forbes suggests Nokia's current lead is threatened by misunderstanding a change in the market, that is so big, it could destroy the company; and the article throughout uses the specific phone category of smartphones as this giant change which might cause the demise of Nokia, then lets examine that evidence.

First, I have to mention the alternate view, that very expensive superphones are not the engine of sustainable market dominance - 40% global market shares - but rather, that the only way you can control the mass market, is with low-cost mass market devices. The biggest car maker is not Ferrari, it is Toyota. GM made more Chevrolets than Cadillacs; Ford made more Ford branded cars than Lincolns. Even if Nokia was somehow unable to hold onto its share of top-end premium phones (smartphones), it is perfectly feasible to remain the biggest handset maker by volume if Nokia holds onto its market share in the lower end of the handset market. The biggest markets are China and India and teh vast majority of the phones that they buy are low-cost models. But lets leave this alternate strategic option to the side. Lets talk about smartphones.

Depending on the exact definition used, it can be argued that Nokia invented the smartphone market. The early smartphones were business-oriented phones (typified by the original Blackberry). Nokia was the first handset maker to separate a whole division to specialize on only business-oriented smartphones (E-Series), as distinct from the dvision selling mass-market consumer phones. Today we know the far larger smartphone opportunity is the consumer smartphone (typified by the iPhone). Nokia was the first handset maker to offer two separate lines of smartphones, one series of business phones and another consumer phones, setting the consumer smartphones unit as its own division (N-Series). This was years before anyone had seen an iPhone. Very literally Nokia was the first phone maker to even start to sell smartphones as consumer phones (as distinct from business phones). Note that recently RIM followed this same trend and released consumer-oriented smartphones and doubled its sales. Again a rival follows Nokia's lead.

Today Nokia is bringing the smartphone to mainstream consumers and sells more mid-range mid-price smartphones than top-end N-Series smartphones. Nokia has literally three separate divisions selling smartphones to different customer segments. Apple has two phone models in total. Nokia has powerfully driven the ever wider acceptance of smartphones.

Maybe this is too much of a finer point of nerdy techie geeky strategy details, that really go so obscure, that the Forbes reader would not really care, right, Parmy Olson? No, wait, Forbes did cover this very matter, Apple's iPhone vs Nokia mass market smartphones in volume, last year printing the Nokia strategy statement that these lwer price new Nokia smartphones are "for a much broader mass market."

In absolute numbers, Nokia today sells more smartphones than the four rival brands mentioned in the article, Apple, RIM, Toshiba and Palm combined. For the latest quarter, Nokia's global handset market share grew to 38%. That is for all phones. But for smartphones, Nokia's market share was 41%. Nokia, the world's biggest handset maker, is performing better in smartphones than overall in all types of phones. Which part of this performance signals a giant that is "lagging behind" and headed to a "Motorola Moment"?

The Forbes article suggests that the West "is trending" towards smartphones. Yes, the US and Canada are indeed now snapping up smartphones and about a quarter of all phones sold in these two countries are smartphones. But the phone market for Europe is twice the size of the USA, and is so far further ahead of America, that next year half of all phones sold in Europe will be smartphones (says the EU commissioner). And who is by far the best-selling smartphone in Europe, not Palm, not Toshiba, not RIM, not Apple. Its Nokia. The company has correctly anticipated the shifts in the market, and achieved the success in the most important market by size. Why is this leading Nokia to a Motorola Moment?

Now, the global economy is in the toilet. Hundreds of giant global branded companies have gone bankrupt. The recent economic news has been reports after reports of IT companies making losses. The handset market is shrinking. SonyEricsson just reported losses and all signs suggest Motorola will also post losses. Nokia has not only grown market share from the previous quarter, but did this while making profits. Yes, the profits are down but find me any global manufacturer whose profits did not decline from this time last year, before the global recession struck. That Nokia did make profits where rivals make losses, says that Nokia is executing particularly well, in exceptionally difficult economic times. And where did you Parmy Olson see a Motorola Moment in this?

This was one of the worst articles I've ever read about any mobile telecoms related topic, by any major periodical. Shame on you Forbes. Shame. Parmy Olson you have been negligent in your duties as a journalist to check sources for your story. And even worse, you have been patently unprofessinoally lazy to not even bother to read past Forbes stories about Nokia. Your colleagues have accurately covered essentially every item you managed to get wrong. (Management ahoy, perhaps this "journalist" is not really fit for the job?) and Lee Simpson, you are either incompetent or biased or both. Shame!

TWO CLARIFICATIONS

I am now (19 July) adding two clarifications, after reading all the comments left so far (thank you all who left comments!). I think it is very important to just keep these two issues clear

Innovation has nothing to do with usability. Many who have commented here, or on various forums, read between the lines in the Forbes article, and perhaps also inject their own personal experiences with recent Nokia smartphones (vs iPhone in particular) and think, but there is a point, the iPhone is far better to use than Nokia. That may be true, but it has nothing to do with innovation. If the Forbes article had been entitled "Nokia smartphones not as easy to use, this may be Nokia's Motorola Moment" - I'd have NO problem with that premise. I'd examine the evidence, but probably would agree. Certainly, I totally agree - totally agree - that Apple's iPhone is by far the best phone out there in terms of usability. (I said so earlier in this blog article!) But usability is not innovation and innovation is not usability.

It is like if I said, "it is raining", and you replied, "the sea is calm". They have nothing to do with each other. Each can be independently true or false, It can be raining and the seas be calm. It can be raining and the seas be stormy. It can be a day of sunshine and seas calm. It can be day of sunshine and seas wild. They both happen to deal with water but are not in any way linked.

Innovation is the introduction of some new technology or ability or gadget or feature etc into some industry. It is almost always "clumsy" at first intoduction. The first plane, Wright's Flier was very tricky to operate. So was the first car by Daimler Benz, so was the first computer in Bletchley Park. So was the first home video recorder by Philips. The first phones were so bad to use, that the user could not call anyone. You could only ask the switchboard operator to connect your call, even if you wanted to call your neighbor. It took 20 years until Almon Stowger looked at the phone, and decided it can be better, and invented the rotary dial, and for the first time, normal phone users could make phone calls. That does not invalidate the original invention of the telephone. Usability comes usually later. We can have total innovation with horrible usability. We can also have improved usability with no innovation. Most bug-fixes and minor software upgrades we all experience on our PCs are not innovations, but do make the usability better (or should do, ha-ha).

It is possilble to innovate in usability, but usability is only one element of a complex gadget as a mobile phone. It is very possible that usability is "the defining attribute" today in 2009, in the modern smartphone market and if Nokia was so horrible at it, that might be a Motorola Moment - But that would be a totally different Forbes article. But innovation is ONLY about doing something new, and doing it first. Whether it is usable or not, matters not at all on the FACT of innovation. It is very common that the original innovator does not create the most successful product and it is very common that companies that specialize in usability will refine such products (like for example Sony and Apple). I think you get my point. Forbes did no argue that "Nokia is facing its Motorola Moment because its Symbian OS is uncomfortable to use (vs the iPhone)". Forbes arrgued Nokia is facing its Motorola Moment because currently there is a lot of disruptive innovation going on (true) and many of its rivals are innovating like Apple, RIM, Palm and Toshiba (also true) but that Nokia is not innovating is TOTALLY untrue. I listed in this blog  Excluding all the items of features I mentioned about either the N95 or N97, in the blog I listed 9 truly giant innovations for the industry, where Nokia has been at the beginning, and far ahead of Apple, Palm, RIM and Toshiba. I could add many more, but those should be enough, as most of those innovations have been already mentioned in past editions of Forbes.

So please do not start another argument that this OS is better than that OS, it is TOTALLY not the point of the Forbes article and the errors in it. I'll grant you all arguments about the OS. It is irrelevant to the Forbes article. Has Nokia been innovative or not (however miserably poorly that may have been executed) is the only point. If Nokia has been innovative recently, and Forbes says lack of innovation causes Motorola Moment, then this argument by Forbes falls. Lets not argue after this ridiculously long blog, about whose OS (or usability) is better. Forbes claimed Nokia in trouble because Nokia does not innovate. Lets discuss whether Nokia is innovating (hwever poorly or well that is executed)

Innovation vs Strategy. Also there are some who like the conclusion of the Forbes article without considering the merits of the argument. There is a lot of feeling out there that Nokia is about to lose its market (totally irrespective of whether Nokia has innovated, some have even said Nokia innovates too much and needs control and discipline and focus, to select a few innovations and perfect those rather than to do everything). On any other issues, is it smart to sell ultra-cheap phones - to capture India, Afirca etc - or the shift in organizational abilities and staff competences from a haredware company to a software company, etc, that has nothing to do with innovation. I am happy to discuss Nokia strategies (or Apple, RIM, Palm, Toshiba; or any other handset maker; or any other player in the mobile space like Vodafone, Google, Microsoft, etc) but for you reading my blog for the first time - I have a treat for you. I am already into a series of strategy articles about the market wars of smartphones. We HAVE this discussion elsewhere. I will discuss all those factors, the role of OS, the role of software, the role of the user interface; as well as other complex matters such as handset subsidies, carrier relationsships, multiple handset ownership, replacement cycles (and price!), etc, in that series of articles about the smartphone market. Please lets move the discussion about Nokia strategies there, unless the Nokia strategy is about innovation.

Because innovation does not require a smartphone! Look at Nokia again. It sells many ultra-cheap handsets (non smartphones) in Africa, India, Latin America etc - which have the FM radio as a feature. It was Nokia who first deployed an FM radio into a phone, a true Nokia innovation for mobile phones. Now, in Africa most of the population is so poor that they don't own TVs or PCs. They cannot afford to buy a daily newspaper. More than half of the population do not have even a household radio (FM radio). Now, when Nokia offers FM radio as a feature on a phone - and about 30% of Africans already have a phone - it is a VERY compelling feature. Innovation yes. Do you (my reader) buy your hot new smartphone because it has FM radio - no. You probably didn't even notice if it had it. But in Africa (India, Paistan, Indonesia, China, Brazil, Russia....) that FM radio feature is currently among the most desired features. (and that conveniently brings my count of Nokia innovations to ten. Not just increasing the megapixel count on a camera, but true giant industry invvoations)

This blog and this counter-argument is only to Forbes articles silly statement that Nokia is not innovating (anymore) in this industry. If I have proven that Nokia is innovating, no matter how irrelevant that innovation is to you, or how poorly you think it is executed, then Forbes is wrong. It may still be true, that Nokia is on a wrong strategy on something else, but on innovation, they have been doing that very well in the past, including very recent past.

AM NOT APPLE-BASHING

And just to be clear, especially to any Apple fans and followers. I am not intending to "dump" on Apple. I am going through the facts of this silly Forbes article, which made those ourageous statements. It ws Forbes who did mention Apple/iPhone on seven separate occasions in the article (all other supposedly innovative smartphones, Palm Pre, Toshiba, RIM/Blackberry, get a combined 5 mentions). It was not me who drew a comparison of "Apple vs Nokia" in innovation, it was Forbes. I am not in any way against Apple (nor RIM, Palm or Toshiba), only correcting the blatant errors where they relate to innovation. It is not an opinion of mine, it is a fact, that the original iPhone was a 2G device. It was Apple, not me, who felt 3G was an improvement to the iPhone and so much so, that for the first re-design of the iPhone, they named the newer device "iPhone 3G". Thus 3G is recognized by Apple as an innovation. Now the reality is that Nokia's N95 was a 3G device more than a year earlier; and Nokia's first 3G smartphone was released in 2003. It is not "Apple-bashing" to report these facts, and I did not select the comparison, the "standard" of innovation to measure Nokia, to be Apple. Please don't blame me, blame that silly Forbes journalist.

But to be clear. Apple is a fantastic company, I have loved them for decades, I was a Macintosh trainer for an Authorized Apple Dealer in New York City early in my professional career. I loved the Lisa, the Mac, the Newton, the iPod. I thought so highly of iTunes that I made it the second case study of my fourth book, Communities Dominate Brands (the signature book for this blog). I eagerly awaited the "Apple iPod phone" for more than two years before the iPhone was announced. I was most supportive of the original iPhone announcement and posted immediate reviews and commentary, including the world's first prediction of how the iPhone would do in the market. Not overhype like some, not dismissing its chances like others, but I forecasted one day after the original iPhone was announced in January 2007, that yes, Apple would hit its 10M initial sales target, with a detailed analysis of why. That blog was very widely referenced. Then a month before the iPhone was launched, in May 2007 I wrote a comprehensive analysis of what its impact would be. Not only to phones, but to the IT industry, the internet business, media, and advertising. That blog was widely praised. My predictions proved very accurate.

I was very honest about the first iPhone, and explained clearly what was wrong with it, why it would not become a world hit (as it did not, the first iPhone was only a market success in America). Clearly Apple management completely agreed with all but one of my recommendations, because they have made those changes to the two revised editions, iPhone 3G and 3GS. I was not Apple-bashing, I was trying to help. And whether anybody in Cupertino happened to read my blogs or not, essentially all of my recommendations have been implemented, except for the slider QWERTY keyboard (which may still come, mark my words). Please understand, that I felt in 2007 that the original iPhone was a good phone, but an incomplete smartphone. Yet I boldly predicted that inspite of initial shortcomis, Apple would hit its sales targets. I will not let my personal views interfere with honest, factual reporting.

Since then the iPhone 3G, new pricing, better global availability and the Apps Store have all helped to bring Apple greater success. Now the iPhone 3GS is a brilliant device. Apple has achieved a lot of cross-sell and up-sell opportunities and the iPhone has helped the sales of both the Macs and the iPods. I don't hate Apple and I don't hate the iPhone. I greatly admire the company. Now recently I have been urging Apple to expand its product line (many Apple fans agree, hoping for an iPhone Nano as its often called). But for this article a journalist said Apple is more innovative than Nokia in phones. And it is honestly true, that while the iPhone is now teaching many new users to access the internet on a phone - and yes, the web surfing is BY FAR most user-friendly on an iPhone - yet Nokia did invent the real internet-surfing mobile phone ten years prior to the iPhone. Now, when that journalist explicity mentions "web surfing" as an area of innovation by which Nokia is behind - and a fellow Forbes journalist has acknowledged this ability in a Nokia phone 8 years earlier - then I have to mention this error.

I am not Apple-bashing. If the journalist had mentioned Samsung seven times or Palm or Motorola or RIM, I would have compared Nokia to that brand. It is not personal about Apple. I love Apple. But I needed to correct errors about Nokia. And trust me, if someone made as silly statements about Apple, I'd be as fiercely there to defend Apple. I defend the truth (and attack incompetence and unprofessionalism). I'm sorry if any Apple fans were offended. (Blame Forbes ha-ha..)

Comments

[A]

Apple sux balls.
Symbian > IPhone OSX, just a pity S60 is lagging behind.

[christexaport]

I know its unprofessional, but CHECK THEM HOES, Tomi!! I am so glad you took offense and spoke up, but I honestly wished your marketing department did the same thing. Your internal policy of not doing direct competitor comparison while all your competition rips you to shreds with propaganda and false claims has taken a toll on Nokia and skewed its identity in the American public. Its gone on far too long, and its time Nokia begin telling the facts in a salvo of print, online, and TV ads. I remembered the iPhone claiming to be the first smartphone to access YouTube while I was using my month old N95 to watch the commercial via...YouTube! These folks in America are the kings of spin and propaganda. Nokia needs to play the same game and expose the competition.

[christexaport]

Now my N90 had autofocus way back in 2005! WAY before the iPhone, and the iPhone's video is definitely nothing of a quality comparison to any DVD I've seen. I find the iPhone's video quality to be downright horrible.

[Boro]

@ SymbiX
I don't think that size of the company has anything to do with it. Just remember Apple and their poor decision making in the past... That's why they are relatively small on the market. But also the right ones! And, in the end, it always comes down to a few poeple making decisions and writing software. I think they were afraid to write a completely new software. And it was a matter of pride, also. Like, now we have to admit our software is inferior and they made us do it; everybody will know it!
Now it's easier - they have no choice. But they lost precious time.

There were so many big companies making wrong decisions.

I didn't like Nokia smartphones because of memory problems, instability and S60 was extremely SLOW (and overall hardver quality; there's no excuse for that). Yes, there are some things iPhone lacks, but there is no phone on the market that has it ALL. And BTW, this is their first phone. They did a fantastic job - primarily for us users. Competition, competition...

And I agree with Marat: iPhone is the first phone to introduce mobile web browsing the way it's acceptable for users.

And I think this is good for us; Nokia was sleeping giant. Now let's see what they are made of.

[SymbiX]

@ Boro.

Sure it has, a company with a lot of money can spend more on R&D, especially if it will help them make more money in the long run, a company like Nokia, once having 3 different UIs over Symbian, is not a company not spending money on R&D. Is it really so hard to accept that they just didn't want to change an already established UI familiar to millions of users ? Companies have no pride in things like that, companies like to make money, it's us the end users becoming fanatics over things like that. Not all Nokia Smartphones had memory issues or were not stable, E90 comes to mind for instance, plenty of ram, very fast, great build quality, so I guess you have to be more specific, there are so many S60 devices out there. I do agree though with one thing, Nokia now has some serious competition, that should be a big kick in their behinds, one which we, the consumers, will benefit from.

[Boro]

@ SymbiX

I understand what you are trying to say. But I think it was wrong from the beginning. Why have so many versions of the software, one for each product? That was a completely wrong model.

So what if millions of users were familiar to the system? It is a bad system! They should have known that, like I did (some Boro from Croatia)..

Less is more. Imagine the computer world where every company has a different version for every PC model?!?

I was Nokia user. I had so many problems with my N70, that after two months Nokia's representative gave me back the money (not the telecom provider where it was bought). The final month I was there EVERY day with it. What did I do next? The next day I bought N73. I was a LOYAL customer. I thought it would be faster and better. And then I said - that's it, no more.

Now, Nokia lost a customer because they didn't want to make it right.

And, if you were right - then Apple would have never came to the market. They came with completely new system and showed them it could have been done. People switched.

Palm came to the market with the system of their own.

At one point you have to know what you have and what will happen. THAT is what makes you big.

I am not a "big company" and I knew what was going to happen.

[Janne Jalkanen]

As far as I recall, the app store model was invented by DoCoMo for their iMode phones already back in 2000. It had even exactly the same business model of people submitting apps, then DoCoMo taking a cut on the sales.

It was very, very successfull. Unfortunately the idea took eight years to root itself to the western world.

[SymbiX]

Again, saying that S60 is bad, is clearly your own opinion, 5800 sales for instance and me personally beg to differ.

Less is more as far as you're concerned, there are people who think that less is not more. Each to their own.

This is your own personal experience, I've had the following Symbian phones : 9210i, 7650, 3650, SX1, P900, X700, 7710, M600, N80, N71, N95, E90 and the 5800, apart from the 3650 and SX1 with their weird keypads and the N71's lousy plastics, I have been very satisfied so far, the only one that was slow was the N80.

Starting fresh from scratch is much easier than being an established OS and trying to re-write everything, I'd like to see how the iPhone will manage to stay as user friendly and relevant while expanding into different form factors and audiences, of course it's a smooth experience, it only has 3 models on the market, changing essentially only some of the insides.

If you can recall, Palm was very successful with Palm OS, they took a heavy beating because of this same reason, they couldn't change their OS so drastically without losing users, they instead decided to switch to Windows Mobile along with Palm Os before finally releasing WebOS and that did cost them significantly.

Unless I'm missing something, Nokia and Symbian still dominate the market, I don't see Nokia or Symbian becoming a small insignificant player in the industry any time soon, especially since SE and Samsung are now backing Symbian with their new phones. No one knows what is "going to happen".

[christexaport]

@ SymbiX,
Nokia knew what would happen, as their data suggests, and their performance has proven their research true. They've held onto and even gained a dominant share of the smartphone market with a quick 4 to 6 quarters to unleash a new UI for Symbian touch devices on its open source OS, apps will be aplenty, their services will have freshly minted distribution channels, and Apple and RIM will still have only gained a paltry 10% go 20% of the market. Nokia has very little to worry about. They have a strong position, knowledge of the areas they need to gain strength in, the finances to implement those changes, and a profitable company to boot. I see Apple and RIM wishing to be in those shoes.

[SymbiX]

@ Christexaport.

No doubt they picked the best possible time to remodel Symbian, open sourcing at the same time as redesigning it, I'm just a little bitter, being a loyal S60 lover, I'd hate to see it go away like UIQ and Series 90 did and I'm sure I'm not the only one thinking that way.

[ASG]

As somewhat of an aside, Lee Simpson at Jefferies is based in London UK, so hardly an example of a US-centric iPhone fanatic.

Prior to Jeffries, Simpson worked as a telecoms equity research analyst at Goldman Sachs, a telecoms consultant at Price Waterhouse and was previously at Deutsche Telekom, so he just may know whereof he speaks.

In any event, he's hardly a "clearly clueless analyst," which was perhaps less than worthy of you.

[Tomi Ahonen]

Hi everybody.

I am travelling in South America today, very briefly on the web now.

I greatly appreciate all comments here, please keep them coming. I will definitely reply to every one of you a bit later when I have a steady web connection and a bit of time. It may be later tomorrow or might take two days.

i will definitely reply to every person who commented here. Thanks! And keep the comments coming

Tomi Ahonen

[Marat]

Some more facts:

"An indication of the problem Nokia faces came with the announcement from CEO, Olli-Pekka Kallasvuo, that the company had shipped 500,000 of its flagship N97 smartphones in June.

However, Apple was able to state that it had sold more than 1 million units of its latest model, the iPhone 3G S, in the first three days of its debut last month." (http://www.telecomasia.net/article.php?id_article=14282)

"Last year Apple and RIM made up only 3 percent of global cellphone sales, but took in 35 percent of operating profits for the market, according to Deutsche Bank analyst Brian Modoff. This year Modoff expects the cellphone market for the two firms to grow to 5 percent, and winning 58 percent of total operating profits, according to the Journal " (http://news.cnet.com/8301-1035_3-10290660-94.html)

That's a vindication that Apple (and lately RIM, Palm) is playing the innovation part and if you play the hardware game (like Nokia, SE, Moto, Samsung), you're stuck with tiny profit margins if any. But Apple is not a miracle, there are places where it has flopped (Russia, India, high growth markets, ironically where Nokia rules) mostly due to the different business models of operators (no subsidy) and which represent the best opportunity for Nokia when people upgrade their phones. And I hope that Nokia can reposition itself, get rid of crappy interfaces and learns a few lessons from Apple to make a decent and competitive smartphone (smart and intuitive UI, ease of use, eye-candy, cool features and etc).

[alfabob]

I found this to be an excellent and well written article. And I found the comments made to be even better, whether for or against the article! If nothing else, the blogger has successfully created a worthy debate, which is more than can be said of the pandering and spin that dominates the US media analyst of the different phone manufacturers.

No, I don't really think that Nokia is having a Motorola Moment. And I don't think that they should place less emphasis on the hardware side either. It is their hardware features, whether in smartphones or basic phones that has raised the standard in the preceding 5 years. Hardware innovations shall set the standard in the future as well. And I really think that their performance issues has been mainly hardware related, their penchant for low speed processors and no graphics chip have made them vulnarable to the accusation that Symbian is..slow.

And they're not exactly lagging behind when it comes to software either. Symbian OS has constantly been upgraded, their move to make it an open source OS makes it easier and cheaper for it to be upgraded, and lays the foundations to an applications store that can rival that of Palm in its heyday.

[Sachendra Yadav]

Ok, Nokia is an innovative company and Forbes got this wrong, but let's not discount the fact that Apple's focus delighting the customers with their products has created the best phone known to man in 2007 (The whole is greater than the sum of its parts)

The question's not if Nokia's innovative, but is it innovative enough to take on Apple. Others will obviously catch up, but what's needed to win this game is to leapfrog iPhone, let's see if Nokia's innovative enough to do it (Note: Microsoft hasn't been able to do it since it's inception)

[Tomi Ahonen]

There is so much here, I have to reply in shorter parts, I'll do the next set of replies Kin, Boro, Symbix and Ratkat.

Kin - THANKX !!! About your kind passionate plea to beg for more quality in higher end phones to India, I can promise you first of all, that this blog is read very widely in the industry and your comment has certainly been read by many Nokia executives at HQ by now. What I will do, is to send also a private email to a few who are relatively close to such matters, but obviously I am a total outsider and can only send greetings, Nokia still has to decide what they do. I greatly appreciate your heartfelt requests and I hope they will respond with phones more satisfying to you. Do remember, the total development cycle for a new phone is about 18 months and the design is locked in about 9 months, so even if they decide to take all of your advice to heart, and immediately implement it, you would not see such phones in India (or anywhere else) for at least a year from now. So give them a bit of time, ha-ha

Boro - some definitional arguments, ok, but you do agree that innovating in implementation is not the only possibility to innovate. What I find very contradictory however, is that you say FM radio is not innovation (and only a feature), then you admit that you miss that feature currently. It was certainly an innovation if it causes withdrawal pains when you don't have it, and yes, we are obviously in the indsutrialized world where we have tons of FM radios all around..

On Arrogance of the wealthy. You clearly prove that sentiment in your statement "I don't think there is anyone with a smartphone but no PC". Yes, I hear you, that you cannot believe this to be true. But you do not live or work or support the mobile telecoms industry in the developing world. I do. I have just in the past year been in public with visits and press visibility and government regulator assistance, industry assocation support etc (and tons behind the scenes with my actual customers) in Colombia, Indonesia, China, Russia. Each of these was a return visit of public visibility (meaning, that my previous visit in public, a conference etc, has been so well received, that the industry invited me back). I met with the Colombian President and telecoms minister, and with the Indonesian telecoms minister. I also have been seen in public for the first time this past year in Egypt and Pakistan.

I know - I report on it - and I have tons of evidence, and I hear all the time, that there are tons of smartphone users in these markets, who don't own PCs. Just one example is the Chinese university student groups, where four poor college student housemates who all have a mobile phone, and together cannot afford a netbook, will get together and buy a smartphone, so they have computing-equivalent power that they then share. A "community computer" and obviously they rotate so any one day, one of the four housemates gets to take the smartphone out and about. Boro, your attitude, that when someone like me says this happens, and do I really have any record of reporting lies here, and even after that, you come and say you cannot believe this to be true. That is EXACTLY that arrogance of the wealthy, which the IT and telecoms industries in the developing world see all the time, and are very resentful about. We - people fortunte enough to be born to rich countries - need to be more open-minded.

About profit, that is not market share, please don't now start to muddle that issue (someone else came into the thread later and already corrected that point) Software upgrades? Have nothing whatsoever to do with Forbes article. I can totally grant you that argument but I won't, but if I did, it would not diminish at all the point that Nokia HAS been innovative, and thus lack of innovation can not be Nokia's Moto Moment. Boro please stay with the topic.

Symbix - THANX, great replies and excellent further details to illustrate clearly that yes, there has been a ton of innovation at Nokia

Ratkat - Thank you

I will post more replies soon to a set of respondents, please give me some time. I am travelling, having a short moment online and have to meet up with my local customer soon. But I will be back and will reply to everyone who posted.

Thank you all

Tomi Ahonen :-)

[Boro]

Ok Tomi, let's clear few things up: if innovation for you is adding new feature - ANY feature, then I understand your position. I think it's more than that so let's not go there anymore.

On arrogance of the wealthy: I feel a bit insulted :), I am the last person you can tell that.
I'm pretty sure you knew what I wanted to say - things you can do on PC you just can't do on any phone. I use phone to surf the web and use it for e-mail (personal), read the news, add new apps, play online games... I would never participate in discussion like this typing on my phone!

And I truly doubt Nokia added FM radio and "torch" feature thinking of people living in Third world countries. I think they had people like me on their mind. (Torch is useful when trying to find keyhole in the dark...:)
Now - it turned out it was perfect for people in those countries - bravo for Nokia.

When I bought N70 and N73, connecting to the web was VERY expensive (and not a very good experience), just like the phones themselves. I could have bought a PC for the price of those two. No internet, no e-mail... All I got was a slow phone, freezing and crashing all the time.
(Those guys in China bought their smartphone. If they surf the web or use it for e-mail they have to pay a basic monthly fee. I think you know where I'm going to, but this clearly IS another subject...)

Just adding new features was obviously not enough and a newcomer got it right and made a much better device. This was a good INVENTION.
RIM came with their BlackBerry e-mail solution - same thing.
So, we need to get back to the subject: all I'm trying to say is that NOKIA should have done that! They forgot and missed the most important part of innovating.

You explained in one of your posts that Nokia was first in so many things and I agree (those were facts, no argue about that). But remember that Motorola invented the whole business. And then some company from Finland that most people never heard of became no.1 in a very short time. Where is Motorola now? On the brink of extinction. What was the reason?

Yes, in a way (not completely), we see the same scenario.

Personally, I think Nokia has too many models. This philosophy worked well with simple cell phones, they saturated the market with so many models (with little or no difference between them). But that's no way to go with smartphones and I think they begin to understand that now.
Let's not go back to that.

1. So, you think the Forbes article is completely wrong. Ok.
2. Sorry, but the market share is not as important as profit, as we had a chance to see lately. You should agree on this one.

So, why don't you give us YOUR analysis - WHAT is happening and WHY?

Reading all the posts in favor of Nokia, someone would think they are doing better than ever and we know it is not so.

[zunguri]

It is hilarious to read what the prancing Apple fan-boys have to say. They just can't understand that it's not about Apple. Maybe their ears were covered by Steve's cheeks.

[Jilles van Gurp]

The Forbes article is spot on: Nokia is lacking in the innovation department and not for lack of trying or even coming up with good ideas but for failing to convert good ideas into good products. Actually having all these ideas and yet failing to come up with a product is a total failure to innovate because innovation has nothing to do with being first to think of something and everything with being first to market and being successful there, where and when it matters. This is what Apple has done and Nokia has not done.

[Professional]

Hi, really great article (maybe a bit too long :-)

A few corrections, though. You write: "Yes, that phone [iPhone]had impressive innovations, in particular the size of its screen, touch-screen interface and accelerometers, all which have been since copied also (not touch-screen clearly yet as well) by Nokia."

None of these were Apple innovations. "Size of the screen" is no innovation itself. Touchscreen is no innovation by Apple and Nokia was first here too. Nokia 7710 with touchscreen was released already in 2004! And it had many features that iPhone still does not have. And Nokia N770 had touchsreen already in year 2005, so 2 years ahead of Apple (and it had truly *innovative* Linux operating system!). I consider N770 to be a smartphone although it didn't have a cellular radio itself. But it had both WLAN and Bluetooth. With BT you were able to connect it to internet basically anywhere by simply pairing it with any Nokia phone with BT. This was *truly innovative*, you had your Nokia phone in your pocket paired with N770 and you had true internet (with full web browser) all over the world.

Accelerometer is either no innovation by Apple and it was first in Nokia phones. N95 had accelerometer already in the beginning of 2007. And there were really innovative applications for it, for example step counter.

So, this leaves zero innovation for Apple :-) We must also remember that Nokia has thousands of key patents related to wireless technologies and hundreds of essential ones (which means that Apple must paying big royalties to Nokia for every device it sells). Nokia has been very active for example in 3GPP standardization where all these cellular technologies iPhone is using have been developed (GSM, EDGE, WCDMA, HSDPA, HSUPA). Nokia has written thousands of 3GPP technical documents, thus making wireless revolution to happen. Apple has written none, they have just benefit the work other's have been doing openly.

But actually, Apple has some true innovations. They are related to multi-touch, but that's about it.