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January 31, 2011



Very well Tomi! Great article (I only read 1/4, but I promise tomorrow morning I'll read the rest first thing). I know you don't like to talk about valuation, so I won't, but I must say that I choose to own Nokia stock because they we're really down. And why was that? Just because more info I got about the company, the more I was convinced about it's competitive advantages, or gems how Mr. Elop calls them. Now I'm a finance guy with a deep love for strategic management and marketing (not usual by the way, finance guys like to crunch numbers, don't even try to see the soul of any company). What I loved more about Nokia was its gems, unbelievably great gems: market share, distribution network, reach, segmentation, ability to understand locally, engineering...
However as you point out there's the marketing problem. Most people think marketing is about opening somebody's mouth a stuff it with undesirable products. Now this is far from truth. Marketing is about making some marketable (sorry for being redundant), for example is about interacting with R&D and steering R&D to develop marketable products, it's about knowing what consumers want, know what consumers don't know that they want, and envolve the entire organization into this vision.
I agree with you, although I'm a Portuguese watcher, I can tell that Nokia lost the marketing focus. Anssi Vanjoki was perhaps the last man standing, with his love for cameraphones and superphones, but now he's also gone. So how is it going to be? I don't know, but let's hope that Jerri De Vard can bring this change, and let's hope that Anssi's roadmap can illuminate the road and buy Nokia some time. Or perhaps meego really fulfills its profecy and becomes the leading OS.


Smartphone market today is a copy of PC market in the 80's. You have Apple, Microsoft is joined by Google, while IBM is replaced by Nokia.

Nokia has probably been analysed by every person owning PC last year, but the bottom line is : People are not buying IT.

Nokia's business practices placed quantity over quality. They were more concerned over selling millions of cheap dumbphones than investing.

Nokia had N-gage platform in 2002, bought Intellisync in 2006, had touchscreen proto 7700 in 2003, had Maemo tablet 770 in 2005, ruled premium segment with 8xxx series, bought Navteq in 2007, introduced OVI in 2008. And out of all this N97 comes out, and N900 - who in the world markets dev phone!!!! Talk about shooting yourself in the foot.

Forget all the studies about texting, market segmentation and other marketing mumbo-jumbo Nokia is a company which for better part of 21st century lived in parallel world. They were selling one thing while dreaming up concepts and technologies. And now somebody else made sure that those concepts and technologies come to the market.

So no Jedi here. Nokia has lost it's technological edge and is on its way to 20% marketshare of questionable platform mix.


It seems most commentators here agree: segmentation is necessary, but the big, unavoidable, paramount issue is software.

Let me one last time try to drive the point home: as an example, consider the article "Ten things Nokia need to fix in their smartphone software in 2011" from -- so from people who are and have always been pro-Nokia.

Superlative camera terminals? "8. Completely replace the Camera interface".

Perfect messaging devices? "3. Nokia Messaging ('Email') needs fixing"; "7. Completely replace the klunky ABCDEFG quick matching code when picking a Contact."

A phone line for youngsters? "4. Nokia Social also needs a big fix-up"; "5. [..] Homescreens".

Multimedia consumption handset? "9. For once and for all, sort out the handling of album art"; "10. Finally, [...] bring back Podcasting (or build in and help fix up Podcatcher) and Nokia Internet Radio".

Ultimate internet terminal? "2. This one needs no introduction really - and Nokia are well aware of it. The current Symbian web browser needs work".

The very best a phone could be? "1. Fix the memory and processor leaks"; "6. Updates. A word that no doubt instills fear into the hearts of the Ovi Store development team."

In other words, every single angle of attack that Tomi is proposing regarding segmentation requires tackling software first.

The iPhone proved that one can skimp on features, provided that the user-interface and basic software have perfect ergonomy and that there is a rich ecosystem of downloadable applications. Android devices have demonstrated that one can offer average hardware specifications, provided the operating system and built-in utilities are powerful, well-integrated and work smoothly. Software is the big challenge for Nokia, not segmentation. And, as the history of the Communicator shows, this has been a sore point for a long time.


In view of Tomi's focus on SMS as a saviour for Nokia, these figures from Vodafone are interesting, they now earn more money on data than on texting:

This is not to say that SMS is not serious money, but I wonder if we are not seeing in this post a view of how to succeed in the past decade rather than the future decade...

Bob Shaw

Just to add, Nokia needs to communicate better its unique product strengths compared to the competition. See link below for more details regarding it.

 Tomi T Ahonen

Hi Guys

Thanks for the comments. I had written and posted a reply to an early part of you all, and it was pretty lengthy in my typical commenting style, and now that I arrive here, I see that my comment had for some reason not been included in the thread. Arggghhhh!!!

So, first, dont' worry, I will of course reply to all of you, individually. Secondly, I thought I had already replied to a good part of you guys, that comment has vanished (tech problem at typepad, no doubt. I already checked and its nowhere to be found). So I will start again and reply to all from the beginning.

But thirdly, please keep the discussion going, its very good commentary and good discussoin you have here going amidst yourselves, I will join shortly.

Tomi Ahonen :-)

Brian S Hall

confession: so far I have only read the short part (but plan to make some coffee and read the entire post ha ha).

I wrote a very brief recommendation for Mr Elop here:

You mention that Nokia has 'iPhone envy'. I would like to hear more about this if possible. Lately, the Nokia fanboy blogs have become increasingly hostile to *anything* that mentions iPhone (even though it is Android that *may* have surpassed Symbian). Of course, unlike Android, both Apple and Nokia control the hardware and software.

Sherman Drotthe

L O L, Nokia should be trading under $1 and the ADR delisted from NYSE, Apple and Android have had Nokia's lunch and now going for breakfast and dinner too.

mel pullen

It's taken me a long time to ruminate on this, and write it up. Nokia could be saved, if they made some great products. Their products rely on software so it's to that they must look. Tomi, you and me both will be ignored.

 Tomi T Ahonen

Ok, lets start again, first comments

Hi enyi, E, brad, Guillaume, Arild and Hoi

enyi - haha thanks. I was pretty exhausted after that one myself, and I think you can see that it has far less of my editing, is even more rambling than usually my long blog postings where at least I TRY to keep them comprehendable..

E - you make a good point and yes, the Communicators have often exhibited that kind of traits, especially the very early models. But this is not a problem unique to Nokia, just look at Antennagate with Apple last summer haha.. You also make a very good point that the transition from Symbian to MeeGo gives added pressures to Nokia. I would counter, that the industry has been in near permanent transition for the past decade or more, from 2G to 2.5G to 3G, from business oriented phones to consumer phones, from phones for the affluent countries to phones for Africa, from basic phones to feature phones to smartphones. From smartphones for business users, to smartphones for consumers. And on and on and on, app stores, mobile web, touch screens, etc etc etc. I think 'the transition' can easily become an excuse for not making an attempt, and if Nokia does not try, they surely will die.

brad - I have a policy here that you have to read the blog to be allowed to comment. In my blog I talk about lots of other things than hardware - I start with a huge long argument about SMS, the service, not hardware, and then explain why that should drive Nokia sales and marketing - to its carrier/operator customers - this is not hardware, etc. I won't waste my time or that of my readers giving you a dozen more. Please read the full blog first, before commenting.

Guillaume - haha, yeah, me too! But you know, this blog is read by many at Nokia - they are a regular customer of mine - and I am sure that in some cases, some individual decision, where the boss is wavering one way or another, his or her underling who read my blog, will feel confident to go argue it, and on that point they end up 'doing the right thing' haha. And separately.. you'd be surprised how many other major players read my blog regularly haha, so if not Nokia, most of my ideas will work on at least one or two of the rivals, some of the ideas would work on any one of them (haha, SMS based T-model phones - remember, this is the same old tired idea I peddled to Motorola to save them, and the exact same idea I was trying to convince Apple to do with the iPhone, and then repackaged the same idea in my open letter to Steve Ballmer when Microsoft was messing up in mobile....)

Very good analogy, that Nokia is fighting with one hand and its not their strong hand haha.. Very good.

Arild - haha, yeah, labor of love and yes, of desperation too. You know how much we Finns weep inside when another disasterous quarterly result is reported by our national pride and joy, the first Finnish conglomerate that is known the world over, and which now seems to be imploding..

haha flint axe. Great! you know I'm also a history buff. Thats really going pre-historical on us, haha, excellent.

On the user experience - I totally completely agree with you, and again, it makes me so sad that at one point, anywhere you went, the most user-friendly phones, the 'intuitive' user interfaces were on Nokia phones. They had it once. And surely don't have it now. Totally agree with you. And I like the point that its relational. We were happy with Nokias, until we saw the iPhone, and suddenly a phone existed that seemed to read our minds...

On app stores - I completely agree with you, that apps are a clear case of customization, and where Apple (today) leads with most apps, they allow the most customization. That is good. But I think, its a bit like in cars, the difference between a factory making clear models (2 door, 4 door, hatchback, convertible, station wagon/estate etc) - that kind of changes a normal car owner cannot make (turn his 4 door car into a 2 door car haha) - and the app store is more like the consumer-customization, we get special seat covers or a new radio, or a leather steering wheel cover, new carpets, that kind of 'interior' decorations (and similar outwardly detailing).. Only the car maker can do the models for its platform and this is what Nokia should be doing to the max - Samsung is doing it very very successfully right now.

(BTW me too, hate the galaxy wake-up beep. I don't wake up to it, but it annoys me when I am working late at night some nights (fully awake) only thinking about it, that if it beeped for someone else, who was fast asleep now, and who didn't sleep as soundly as I do, then that someone would now be awakened and probably not happy about the new Samsung phone..)

On the media consumption - here I agree with your point, but make the counterpoint, that Nokia has been phenomenally good at ensuring it is compatible with just about anything coming down the pike from MMS to Java to 3G videocalls to WAP to web..

As to the marketing side - also I totally agree - good marketing cannot save a bad product. BUT, most Nokia phones are not bad. They are very well suitable for their price levels - remembering 90% of Nokia phones are well below the iPhone in price and satisfy VERY competitively the needs at lower price points. What I want, is for Nokia not to do bad marketing of reasonably good products, to do both good products AND good marketing... And they seem to be leaving so many obvious marketing tools and methods utterly un-used..

Hoi - we totally agree, thank you! Totally true, the smartphone market is totally a perfect case study of early adopters at this point, up to the level of the silly debates about is Android better than iOS etc - where all consumer surveys EVEN of smartphones, say that the OS is nowhere near the top of the consumers' list of choices of what they want in a phone..

Thank you all, I will come with more replies, keep the commetns coming

Tomi Ahonen :-)


> the Communicators have often exhibited that kind of traits, especially the very
> early models. But this is not a problem unique to Nokia, just look at Antennagate
> with Apple last summer haha..

The iPhone went through 4 generations and only one exhibited a major deficiency. From experience, all first 4 generations of Communicators (9000, 9110, 9210, 9500) were buggy, unreliable, much too prone to freezes. By the time the 9300 and E90 were released, the flagships from Tampere had lost all credibility for a whole generation of mobile users.

Notice that there was one major alteration between the 9110 and the 9210: Nokia changed the OS. It moved from Geos to EPOC (an early version of the OS, specially tailored for Communicators, and that would later become Symbian S80). And by the way, in the early 2000s an important transition from the CUI OS to the ISA OS on feature phones took place; it was painful. Even the evolution from S60 to Symbian^3 is proving laborious. Now Nokia is attempting to migrate from Symbian, certainly a bit in the years but at least a rugged OS, to an unproven, immature Meego. I wish them full success, but if history is any guide, this is an ominous endeavour; the big question is how much patience the market will have for Nokia while it sorts out its software.


Friday is the big day for Nokia, but today TechCrunch Europe reports that Elop circulated a memo internally entitled "Standing on a Burning Platform." See

Clearly, Elop's evaluation of Nokia indicates there is plenty wrong internally. He sees Apple owning the high end, Android winning the middle range, and Mediatek and other Chinese competitors snatching the low end. His statement at the last conference call about "build, catalyze, or join" an ecosystem refers to build Meego/Qt ecosystem, catalyze Windows Phone 7 ecosystem, or join Android ecosystem.

With that memo title, I think build is out of the question and he will choose catalyze. I think Nokia will have the ability to customize WP7 somewhat so they can differentiate their brand, and it will give Nokia more time (from investors) to straighten things out. This choice will also make Apple's patent lawsuits go away.


Engadget has posted the whole letter.

Wow, Apple had 61% of the $300+ handset market in 2010.

Elop's memo confirms what many of us commenters thought about the overarching importance of the platform and ecosystem, even if it does include non-phones like the iPod touch and iPad.

With digital convergence, many large companies from other industries will be clashing with mobile companies for "influence" over the user and their cash. Not just carriers and handset makers in the battle, but retailers, content owners, advertising providers, and credit card companies (when NFC arrives in 2 months).


nonsense. in what world are you living in...



I am a Nokia User. Why you may ask?

Cos' I have experienced the joys of 3315 (changing covers, playing snake), the fun of clicking pictures 3320, the messaging of N71, the music of N85, the robustness and N-Gage of N95.

In between all these phones I got myself a Razr, a Corby and an Iphone V1(2007) and yet after all these phones I am back to N8.

And after using it since Oct 2010, I have not had one glitch, I am satisfied with the phone, Sure it needs a browser fix but I have opera
Sure the Social sucks but I have the Socially.

I agree it could do with better Memory Management but I have Xplore and Mobi-Guard to take care of the inner works. Its fun killing off processes and setting up bootup applications.

I used the GPS for a 12 Hour drive once in India where the GPS Sat ranges are notoriously poor and N8 was my savior it never did bleep and die so the battery is good.

I love playing NFS and taking Golf Swings. I enjoy building blocks in Tetris and Flinging birds during my spare time is a treat.

Not to forget the FM Transmitter which gives me the ability to play my own music on my Car's FM Tuner.

My wife want's my Nokia cos she is crazy about the Gem Swapping Bejeweled, My Bro want's my Phone for it clicks amazing pictures.

Why would people Bash Up Nokia? Nokia's Dead? I do not think so.

I am confused.. Arn't You :)))

I hope The new CEO does not kill of Symbian OS Platform now that it is somewhat reviving under the flagship of N8.


Part Time Online Job

you’ve got great elements there and I do like how you encourage the readers to take the time to think.



It happened.

Oh no, Nokia murdered. Elop is the villan indeed.

Dan Carpenter

Great blog. I knew that going with windows was the wrong option, but I wasn't sure what the other options looked like. The future of Nokia is normally presented as "Windows vs Android vs Meego" and obviously that's part of equation, but there is so much more involved with getting people excited about Nokia phones again.

I wish you were in charge of Nokia instead of Elop...


I recently came across your article and have been reading along. I want to express my

admiration of your writing skill and ability to make readers read from the beginning to the

end. I would like to read newer posts and to share my thoughts with you.

Acekard 2i

Acekard 2i

The comments to this entry are closed.

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