My Photo

Ordering Information

Tomi on Twitter is @tomiahonen

  • Follow Tomi on Twitter as @tomiahonen
    Follow Tomi's Twitterfloods on all matters mobile, tech and media. Tomi has over 8,000 followers and was rated by Forbes as the most influential writer on mobile related topics

Book Tomi T Ahonen to Speak at Your Event

  • Contact Tomi T Ahonen for Speaking and Consulting Events
    Please write email to tomi (at) tomiahonen (dot) com and indicate "Speaking Event" or "Consulting Work" or "Expert Witness" or whatever type of work you would like to offer. Tomi works regularly on all continents

Tomi on Video including his TED Talk

  • Tomi on Video including his TED Talk
    See Tomi on video from several recent keynote presentations and interviews, including his TED Talk in Hong Kong about Augmented Reality as the 8th Mass Media

Subscribe


Blog powered by Typepad

« My attempt at humor - the Microsoft Song (sung to Abba's Waterloo) | Main | When Things Get Even Worse Than You Thought - 1st Preview of Potential for Nokia Microsoft Partnership, short term 2011 and 2012 »

February 14, 2011

Comments

Nth

Stephen Elop is the 8th biggest individual stockholder of Microsoft, so Elop's actions are probably criminal.

http://imgur.com/3nN2k
http://www.dailyfinance.com/company/microsoft-corporation/msft/nas/institutional-ownership
He holds shares worth 3 million dollars.

Vitaly Polozhiy

The answer to the puzzle was quite simple. As it's turned out US press was chewing this issue in Decemebr 2010:
http://www.businessinsider.com/microsoft-should-buy-its-way-onto-nokia-phones-2010-12#comment-4d1f37ffccd1d59a632f0000
http://www.prweb.com/releases/2010/12/prweb8019958.htm

Bob Shaw

Tomi - Your analysis makes lot of sense. The first responsibility of a company is to regain its health so I can fully understand Nokia's choice. As the saying goes "One has to live to fight another day".

Now accepting the decision of Nokia to use a third party OS i.e. Windows, I believe Nokia still retains its advantages in smart phones with their great hardware capabilities provided they execute well. Some of the points to support my statement are:

1. There is enough market for smart phones especially at the mid price range where consumers care about functionality rather than OS and the apps. In this market, consumers are looking for a great hardware at a decent price. Nokia can still address this market with their N8, E7 etc. probably at a little lower price.

2. The importance of hardware in comparison to software increases as the constraints around the size/weight/battery life increases. An example the OEMs were better able to distinguish themselves in the laptop/netbook space where the above constaints exist and improve their margins significantly as compared to PCs. The importance of hardware increases significantly in the smartphone/tablet space thus allowing Nokia to distinguish itself significantly even using a third party OS provided the third party OS is competitive which I believe Windows to be.

3. Besides normal computing, there are some unique uses of smartphones especially in the areas of audio, video and imaging. Nokia has great strengths in these areas and thus can easily distinguish itself despite using a non-exclusive third party OS.

Kalle

Tommi I agree with your thought play. When the burning platforms memo was confirmed very similar thought came to my mind. The whole point of hiring Elop was to execute this plan. Last fall it was obvious that ice water was poured down peoples back every time something that could have evoked hope for either Symbian or Meego. MeeGo kept hiring, but I guess that was just a ploy.

As an independent software guy I'm glad I didn't spend more time on MeeGo scratchbox and Qt. I think now the only thing to do is to finish up last Symbian apps and download android sdk and join iOS developers. Damn java and objective-C, meh. When is anybody going to buy apps for Microsoft? Two years from now I'd guess.

Vitaly Polozhiy

@Bob Shaw
I would like to ask Mr. Bob Shaw, what about the client, customer base, which Nokia seems to have lost? After such illogical steps and. After 11 February 2011 Nokia is the most hated and despised company in the world so as its customers of many years feel betrayed and disparaged by Nokia.

OK, let us presume that Elop tried to save Nokia, but what about the cancellation of the release of long-awaited and achieved through many sufferings N9?
Why delay it for a year?
It has nothing to do with "regaining health" . It is called SABOTAGE.

Phil W

@ Vitaly,
I think (whatever you think about the strategy with MS) that if you think that Nokia is the most hated, despised company in the whole world, then you need to examine your grip on reality. Most consumers won't care at all about this change.

Vitaly Polozhiy

Phil, you may be right cocerning my grip on reality, but , nonetheless, you have to agree that the most sophisticated layer of customers who bought top-notch mobile phines from Nokia are quite versed in phones and can distinguish MeeGo from WM7.Ironically, it is them who make tasty margins in sales and bring profits to Nokia.
Yes, the market of dumbphones hasn't been affected (though I doubt it),but it goea about smartphones, right?
Nokia is being prepared to be taken in by Microsoft.
That is my humble grip on reality. )))

Bob Shaw

Vitaly:

I am sure that there are Nokia customers who would be disappointed by this deal with Microsoft. However I believe that when these customers understand the choice that Nokia faced they would reconcile to the decision taken by Nokia. I believe that folks at Nokia need to spend some time communicating their decision to their loyal customer base. The CEO Mr. Elop has started this process but they need to do more.

Vitaly Polozhiy

Sabotaging N9 with MeeGo was an acute necessity too?

vasra

Too verbose and convoluted, but in the end roughly correct, imho.

Nokia screwed up, gave away it's value-added sales future and made itself the Dell of mobiles.

Good luck with that strategy.

Also, Tomi, if you very carefully read the slides and listen to what Elop says, then the following looks to be the situation now:

- One MeeGo device is likely to ship
- Meego dev costs will be reduced c. 60%
- Qt is nowhere in sight ("being evaluated")
- Symbian is utterly, totally dead, it's just officially on life support (will be cut to zero, if you look at the press briefings)

So. MeeGo is not totally dead, it's just some tinkering platform, whatever that means.

Perhaps a Plan C, if WP7-game fails and Nokia has to go crawling back to Google.

Ola

"people dont like Windows" DOH?!...I dont mind..... I DON`T like apps!


GO Microsoft GOOO Nokia :-))) lets shake the tree ;-)

Phil W

@ Vitaly,

The people who are probably most upset are the developers and I can understand that. The customers who frequent the blogs may well be upset as well (so you have a point), but these do not make up the vast majority of consumers. Most people buy phones because they like the look and feel of the phone and what it does for them (not what OS it contains), so those that liked Nokia phones before, will still like Nokia phones and those that didn't still won't. What will happen is over the next two years they will become less competitive and will become increasingly discounted to sell. They will still find buyers as not everyone wants or can afford the latest shiniest phones on the market. the jury is out on the MS phones as they are still the best part of a year away and the MS software will be different to what you see today by then.

Ts

I think sum it up:

logic, gaming, patents, scale, powerplay, the ambition of Nokia to remain leader also 2-5 years from now. I'd put my money down on them succeeding ahead of Android and iPhone. Why? Everybody knows windows and it is nothing if not the most natural transition to make for most PC using consumers in most key markets. Not about better, it's about being able to do the math as Tomi you do tend to know.

Moreover, these brands can be trusted by other businesses of any size. Read the privacy clauses when you sign up for google. The employer that gives all his employees iPhones is seen to be overspending nowadays. The Nokia Windows Phone may very well be the new Superphone for the common person that works perfectly well in sync with what you already may have at home. Perfect salespitch.

It is also risky. But without risks no rewards.

Don McLean

@ Ts
> Everybody knows windows and it is nothing if not the most natural transition to
> make for most PC using consumers in most key markets

By that kind of logic, Windows Mobile should have won long ago. Wait.

Carlos

As a developer, I fully regret this decision. I was starting to learn Qt, so in that I've not lost a lot of time.

I like Symbian, but I don't care too much about the kernel and the WP7 UI looks nice (although maybe it will be boring with time). And I think that most consumers will take a look and decide if it's nice, then they will buy it.

What I think is the worst for me and my company is that WP7 is even more closed than Apple. Now I wont be able to recommend to my clients a Nokia phone because I won't be able to install the application I have done to him out of Ms Marketplace (please, correct me if I'm wrong). This is an unsolvable problem. What will happen to small developers that don't want to use the MS Market? Also, even if I want to sell in the Marketplace it seems that the bureaucracy is a big problem http://mobilephonedevelopment.com/archives/1177

As a user, I don't think I will buy a phone without USB support, full BT profiles, native code applications... but I know that my preferences are in the minority.

Finally, as a little rant, why is Windows Phone 7 considered a smartphone and Nokia S40 not? their capabilities are almost the same.

willem


"Nokia was like a plane rapidly losing altitude. If you don't pull back on the yoke in time, there's nothing you can do to avoid hitting the ground. The company was very close to that point."

"It's not as much fun as conquering the entire tech industry, but it's a lot better than going broke. And it's probably the only choice Nokia had."

http://mobileopportunity.blogspot.com/2011/02/impact-of-nokia-microsoft-alliance.html
Nothing more really needs saying. Certainly the Nokia fans I've heard had no other plan other than more of the same, it seems.

novice

Hi Tomi,
I am an avid reader of your blogs and it all made sense to me except this one. To me the most important thing that Elop did to Nokia now is not the decision to ditch Symbian or Meego but the decision to ditch its vision of being an internet company. Could the board make such a decision while hiring the CEO back in september?

As you say everyone in the industry is moving up the value chain, from Apple to Samsumg to HP, everyone. Then the biggest of all, Nokia, had seen this coming early enough I guess and came up with a new vision of becoming an internet company. Then Nokia started working on the new vision and at least changed its organization setup according to the new vision. What you are proposing is that when Nokia had to hire a new CEO, as its share value eroded due to poor execution, the board has hired a CEO whose proposition was to ditch its vision? Do you believe that Nokia board directors agreed to the new direction that Stephen Elop brought, the direction of going backward? Even if Nokia board decided to go back, why should they chose Elop for that? Doesn't anybody else, even OPK would have done that job, isn't it? Also you are presuming that Nokia board has approved this journey of going backwards, by even allowing to kill Meego, knowing it would have been better than Phone7. As you put it, if Meego was released it would have made things difficult for Nokia to move backwards, as Meego would have turned out better than Phone 7. As you have said in earlier blogs, Meego didn't needed to beat iOS, to become the most widely used. It only needed to be good enough to be widely used as history shows us.

How would you explain in this story, the big announcement that Elop made after becoming CEO, the announcement about Qt? If the board and CEO had already made up their mind about ditching Meego and Symbian, why should they do what they did with Qt during that period? Was the intention to cheat people to make them think we are going north while the hidden agenda was to go south? Could a company like Nokia, with Finnish values engraved in it, do this?

I am trying to think about other possibilities that the board would have had back in september if they had to take the step they took. I don't know anything about business, but I am raising some questions here.

Nokia could have split the company into a device manufacturer who concentrates on devices and a software solutions company (internet company). Thus giving a chance for the Nokia software solutions company, a fairly nimble unit who gets a chance to get their execution correct. Nokia device manufacturer would have stood as Nokia is today (after 11th Feb). If needed, Nokia device manufacturer could have made phones with Android, Phone7 and others on top of phones containing Nokia software solutions? This would have given a chance at least for Meego and the whole idea of open software to prosper on planet earth, if Nokia was ever really serious about it. Am I over simplifying things here? Kindly pardon my ignorance. Even if the Nokia software solutions failed, Nokia device manufacturer would have stayed as Nokia is today, but may be better, with an array of devices with Android, Phone7 etc. At least it would have given Meego and all those who are loosing their jobs now, a chance.

DS

Nokia is certainly betting on the fact that it can create compelling market for struggling WP7, turning into dominant provider and creating an equivalent of wintel franchise of the PC era.
Let's assert that as a fact.

If NC can create market of its own with WP7, than it could create it with any other capable OS, make it Android, MeeGo, WebOS.

With Android they would further fragment the platform. So what? With market creating power soon they would be dictating what is the standard and what is not. And Android devs may not like this but have long prepared mitigation strategies, supporting another brand of such a prominence would be a no-brainer.

With MeeGo route they should have announced Android compatibility this time, paired with compelling, high productive native platform support (QT) a feat that NO other mobile platform can offer (even IPhone), this would have provided a good start without the drawbacks.
What they could offer Google in exchange for access to market? Much better map and location support in many key areas in Europe than google can to offer. Deals with operators (only credible way to sell apps and services in many parts of Europe)
Platform-wise they would eat the cake (stable route to own sw platform) and have the cake (no chicken-egg dillema) and even more (compelling native development ).

With WebOs route we would have similar situation to current one, only then they could have a better leverage and (to many) a better OS, that's definately easier to switch developement teams to than WinMo. After all the have eaten teeth on developing mobile linux already.

All 3 scenarios somehow miss the US part, but given Nokias great hw (that in some aspects stops the android competition) I guess it would fare well in the end.

All of this with much smaller price than going with MS.

Kumar

Wow! This blog and the comments show the most incredible lack of understanding of the smartphone marketspace. Symbian is a complete no-go in the US. Meego was NOT ready in Oct 2010. Even now, it is nowhere near ready for productization. N9 was NOT delayed by Elop. There was no Sabotage. The software was simply not ready and is still not ready for launch. Please check with your contacts within Nokia to get the actual facts rather than wild conjecture. It is laughable to hear the N9 was delayed for a year.

Nokia never could develop good software in time. Nokia took 18-24 months to develop a product, while LG/Samsung/HTC used to release products in 8-12 months.

In the US and Europe, it is all about eco-systems. There was a very slim chance for Meego to develop an ecosystem, especially given the size of the Android/IoS ecosystem. Seriously all - please look up the definition of "network effects" and how it helps platforms to succeed or fail.

I understand that there are a lot of Nokia fans here. But please be honest and realistic. The scandinavian culture of 9am-4.30pm is not going to work with the 12 hr workdays of the smarter, more innovative software folks in Silicon valley or the 14-16 hr sweatshops of LG/Samsung.

NOkia's ecosystems had a glimmer of a chance in 2009/early 2010, before Android became the ecosystem of choice. Nokia moved too slow and the race was pretty much over.

Lets not bring idiotic conspiracy theories here. Nokia has two choices - Android or WP to survive. With Android, Nokia had literally no avenue to differentiate and it would have been a price war. With WP, there is some avenue to differentiate. That is the only reason for the decision.

For all you folks who believe so fervently in Meego - whatever gave you the impression that Meego is ready?

Jonas Lind

Interesting article but there is a flaw in the argument. New CEO-candidates from the outside would not offer specific advice on a detailed level before they are hired.

The not-yet-hired candidates are not given access to sensitive confidential internal information. A prudent and professional executive would refrain from holding strong opinions before he has all the facts on the table. Once hired, he would spend considerable time asking his business units for things such as SWOT-analysis, financial reports, and market data.

However, you might be right that the board made this decision before hiring the new boss. On the other hand, considering that Elop’s burning platform memo seems to be genuine (no denial at the press conference) and that the memo contained erroneous market data, the higher echelons of the business world might be just as haphazard as the rest of society.

The comments to this entry are closed.

Available for Consulting and Speakerships

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

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati