The Nokia CEO 'Burning Platform' memo at Engadget, doesn't ring true to my ears..

Engadget has published the full text of what it claims is a memo by Nokia's new CEO Stephen Elop. The memo is entitled the 'burning platform' memo. It seems to foreshadow a shift in Nokia smartphone strategy but is not clearly identifying what that shift would be. It is a good read, and well written, with lots of good facts in it. Its general sentiment, to rally troops, seems about right. I think, that to most industry-watchers, it seems very credible, as it could have been written by Nokia's new CEO.

UPDATE 11 February - Stephen Elop has confirmed today that the memo was real. This whole blog posting is now pointless, I was wrong. I will of course leave it here if anyone would like to come read it (and its comments). But please recognise - I am admitting I was totally wrong about it. For those who want to see what my view is of the new Nokia Microsoft alliance, please read: Wow this is good for Microsoft.

I don't think so. I think it is a hoax, but honestly, I do not know Stephen Elop, I have never met him, and I certainly have not heard one way or another, from my Nokia friends and colleagues, whether that memo is actually true. (please read the memo first, at Engadget)

Here is why it doesn't ring true to me. There are several astonishing errors and also 'obvious' missing pieces, that I cannot imagine Nokia's new CEO 'not having heard' from most of his meetings with most of his staff. I think, it reads more like a US analyst, who is trying to influence the discussion, who knows much of the Nokia story, but not the whole story. Here is where I think there are very glaring omissions or faults.

First the statement about Apple owning 61% of the 'over 300 dollar phone' segment is patently wrong, and Nokia is nothing if not meticulous about market shares and they buy every report and their competitor analysis department could not have suggested this kind of number. This to me, is an Apple-friendly analysis, based on US market share, not globally. Let me explain why. Apple sold about 47 million smartphones in 2010. RIM ie Blackberry has an average sales price of over 300 dollars, about half of its smartphones sell in that price range (over 300 dollar phones). Lets call it 23 million. Then we have HTC and Samsung, both sold about 25 million smartphones - the whole Samsung Galaxy series is in that price range (Samsung also sold 5 million cheap bada smartphones in 2010) and I'd say most HTC phones are in the price range. Lets call it 35 million combined from Samsung and HTC to play safe. Then what of Nokia? It sold 5 million S^3 phones in just one quarter, those were all 300 dollar or more phones (plus many more N97s and premium E-Series phones as well in the quarter). Again, if we play it safe and say of Nokia's 100 million smartphones, only 20 million were in this price point, we already have a combined global market of 125 million phones that cost over 300 dollars. And Apple's 47 million would be 38% of that. It will be even less, after we add premium cost Motorolas, SonyEricssons, and various other premium phones like the new ones from Sharp etc. No, this number does not ring right. I can believe, that an American analyst would be inclined to believe that as a 'fact' that Apple has 61% of the premium phone market, but Nokia knows this far better, and Nokia internal staff know the numbers better, they would not believe their new CEO if he suddenly says Apple is that big. And they have the corporate licenses to big handset analysis reports by Gartner, IDC, etc that all echo the same story. That Stephen Elop would start his email with such a number, that his own competitor analysis department would scream and kick and yell that it is totally off, does not seem right to me. But maybe its an isolated error. Lets read on.

On the low price phones, the memo mentions MediaTek but it does not mention any of the low-cost handset makers by name? The memo dares to mention Apple and Google, but now the CEO seemingly doesn't dare to mention Chinese brands like ZTE, Huawei, G'Five etc? That doesn't seem right.

While we are on competitors, Nokia's real competitor is Samsung (not Apple) and all at Nokia HQ know this. Samsung has recently launched its own OS bada (the most successful new OS launch in history, better than Google's Android or Apple's iPhone in its first 6 months) and Samsung is very successful in the high end with Galaxy smartphones and - most relevantly - Samsung has passed Nokia in the dumbphones market of Europe and now gaining in Asia, including China. He mentions Apple and Google but ignores the real (and currently only) threat to Nokia's hegemony, Samsung. This to me doesn't sound like the CEO has understood his primary competitor or the main market or how his primary competitor is moving into the smartphones space. I cannot imagine that the real Stephen Elop was blind to Samsung, and I cannot imagine if he talks of competition, that he would not point out how hungrily Samsung is eating into Nokia's markets globally. This doesn't ring right to me.

Then he supposedly writes "While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time." This again smacks of ill-informed US based views of Nokia. "..we missed big trends" (?) WHAT? Excuse me? I can accept, definitely, that Nokia has recently been executing poorly, and its early steps in new areas have been clumsy. But 'missed' big trends? Which trend has Nokia missed. Name even ONE! Touch screens? Before iPhone! Internet phones? Nokia did the world's first. Consumer smartphones? Nokia invented that. Gaming phones? Nokia had years before the iPhone ever heard of Angry Birds. An app store? Nokia followed this trend from Japan five years before Apple launched its first app store. A developer community? Nokia has had it for more than a decade. Apps? Nokia has a whole unit that sells apps and services. Maps? Nokia bundles those on the phones. Money? Nokia launched Nokia Money long ago. Dual SIM phones, Nokia did that years ago. What trend is it that Nokia has supposedly missed. MISSED?

I can accept that Nokia's touch screen interface is not the most elegant and its user interface is currently not as good as rivals. That is not 'missing big trends'. The are perhaps slow in capitalizing on the big trands. That is fair. I really can't see him saying this. This is a typical US analyst view who don't know about Nokia's global products and its years of innovations. Stephen Elop could easily say, "we were not capitalizing on our innovations" or something like that, but seriously, he has been on a deep fast fact-finding mission to understand the company he is running. There is no way, Stephen Elop could be under any misconception about where the big trends are, and when Nokia first moved to enter those trends. I cannot believe he would say this in a memo to staff. This to me, sounds like a US analyst writing what he wishes Nokia would say, from a US viewpoint.

The supposed CEO memo continues "At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind." Again, 'years behind'. Years? On what? I could see, that last summer, when the N8 was again delayed, and Symbian S^3 had not shipped, that perhaps, perhaps a Nokia CEO could say, they were 'years' behind. But not today. Ovi store is the second best-performing handset maker app store behind only Apple's App Store. Nokia is years AHEAD of most of its rivals from RIM's app store to Microsoft's. Symbian S^3 sold on 5 million handsets, on only 3 Nokia models, vs Microsoft's brand new and fresh 'from the ground up' OS, Phone 7, which on about a dozen phone models from several manufacturers, shipped 1.5 million units in the same period.

Meanwhile Google talks of Google Money (Nokia Money years ahead). Apple is rumored to introduce Near Field ability to hits handsets (Nokia years ahead). I can see that the CEO would want to motivate his staff to work harder, and I totally agree that Nokia is currently under-performing. It is executing poorly. But this is totally the wrong message from the CEO, the facts he sees and hears, cannot support this type of claim. If anything, after Nokia bought full control of Symbian, Symbian has been climbing back into the game. It is not as user-friendly as Android or iPhone OS, but it doesn't need to be either - for that Nokia is bringing MeeGo and has very good 'prototype' experience from the N900 that ran Maemo. Nokia can definitely create a very competitive and utterly modern OS. Symbian is clearly stated to be the legacy OS, to power increasingly lower cost smartphones, and is designed to operate on modest power phones (CPUs and memory). Nokia is far ahead of Android or Microsoft Phone 7 or Apple iOS, in specifically having Symbian prepared for low-cost phones, something bada at Samsung is also designed for. To my mind, Nokia's CEO would be mentioning this, not saying they are years behind.

What is more, Nokia invested heavily in designing a migration path for its two operating systems, to help developers manage that transition. That is built around Qt and it is a centerpiece to Nokia's smartphone strategy. Qt is not mentioned in the whole memo? Why? He mentions Apple or iPhone four times and Google or Android four times but no mention at all of Qt? This again, seems to me like it was written by someone who studies Nokia but isn't fully aware of it. I cannot imagine, after all the effort Nokia does in all its communications to promote Qt as critical to the two OS platforms it controls, that it would not even be mentioned here. And it is definitely leadership - Microsoft decided it was too complex and costly to help its developers migrate from Windows Mobile to Phone 7 and just left the developers adrift. They now are witnessing the effects of that. And I cannot - cannot imagine - that Nokia's CEO could think, that this Qt strategy was somehow wrong, now? When we are mere months from the first MeeGo devices? This is the ultimate care of an existing eco-system. To go through the extra effort, time and money, to build a migration path - for Nokia's developer community! If the CEO talks of competitors, and 'falling behind' and ecosystems, why the stunning silence about Qt? What would be seen as the ultimate betrayal of Nokia's loyal developers would be for Nokia to abandon Qt and MeeGo now, mere months before the first phones? I cannot see Nokia CEO making this strange memo, without acknowledging Qt. It doesn't ring right to my ears.

Now what really hit me the first time I read this memo, that made me 'decide' it cannot be right, is the line in it that reads "Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes." This sentence refers to the widely-reported Canalys numbers about Android OS overtaking Symbian in Q4 of 2010. But right after it was released, many analysts have said the numbers don't add up! It is a math error! You don't build corporate strategy on someone's math error haha. Canalys have jumped the gun, it has not happened that Android would be bigger than Symbian (that is likely to happen, now in 2011, and this is something Elop would be very wise to warn his staff, but not claim it had happened). Right now, IDC for example very explicitly on Monday said that Nokia is still ahead of Android. The official numbers from Google itself on Android, do not support Canalys's claim! I cannot believe, that Nokia's CEO would take a number which is ridiculed by the industry (and must be against every other measure Nokia tracks internally) and puts it in the memo! I can see it from a US based tech analyst, who is not that familiar with the issue. Since the Canalys number had more than 400 press mentions all the way from CNN and CNBC and Bloomberg on down - it must be right. But Nokia CEO would know fully well that there are four analyst houses and that this one number is utterly at odds with what all others report on the industry. He would not take it as the truth, where all other evidence suggests the opposite. It would not be believed by anyone in the organization (but would be easily believed by those who are not very familiar with the industry, especially US analysts, who have heard earlier - correctly - that Android had overtaken Apple and RIM). This is the biggest glaring error in the memo to my mind, I cannot see that Nokia's CEO would give any credence to that reported market share. Especially not, when its already been discredited by other sources Nokia prefers to use, like IDC.

Then a weird statement. The supposed memo states "We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market." Its early February. If the CEO wanted, he could easily accelerate MeeGo development and give it resources and bring more devices to the market, if that is what he needs. I think this is now an analyst 'speaking' who projects from recent delays in N8 and E7, and expresses a warning about possible MeeGo delays. It really doesn't seem like the CEO would make this kind of 'forecast'? I could see him 'committing' to some number or asking his team to help ensure they have x models this year, but for the memo to have this kind of 'forecast' seems totally at odds with what I would imagine any CEO saying about his company?

The truth is, that MeeGo is new. It is the amalgamation of Nokia's Linux based open source new smarthone OS project, Maemo (that powered N900) and Intel's similar project. The strategic decision to join with Intel is a masterstroke by Nokia, it brought new partners into the new Maemo/MeeGo ecosystem and of course, because of this there would be no more Maemo devices, and MeeGo would need to be managed together with Intel. What is far more important is a good OS, than having tons of devices on the OS (remembering that the 'old' Symbian in its newest edition S^3 outsells the brand new Microsoft Phone 7 by more than 3 to 1). Again, I cannot imagine that the new CEO of Nokia would not have studied MeeGo carefully and know this. Most Nokia staff know this. Therefore there is no point at all in saying it is now somehow 'in jeopardy' or 'endangered' or 'severely delayed'. I can believe that Nokia's new CEO would want MeeGo devices this year, but for him to suddenly say he projects only one device - when we are in February, this doesn't seem right to me.

And on that point - why no mention at all of Intel, Nokia's partner in MeeGo? Or no mention at all of NTT DoCoMo, Nokia's biggest remaining partner in Symbian. How can it be, that Symbian can power phones for the world's most advanced mobile phone market, Japan, years ahead of every other market - and is the OS of preference by NTT DoCoMo the worlds' most innovative and inventive mobile industry company, and at the same time that same Symbian is obsolete and somehow 'years behind' the competition. I again don't see Nokia's new CEO being somehow so ill-informed about key strategic assets - and key strategic allies - especially in a memo where he talks about ecosystems and partners.

Then the funniest error in the supposed memo, is something only a US based writer would dare to write with a straight face, and no Nokia exec would accept - "(Symbian) ...has proven to be non-competitive in leading markets like North America." Haha. Yes, Symbian is failing in North America. But Nokia do global analysis of all of their markets. They know fully well, fully well, that the world's most advanced market for phones is Japan. Then comes South Korea. Then come the other leading Asian 'Tiger' economies like Singapore, Hong Kong, Taiwan etc - here we have far more than 50% smartphone penetration rates etc. After that comes Western Europe, ahead of the North American market. There is no way, a Nokia exec will say with a straight face that North America is a 'leading market' in phones - knowing how well they do, how backwards the US carriers (mobile operators) are in stiffling that market.

To me the memo is a well-written hoax, which has a few critical 'obvious' errors. Here for example, if the memo had read something like 'proven non-competitive in significant markets like North America' or in 'important' markets like North America or 'growing' markets or something like that. But for anyone to suggest North America is a leading market in mobile phones, this is something laughed at by all major analysts. It is a mid-range market, slightly behind Western Europe, on par with the Middle East and slightly ahead of Easter Europe..

On the Symbian paragraph the memo says "if we continue like before, we will get further and further behind" and again, this is something that the US based myths do perpetuate, but the facts are strictly the opposite. Symbian based Nokia phones outsold its two biggest rivals, all Apple iPhones and all RIM Blackberries, combined. Yes, the CEO could have written that rivals are starting to catch up to Nokia, but just in smartphones, Nokia is more than twice as big as its nearest rival. (and is still profitable!) You want to give this 'problem' to Toyota? To Coca Cola? To Boeing? Anyone in almost any other major industry would desperately love to have this 'problem' of being that huge, that you are twice as big as your nearest rival. I cannot imagine the Nokia CEO would make such a blatant error in his memo, suggesting Nokia is not far ahead. Yes, the rivals are catching up, but Nokia is not behind! Not falling 'further' behind. And definitely not falling 'further and further' behind. This could only have been written by a US based analyst who mistakes US market share for global market share. Nokia HQ staff know fully well that the world outside of USA is 3 times bigger in smartphones (and 8 times bigger in dumbphones).

Lastly, the direct oppostite finding. When the CEO says Symbian has proven non-competitive in 'leading markets like North America' - when we go to the world's leading market, Japan - Symbian is supremely competitive there! The exact opposite is the truth, but few analysts know the Japanese market. Nokia knows, and Nokia's Symbian team knows very intimately, because NTT DoCoMo, Japan's biggest mobile operator/carrier with half the market there, is a Symbian partner. I can see how a US based analyst would think Symbian is failing in 'leading markets' but I know that the Symbian team inside Nokia know the facts, that Symbian is succeeding in the market with by far the most advanced phones and by far the most demanding customers, used by the operator/carrier that is by far the most demanding. The Nokia CEO could not have missed this fact, when talking to any Symbian people at Nokia.

Lets move on, the memo mentions how fast the "Chinese OEM's" are - where all Chinese makers combined produce less phones than Nokia alone - but doesn't mention Samsung - which is by most industry analysts who specialize in Asian phones - far faster than the Chinese - and who are closing in on Nokia's market share (leading it in some markets already). This again, doesn't sound like it was written by a real Nokia CEO. There is speed in innovation, and then there is South Korean speed, which is legendary. He does mention the speed, yet he somehow ignores the chance to motivate his staff, that Samsung is using its world-record speed to catch up on Nokia (and has now in public even stated that its goal now is to become number 1. This memo really doesn't sound right. The theme - lets compete harder - makes sense but the example, Chinese OEMs without names, and ignoring Samsung, this doesn't seem right to me).

Then the memo has a paragraph on ecosystems. I much agree with that paragraph. But, if this was Nokia's CEO, I cannot see that he'd be able to include this glaring contradiction with what he wrote just a little bit earlier. The ecosystem includes not just hardware and software but "developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things." Yes. What was that? Developers? And previously in the memo Nokia was supposedly not innovating and years behind. Nokia's developers were recruited way back in the previous century! Applications? Nokia has a software unit that reports quarterly. Ecommerce, fine. Advertising? Nokia has bought two advertising companies to build its ad platform years before Apple or Google bought their first mobile ad platforms. Search, fine. Social applications, fine. Location-based services? What is Ovi maps for goodness sakes, Nokia was the first to offer maps totally free. And so forth. Either Nokia "thought it was making the right choices but has fallen years behind" or else this chapter about the ecosystems is not true, but both cannot be true. They are at a contradition! And again, a brand new CEO, in a memo to energize his company, cannot possibly make this basic level of error? This does not sound right to me.

While on ecosystems.. where is Ovi? Again if the new CEO emphasizes the need for an ecosystem, surely Ovi should at least be acknowledged in the memo? The world's second-biggest app store by a handset maker? Far ahead of most rivals? And all the steps Nokia has done to expand this ecosystem, not just apps but also services and content and maps and communities etc.

And then on customer preference, again I agree with the sentiment, and have written on this blog that Nokia loyalty and customer preferences are in decline, and that is very bad for Nokia. But this paragraph? "(Nokia loyalty is) ...also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE..." 

????

Russia. Yes. Germany. Yes. Indonesia. Yes. UAE? WHAT? Yes, I love Abu Dhabi and Dubai, but come on? Where is Nokia's single most important market? CHINA? China alone adds a whole new UAE every single month in new mobile phone subscribers. Where is India, Nokia's second most important market? India now adds not one, but TWO whole new UAE's every month! There is no way, no effing way, that Nokia CEO would write a sentence about Nokia's 'traditional stronghold' markets and ignore China and India, while including the United Arab Emirates. Wrong, Mr Fake Elop. This is not a Nokia CEO writing.

Note that the facts actually support the thesis - Nokia has been bleeding markets share in China and in India! So if that is Elop's message, he would most definitely include China and India in the memo! China houses the world's biggest phone factory for goodness sakes (a Nokia facility). There is no way, no no way, that Elop mentions the Arab Emirates, but forgets both China and India, the two biggest markets in the world of mobile telecoms.

Now, as to the sentiment, that Nokia is in trouble - yes, that Nokia faces huge changes, yes, that Nokia needs to embrace change, yes. Yes, the sentiment is right. But the statements in that memo do not ring true to my ears.

I think we'll know for sure on February 11th. If Stephen Elop's strategy presentation echoes many of the themes in this memo, then I will be clearly wrong. I doubt it. I do believe that his strategy view will be in many ways at odds with this memo. I do think that Nokia is very committed to Symbian, MeeGo and through Qt and Ovi is well along in achieving a long-term sustainable ecosystem leadership advantage, using its partners like Intel and NTT DoCoMo. I believe these will be clearly stated in Elop's strategy. There are lots of areas where Nokia is struggling (as I wrote in my blog last week giving my recommendations) but the platform for Nokia is not burning and definitely, now is not the time to jump off Symbian and MeeGo to Android or Phone 7. Yes, the CEO needs to motivate his team and company, but I do not believe this was a real memo from Stephen Elop. One or two of the above mistakes I could see in it, not this list of errors. No way would Nokia's CEO be so deluded from the facts.

(But obviously, lets see. Worst case, it is proven to be real, he really believes all that, and Nokia is led by a delusional psycopath who willingly suspends reality. Imagine if Microsoft had thrown in the towel when it had the world's biggest PC operating system! Imagine if Blueray had stopped fighting for the market when it was leading. This is silly)

Lets see if we get any official confirmation or denial of this memo. I do honestly believe, it cannot be true, that it would seem like the CEO didn't understand his own company, its markets, its products, and would not be believed by his own staff if he circulated this memo with this wording. But hey, I'm an outsider looking in, wouldn't be the first time a CEO had misunderstood his company haha..

ADDENDUM -  We have over 50 comments on the blog. I am writing now to clarify. I thought I was perfectly clear in the above - but let me be as clear as I can - I TOTALLY - TOTALLY agree - AGREE with the SENTIMENT of this supposed memo. Do not write comments saying 'Tomi you are delusional' etc. I TOTALLY AGREE with the main themes that this memo expresses. All of those - ALL OF THEM are valid concerns for the new CEO - and I HAVE MYSELF EXPRESSED MOST OF THEM ON THIS BLOG BEFORE. I am NOT SAYING that Nokia is 'not in trouble'. I am ONLY saying, that when I read that article on Engadget, and many of my Twitter followers asked me for my opinion, I said I don't think that is genuine, that I honestly think it is a hoax - because of some detail errors in it. It is possible that this is an inaccurate representation of Stephen Elop's statements, speeches, blogs, memos whatever. If so - if it is not 100% verbatim exactly from beginning to end exactly as Elop wrote it (or spoke it) - then I am right. That is my only point. I feel like there is some fraudulent person who has manufactured a well-written story, that seems credible to be from Stephen Elop to his staff. It apparently has borrowed several direct phrases from other items he's said or written.

The point is that I - Tomi Ahonen - TOTALLY AGREE with all major sentiments in this supposed memo. I am not in denial about any of the issues reported in it, as being problems with Nokia. I am finding astounding faults in how it is written - on specific items that to me, are not professional, and to me, could not have been expressed as they are written. That is why I feel this is a hoax. I have never said in this blog that the main points of that supposed memo are not true. I AGREE with the memo, ok? I just believe, that a Nokia CEO would not be making these basic errors in basic facts. Are we clear now? Tomi fully agrees with the 'sentiment' of that memo. Not partly agrees, fully agrees! Ok?

UPDATE - I just read a brilliant comment by Terence Eden @edent on Twitter who said that this might be taken out of context. If this was part of a longer memo, where Stephen Elop said first "Others are saying this about us" - then yes, very clearly, this could be in a memo, but then Stephen Elop would know - and his employees would also know, that those statements are not reality. That would be fine, and then, Engadget would have been publishing deliberately or accidentially a partial excerpt that expressly communicates the opposite of what was intended.

MORE - I have written a companion volume to this blog, explaining to those who might not immediately 'get it' why Nokia's current smartphone OS strategy (Symbian and MeeGo with Ovi and Qt) is the best for Nokia and any change to the OS now in 2011 would be tantamout to corporate suicide. The blog article is here Why Nokia OS Strategy is Right for Nokia.

EVEN MORE - and for those visitors who are interested in the overall market shares and the major players in the smartphone industry, as the final numbers were reported earlier today, I have just done my final analysis of all the numbers, market shares, major manufacturers, operating systems, by Q4 and for full year 2010, at this analysis: Smartphone Bloodbath 2010: Now Final Numbers.

Comments

[Rurik Bradbury]

WP7 is the right move. It will get Nokia back into the US market and give MeeGo cover until the Qt -> Symbian/MeeGo developer proposition is actually up and running.

[gyzar]

Great article, thanks a bucnh!

[John]

Did Nokia hire the same marketing group that put on the "Developer losing his iphone 4 in a bar"?

The community is buzzing - we'll find out the reality behind this memo on Friday.

[kevin]

Tomi, I think it's valid. The WSJ has also now carried it, and I'm sure they've checked it out.

I actually think it was intentionally leaked by Nokia as a trial balloon for the market and analyst reaction prior to whatever gets announced on Friday.

[Brian]

BBC News saying that it has confirmed the memo as genuine....

[Mark]

Really? Do Nokia own the BBC now?

Pro tip: The BBC don't always get it right.

[Kobra]

what Elop should be doing is putting as much effort into speeding and intensifying MeeGo development and marketing, as in my experience this is the best platform currently available. It's the most open of all and it has very very nice development tools for for C++/Qt, declarative QML and WebKit for HTML development. And if I can judge from predecessor Maemo and well by the fact it is so much open then the potential is really huge. But I guess his past at the dying Microsoft (even Bill Gates doesn't believe in it anymore if I judge by the fact that he is selling large quantities of Microsoft shares), could be a real danger. And if this truen sout to be true then I guess Nokia will just dye together with Microsoft. it will be slow and painful but well, even the biggest die some day. So what I I'm trying to say is: I hope Elop is smart enough to keep his past behind and keep away from Microsoft and do the right thing and focus 100% on excellent open platforms for the future which are MeeGo and Qt.

[Tomi T Ahonen]

Hi all

just so you know, as I CLEARLY stated in my blog that i AGREE with the sentiment of the supposed Elop 'memo' but I find several statements in it erroneous or bizarre - I am of course deleting all comments that suggest I am somehow in 'denial' about Nokia's troubles and comments that suggest I think Nokia is doing just fine.

The rules on this blog are clear, that you have to read the article before you are allowed to comment. Anyone who is not adult enough to understand basic English when I clearly both in opening to the blog - and in the conclusion of hte article I repeat myself, saying about the supposed memo that its 'sentiment is right'. I only take offense to the errors and bizarre issues in the memo. All who try to waste the time of my regular readers, by posting comments that were not related to the actual blog article as I wrote it, are now deleted. Stay on topic guys, I'll respect all views that are related to the actual blog including 'Tomi you are an idiot' etc, but not those who didn't read the blog.

Tomi Ahonen :-)

[Bill]

There is a thread to these comments that says that Elop is a microsoft spy/psychopath/saboteur and that he will push Nokia towards WP7 for that reaosn.

Here's another possibility. Maybe the board of Nokia actually made the decision last year that WP7 was the way to go, and that's why they fired OPK and hired Elop. Even if this si not true Elop clearly has the board behind him for whatever he announces. I am predicting:

1. Licensing of WP7 (Android is too competitive)
2. Immediate death of Meego and slow death of Symbian (the developers and NOK fanbois will scream but what is the point of having two competing OS).

We keep hearing from the fanbois how advanced Nokia was in smart-phones (they had all these specced up phones before apple etc etc). Simple question: if they were so advanced why are they in the position today where it looks strongly like they are doing a 180 on smartphone strategy?

I think you guys were all deluding yourselves. They weren't really that advanced. Instead they were doing the opposite of Jobs/Apple. Instead of carefully deciding to add a technology/feature, picking a cost-effective supplier, implementing the feature robustly in software, featuring it on all their phones (as Apple has done), Nokia did:

1. Spew out features like diarrhea and see what sticks
2. Compensate for #1 by choosing the most expensive and highly specced feature (hello 13 megapixel camera!!!!). I don't even need the resolution offered by a 5 MP camera. That's why some of their smartphones are so expensive.
3. Don't think about how the software operates the feature (someone earlier made a comment about 'always-on WIFI/3G' and how Symbian failed epically to make this seamless). If a feature is difficult to operate then there is no point in having it.
4. Segment their phones like crazy. I know this is against the Tomi wisdom but it leads to farcical end results like this:

'Nokia N8 vs Nokia E7 Dilemma – What would you sacrifice for: Camera or QWERTY Keyboard?' (http://symbianworld.org/8252-nokia-n8-vs-nokia-e7-dilemma-what-would-you-sacrifice-for-camera-or-qwerty-keyboard-poll/)

Why not be courageous? Pick a set of features that you think are essential but not luxurious. Make them work. AND PUT THEM IN ALL YOUR PHONES!!!

[Bill]

See this:

http://twitter.com/vicgundotra/status/35182523650801664#

Looks like its going to be Nokia and Microsoft

[Mark]

So we now know that...

This was a memo that was sent to all Nokia employees. Except it wasn't.
This was a memo that was sent to some Nokia employees. Except it wasn't.

What this appears to be is, at best, the transcript of a speech made by Elop published by him on an internal blog and, at worst, the output of someone else posting on the blog. You see, in my company, we can all post on the internal blogs.

Hmm... interesting.

[nokia employee]

@tomi, we know u love nokia, but your long verbose opinions can be somewhat overwhelming. the memo is legit, and there needs to be huge shift in the company to succeed in this space. pls dont be in denial of the bleeding course we are on because of our current platform strategy.

the original intent over the past few years of nokia's was good and courageous, and you cant blame the market leader in trying to grow their own proprietary platform and ecosystem, however one day we needed to wake up and realise it is not in our core competency to succeed without valuable partnerships. that is the real definition of a true ecosystem, you contributing your strengths and balancing your weaknesses by complementing it with your partners.

in any case we appreciate ur support, but please calm down a bit

[Mark]

I'm from the US where everyone (but me) has an iPhone or Andriod. IPhones are pretty, Andriods are smart. My N8 is both! But...no one cares. Here, no one knows that 12 mega-pixels exist on a phone.

Nokia needs to learn US marketing. I tried to buy my phone from Nokia's US online store. I couldn't! They messed up and confused my simple phone purchase and after a week, I finally went to Amazon.com.

I fear that someday soon I will have to downgrade to those other common ugly or dumb phones. :(

[Darwin]

Quote: "Now what really hit me the first time I read this memo, that made me 'decide' it cannot be right, is the line in it that reads "Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes." This sentence refers to the widely-reported Canalys numbers about Android OS overtaking Symbian in Q4 of 2010. But right after it was released, many analysts have said the numbers don't add up! It is a math error! You don't build corporate strategy on someone's math error haha. Canalys have jumped the gun"

Facts: The Canalys numbers cover the October, November and December quarter. But Elop's memo says "this week", which presumably was the first week of February, i.e. well into Q1 2011.

Ahonen is comparing 2010 apples with 2011 oranges. I'd expect more accuracy.

[THEWISEMAN]

MICROSHIT IS OUT TO KILL NOKIA!

(Corr.typos caused by WinVista and Microshit keybord)

[Tomi T Ahonen]

More replies

Hi years, Nok, Romain, ryzvonusef, Alex, Tom, Andre and don

years - Thank you, I know, my name even means 'I am crazy' in Japanese

Nok - thanks. Would you mind posting the same comment under your real name so we can verify it too?

Romain - haha, ok, I'm sure we can find some if we dig enough, but if the 'big trend' is either 'touch screens' or 'capacitive screen touch screens' certainly the first was the bigger trend (from previous inputs being keypad).. The more we go to specific details, we can find the evidence, but then the issue becomes is that really a 'big trend' haha.. But I see your point. And yes, Friday is now ever more fascinating haha. I am betting on Elop being the smart dude I hear from my gossip, that he is very good at listening and learning and therefore... haha..

ryzvonusef - thanks! Actually almost same reply is on the Financial Times article, and it is of course the standard Nokia reply from years and years ago, for all cases when there is some silly rumor about Nokia (that often surface)

Alex - haha, now you're implanting horror scenarios into my fertile creative mind haha.. I see conspiracies everywhere!! Seriously, good point. I would, however, think that if this was verbatim accurate - and as reported, was circulated at Nokia - then obviously Jorma Ollila and the Board have also seen it. And either the plan to ditch MeeGo/Symbian/Qt whatever was already pre-approved by the Board, or immediately after the memo was circulated, Elop got a call from the Chairman, about what will fly, and what won't fly with the Board haha.. Abandoning MeeGo (and Qt migration path) would make Nokia look ridiculous. The only variation I could see, is an accelerated abandoning of Symbian if that was the need, ie 'more' MeeGo (that Ollila and the Board could approve) and no way can I see them approving an Elop proposition to take on a third OS alongside Symbian and MeeGo (Android or Phone 7). Not now, when MeeGo is coming and Symbian S^3 already sold 5M units in its first quarter. But haha, you know Alex, we've seen stupid moves by big companies many times in the past too. Lets just hope Elop is as smart as he is credited in being..

Tom - I have read your first sentence honestly over 20 times and I do not understand what you mean. If you're back, please repost the point you wanted to make of where I am confused with percentages, ok? Please explain a bit what you mean, and I'll happily respond to it.

But so you know, I was about to delete your comment. Your next statement is against the rules of this blog. You HAVE to read my blog before I allow you to comment. I never said I disagree with Elop's claimed position or how he sees the perilous position of Nokia. I EXPRESSLY stated that I AGREE with the sentiment of the memo. I only commented that it has so peculiar faults in it, that to my mind, it doesn't seem authentic.

On your specific questions 'is Nokia smartphone profit going up or down' it was going down until Q3 when it turned into going up. 'is profit per smartphone going up or down' it is now going up in Q4. Is Nokia selling well vs US - obviously not, it has been doing worse for about 5 years straight. But against European rivals, Nokia is dominating smartphones in Europe, its ranked number 1 in all markets except France if I remember the latest numbers correctly (where it is second). Is Nokia UI and OS competitive currently - it sells 2x as many units as iPhone and 4 times more than the biggest Android provider. I think it clearly is more than competitive. It is not the 'best' but it is certainly beating the pants off its rivals. Will it be next year with dual core ARM etc.. Who knows next year. Look at my forecasts for this year, I was off on most of my forecasts, but I tended to get the rankings about right haha.

Andre - haha yeah totally agree! I've said on Twitter and on this blog before, that if Elop announces Phone 7 or Android, then sell Nokia shares immediately. It is the sudden, irretrievable end of Nokia's hegemony.

don - you know, there is honestly a frightening proportion of possibility in what you write, but again, I am very confident that he is a smart guy, and has listened honestly - he WANTS to win, he WANTS to be the CEO who rescued Nokia, and he has no reason to not listen to all facts with an open mind. I happen to think, that any intelligent person who looks at the picture today, in 2011, will not pull the rug on MeeGo or Symbian, but I'm just a blogger and pundit haha..

Ok, will return with more, please keep the comments coming

Tomi Ahonen :-)

[James Katt]

TRENDS NOKIA MISSED:
1. Top Notch User Experience - like the iPhone. Definitely not Nokia.
2. Ecosystem - like the iPhone. Definitely not Nokia.
3. Modern, extensible operating system - like the iPhone. Definitely not Nokia.
4. Software is more important than Hardware - like the iPhone. Definitely not Nokia. Nokia can't do software very well. Apple is the best in the world at software.

The iPhone changed the world of cell phones.
Everyone else is a follower.

Nokia, however, is getting left behind.

[Sven]

Tomi,

being too early is the same as being too late.
One of the many problems of Nokias service unit is that they "sell" services to program managers from the devices unit and not to customers.

[matt]

"While we are on competitors, Nokia's real competitor is Samsung (not Apple) and all at Nokia HQ know this. "

As long as Nokia continues to believe that, you'll never be 1st place.

[KenC]

Denial is not just a river in Africa. What you don't seem to understand is that Elop is telling a story for dramatic effect. The numbers and details you are obsessing about are not that important, they are just background noise to Elop's purpose. You are seeing the trees, and missing the forest.

As for your comments upon trends, you take Elop's story TOO LITERALLY. He's saying exactly what you are. Nokia didn't capitalize on its first mover advantage. That's missing the trend. Sure, they had touchscreens first, but did they promote them the way Apple did? That's what missing the trend is about.

We'll know all by Friday.