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« Timing? Why did Stephen Elop announce Microsoft in February when first phones take a year more? | Main | The real numbers for Nokia Q1 are hidden under China sugar-coating »

June 03, 2011


Mikael Pawlo

I think "delusional" might be a bit hard and you should never pass psychological judgement on someone if you are neither a psychologist nor has treated the individual.

Having said that, reading your overwhelming blog post, a word coming to mind is "incompetent". Jumping to conclusions, sticking to bad decisions based on those conclusions and even ignoring facts could also be described as handling the company in an incompetent and ignorant fashion.

Unfortunately, for Nokia, being a mix of Tata and BMW design as you so well put it, it will be in dire straits for quite some time. Luckily, the company has a wad of cash to save it for a while, but Nokia needs to get back to its Finnish roots or prepare for a Microsoft takeover...



Epic post, Tomi, as usual.

Having experienced some of Nokia's best phones from the 2000s as a Nokia employee, you're right that the tech was there well before anyone else had it. I was frustrated that Nokia did not make a stronger play for the US market as were a number of my colleagues.

One thing Apple was able to do was cause the operators to loosen their stranglehold on devices. They also provide a user experience second to none (which isn't as techonogically advanced mind you). That is important.

I get the sense there is a lot more to this story than any of us can divine. Stephen Elop is either smarter than any of us or he is very delusional. I'm hoping for the former but I fear the latter.


Good post Tomi, but much of you analysis was similar to what i heard my Nokia colleagues saying back in the day of the iPhone 2G release. People were too focused on the handset's "old features" to realize, as Elop now says, this is a new ecosystem game. This is why he says the things he says, he's looking at it from a broader perspective. I wont go all American gung-ho here, but let's be honest, the most influential platforms are now based out of the USA. That can't be denied. The amount of innovations from 3rd parties that iOS and Android has released is insane! Nokia could not offer anything like this.

Yes, Nokia is a true innovator. without a doubt. But let's be honest, the asian manufacturers were already feature innovating ahead of them. Nokia would many times follow behind them, especially around hardware features, but do it with better usability. So how can you now condemn apple for doing the same? They did the old things in a new way and set-up a better environment for others to innovate and make money. They even beat the operators (in some respects!).

Any by the way, many of my former colleagues are from the California sites you mentioned. And trust me, those guys embody all the "sisu" needed to work at Nokia...despite many times getting handcuffed by some of the more "Euro-centric out-of-touch with America" management. On hardware design alone, some of those people have come up with just absolutely fantastic devices, but had to downgrade to make them fit within a global brand...even if that design language didn't fit the U.S. consumer. Yeah, some of their products failed, but that is more due to a disturbingly bad relationship with operators and a platform that couldn't reach the end-consumers. No matter what they did, as you somewhat hinted at, the products were dead in the water.

Lots of interesting facts in your writing Tomi, but I just have to disagree with the fact that Elop is delusional. I would encourage you to go back and look at the same "delusional" words coming from OPK and his management. At least Elop has come out, admitted there were problems, and is attempting to take the drastic means necessary to compete in the future.

'Cause let's be honest, the previous administration didn't cut it. During my last week at Nokia, I saw OPK speak. During his talk, he even admitted how the Nokia machine would take something he said and by the time it went down through 2 or 3 people it became something else. It was at that point, I knew Nokia needed a drastic cultural change. He was the CEO, what he says should be gold. I really liked the guy and thought he had some great dreams for Nokia, but a company that can't act on it's CEO's directives needs change.


My first thought when Elop made his February 11 announcement was why doesn't he go full steam ahead with Windows OS in the US, and stick with Symbian/Meego elsewhere. But what would I know? ;-)

As for Elop's inference that an N8/E7 is years behind an iphone 4 - that IS delusional!

A good read Tomi, but you have to move on - Elop's not going to backtrack any time soon.


It would not hurt to substantiate your claims with references and links.

Stijn Oomes

Wow, what a passion!

My 2 cents as an iOS developer who is new to the mobile industry; apparently Apple's marketing is so powerful that it even persuades people that should know better. This story is almost a parable on not appreciating what you have and looking for love in all the wrong places, while the love of your life is already living in your home.

Thanks Tomi for your insights and lessons. You should take a break now and enjoy your weekend!

Heimo Laukkanen

Thanks again for your analysis and thoughts Tomi. I have greatly enjoyed your analysis about the mobile world, but as just a user and outsider of the mobile industry - I do have to say that contrary to what you are saying, I'd have to say that unfortunately your rant makes you seem a little delusional.

Let me elaborate on few points.

I do agree that Nokia has had technical leadership and technical innovations in many fronts.

I do agree that Nokia might have the deepest and widest amount of information on customer wants and needs around the world.

I do agree that Nokia can anticipate needs and trends before competition.


They have constantly failed in execution and in creation of compelling narrative and experience for the user.

Let us not be delusional. The hardware rocks. I loved my N95 as a piece of great hardware - as I do love my N900, but boy do I feel that Nokia did let me down on not making most out of the possibilities? Technical capabilities and features do not mean a thing, if the user does not have a good experience while using them.

Just recently a small business CEO-friend of mine changed from Nokia devices into Android devices - and has been a thoroughly happy camper ever since. He is as far as you can get from a techie, but he boasts around about what he can do with his phone and how easy it is to use. There would be no reason to point him out that many of those features and ideas he likes, were available in previous Nokia phones he has had. They just did not work as well, were not as usable and basically just did not exist to consumers. So where is the customer insight again?

As an outsider I feel and see that what Nokia lacked was the courage to follow their ideas to the end. They had really cool technical innovations and ideas, but executed them ( on software and service level ) only to the half. Why is that? Is that too much of hardware manufacturer mentality, which prevents them seeing the device properly as a whole - or what? That is the true enigma on Nokia.

Tomi T Ahonen

Hi Mikael, Phoneboy, lorion84, Jeremy, Vistant, Martin and Stijn

Thank you all for the comments. I'll respond to each individually as is my custom on this blog

Mikael - haha, thanks. I am honestly feeling very down and depressed after finishing that blog and re-reading parts of it as I am now adding the links brings me further sadness. Maybe its too much caffeine in the past 36 hours of editing haha.. But yeah, I hope and think that anyone reading the blog knows that I am not pretending to be a professional trained psychologist and that I don't need to go say that, should I?

I take totally your point that incompetence is now severely a point to consider. Very good point.

Phoneboy - good points and we share similar experiences haha.. About either delusional or very smart - I kept thinking that from the early stuff I read (he apparently asked every Nokia employee to write to him in a personal email and he replied to each of those over 2,000 emails) and obviously, in the high tech digital space, there is opportunity for huge, dramatic leapfrogs and disruptions - look at Apple and the music business, look at Amazon and Kindle and the books industry, or search engine company Google radically altering the smartphone space etc. I am hoping as a Nokia fan, that Stephen Elop has a grand plan and this is merely misdirection and a prelude. But the more it looks like the grand plan is 'lets join with Microsoft to beat Apple' then this really feels like a gambler who has bet his home and his wife and kids into slavery on a hopeless hand he's been dealt in poker..

Lorion84 - you didn't read the blog, you are deleted

Jeremy - good points and I really do agree with much of it. But consider this. The 'platform' alone is worth a pittance in smartphones. It really does. Anyone can do Google Android phones for free. So the huge empire that Microsoft built in Windows (built on previous platform DOS) is nowhere in mobile. The handset is still the thing we walk into the phone dealer to get, and the operator/carrier still gets our business. The platform is important yes, for the app developers yes, but its not the basis on which the industry earns at this point.

So its a bit like a TV network or newspaper abandoning its current assets to go 100% on the free internet hoping to sell some eyeballs to some advertisers. A huge industry switched to a similar but far smaller industry. Nokia is the leader in handsets - by a country mile - and was before Elop came in, by an even bigger margin in smartphones. Now, Nokia has all sorts of problems yes, but they are in the execution, not in the design or the features or the customer research - nor in the software. Symbian, come on, it was a hodgepodge developed with a dozen competing rivals all insisting on their requirements. Nokia bought the rivals out, and once Nokia took control of Symbian, it became a very competitive OS, look at S^3 now, it is embarrassingly good for Nokia to kill it off haha.. Nokia is competent at this part of the business, but the money is in the handset and in the network based services, not in the OS and totally definitely not in the apps haha...

Visitant - thanks, we agree. And really, honestly, thanks for the 'you need to move on' comment. I really needed that today, after pouring 36 hours of edits into this monster blog and tons of coffee - and how lousy I now feel for having written it. I really REALLY need to move on, accept it that Stephen Elop is probably going to crash this bus, but that there is nothing I can do. Obviously I am 'persona non grata' at the Powerpoint Palace of Espoo (Nokia HQ) from now on haha...

Martin - "thanks". I trust you see I am already doing that. If you could give me a few minutes to insert them, I have not eaten since yesterday as I have rushed this story for my loyal readers. But thanks for rushing me on the links..

Stijn - oh, that is perfect! Thanks. Yes, its the looking for love in all the wrong places, perfectly. That is it. And yeah, I'll have a good rest this weekend but gotta do the friendly host interactivity here on the blog obviously and have still plenty of Twitter stuff to do today (plus some real work which got delayed because of that one short sentence in the CNBC interview by Stephen Elop..)

Thank you everybody for the comments, keep them coming

Tomi Ahonen :-)


Heimo Laukkanen is 100% on target :-)

Your own delusions shine - and you even ignore pearls of wisdom in your own writing.

Your post has a refrain: "Who leads? Who is the follower?"

So let's see.

Tomi: "NTT DoCoMo invented the app store in 2002."
Me: "Available abroad: never".
Tomi: "Mobile banking and payments (NTT DoCoMo FeliCa) have been the norm for most of the past decade!"
Me: "Available abroad: never".
Tomi: "Months before Apple showed its first iPhone, what looks like its clone had won an industrial design award in Germany. That design was by LG, and their touch-screen phone was so near to production that it was released in Europe weeks after the world had seen a prototype of the iPhone, and LG marketed it as the Chocolate."
Me: "Wow. Cool. And for each iPhone sold home many Chocolates LG sold? Ah, less then 0.1. Close, but no cigar".

Sorry, but Japan and Asia were never leaders in world mobile phone industry. And probably will never be. For years leaders were European companies (Nokia, Ericsson, Siemens, Alcatel) with only marginal presence of U.S. (Motorola) and Japan (Panasonic). But the fact that most firms were European ones are not very important (Wii, XBox360 and PS3 are all "Made in China" but somehow nobody says China is leading game consoles market). The important fact was that the leading market was European one. This is where new models were sold first and this is where world expansion inevitably started.

Apple changed all that. Today *USA* *is* *leading* *the* *smartphone* *market*. Even *you* admit it. In two places, in fact.

First instance: "The lesson from the iPhone is, that what is best for laggard market America, takes a year more of work to succeed in Europe and two years of improvements before it succeeds in the most advanced countries of Asia." So... in two years you can tweak US-Ok model enough to penetrate Japanese market. And how many years you need to move advanced Japanese model to US? Ah, that never happens... Oops.

Second instance: "Tata is the cheap car maker of India. Yes, they bought Jaguar and Rover recently, but the standard Tata branded car is definitely not – even Tata themselves will readily admit this – they are not attempting to be luxury premium sporty cars". Wow. So... is Tata the market leader or not? The answer is obvious: Tata is the leader and Jaguar and Rover are extinct. The fact that Tata cars are primitive is not important. The important fact is that they sell well and generate enough profits to buy other companies.

Remember: market leader is not the one who invents the most sophisticated machinery. It's the one who *leads*. Who determines trends, who's creations are widely copied, etc. Do you really think Samsung Galaxy will looks like it looks in a world with LG Chocolate but without Apple? Japanese markets inventions never beget a rush outside of Japan. Few times Japanese tried to push Japan-exclusive thight (like i-mode) - they failed. But when some if the same inventions finally reach the leading market (currently US)... that's another story.

P.S. It's funny: you pride yourself on being honest and ready to discuss your past mistakes, but somehow I've not seen your explanation of your Android fiasco.

I mean this one:

"Now, the second part of that quotation - "People on the West Coast of the US are iPhone drunk; its time to wake up to Android." takes the right premise, and then jumps to the totally wrong conclusion. If the iPhone is the Cadillac, then the Android is not Ford or Toyota, the Android is Maserati. If Apple is the Cadillac as a niche luxury product, then Android as Maserati, is a far far more niche, more rare luxury product."

"The Android based smartphones are, and will absolutely definitely be for at least the next year 2010, a smaller niche smartphone segment, than even the iPhone. So if anyone is 'drunk' on the iPhone today, then the wrong thing to do is to go and now get even more drunk or 'hammered' on Android."

Today's post shows why: you equate market leadership with technology leadership and totally forget lessons "The Innovator Dilemma" teaches us. Sorry, but as long as you ignore these lessons you'll continue to miss the point.


One additional note: when I've said "Japan and Asia were never leaders in world mobile phone industry - and probably will never be" I meant Taiwan, South Korea, Singapore... China is not leader today but has the potential. Current phones of Japan, Taiwan, South Korea, Singapore hopelessly overshot world market needs and so have no hope to invade world market. China is too far below so the current "chinaphones" are not important. Tomorrow... the situation may change.

I assume you have read at least "The Innovator's Dilemma" (and hopefully "The Innovator's Solution") and just forgot it's lessons when you continue to insist that USA is not leading the smartphone market. It does - whether you like to admit it or not. But it leads *the* *market*, it does not lead the *smartphone* *development*.

P.S. Yet if you'll think about Elop's moves from "The Innovator's Solution" you'll see that Elop is *still* delusional. Not because he believes USA is leading the smartphone market (it does) but because he believes he can save Nokia by rapidly shifting to disruptive technology (WP7 here). It usually takes *years* before disruptive technology is ready to replace mature one - and even then bold bet is disaster for the company (think Motorola with Android). The idea to move development to California was extremely good one (from "The Innovator's Solution" POV: you don't *ever* employ champion quarterback when faced with disruptive technology - this is recipe for disaster), but the idea to announce the move two years before WP7 is ready (year till first phones will be available and at least a year to polish after trial run)... gosh. The move to shift all US phones on WP7 (developed in California) and keep Symbian for the rest of the world would be brilliant (and if WP7 strategy will not pan out then so be it), but what he did... it's sheer lunacy.


Stephen Elop will kill Nokia, kill their brand and they will never become relevant again. Too late. The damage has be done. They think that Windows will save them but what they don't know is that exactly Windows will kick the finishing punch and they have no other way out cause they put all the eggs into one delusional huge Windows basket. Windows mobile is crap, always has been and it always will be. After seeing Windows 8 I think they will even lose out on the PC long term.

What Elop has forgotten is that he's no longer working for Microsoft but for Nokia. Sometimes the way he speaks it sounds as if he's a Microsoft representative more than he's the Nokia CEO. What a shame.

Omar Moya

Tomi, I have been following you in Twitter just recently, and I must say I admire all your work, and have started to read many of your blogs. Thanks for the piece you wrote here. It's very illustrative and it puts the facts, the reality, as a base.

However, I gotta agree with some of the comments above. Very good points on technology leadership, but there is a keyword that I failed to find in the article and can't be left behind: Ecosystem.

Being a mobile phone power-user (also ex-Motorola, ex-Nokia employee), I've been using all the features you mention before American users and was witness of how American operators pushed back WI-fi and Bluetooth, and are even doing it now with tethering. I agree that was Nokia's debacle in USA. But the fact that they failed, before Apple was successful, doesn't make it a leader. Apple was successful because of its name, which has a dose of american pride that they lost when Motorola and Palm fell. American market is not big, and is not technologically leader, but it is a Marketing monster, together with Apple.

If Steve Jobs makes a keynote, I can read it in peruvian, indonesian, emirati, german and moroccan newspapers. That's leadership. Market leadership

Apple is a name that is worth millions and is so powerful that could sell EDGE+WiFi phones by millions and be iconic... in 2007.

So, when the marketing is there, when the monster is moving, what is required to consolidate that leadership? Quality, and that's what iPhone brought to the market. I agree, N95 was a great phone, feature rich... but also sluggish, made of plastic that was easily broken and losing color after few months. It was supposed to be a Porsche within Nokia's portfolio, and looked like a Nissan next to the iPhone.

Apple has a name and a reputation, that he got by having the right product when it was in the spot. When it was disruptive. Nokia has (or maybe "had" by end of this quarter) a name and failed to deliver when it was supposed to have an answer. That's when Nokia became a follower.

I agree Elop is incompetent (that's how I summarize your blog) and agree in the fact that he is throwing away it's best asset, which is Nokia's R&D, it's brains. However, I understand that the goal is ecosystem, because this is no longer about mobile phones, but about customer experience, and Nokia is behind (I'm writing this with an E7 sitting next to my laptop). Nokia is behind, by years, and not by lack of features, but by luck of customer experience, and by having lost its name in most of the markets.

Nokia used to be disruptive, because of all the reasons you mention in the article. every time I've been in Finland (at least once a year since 2000) I was impressed on how we can rely on mobile phones and mobile networks, being really efficient. I was proud of working in Nokia, and being part of that revolution. I'm sad to see it becoming an OEM for the most unsuccessful Operating System (not that it's a bad one) even behind Bada. And partner with the masterminds behind Kin One and Two. I don't want to be simplistic, but it doesn't make sense, and I don't see a breakthrough point of view, to justify it.

Elop's latest moves, starting from the Burning Platform Memo, and the stupidity of announcing WP7 more than one year in advance, is making him lose his most valuable assets: Nokia's R&D and Nokia's name. what to think about it? As a proverb says: "When in a tree, you don't cut the brunch you're sitting on".

Blender Tom

I have no how on earth I managed to read all of this.
At first when I found about the rumours that Nokia will be taking on WP7, I dismissed them. I couldn't believe why they would do that. Nokia spent lots of resources developing Symbian, and Symbian is improving a lot, take S^4, they had the code which they showed. And if Stephen Flop, hadn't announced that it'll be droping support for symbian, when equivalent of S^4 comes out, no matter how successful it could have been, It will fail. No one wants a phone which will not be supported by it's own manufacturer. Symbian has a lot of potential, and they are dropping it for an infant OS!? And what about meego!?
Have you see the video of Meego running on Nook Colour? Is a former CFO letting money go to waste?


Re Iphone design: Samsung had the F700 at Cebit 2006 and in feb 2007 for sale. Picture:


I did not even know that Japan or let's call it the Asian market is that far ahead of Europe. I always wished for good Dual-Sim Smartphones in Europe, never got my hands on one though (maybe because of Nokia not executing their plans).

I think you quite hit it there with the entire posting. I knew about that the innovations apple "invented" (ha ha) were there before the iPhone, I just did not know most of them were from Asia or Taiwan.

I was also confused about Elop / Nokia focussing on the USA market that much, suggesting this will be good for "all" markets. I though this is dangerous, though, I had no facts, but it was just a feeling. You gave some facts there (time-to-market in different markets, shares in USA, Carrier-System etc.).

I sometimes wonder why no Phones sold on the Asian market are to be seen on the European market. Is the general european market not ready for phones as they are used in Asia?

Thanks for this great article. Yea, I did really read all the paragraphs :-).


Tomi, suggesting that Apple somehow copied LG Prada is ridiculous. The iPhone had been in the Apple labs for years. LG may have been the first to market with that touchscreen look but it's not as if Apple suddenly saw the LG phone and quickly mimicked the design from the time the LG Prada came out.

Apple had been working on that for years, and more importantly, working on the software to fit the uses of a touchscreen device.


Tomi, you constantly write about features and who invented them first. The fact is, it doesn't matter who invented them first or whether Apple followed/copied Nokia.

What matters is that Apple has raised the standards of software in terms of usability far passed Nokia and others. It doesn't matter whether Nokia had an app store first or not - what matters is that Apple is the leader in how an app store works and what the customer wants and a leader in giving customers the best experiences.

That's the only thing that matters. Features by themselves don't matter - otherwise Symbian would be the best OS when it very clearly isn't.

America is the leader in smartphones because the best and soon to be largest smartphone OS's are American. Talking about Asian hardware makers doesn't mean much. Without Android, what would LG or HTC or even Samsung be doing against the iPhone? Not much.


Regarding Meego

"...On Jan. 3, Chief Development Officer Kai Oistämö walked over to his boss's tiny cubicle to share his concerns about the MeeGo software that was supposed to be Nokia's answer to Apple and Android. The pair decided to quietly interview two dozen influential employees about MeeGo, from executives to rank-and-file engineers.

Before the first interview, Elop drew out what he knew about the plans for MeeGo on a whiteboard, with a different color marker for the products being developed, their target date for introduction, and the current levels of bugs in each product. Soon the whiteboard was filled with color, and the news was not good: At its current pace, Nokia was on track to introduce only three MeeGo-driven models before 2014—far too slow to keep the company in the game. Elop tried to call Oistämö, but his phone battery was dead. "He must have been trying an Android phone that day," says Elop. When they finally spoke late on Jan. 4, "It was truly an oh-s--t moment—and really, really painful to realize where we were," says Oistämö. Months later, Oistämö still struggles to hold back tears. "MeeGo had been the collective hope of the company," he says, "and we'd come to the conclusion that the emperor had no clothes. It's not a nice thing..."

That's from the recent BusinessWeek article about Nokia. Clearly Meego was an absolute failure that had no chance of redemption and effectively sank Nokia because of awful execution.


Tomi - I tried to comment immediately after you posted, but it was denied. I'll retry, below:

Tomi - there is one point you make crystal clear, and one that I think you are missing.
1. Clear: why the Finns probably have no respect for their new CEO. And this spells trouble... huge trouble.
2. Missing: Apple didn't make a desirable phone. They made a lousy phone - yes, iPhone is average as a mobile phone (and I say this as an European, God knows what the Japanese think :) ).
But, what they DID make, and the reason that iPhone (and now iPad) is a huge commercial success worldwide - they made a nice ultra-portable computer. Probably world's first usable, general-purpose, ultra-portable computer - and they disguised it as a phone (it is not a phone; it can do calls, but that's not it primary function; no sane person that only needs the "call" functionality would ever purchase an iPhone).

Now, UMPCs are nothing new; it's just that Apple did them right - and the market exploded. And, herein, lies the dual problem
A. Nokia may be the leader in phones, even smartphones... but they didn't look at them as UMPCs, from what I know (or anyway, didn't look at UMPC as being anything but marginal business). Nokia is a phone maker, Apple is a computer maker. Do you see now why Apple is inherently better positioned on the UMPC market?
B. In computers, it's the software that matters a lot. Nokia makes excellent hardware, and is designed to bring hardware innovations to the world. But it's not so good on software....
Worse yet, as Microsoft/Wintel has shown us, it's not the "best" software (or hardware) that wins in the PC market. Was DOS/Windows (classical, e.g. up to 3.1) better than CPM, VMS, OS2, MacOs, Solaris, and a host of other OSes? Probably not. Was the IBM hardware better than DEC, Sun or Apple? Was the Intel x86 processor line (CISC architecture) better than the PowerPC, Sparc, Alpha etc. (all RISC) ? And yet..... who prevailed, in the end?

It's like that in the UMPC era. Is Nokia the IBM or the DEC? I leave it up to you to decide :) However, I think in this era, one critical influence will eventually be "the cloud". And this is why I think that, although Apple has had an early start - Google will be dominant in the end (on all mobile platforms - tablets & phones), and there's nothing Apple or MS(+Nokia) can do about it. It doesn't matter that Android is not as polished as the iOS - DOS/Windows wasn't, either. It doesn't matter that Samsung lauched Bada - Altair didn't make a dent in the Wintel dominance, despite their initial success. If all goes "normal", there's no foreseeable competitor that can stop Google - even more so now that Amazon seems to start launching services on Android.

Theodore Ts'o

You are constantly focused on when was a particular hardware feature (i.e., bluetooth, touchscreen, voice dialing, autofocus, etc.) Unfortunately, it's not just about hardware and features; it's about software and making the features useful. And unfortunately, Nokia has always been terrible at software and usability. There may have been Nokia phones that I owned that had voice dialing --- but I never used it because the on-phone contact database/phonebook application was horrible, and the ability to sync said that database to a PC involved using software that was terrible. As a result, I kept on using a Palm Pilot for my phonebook, and I never used that feature on my various Nokia phones. It also meant that I never used Voice dialing.

Similarly, although I've owned Nokia phones that might be technically classed as a "smart phone", but the application ecosystem was so bad, and the applications so uninviting, that I used it essentially as a feature phone.

So in terms of who was a leader and who was a follower, I don't think it's enough to say, "oh, manufacturer XXX was the first to stuff technology YYY into a product". Especially if the manufacturer is throwing tons of features in into hundreds of phones, trying to see which ones will stick, without necessarily having good software to make said hardware features actually _useful_.

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