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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

Comments

KPOM

Ahonen's criticism about the 2G nature of the 2007 iPhone as evidence of the US' "trailing" in mobile technology is off mark. Note that even the US press commented in 2007 about how the iPhone ran on EDGE rather than 3G, and Jobs himself pre-emptively defended it by pointing to battery life. It wasn't the iPhone's hardware that impressed anyone (apart from the capacitive touchscreen). It was the software and the ease of use, which have long been Apple traits. Apple surmised, correctly, that they could make a splash and attract a following by introducing a subpar phone with a really great UI and tight integration with iTunes, and figure out how to make "real" phone hardware in the time it took the other manufacturers to catch up with its software. By the time they did (in 2010, where we can finally call the iPhone 4G the rough equivalent hardware-wise, and Android the rough equivalent software-wise), Apple had settled into a nice niche with the iPhone and had moved on to the next big thing with the iPad, entering another area that someone else (Microsoft in this case) had championed for the previous 10 years.

So, yes, it's true Apple didn't really innovate in terms of hardware, and never really has. However, where they succeeded was in creating the "community" to support their brand, and that is where they are innovative. I'm guessing that Steve Jobs had this in mind in 2001 when the first iPod was released (i.e. entry into the mobile space and tablets).

Karlis

Excellent post. Thank you for all the info. One thought tho, about that iPhone vs LG.

LG showed its phone late in 2006. Apple presented iPhone in february 2007. I refuse to believe they could come up with fully funcioning prototype to show off in just a few months. So i don't believe Apple copied in any way the LG phone. It just happened that they came up with very simmilar designs, as this design proved to be the most logical for such devices.

Second, Apple did work on a touchscreen tablet device (which later became the iPad) a long time before the iPhone. Steve Jobs himself ackowledged that they started on tablet and just later decided to make it into a phone. Which means the basic idea of a touchscreen device with big screen and button(s) at the bottom was already in progress at Apple. Of course, because of the secrecy Apple has, we will never know the exact details and timeline for their R&D. But i don't think we can nor should say that LG were the inventors for this device/style.

KPOM

When I read through Tomi's post, I'm reminded of an old Apple ad from the 1980s. Two men were staring into a computer lab, and one asked "which is the most powerful computer." The second went on and on about specs such as the one with the most "MIPS," while the first man observed someone walking past all the "more powerful" DOS PCs, sitting down in front of the Mac, getting his work done quickly, and moving on.

Everything Tomi says about Nokia phones being "ahead" of the iPhone is technically correct. Heck, even I opted for a Nokia N95 in 2007 (purchased from a Nokia flagship store) over the original iPhone. It was a technological marvel, to be sure, but after several attempts (N95-1, N95-3, N85, N97) I switched to a Nexus One last year and haven't looked back. Sure it isn't the fastest phone anymore, and the camera isn't any good, but the Nokia's always had something missing. Ahonen writes that "usability isn't innovation" but I think he's off mark. As that 1980s ad said, the most powerful computer is the one that people actually use. What Nokia was always missing was that ease of use and integration with everything else I have. The best in that space are Apple and Google right now.

That's the reason Nokia brought in a software guy to run the company. Nokia doesn't need anyone to tell them how to make a phone or produce hardware. However, what they didn't realize until late was that it's now the software that sells the phone, and not the phone that sells the software or even itself. Mobile devices are a mature area now. "Innovation" in the hardware front is less important now. When's the last time you worried about how "innovative" your refrigerator is, or which country is "ahead" in dishwasher design? While mobile phones haven't reached that point yet, they are quickly getting there. If Nokia is to stay relevant, they need to build up a service and software portfolio quickly, and apparently Elop concluded that building their own based around MeeGo wasn't going to cut it. Going with an unproven Windows Phone was risky, and it may yet fail, but it wasn't delusional.

JukkaM

Heimo is right on:
"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."

Even if the feature exists, if the user interface blocks you from easily accessing the feature, the feature is not really there to be used by the user.

If we look into Nokia's past, it is in fact usavility, which earned them success. The Jesus phone of gsm phones, Nokia 2110, invented the modern menu and softkey structure (and also the Nokia tune as ringtone) it was so much easier to use than any previous gsm phone and it was so much smaller. It was the iphone of the 1990's

Also, the first Symbian phones were rather easy to use as smartphones and the messaging client was just great at its time - first good e-mail experiences out there.

But up until then, the software stack was simple by today's standards and ever since, Nokia was terribly late with new OS releases. One in the first batch on nseries phones, N90, was delayed for months because it was the first phone running S60v3. Hardware was ready. The same story goes for N8. Hardware was ready on schedule, new release of software platform not.

Microsoft and Nokia have a chance if they can do it right. MS has had problems with hardware (overheating xboxes, anyone?) but with software it has done good job. Nokia on the other hand has always delivered on schedule with hardware. If they are able to combine only strengths, not weaknesses, they can succeed. Microsoft does have some cloud experience, at least far more than Nokia does, so they are prepared for the future.

If they can do the Wintel and repeat xboxes success there is a chance. But there are high risks also of course.

I agree that the communication of new strategy was suicidial. Not even grandmums of my friends buy a Symbian phone today. Even they know that Symbian is dead and I am not kidding here. I think that Elop with his b2b background did not quite understand consumer goods market.

In b2b it is quite normal to tell lifecycles of products and major shifts on technology to your customers long beforehand. b2b decisions are not as much emotional as consumer decisions. B2b do buy end of life platforms if the vendor says, that support will continue for years to come and if the discount is good. Goods are purchased for functionality rather than emotion. Consumers, on the other hand, make purchasing decisions more emotionally. Consumers buy brands which they can relate to - as long as it has sufficient functionality - not best functionality. Consumers hate to be associated with something that is "end of life". Is is a synonym of old and dying and who wants to be old and dying? Everyone wants to be young and growing and to be associated with a brand which represents that.

KPOM

Molly Wood might object, but Ahonen should change the name of his blog to "Tomi Rants." His posts lately drone on and on and on but repeat the same dubious talking points.
- The US is FAR FAR FAR behind the rest of the world in anything and everything to do mobile (even though our carriers are putting up LTE networks and Europe's carriers are still working out license issues)
- The 2007 iPhone sucked but was transformational because Americans are stupid
- Symbian is the best OS ever, if only the American press were smart enough to say so, Nokia would be flying high right now.
- Elop is an idiot/delusional, because he's American (OK, Canadian, but close enough).

We get that you don't like Elop or Nokia's new strategy. However, they have taken their gamble, and we'll see how well it works or doesn't work over the coming months. Anyway, what has that to do with the rest of the industry? Android seems to be eating everyone's lunch right now, except for Apple's niche. Heck, Android is even #1 in Europe now. We all know Korea and Japan are miles ahead of the rest of us when it comes to the technical matters. However, for all the faults in the US infrastructure, dominance in the American market (or at least a major presence) is still a key for global relevance for technological goods. That's why all the big players want in, and why Nokia made a big mistake in largely abandoning the US market in the 2000s.

Weave

Research recently conducted in the UK showed the demographic of iPhone users to be low skill, low education, low pay. I would suggest the success of the iPhone has much more to do with good marketing and the sound effects of flatulence than it does with productivity or eco-systems.

Harris

Tomi, I agree with nearly all your points. However, I think Elop is not deluded but makes everything on purpose to finally ruin Nokia and sell it to MS. Nokia doesn't allow to spy on its users and yankees are not happy with the independent European company that have independent strategy and "respect privacy" is not an empty phrase for Europeans.

And its useless to argue with the majority of US citizens because their mental capacity leaves much to be desired because they believe everything they are told by the mass media and refuse even to think by themselves. Here's an example, An ordinary US citizen supports usa trying to kill Muammar Gaddafi in Libya and even doesn't know that the majority of those peaceful rebels who are against "dictatorship" of Gaddafi are the members of Al Qaeda, ie terrorists because as we're all well informed Al Qaeda organized the September 11 attacks on the US. Doesn't it sound strange that US support those terrorists while Gaddafi is fighting against them? For the ordinary yankee there's nothing really to think about cause it's so difficult.
Al Qaeda backs Libyan protesters and condemns Gaddafi(reuters.com/article/2011/02/24/us-libya-alqaeda-idUSTRE71N12B20110224)

Cloud_Connected

Hello Tomi!
Great arcticle - I for my part agree with you in most of the points. But there still are questions which are not adressed in your blog entry:

Elop is allowed by the board to dump symbian as part of his contract - he delays meego and two meego responsibles take their hats - and now they´re going to offer a meego consumer device before any WP7 device is brought to market?

Is the board of directors of Nokia forcing him to do so because otherwise Nokia doesn´t have ANY high tier device this year? Are they (board) getting nervous when they acually see their symbian sales rush down?

How does this fit in? What is their meego strategy, if they have one at all?

MIP

Great post Tomi, keep them coming no matter how long they are.

I have linked to your post from my own blog where I have commented to your post and provided my take on the matter, but if you don't allow links I will copy and paste the content here directly instead.

http://www.mobileinfoplanet.com/2011/06/05/was-stephen-elop-right-to-go-with-wp7/

Troed Sångberg

If there's any phone by any company that was an iPhone before the iPhone it was the Sony Ericsson P800 in 2002 (esp. when removing the keyboard and only using the touch screen - which was an intended way of using it as shown by supplying the keyboard-less cover with the product).

Full touch, full Internet, apps (and app market) etc, running an OS (Symbian) open for third party development.

Who cares? ;) It's only fun to remember for those of us who created the product (I'm one - that wasn't the unbiased part of this post).

The fact that Android was going to be popular with developers, thus consumers, thus carriers in the end was writing on the wall already late 2007/ beginning of 2008. While were I work influences when and how such insights are communicated, this blog post (and the linked one regarding It's Not About Smartphones) captures - I hope - the rationale:

http://blogs.sonyericsson.com/troedsangberg/speed-of-innovation/

Even earlier: Those in the business who were in London at Mobile Applications and OS (MAPOS) in December 2008 might recall the presentation I did there on how openness would change the mobile landscape completely. Sony Ericsson announced at the same time that we would work with Android by joining the Open Handset Alliance: http://www.openhandsetalliance.com/press_120908.html

The third party developer buzz came to explode out of Silicon Valley, which can be seen as natural since mobiles went from phones to computers, and that's why it's quite irrelevant whether less popular building blocks existed elsewhere. Some like to call it "eco system".

Today it's all about becoming #1 in Android ;) The next shift will be when the OS is of no concern and it's about becoming #1 in web applications.

I'm just surprised it took this long for Nokia to react. If the reaction (WP7, not Android) is the right one will be interesting to see.

KPOM

@Harris, this isn't the appropriate board (if there is one) for American-bashing. Take your closed-minded and hateful political views elsewhere.

Anyway, Android has passed Symbian in market share in Europe in Q1, and much of this was before the fateful announcement. By your argument, shall we conclude that the mental capacity of the average EU citizen leaves much to be desired because they believe everything their mass media tells them?

Alberto Depiedra

Congratulations for such a brave post, Tomi.
Do you have any idea about how much of the huge political change in Finland in last polls can be attributed to Nokia demolition?

janne

A passionate writing indeed and interesting read (as well as your blog as a whole).

What I find interesting is that in the interviews given to the Finnish press Elop has said that the future phone is designed and built in Finland - so to say that it's being designed and build in the USA is contradicting at least.

Elop is being a sales man and he tunes the message to the audience (and shareholders) in question. In USA he's competing with Google and Apple in 'being American' (Which Nokia is not by a fact, but he's stating the new reality).

In saying that the US is the leading edge he's being conforting and not factual, playing with the emotions of the audience rather than being an engineer and statistician (or a mobile analyst :))

Nokia will surely be the underdog for some time and I believe in the end Windows platform will be phased out by Nokia and they'll replace it with something new. The future lies in virtualized and adaptive multi-platform devices.

Jurg

Elop is doing some very discutable things, but I doubt he has lost his mind. I think he is a politician that will get away with this in time. He is making powerful friends in a space that is structurally not going to change over the next 15 years. He sold his soul to Microsoft, and is now consciously re-valuing Nokia for the imminent takeover. It is a bit of a shame he is too incompetent to make it look a bit less banal.

It is a bit scary to see that Americans still think their country IS the world. I am sorry it is not. If you want world-domination in mobile the US is just not that interesting. Apps? The 'ecosystem'? Nice for marketeers and advertising agencies.

Very sad, but the battle is for the 'bottom part' of the world. She who comes up with a smart-featurephone (cheap-smartphone) will be the winner. I don't see Apple being interesting in that so much, although there are those rumours... I do believe this is the sole reason for Google to have invested in Android (getting Africa online). And Nokia can be Microsoft's new HP for the emerging markets.

Apart from this I still think Nokia and Microsoft could be an interesting partnership, technology/product-wise. Look at what Microsoft did with a technology like Kinect. Really really interesting...

KPOM

@Troed Sångberg, interesting that you mention the SE P800. I actually owned one of them. I think I paid some ridiculous amount of money for it back in 2002 ($800 sounds about right). I did think it was ahead of its time, and I'm surprised in retrospect that Nokia didn't see the promise of UIQ back then (opting instead to go the non-touch route with S60).

Fast forwarding to 2007, when Android was being shopped around, I recall OPK making a comment about how he didn't think it would be much of a threat, and that Nokia wasn't interested, not that it was asked. Nokia's market cap was close to Apple's at that time (both were around $150 billion), and I'm wondering if there weren't any C-level execs at the time (or perhaps some EVPs or SVPs) who thought it might be worth it for Nokia to develop an Android phone as a side project. Sure they were all gung ho about how great S60 Touch (as Symbian^1 was referred to back that) was going to be, and iPhone had only recently made a rather muted initial European launch (it was still in the EDGE era), but what would it have cost them to have a small US team working on an Android phone for the US market? Imagine how differently things might have turned out.

Well, you can only look back for so long. Symbian's on its way out, and Google is now in a position where it can turn away Nokia (and essentially did). WP7.5 is the future and for Finland's sake, Nokia's critics there ought to stop wishing to turn back the clock and instead work for a successful WP7.5 launch.

Ben Eng

Check this out: "I am not a Trojan Horse" claims Nokia's neigh-sayer Elop

http://www.telecomtv.com/comspace_newsDetail.aspx?n=47704&id=e9381817-0593-417a-8639-c4c53e2a2a10

HCE


I tried my best to resist the urge to pile on ....

Sorry, I failed. :-)

Unfortunately Tomi, I must agree with many others that the deluded individual here isn't Elop - it's you.

You seem to define a smartphone as this list of features with check-boxes next to them and as per your definition, the most competent smartphone is the one that checks the most boxes and an "innovator" is one who checks the boxes first. Usability, in your view is yet another check-box. So, as per that view, Apple may have been the first to check the "usability" box but Nokia (and others) have had a lot of the other boxes checked for quite some time now.

The problem with that view is that usability *isn't* merely yet another feature. It affects every other part of the phone and opens up features to users who were not even aware that such features existed. Check-boxes are for power users and smartphones aren't catering to just power uses anymore. The average smartphone user isn't going to find one tenth of the features in the average smartphone unless they are made accessible to him/her. If they aren't easily accessible, they won't get used. As someone else put it in one of the previous comments - having the best gun in the world is absolutely no use if you can't find the trigger.

When we talk about usability, we're talking about software - not hardware. Nokia and the Asian vendors did a tremendous job in hardware innovation but software was always an afterthought. What Apple did was to make smartphones less about the hardware and more about the software and in doing so, they turned the market upside down. When the original iPhone came out it was admittedly a less-than-capable phone but what attracted people to the phone was the following combination of features

1. A capacitive touchscreen
2. A gesture-based multitouch interface
3. A browser based on WebKit that allowed full websites to be displayed on the phone.

Now take each of these things individually and you are justified in claiming that someone other than Apple is the innovator. The iPhone was not the first phone with a capacitive touchscreen - the LG Prada had it before the iPhone. Apple did not invent multitouch gesture-based interfaces - they bought the technology. They were certainly not the first company with a WebKit-based mobile browser - Nokia had that long before Apple.

However, ask yourself the following question. Prior to the iPhone, how many phones were released that had the above combination of features. The answer is - none. The iPhone was the first to combine these features. And how many phones have this combination of features today? Pretty much every single high-end phone does. If that isn't innovation, I don't know what is.

Today, the two fastest growing smartphone platforms in the world (iOS and Android) are developed in the US. In addition, you have platforms like Microsoft Windows Phone and WebOS which are developed here. Even Blackberry OS, while not developed in the US, is from North America. Elop is right - the US is where the action is in smartphone software - and, as I mentioned earlier, smartphone are now more about the software than the hardware. The hardware is getting commoditized. It is fast becoming clear that if you want to make a lot of money in the smartphone space, you need to control a software platform.

- HCE

Michael

1. Your comparison of mobile phone industry with car industry is lame.

2. So it is Jobs fault after all. If only Jobs didn't return in Apple in late 90's and if he didn't any vision of future Nokia would still convince you, themselves and everybody else that Symbian rocks.

3. You spend good deal of your article convincing yourself and everybody else that Apple is only following what Nokia invented before. This is also lame, yes IBM invented PC industry and Nokia invented smartphone. What does this mean? Using your outdated car industry comparison how does the Japanese car industry fares. Didn't invent diesel and otto technology, didn't invent ABS brakes, in fact adopted technology from competition. Does this make them less worthy? Is Tag Heuer better because the company was founded 24 years before Breitling?

4. You can blog at a rate of thousand and thousand words of day, but as not to go into Groundhog day syndrom Nokia's problems are vey well documented and at the end of the day of their own doing.

5. General buying audinece have sent Nokia strong message what they think about their products, especially in the smartphone segment. This blog is just a mirror of Nokia's business practice. Instead of making changes to their portfolio and overall business practice they spent good part of their energy convincing everybody else that their way is the right way?

6. Yes the 2007 iPhone was no smartphone. Missed all the features the competition had. But guess what? They listened to their customers and in 4 short years made an OS second to none. And you can be sure that today's announcement of iOS5 will bring new improvments. And these improvements can be actually seen and used by their users. Nokia's Symbian improvements were twofold. Yes we changed something in the code, and we give you new theme! It took them YEARS to implement auto-lock, for example! With Apple/Android users get added features they actually could see and use. My God HTC desire came with Andorid 2.1, and you can update it to 2.2 and even 2.3. Nokia sees this as an missed opportunity to sell millions od 2.2 and 2.3 devices!

7. Nokia is not listening to its customer. It only started to listen recently after HTC, Samsung, Appla, Android and likes came for their share of Nokia Pie. I don't know about Nokia innovation, but if those innovations are kept in the labaratory and never implemented then they are not innovations. Don't tell me that implementation of international standards such as WI-Fi and Bluetooth are result of R&D.
Back in 2007 Nokia issued a stetement about introduction of Haptikos technology to basically make screen give the user tactile feedback (http://gizmodo.com/319318/nokias-haptikos-technology-makes-physical-keyboards-obsolete-hopefully). Where is that technology today? And after Apple and Nokia successfully implement it Nokia will be taken by surprise and will only utter "Yes, but we invented smartphone". Invention without implementation can only guarantee you royalty payments through oatents, not a household wordwide marketed brand name?

Nokia has failed miserably. Had n-gage in 2003, shipped Nokia 770 mamemo device in 2005, bought Intellisync in 2006 (think active sync), bought Navteq in 2008, had ovi store introduced in 2009, in 2007 they bought Enpocket, a supplier of mobile advertising technology and services. They introduced Comes with music in 2008.

This has iPhone written all over. Nokia was probably the best positioned mobile phone company in the world few years go. They could go any direction they wished. They decided to peddle millions and million and millions of cheap plastic phones to the third world markets, keeping their market share and offsetting any loss of smartphone market share.

From 2005/2006 Nokia was run ba a ship of fools, and now you call Elop delusional!

Andreu Castellet

Hi everyone,

As a regular here I agree many times with Toni's remarks, but now I am going to differ on something substantial to me: who leads and who doesn't.

To me it seems clear that since the iPhone appearance the whole mobile ecosystem has been disrupted in a way that doesn't depend only on devices' features: the launch of the iPhone has made effectively available -and sexy- to millions Internet browsing on a phone. The App Store has achieved a degree of integration content-device that has been favored with people's interest -and money-, and has created an interesting, global environment for developers in a way that Nokia or others never did.

With Android, Google has set up an open community of developers who work to offer users the best of their talent, and has offered to device makers a cheap, customizable -OK, at a perhaps costly price of fragmentation- opportunity. The walls of the garden dissappeared!

What is DRIVING industry: is that the Amoled screen? Is that the new chips? the 3D?the wi-fi? Femtocells? All that is important, but not disruptive, to my understanding. I would rather turn my head towards aggregation activities, operating systems, communities made of users/developers.

I wouldn't like to sound arrogant, but the rest resemble rather to the "box movers" so many times discussed here, than to truly innovators who can address to a mass audience a new value proposition. So who is a leader and who a laggard?

And that's my two cents.

Jonay

Tomi, as usual, your posts are long and interesting. I wanted to remember (becouse I'm sure you already knew) that besides China Mobile, there is other operator backing MeeGo up: Movistar. It is one of the biggest operators, and is getting bigger (specially in latin america) by the days. I doubt MeeGo will die (anytime soon), nor Nokia, but in the long run, who do you think will outlive who?

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