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Imagine, the Lennon Imagine Lyrics, applied to Nokia CEO and strategy?

So, in a Friday sort of frame of mind. Lets re-write some John Lennon lyrics, to consider an imaginary world without burning platforms? A 'better' world if you will..

IMAGINE
(original lyrics by John Lennon, adapted for comic purposes)

Imagine there's no fire
It's easy if you try
Nokia can still hire
programmers, oh my
Imagine all the people
Working for today

Imagine there's no Windows
It isn't hard to do
Nothing to kill platforms for
No Microsoft there too
Imagine Symbian phones
Growing strong in.. O'vi

You may say I'm a dreamer
But I'm not the only one
I hope some day you'll join us
And the world will be one

Imagine no Steve Elop
I wonder if you can
No need for burning platforms
A brotherhood of man
Imagine all Nokias
Connecting half the world

You may say I'm a MeeGo
But Intel's the only one
I hope some day you'll join us
And the phones will live as one

The above for comic purposes only, no smartphones were injured in the making of this joke.

Will the Real Stephen Elop, Please Stand Up?

Will the Real Stephen Elop, Please Stand Up? What is going on with the Elop-meister? Nokia's new CEO is sounding less and less like a deranged psycopath these days, and more and more like a confused schizophrenic. Is that a sign he is more or less incompetent nowadays, to be a CEO of a Global Fortune 100 sized company, you be the judge. But consider the following:


ACT 1 - THE COMEDY


NOKIA IS YEARS BEHIND APPLE, OR..

A Stephen Elop Nokia CEO on February 9:
"We find ourselves years behind (Apple)."

Another Stephen Elop coincidentially also Nokia CEO on June 14
"We are very pleased to have Apple join the growing number of Nokia licensees. This settlement demonstrates Nokia's industry leading patent portfolio."

SYMBIAN IS BURNING PLATFORM, OR..

A Stephen Elop Nokia CEO on February 11:
"We are standing on a burning platform. Symbian has proven to be non-competitive" and "Transition period from Symbian to Windows Phone will take 2 years (to end of 2012)"

Another Stephen Elop coincidentially also Nokia CEO on June 20:
"Nokia will continue supporting Symbian till 2016."

NOKIA MAIN MARKETS GERMANY, UAE OR..

A Stephen Elop Nokia CEO on February 9:
"Traditionally our stronghold markets are Russia, Germany, Indonesia, UAE."

Another Stephen Elop coincidentially also Nokia CEO on June 15:
"Our largest markets are China, India, Russia, as well as Western Europe."

NOKIA FOCUS IS USA, OR..

A Stephen Elop Nokia CEO on June 1:
"We believe we can be successful in the US market. Our very first Windows Phone products are being designed and put together here, in California, with the US market very much in mind"

Another Stephen Elop coincidentially also Nokia CEO on June 15:
"Obviously we have work to do in North America, but there’s a much larger world out there. 80 per cent of the world’s population live within cellphone reception."

SYMBIAN HAS NO FUTURE, OR..

A Stephen Elop Nokia CEO on February 9:
"Symbian is creating a disadvantage when we seek to take advantage of new hardware platforms."

Another Stephen Elop coincidentially also Nokia CEO on June 20:
"The next generation Symbian Anna will bring a new user interface, new icons, and all the other performance promised earlier."

MEEGO IS USELESS, OR..

A Stephen Elop Nokia CEO on February 9:
"We thought MeeGo would be a platform for winning high-end smartphones (but it is not capable of that)."

Another Stephen Elop coincidentially also Nokia CEO on June 20:
"(N9 running MeeGo) brings innovations to the marketplace such as the industrial design, user interface, and elements that will be seen in future Nokia's products."

MICROSOFT IS THE FUTURE OF NOKIA, OR..

A Stephen Elop Nokia CEO on February 11:
"Windows Phone is our primary smartphone platform,"

Another Stephen Elop coincidentially also Nokia CEO on June 2:
"Nokia's mass-market phones, 80 percent of its total units sold, are not a good strategic fit for Microsoft"

NOKIA IS LOSING ECOSYSTEMS WAR, OR..

A Stephen Elop Nokia CEO on February 9:
"The battle has now become a war of ecosystems, where ecosystems include developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors are taking our market share with an entire ecosystem."

Another Stephen Elop coincidentially also Nokia CEO on June 2
"Nokia will contribute to the whole Microsoft ecosystem by offering mapping, navigation, location-based services, operator billing, languages, customization, hardware capabilities, and more. Nokia is also the most operator-friendly mobile operator system." (He also pointed out at this time or later, that Nokia is the global leader currently using Symbian/Ovi on several of those ecosystem elements).

NOKIA CAN ONLY MANAGE ONE MEEGO HANDSET THIS YEAR, OR..

A Stephen Elop Nokia CEO on February 9:
"At this rate, by the end of 2011, we might have only one MeeGo product in the market."

Another Stephen Elop coincidentially also Nokia CEO on June 20
"Today, a new season is beginning at Nokia." At the time, Nokia shows its 'next generation' handset N9 running MeeGo as a flagship which is to ship by September 2011 and shows specifications of next MeeGo handset, the N950 to ship later in 2011. Nokia even had a third MeeGo device ready to roll (N9-00 'Dali' ready for launch in January, some say it was ready even in September when Elop first delayed it).

MICROSOFT IS ANSWER TO MASS MARKET, OR..

A Stephen Elop Nokia CEO on June 1:
"Nokia has a long history of serving customers at all price points. Thats something we have to be willing to continue to do, using Windows Phone as the smartphone platform to do so." (On next day, June 2 same Stephen Elop admits Microsoft not good fit for 80% of Nokia's phones.)

Another Stephen Elop coincidentially also Nokia CEO on June 21
"Nokia is putting in place the pieces to capture the next one billion users who connect to the internet, many of whom will be in the SouthEast Asian Region." (Related: Nokia press release at same event: Nokia the company "Announces continued support for Qt as part of ‘next billion’ strategy.")

NOKIA PROBLEM IS FALLING BEHIND IN INNOVATION, OR..

A Stephen Elop Nokia CEO on February 9:
"If we continue like before, we will get further and further behind, while our competitors advance further and further ahead."

Another Stephen Elop coincidentially also Nokia CEO on June 2:
"Mismanagement - not a lack of innovation - is what ails this company."

 

WHAT HAVE YOU DONE WITH OUR STEPHEN ELOP?


Who are you, and where have you hidden the real Stephen Elop? The new statements sound reasonable, as if said by a real CEO of a major handset maker! Thats not our Stephen Elop!

Where have you kidnapped our Stephen and what do you want as ransom so we can have him back? (or rather, how much do we need to pay you to keep him?)

 

ACT 2 - THE CRUELTY

 

So. Stephen Elop has totally changed his tune? For months he spawned the most ludicrous gobbledygook that any CEO has been witnessed in making. He continued that babble happily on untill about the beginning of June. Now he has utterly changed his tune.

Nokia IS an innovator? (hey, I said that in February!)
Nokia's problem is not lack of innovation, it is execution? (hey, I said that!)
Nokia's main markets are indeed China and India, not the UAE.. (I said that)
Nokia would be foolish to focus its new phones on the US market at the expense of Nokia's massive global reach (wait, I said that)
Apple is not leading Nokia, its the other way around, Nokia leads and Apple follows - in fact pays royalties to Nokia (I said that)
Symbian is competitive (now way! I said that)
MeeGo is hot (I said that)
Nokia can do many MeeGo devices if the CEO bothers to not torpedo all the projects and force all MeeGo top execs to resign in protest (I cant believe him - I said that)

Nokia's existing ecosystem with Symbian/Ovi/MeeGo/Qt was the strongest - ok, some argue second strongest - and now Nokia is gifting most of its advantage to Microsoft which is weakest (I said that)
Microsoft is not viable for most of Nokia phones (and yes, I said that)

What has happened? If the CEO changes his mind on one or two points, thats perhaps 'normal' but all these? So many of these were vital, essential elements in his 'Burning Platforms' memo and were used not just to change Nokia's strategy, but as the pretense to fire thousands of competent Symbian, MeeGo, etc staff. What is going on?

CORPORAL PUNISHMENT

I'll tell you what. The CEO who answers to the name of Stephen Elop has been spanked. Utterly, totally, comprehensively. Some time around the start of the month of June, little naughty Stevie-boy has been put on a knee, and his pants have been taken down, and he has been given a thorough ass-whipping, belt and buckle and all. So hard, that his butt-cheeks still burn today weeks later.

He has TOTALLY changed his tune in a matter of days. That only happens if you get a total, no holds-barred, beaten until the skin bleeds, type of ass-whipping.

What the hell happened? What happened between then and now, that our darling little Microsoft Muppet has been given such a beating that he can't walk straight? That he can't - goshdarnit - talk straight. Look at him, the sorry Muppet. He is crying in the corner, he's changed every one of his phrases. All of it!

WHAT DID IT?

Its not the stock market. That started tanking February 11, when our mischevous Muppet decided to start his tomfoolery with the Nokia share price (dropped 52% since, if anyone's counting. When Olli-Pekka Kallasvuo the previous CEO, saw the Nokia share price crash 55% but over a 4 year period, he was fired. Elop has seen 52% dive in four months..)

Its not the Symbian reseller boycott. Yes yes yes, that is killing Nokia but the timing is wrong. That reseller boycott was discovered in May and has been widely reported already. That is what eliminated not just 3 Billion dollars of premium smartphone sales revenues (per quarter, forever abandoned by Nokia under Elop's can-we-call-it 'leadership'), but also wiped out half a billion dollars of pure profit, per quarter. Wiped out half a billion of profit. Few get to burn that much cash. Even Donald Duck cartoons with Uncle Scrooge didn't manage that degree of wanton destruction of value. Yeah, this guy is quite a clown, he deserves to be fired for that incompetence alone. Half a Billion dollars of profit per quarter is 5.5 million dollars of profit wasted every single day, Saturdays and Sundays included. But while this is 'cause' to fire a CEO, even this is not what he was spanked for in June.

ONCE UPON A TIME, IN A SMARTPHONE UNIVERSE FAR, FAR AWAY

But what is it that happened? You remember the story, the nice story that was sold to Nokia investors and owners, that the nice Microsoft Guy would help migrate Nokia away from the old and obsolete non-competitive and nasty Symbian to the wonderful Microsoft Windows Phone operating system, that would restore Nokia's profits and market share? That very nice fairy tale we were hearing in February that seemed so soothing? The fairy tale, with Prince Stephen the Elop as our hero.

Well, a witch, a real monster came along in May called Steve Ballmer, who is employed by the Evil Empire, also known as Microsoft. He didn't feel he had screwed Nokia and his whipping-boy Stephen Elop enough, in the rip-off contract by which Nokia signed to make Microsoft phones. No, Ballmer doesn't enjoy winning nearly as much as he enjoys crushing his victims. So he added the ultimate salt into the wound. Skype.

The carriers/mobile operators hate Skype more than anything else on the planet. There will never be carrier-supported (for example subsidised) smartphones that run Microsoft, even if those phones have Skype crippled - the carriers hate Skype and will not trust Microsoft (they have long memories, they remember Microsoft and Sendo, Microsoft and Ericsson, Microsoft and Nortel, Microsoft and Palm, Microsoft and Motorola, Microsoft and LG.. need I go on? There is a reason its called the Evil Empire)

When Microsoft bought Skype, that sealed the fate of any Microsoft-powered smartphones. Suddenly all Microsoft phones disappeared from stores, as reported already by independent surveys by the San Francisco Chronicle and the Boston Globe. That is only the beginning. What did our cheerful little Microsoft Muppet do? This is what our starry-eyed little Muppet said on June 2:

"You will have heard of the acquisition of Skype (by Microsoft) ten days ago. Clearly that will be part of the Microsoft Phone ecosystem."

And to really make it clear of what he meant, the real Stephen Elop also said:

"The acquisition of Skype by Microsoft is a great way to bring all pieces (of the ecosystem) together."

WRONG MOVE, CHESTER

That is why Stephen Elop will not survive as CEO of Nokia. He has now heard from all the major carriers, that after statements like that, there will be no happy ending to the Microsoft-Nokia saga with Elop in charge. Even if the carriers/operators fell in love with Nokia-Microsoft-Skype phones, they will not support them, simply because of Elop's ridiculously arrogant and abrasive statements.

He who embraces my enemy - becomes my enemy. You want to quote Sun Tzu, Stephen Elop? You should have learned to study the terrain before you move. To understand your position, where you are at strength and where at weakness. And not to launch an attack against superior numbers. One Nokia will not ever survive, even with a Microsoft by its 'side' (See Sendo, Motorola, Nortel etc above) - if it faces 600 carriers/mobile operators of the world, united, against Nokia.

Stephen Elop did the cardinal sin, he actually said his Nokia phones would indeed have that poisonous 'ecosystem' run by Microsoft, that included Skype. This is why Stephen Elop cannot sit down anymore. This is why he was whipped, he was beaten, he has had the spanking of the century.

And look at the little boy and what a spanking will do to you. Stephen Elop has totally changed his tune in the past weeks. Now his whole Microsoft fantasy, the blissful fairy tale full of Windows and Microsofts, has come down tumbling like a house of cards. This can not ever end well. Mark my words. The operators/carriers have very long memories, they will never let him survive that level of arrogance.

MICROSOFT, YOUR PLATFORM IS ON FIRE

So, Steve Ballmer, kiss your Nokia plans goodbye. Look at your Microsoft Muppet, Stephen Elop is now backpedaling as fast as he can - Symbian was supposed to end in the summer of 2012 after 150 million handsets and you believed you'd be selling over 100 million Microsoft Windows Phone smartphones next year? Not gonna happen.

Now Symbian will live until 2016 at least. Elop is shifting ground as fast as he knows how to dance, he's now committing to several new Anna based phones already announced, and ten more over the next twelve months. He said earlier that Nokia can't do more than one MeeGo device, he's already committed to two.

And most of all, for any Microsoft delusions of a future - Nokia has now committed to one billion - thats billion with a B - new Qt devices. Qt is either Symbian, or MeeGo (or Ballm,er get this - Android) but categorically Qt is not Microsoft. So? Ballmer? How's it feeling now, that Nokia promises a launch of the first (possibly only) Microsoft WP phone in Q4 in only 6 European markets, which is estimated to sell 125,000 total units. But meanwhile Nokia branded smartphones explicitly NOT running Microsoft (ie Qt based) will be produced in excess of one billion units. Did we want to do a re-calculation of that market share? Suddenly Microsoft at 2% market share seems 'big' compared to how tiny it will be with the 'Nokia' phones?

Someone miscalculated perhaps? Steve Ballmer, you really, really don't focus do you? Google or Apple (or Intel) would never ever had made this colossal an error in a 'strategic' focus area.


ACT 3 - THE ARSONIST

ELOP KNOWS HE IS RIGHT, OR..

Now, we are gaining interesting insights into the man who made the biggest CEO blunder in tech history in releasing his Burning Platforms memo. A Stephen Elop the Nokia CEO said on June 1: "My fundamental belief is that people will succeed or fail in the context of the leadership they are being provided."

Yes. And in this difficult year 2011, when Nokia entered the year as big as its two nearest rivals combined, and with a resurgent Nokia Symbian S^3 powering Nokia's first hit phone since the N95, with the N8 selling 4 million units in Q4 alone, and propelling not just a huge January quarter in China, but an unprecedented jump in Nokia average sales prices, by a massive 15%. This resurgent Nokia smartphone success you took, Stephen Elop, and you burned with your memo.

And yes, after years of building the world's most open, most broad, most carrier-friendly ecosystem; and after difficult early stages, just as it had become the second-bestselling app store too, you killed all aspects of Symbian, Ovi, MeeGo and Qt, selling parts off, and firing staff willy-nilly. All based on a memo of 'burning platforms'. Now four months later you've studied the facts, and now you admit that Nokia's ecosystem is strong. So strong, that Microsoft wants it all to make its weak ecosystem competitive, as the 'third ecosystem'. Without Microsoft, Nokia was legitimately the first or at worst, the second ecosystem. After Microsoft meddles in, Nokia's assets still would create the 'third' ecosystem. Whose side are you on, Stephen Elop?

And when Nokia had its MeeGo handset ready for launch - we now see MeeGo is strong, and that Nokia's (Finland-based) handset designers are truly innovative and clever - you sunk that project days before it was to be launched. If you were the 'execution-oriented' CEO., and you just bothered to support MeeGo a little bit, you'd have 2 MeeGo devices already selling, and a third announced now in June. But you claimed MeeGo was dead.

In the burning platforms memo, the new CEO of Nokia claimed that the USA was now a leader and that Finland had fallen behind. That Nokia was years behind Apple and falling further behind. That Nokia's ecosystem was losing in the ecosystem battle. That Symbian was not salvageable and MeeGo was stillborn. You actively ignored Nokia's strongest ecosystem parts, Ovi and Qt without a single mention.

Now we hear, from your words, Stephen Elop, CEO of Nokia, that you know it was not true. The USA is not the leader, Apple is not years ahead of Nokia, Apple agreed to pay you royalties for all the patents Nokia has accumulated. You admit now, that Nokia's platforms and innovations were not the problem, that Nokia's innovation is actually a true competitive advantage, and in fact it was 'execution' where Nokia had fallen behind, not in innovation or creativity or usability or understanding the consumer.

WILL THE REAL ARSONIST PLEASE STAND UP

So you circulated deliberately a memo to all Nokia staff, claiming Nokia was on fire, while it was not. That is what in US legal term is like 'yelling fire in a crowded theater'. You actually caused the damage that ensued. It was not Nokia that was headed to trouble in February. It was you, Stephen Elop, and only you, with your delusions and utterly false memo, who created unnecessary panic inside Nokia. You fired the wrong people, you destroyed the wrong platforms, you sold the wrong assets, and you set the whole of Nokia on fire.

Now you are desperately trying to put out the fires - no no no, Symbian is not on fire, it will happily live for five more years. No no no, MeeGo is fine. We'll do Qt phones for another billion to come. And Microsoft? They aren't even compatible with 80% of Nokia's phones!

WILLING TO SUSPEND FACTS

In the Business Week article, Stephen Elop quoted from sun Tzu's The Art of War: " 'first, you must believe in yourself.' That's a message we have embraced."

There is a fine line with confidence and delusion. When we examine those 11 statements that 'Delusional' Stephen Elop said earlier this year, and contrast them with the new-improved 'Schizophrenic' Stephen Elop of today - we see that he made at least 11 strategically significant but factually utterly false statements, about the company he is leading, and its critical facts. He has been leading his company with deliberate lies.

But Stephen Elop is a great marketing man. He makes a great presentation, he is a great sales guy. He is an excellent communicator. That makes a great con-artist. He can convince you, even when the truth is not there. Not just you and me, Stephen Elop managed to even convince himself of an alternate universe. That is delusion. The willful suspension of facts, and substituting an alternate imaginary world in the place of the facts.

Now in June, Stephen Elop has been spanked royally, and he has come back to reality. Unfortunately, now when we examine those 11 statements, if those are delivered in a four month period, that is the most confused CEO of all time, the sky is blue. No, the sky is red. No its blue again. This guy is a clown, he deserves to be in a circus. He should be on the Muppet show, probably as a supporing musician in the band without too many lines to say out loud. But Stephen Elop has lost all credibility as CEO of the biggest handset maker in the world.

He lost the confidence of his staff on June 9 when he circulated the idiotic error-laden Burning Platforms memo.

He lost the confidence of Nokia's developer community on February 11 when he announced the end of Nokia's migration path from Symbian to MeeGo and that he'd go Microsoft instead.

He lost the confidence of the Nokia investors when he told them he is no longer in control of the company to the degree that he can even offer guidance on profits for the year.

And he lost the confidence of the carriers/operators - and his resale channel - when he uttered those classic words "Clearly Skype will be part of the Microsoft Phone ecosystem."

I wrote in February only half in jest, that anyone foolish enough to author the Burning Platforms memo would have to be a delusional psycopath. Now we have heard from Mr Elop the author of the memo himself, that most of what he wrote in that memo was not factually true. Please remember - I said back in February that I agreed with the sentiment - Nokia WAS in trouble - but as we have now heard form Elop himself, it was not innovation or ecosystem of Symbian or MeeGo where the problems were. The problems at Nokia are at its execution (and marketing).

Did this past four months help Nokia execute better? You be the judge. Nokia quarterly results care coming in July. It will be nasty.

ACT 4 - THE AFTER PARTY


MY PERSONAL OBSERVATIONS

I have to comment also personally. I am quite bitter about this obviously, so please try to see past that and the hostility in the blog posting, ok? I tried to write the above with some humor, I hope you can see at least the attempt. But lets come back to this blog. Remember that Burning Platforms memo. I went public, very loudly and clearly, on this blog, in early February claiming that I felt the memo was a hoax. A very well-written hoax. That while I agreed completely with the sentiments - Nokia was in trouble in early February and yes Nokia needed urgently to change (mostly marketing and execution, not change its OS obviously) - I felt that there were such glaring errors in the memo, that it could not have been released by Nokia's new CEO. If the new Nokia CEO released a memo with so many blatant obvious factual errors - he'd lose all credibility as the head of his company.

I was right. Stephen Elop did write that memo. It was taken with shock by the employees. And he lost all respect of his employees in February. Remember, the 'sentiment' of the memo was correct, Nokia did need to change. But because of the idiotic litany of errors, nobody inside Nokia could take this clown seriously.

Since February, we have seen Stephen Elop roll back almost all claims he made in the memo, and issue corrections that are diametrically opposed to what was in the original memo. That memo will go down in history as the most notorious memo ever written by a CEO, and the one that nearly destroyed Symbian and Nokia. He has since clearly retractred most of the issues that I felt were at error. So I was correct. That 'Burning Platforms' memo could not have been written by a competent CEO of the world's biggest phone maker. Obviously on this blog I was massively ridiculed for my 'error'. You may want to go read that blog posting, and consider, what insights were there, that if you trusted the old Tomister here on Communities Dominate blogs, you would have understood, and perhaps even fore-seen some of the moves soon to come from the ever more beleaguered CEO.

And his Microsoft selection. I wrote a clear posting here on this blog, explaining why it would be utterly foolish for Nokia to abandon Symbian and MeeGo (and Ovi and Qt) and switch to either Android or Windows. Now look at what Stephen Elop is telling us in June and compare to what I wrote on this blog. Symbian will live for another 5 years. Qt will provide a billion new handsets from Nokia. MeeGo at least two phones this year. I was right, Stephen Elop was utterly foolish in February and again, I was ridiculed on this blog. I can't say 'whose laughing now' as I am not laughing. For Nokia, I am this close to tears...

And then that February 11 announcement (selecting Microsoft). Unless you are a regular reader of this blog, you probably didn't know that I wrote my 'preview' of what to expect Stephen Elop would say in his big Barcelona keynote address. I said he might do one of two things. He might announce a new OS, which would be a catastrophic error (see above). But that I trusted he was a competent CEO, and that he would do the following. He'd commit to Symbian. He'd explain Qt. He'd show a cool new phone on MeeGo. He'd explain the enormous success of Ovi..  Stephen Elop did not do that in February. Now look at him in June, four months later. He is doing ALL OF THAT NOW.

Again, I was right in my preview of what Elop will say. Except he waited four months to say it all.

What took him that long? Why did Nokia have to lose half of its value until silly-boy @Selop Stephen Elop would bother to learn. Why did Nokia have to lose more than half of its market-leading market share in only four months (literally, a world record, the single greatest loss in tech history of any brand, any technology, ever). Why did Nokia have to abandon 3 Billion dollars of quarterly revenues (12 Billion on annual level - and when I say 'abandoned' can you now trust me, this money is never coming back to Nokia, thanks to Elop) and half a billion dollars of profits (2 Billion annual level). This goof is the single most expensive CEO to destroy corporate value ever! Why is he allowed to stay in power?

But my point is, I told you in February, what a competent CEO of Nokia would say. Stephen Elop in February was incompetent and didn't say that. He was spanked in June, and now he has learned his lesson and he is reciting ALL of it, word-for-word, just like Uncle Tomi wrote on CDB. But why did Nokia have to be destroyed in the interim, thousands fired, careers destroyed, etc.

So thats my personal gripe. And one last point. If you honestly want my opinion how to fix Nokia overall, read this from before the Burning Platforms debacle (its all about the marketing and execution); and if you want to see how to try to fix it now, here is my best advice for Nokia's Board of Directors. But fire the Microsoft Muppet now. He is doing nothing but damage to the Nokia corporation.

What Happened to Blackberry? RIM reports 10% decline in smartphone unit sales for Q2? Decline? This year?

The wheels ARE coming off RIM's aspirations in smartphones. In Q3 of 2009 the Canadian Blackberry maker rached its peak in market share at 21%. And while its market share erosion since had been steady, but slight and gradual (about 1 market share point per quarter loss, down to 14% market share in Q1 of 2011) the total number of Blackberry smartphones had still be growing every single quarter up to now.

RIM RESULTS

So we have RIM quarterly results that were out last week. Now, for the first time we hear RIM reporting a decline in Blackberry unit sales from Q1 to Q2. A decline of 10 percent in unit sales, down from 14.5 million Blackberries in the previous quarter, to 13.3 million now. RIM's market share was 14% last quarter, and by my early projections for full Q2 smartphone sales of about 107 million units, RIM's market share has now dropped to 12%.

The market share decline can be 'understood' by RIM's particular niche focus in two specialist segments that fit its products and services - the business/enterprise customer segment and the youth/texting segment. These were 'early adopter' segments and their proportion of all smartphones was disproportionately large early on in smarpthones, and as more and more 'normal' people get smartphones, their relative size will of course shrink. But the overall smartphone market is growing strongly this year (anywhere from 50% to 75% growth year-on-year) so RIM should be benefitting from the fact that the total market is growing.

It is not. In fact RIM is seeing a massive rejection of its product now. If the market grew by about 5% and Blackberry sales declined from the previous quarter by 10%, it means Blackberry lost a total of 15% of its natural customer base. What was once a highly addictive user base and loyal customer base for Blackberry, seems to be abandoning the brand.

WHERE NOKIA WINDFALL BENEFIT?

And where are all those 'disgruntled' Nokia-Symbian clients, who used Nokia QWERTY phones like the E-Series? We know from Nokia's own statements that Nokia smartphone sales are collapsing right now. In fact we hear from the sales channel that Nokia is effectively in boycott, the resellers refuse to sell Nokia-Symbian smartphones. So, a customer walks into a store, asks for a Nokia QWERTY phone like an E-Series and the sales guy says they don't stock that model, but sells then what? Another QWERTY phone of course.

Why are these not translating into Blackberry sales?

I calculated in the February blog about the preliminary numbers of the Nokia Bonus 2011 Windfall Gift customer give-away of premium Nokia Symbian customers, to be roughly 50 million in size this year. I also said that the four smartphone makers to gain most ouf of the Nokia give-away were Samsung, Apple, RIM and HTC. So RIM is a 'natural' beneficiary of the 2011 Nokia customer give-away (much more so, than for example Motorola or HP/Palm for example). I estimated that for the full year 2011, from February, RIM should gain a bonus of about 6 million Blackberry smartphones this full year, or about 1.5 million per quarter.

Think for a moment. If you are heavily addicted SMS text messaging user, and have had a Nokia E-Series or another Nokia QWERTY phone, then you will not naturally want a pure touch screen phone. The Apple iPhone for example is not the natural 'replacement' but a Blackberry would be. And roughly speaking, about a fifth of Nokia's smartphones have been in the business/enterprise and youth segments, mostly QWERTY based smartphones.

But more than that, the two customer segments MOST likely to 'instantly' learn about Symbian being obsolete, and instantly wanting to switch away from Nokia Symbian phones, are not elderly people or family users or camera buffs etc. The users who are most dependent on the phone for business, are those who really need the phone for business - like travelling salespeople for example - and those most addicted to the phone - the youth segment. The enterprise/business user will not be deciding on which smartphone operating systems the employer will be supporting in its IT department and which brands of smartphones the employees are allowed to buy. Those decisions are made by the employer. And if the company had already been 'sold' on how great Nokia E-Series is - which in many ways was a Nokia business unit set to mimick Blackberry - isn't the natural home of that customer, if they no longer want Nokia Symbian - to be Blackberry then? No?

And if the other instantly aware customer segment, who know smartphones the best and consume them the most (and all services on them) ie the youth segment and young adults - if anyone in that segment was buying the Nokia consumer oriented smarpthones with QWERTY keyboards - isn't for them also the natural alternative specifically the Blackberry?

We do know that Nokia smartphone sales are plummetting worldwide. Those customers walked into the phone stores intending to buy a smartphone with a likely preference that it would be Nokia. They didn't buy Nokia because of the reseller boycott. But their need to have a new smartphone did not disappear. So they did walk out of the store with something else? Some will have gone from Nokia to the iPhone, I am sure, but those would mostly be the type of customer who is not addicted to SMS/messaging and didn't have an E-Series or other Nokia QWERTY phone. So what then? Androids, Samsungs, HTC's. But really, no Blackberries?

This is the golden age of smartphones. Blackberry is one of the most recognized, iconic, established brands with a high loyalty in its target segments. Why is it failing now? This is a mystery. And where are those customers going?

If we count a Q2 Nokia shortfall of about 10 million Nokia-Symbian smartphone sales decline from Q1 in total, and now add Blackberry losing another 1 million sales, we already are 'in a hole' the size of 11 million. And Apple analysts are suggesting iPhone sales have declined from Q1 with the China bonus sales, especially because there is no new iPhone 5 for June, so they are expecting iPhone sales in the 15 million to 17 million levels. If we say that is 17 million, that would mean Apple branded smartphone sales would be down almost 2 million from their Q1 level. Now we have a total 'hole' the size of 13 million!

Who has all those sales? It can't be Android based smartphones on Samsung, HTC, SonyEricsson, LG and Motorola, because Google itself says Android activations are up yes, but only to 400,000 per day so their sales now is about 37 million. Thats only up about 2 million from Q1. Where are 11 million smartphones? Thats 10% of the total market now that is 'missing'

Samsung's bada may have some, but again, I am curious that Samsung hasn't yet announced their 10 million milestone. And it can't be Microsoft, the sales of its new WP7 operating system is so bad, that its biggest supporter, HTC announced they are shifting most of Microsoft phone production away from Microsoft and onto Android. In fact after the Microsoft purchase of Skype, all Microsoft based smarpthones are now also in reseller boycott by the carriers/operators who hate Skype. So the missing ten million smartphones are not in the Microsoft camp either. Where are they?

BUT RIM HAS PEAKED

So, that is a big mystery to me. I will seek to find out where our phones are, and why they are there. Maybe the whole market is now going through a correction and Q2 total smartphone unit sales are down from Q1? Because Apple's iPhone 5 is delayed and Nokia is collapsing and Blackberries also falling in sales, maybe there is a tiring of the smartphone hysteria and we see a 'correction'.

But the big early bombshell news in Year 2 of the Smartphones Bloodbath, is that Blackberry's unit sales have now peaked. I think its fair to say, it was not the iPhone that killed the Blackberry, as RIM managed to grow both unit sales and market share of the Blackeberry through the first two full years of the sales of iPhone. But once Android came along, Blackberry saw its market share peak in late 2009 and now in early 2011, we see Blackberry's unit sales to have peaked too. Their best quarter was 14.5 million Blackberry sales. Now they are in decline.

And they have the typical management 'solution' to the problem - they are firing staff. That may be good for the bottom line, but in this age of the strongest growth in smartphones ever, that is a very short-sighted move. Now is not the time to cut sales staff - Blackberry enterprise/corporate sales are long sales cycles. Now is not the time to cut Blackberry marketing because the increasing part of Blackberry sales are now to consumers where most sales are driven by marketing. Now is not the time to cut R&D, as this is the most creative, inventive and innovative time in smartphones.

I do think that the tablet PC market is in hype mode, and one where enormous R&D effort is needed to keep up with Apple's iPad and where very heavy insvestments can result in tiny gains in market share. I am afraid that Blackberry's tablet adventure is hurting them unnecessarily. But I am sure that most who own Blackberry shares and most who study the RIM strategy would think that RIM has to mimick Apple, so if Apple does a Tablet, so too must RIM...

But as RIM cuts staff, that will hurt its chances to claw back market share in smartphones this year. Their market share is now to approximately 12% and in severe decline. Two market share points to lose in one quarter is very dangerous in this industry and must be stopped very soon or we will soon start to think of the Blackberry as yet another dead phone brand in the style of the Palm and Microsoft Kin and Nokia Symbian..

Very poor quarterly results from RIM. Very bad performance in this bloody year of smartphones. To use boxing metaphors, RIM, a past champ has taken it on the chin and has fallen to the canvas and is facing a count. Blackberry is not yet out, but staggers up onto its feet feeling very wobbly. Of perhaps, to put it in ice hockey terms for our Canadian readers, its the Stanley Cup playoffs, you're in overtime in a game, and your team takes a penalty. Its not the end of the game yet, but this is the worst time to be playing one man short on the ice.

RIM needs to turn it around really fast for Q3. This is perilous indeed.

Whose On First? Its Three-Way Race with Apple, Nokia and Samsung vying for Title World's Biggest Smartphone Maker Q2

First, my congratulation to Nomura analysts. I try to monitor the smartphone space and I did see that Apple seemed to be edging ahead of Nokia for Q2 and called it, but I missed the simultaneous surge by Samsung. Nomura calls Samsung as the biggest smartphone maker for Q2.

Well. We'll know soon enough, by end of July we'll have the quarterly results from all three companies. But lets read a bit of the tealeaves and see why this is so intriguing right now. Whose on first?

AS RECENTLY AS

So, lets start with how inconceivable this all is. For full year 2010 smartphone market, Nokia towered over its rivals, sold 100 million smartphones and was literally twice the size of number two (RIM 48 million) and obviously bigger than number 3 (Apple iPhone 47.5 million). Where was Sammy? Samsung was down in 5th place (HTC ahead of it for full year 2010 smartphone sales) and Samsung sold 24 million smartphones for the full year.

So. Just six months ago, it was 'fair' to say, that Nokia was twice the size of Apple; and Apple was twice the size of Samsung. And RIM was technically bigger than Apple, and HTC was technically bigger than Samsung., How come we now are considering these three to be running neck-to-neck for the title of world's biggest smartphone maker?

Ah, the volatile world of the smartphone bloodbath. First, RIM (ie Blackberry) and HTC have stumbled a bit. By Q4 they had fallen behind their close rivals and by Q1 of this year, Apple had pulled well ahead of RIM; and Samsung had pulled well ahead of HTC.

NOKIA

But the big reason why its neck-to-neck is of course the Stephen Elop Nokia smartphone customer give-away of February 11, when he announced Nokia would end the Symbian platform, abandon Nokia's migration path to MeeGo, and switch to Microsoft OS instead. This meant an instant collapse of Nokia smartphone sales. That is why Nokia is not towering over Apple and Samsung. Still in Q1, Nokia (24 million) was 25% bigger than Apple (19 million) and almost twice as big as Samsung (13 million).

The big reason why this is even in the cards, is the Nokia global sales channel boycott and smartphone unit sales collapse. We have no idea how low Nokia sales have fallen, but I've done some conservative modelling, and figured that Nokia was well below 15 million smartphone unit sales for Q2. They might be as low as 12 million.

Remember that Nokia invented the smartphone and has led the market ever since its inception. For fourteen years they have been the biggest player in town. That changes now in Q2, 2011, when they fall to second or even perhaps third in the rankings.

APPLE

So its gotta belong to Apple, right? They had 18.7 million smartphone sales in Q1  vs Samsung's 12.6 million (and RIM's 14.5 million). And if we look at previous years, usually Apple does about the same level of iPhone sales from Q1 to Q2.

Except, that for this year, that pattern is broken. Before Apple released its new iPhone at the last week of June, which would give several million units of sales (the loyalists who stand in line, you know). So this year we are not getting an iPhone end of June. The gossip now says the iPhone 5 or whatever it is called, won't be released until end of September.

So the iPhone sales 'should have been' in the 17-18 million range. If we cut off the June sales of a couple of million, then iPhone sales could be as low as 14-16 million. Well, there also is the White iPhone and the Verizon CDMA iPhone etc, but still, most analysts do expect that iPhone sales will be below the level that Apple did in Q1 of this year (counting calendar quarters, not Apple Fiscal quarters, obviously).

When I projected the 'Apple is bigger than Nokia' calculation, I was expecting Nokia smartphones in the 12-14 million range, and iPhone in the 15-17 million range. I was expecting a new iPhone for June. Now I'm cautiously lowering the iPhone Q2 estimate to about 14-16 million range. Still expecting it ahead of Nokia, but yeah, what about them Koreans? Can Samsung pull a swift surprise?

SAMSUNG SUNG SUNG, SING-SANG-SONG

(Wasnt there some Eurovision song all those years ago, Sing-Sang-Song? Dutch? German?)

So yeah. I honestly didn't see this coming, so thanks to the guys at Nomura for spotting it. And its intriguing, it is close. First, Samsung has recently been strongest growing smartphone maker. In the period from Q4 to Q1, when the industry grew by 2%, Samsung grew by 20%. In one three-month period. And if we just assume same growth rate, Samsung would be at... 15.1 million smartphones for Q2! Just by holding same growth level, they are in the thick of it. And if my other assumptions are roughly correct, they'd definitely pass Nokia already.

Except that this period usually has growth in it, so if the industry grew 10%, and we add that to Samsung ie they grew 20% more than industry, and we try 30% growth from Q1 to Q2, then Samsung would be at 16.4 million! That is well at the top end of where we expect Apple to come in with the iPhone. It is definitely conceivable, plausible, that Samsung may have passed Apple iPhone also, in Q2.

But lets do a bit of sanity checks here. Google's Android numbers. Google tells us that Android activations now in June are at the rate of 400,000 per month.. Thats a quarterly level of 36.5 million. There are five major handset makers doing Android phones plus many smaller ones. HTC is the biggest, not Samsung. I estimated for Q1 that Samsung had a quarter of all Android activations. If we say its the same now in Q2, then that would be 9 million Samsung Android phones.

Then for us to hit the over 15 million level, we'd need another about 6 million Samsung smartphones sold using bada, Microsoft Windows Mobile (the old OS) and Microsoft Windows Phone 7 (the new OS). In Q1 the total sales of bada were about 3 million. So that could have grown maybe 50% from then, and be in the 4.5 million range. Sammy would still be 1.5 million short just to be 'in the game'. And total Microsoft based smartphones were about 3 million in Q1, but since then, we've heard there is a Microsoft boycott because Microsoft bought Skype. Also some Microsoft vendors have been reducing their support of Microsoft most visibly HTC who said they are moving their capacity to Android. The Microsoft OS might see a flat or even declining sales. And its not likely Samsung could have half of that business.

So Samsung is a bit short, by this 'bottom-up' analysis. So I am not saying it can't happen. First, it obviously depends very much on exactly what number Apple reports, the lower the better for Samsung.

Secondly, Samsung seems to be hot in Android. It could have sold more than 9 million Androids, that is the 'easiest' way to get Sammy to the about 16 million they need. And they might be having a monster quarter over at bada, but here my gut is a bit queasy. You would expect Samsung to have celebrated its 10 millionth bada handset and if that hasnt' happened yet, then we're not in the 4M or more sales for Q2. But Samsung could also have deliberately waited with the announcement, to splash big, when they announce a world-record number and claim top dog status! We'll have to see.

RIM-RIM-RIM?

Is there room for a RIM in this thing? Ring-ring-ring? Well, RIM did issue a warning that they expected market share losses in this current quarter (they report already this week so we'll know soon enough). I don't see RIM in the running to win it, but they might just make it to kick Nokia down yet another notch. It will be close again, but if RIM is marginally down from Q1 (14.5 million) to say 13 million, that is smack-middle or where I expect Nokia smartphones to come in for Q2. Could go either way, could go either way. Nokia might make the tumble in one 3 month period from world's biggest to second, third and finally fourth biggest. But I don't see it in the cards for Blackberry to fight for the lead (and just watch me be proven wrong haha)

IF I HAD TO CALL IT..

Obviously I dont have enough granularity and real time data across all markets to call it at this close a race. But this is a fun parlor-game, if I had to try to guess Q2, I rank them like this: Apple iPhone biggest, Samsung second biggest, RIM Blackberry third and Nokia down to fourth. But some of these can be split by less than a million units so it really is too close to call until we have the numbers.

But into the end of the year? I projected the Nokia Elop give-away to run Nokia into this level towards the end of the year. With the global Nokia reseller boycott, the damage to Nokia is far worse, they are headed to single digits before the year is done, easily. That means far behind HTC, and wrestling with the 'usual gang' of the other makers who report losses most quarters: Motorola, SonyEricsson and LG..

RIM should hold 'steady' but not grow, so they're falling into the aim of HTC and by Q4 HTC will have passed them. Apple? The delay with iPhone 5 is very bad news, that means that even if Samsung runs even with Apple, Sammy will pull ahead strongly by Q3 and by Q4 is far ahead of Apple, even as the iPhone should have a spectacular Christmas. So for the Q4 ranking (which is about as accurate as forecasting the US presidential elections of 2020 haha) I'd rate Samsung biggest, Apple number 2, HTC number 3, RIM number 4, and likely LG pulling away from the pack into number 5, as they get their Android act together and use their scale. Nokia-Moto-SE would fight for who gets to be 6th biggest at year-end. So in other words, whether Samsung now passes Apple or not, the Samsung trajectory is strongest and they should end the year far ahead of the pack as the biggest smarpthone maker. What is their Android/bada OS split at Q4, that is perhaps the most fascinating issue to monitor as the second half of this year unfolds..

But right now, mid June, for Q2, its too close to call between Apple and Samsung. But I think its safe to say, Nokia is no longer on top. We will know soon, its a dynamic market and exciting time in the Smartphone Bloodbath this year 2. Stay tuned.

In Other 'Bloodbath' News: Recent Developments in the Smartphones Contest

We haven't looked at the Electric Boogaloo: Smartphones Bloodbath year 2, for some time, and last blogs have mostly centered around the Nokia implosion. Lets tour the Bloodbath scene and see what else is happenin' in the wild and wacky world of the phone-so-smart.

APPLE: WHEN?

So Apple had taught us to expect the new iPhone at the end of June. Now we know that won't happen. Apple will give us the 'iPhone 5' (or iPhone 4G or however it will be called) later in the year. If there was one year you don't want delays in your smartphone launches, it is obviously 2011, because of the bonus Nokia smartphone customer give-away which is worth a million customers per week. So if Apple gets the iPhone 5 out at the end of September, it will have abandoned - above all the sales the new iPhone 5 would steal from competitors under normal times - an additional 'Apple market share level' of about 18% out of the 13 million ex-Nokia customers given away during that period. That's 2.3 million happy iPhone 5 owners that will never be, because during July-September they went and bought an Android most likely..

But what of the iPhone 5? The early gossip had it, that it would come without a SIM card slot. Apple wanted to do a virtual SIM card, which would have allowed Apple to also deploy something called MVNO, and easily for Apple to manipulate which network is used by the same iPhone 5 in whatever country it was used. And potentially circumvent the international roaming fees that the networks usually charge. The networks said they were having none of that, and sent Apple back to the drawing board. Since that attempt, Apple went to the European standardization body ETSI with the proposal of a micro SIM card slot in May, and the Orange network has agreed to co-sponsor that micro SIM slot concept so it can advance to be accepted as a standard. We should know during June what happens at ETSI and you can expect a micro SIM slot in the next iPhone. That is the primary reason why it is now delayed, I believe.

In other iPhone news, first of all, I was the first analyst to call it, Apple has passed Nokia in Q2 and when the final numbers come out, the iPhone has sold more in this quarter than all Nokia branded smartphones, and Apple is now the world's biggest smartphone manufacturer brand (but Android will be the biggest smartphone OS platform obviously). Then the Apple iMessenger was announced last week. It will be a tricky move by Apple, the operators/carriers don't like it, but I think Apple will get away with it. It will most of all ciphon traffic and revenues away from SMS obviously, but the one brand smartphone maker most hurt by iMessenger is of course Blackberry.

BLACKBERRY NFC

The big news over at RIM are the NFC enabled Blackberries that are coming out during the summer, led by the new Blackberry Bold models 9900 and 9930. NFC ie Near Field Communications usually has mobile wallet and mobile money uses as the primary benefits, but from RIM's view, it also serves as a security access tech, so for example Blackberry owners could use the BB as their corporate identity pass.

SAMSUNG

Samsung's bada OS should be nearing its 10 millionth device sold any day now, and as they are rather eager to celebrate any milestones of the young OS, I would expect them to make a big splash about the number. My math says its any day now.

Meanwhile in Android powered Samsungs, an interesting twist from the South Korean maker. They have launched the most eco-friendly smartphone Samsung Replenish, which they say is made from 34% recycled materials. I would think that kind of marketing will find a strong appeal in especially the younger buyers and in particular probably in the European smartphone market where Samsung is strongly targeting to steal all Nokia customers. The Replenish is also sold for example by Sprint in the USA.

And in the world domination plans of Samsung, the Galaxy 2 has already notched up one million sales in South Korea where it was first sold. It is already available in Europe and will soon be launched in the USA. Oh, and I should mention in passing, that some gossip says Samsung is considering buying Nokia. My gut says the primary reason for that thinking would be defensive. Samsung wants to become number 1 in its markets including all mobile phones (where it is number 2) as well as in smartphones (where it is number 4). If a rival like ZTE of China or LG or South Korea were to buy Nokia, then the big mobile phone market would shift, and the traditional number 1 rival would no longer be the 'blated' old European giant, Nokia, but rather the company after the take-over would be run by a lean mean competitive Asian rival. But if Samsung bought Nokia, it could keep those assets it wants and sell the rest, and easily take over the number 1 ranking in both mobile phones and in smartphones. Can you imagine what 'execution perfection' Samsung would do with 'innovation excellence' Nokia assets? And they'd terminate the Microsoft deal obviously and migrate all low-cost Nokia phones to bada, and suddenly bada would be a serious rival Android which together would be the duopoly of the smartphone OS space. I think the Samsung rumor has some degree of legitimacy. But I also think, that part of Samsung says, we can do it better without the Finnish baggage - they are that confident they are that good haha..

HTC MOVING AWAY FROM WP7

In HTC news, the big news is that they are now shifting their attention away from Microsoft Windows Phone 7 and onto more Android. They didn't give a reason for this (and we have it below in the Microsoft section of course). But this is again more bad news for Microsoft. HTC is the launch customer of Microsoft's smartphones with a 10 year history with the brand. If HTC doesn't believe in WP7, then Microsoft is having some serious troubles. And on the Android side of HTC, an interesting twist on the CDMA side of smartphones, HTC has released the HTC Merge, a world phone that works on both CDMA and GSM networks.

SONY ERICSSON

The big play by SE was with the Xperia Play, the 'Playstation' phone that runs on Android. It has not set the world on fire. Is it perhaps a problem with the concept, that gamers will go for the optimized device (Playstation Portable etc) or is it now brand and execution at SonyEricsson. But many of us in the industry - including myself - had expected that when Sony finally release a Playstation compatible smartphone, it would be the next big thing, and would sell like hot cakes, and be the biggest story since the iPhone. Also the management of Xperia Play titles seems to be mired in 1990s thinking, they annouced 20 new titles. Twenty? In an Android-iPhone world of today when we measure apps by the hundreds... of thousands.. of titles. Its not that its a total dud like the Nokia N-Gage but certainly SE is not getting the traction it would have hoped for, with the Xperia Play. Pity. But in other news, Tommi Laine-Ylijoki joins SonyEricsson as Head of Operations. He comes from where? He is part of the Elop-Exodus of top talent fleeing the sinking ship MS Nokia-Titanic where he was VP Materials Management.

MOTOROLA

The picture at the ole Moto-Moto is quite blurry, nothing that amazing to report. The big news past weeks is that Moto is killing its customization of Motorola Android smartphones called Motoblur. While others emphasize differentiation, Motorola boldly steps in the opposite direction. We wish them well, the poor sods. When will we see a strong Motorola again in this industry? Maybe some dinosaurs deserve to die in peace?

NOKIA

As I have had a long series of Nokia smartphone blogs, I will keep this brief. Nokia is now bleeding market share even more badly than before. The mobile operators/carriers have started a Nokia Symbian smartphones boycott. There are millions of Nokia Symbian phones sitting in warehouses, with the channel refusing to sell them. The Nokia Symbian smartphone factories are on idle, with capacity to make dozens of millions per quarter, and doing nothing. This at a time when rivals complain about such high demand that they cannot meet demand and the industry growing at its record pace. Bad timing, Stephen Elop! Bad timing to incite a reseller revolt.

Nokia decided to pull the plug on Ovi branding on its store and seems to be giving most of the crown jewels of Nokia's app store to Microsoft and all WP7 partners, free of charge (the maps, the carrier-billing relationships etc). Who is Elop serving, honestly, Nokia or Microsoft? And then Elop tried to talk back the Symbian end, by telling the China market that Nokia would now commit to Symbian up to year 2016. Haha, is that because Nokia 'wants' to extend the life of 'burning platform' Symbian or is it because Nokia has so many million unsold Symbian phones in its warehouses, it will take until 2016 to dispose of them?

The ship is sinking and the smartest are jumping off. We just heard last week that Nokia Chief Technology Officer, Richard Green had left (was on extended leave of absense) and why? Because of Elop's strategy switching from MeeGo to Microsoft. Green had been brought in, to build the most carrier-friendly and most developer-friendly, open, ecosystem on the planet, which included the concept of 'migration path' from legacy Symbian to MeeGo with Intel, via tools called Qt and with the separate branding of the Ovi store. As we have seen, Elop has killed all that, and rather wants the least carrier-friendly, least developer-friendly, closed, ecosystem led by Microsoft without Nokia co-ownership. No wonder Green refuses to support that.

This is your Arabic Spring, Stephen Elop, the channel has spoken and like Europe and Nato came to support the Libyan revolution, the Shareholders of Nokia have now joined the chorus by slashing the Nokia share price. Like the 60 Libyan army generals who fled to Italy, your best and brightest are already deserting your ship. You do have to go, Elop, like Libya's Muammar Ghaddafi. And what is worst of all, after Elop torpedoed Nokia's Symbian, and assassinated the evolution path to MeeGo, now Nokia is set on a path to Microsoft Windows Phone 7, where another reseller boycott has been started.. The Microsoft WP7 option is actually even worse for Nokia than sticking with Symbian!

ANDROID

So how's our Android doing? The Android ecosystem is picking up speed and now the whole Nokia-Symbian developer community has fled that sinking ship and joined Android. Android has 450,000 developers and is up to 200,000 apps already. The developers who do both iPhone and Android say its easier and faster to develop for Android, and obviously the Android platform is selling far more than the iPhone and will shortly become the bigger of the two platforms by installed base of devices. Google also celebrated the 100 millionth Android device shipped, a massive milestone. Bear in mind, that as Android is essentially about 2 years of age (vs Apple's iPhone which is four years of age).

The Android army of smartphone makers meanwhile keeps growing at breathtaking speed. Google announced the daily activation rate has passed 400,000 per day, so Android phones now are sold at an annual rate of 146 Million or 36.5 Million per quarter. Thats now twice the size of Apple iPhone. And toss in the news from the above that HTC is switching most of its Microsoft effort into Android, and remembering HTC is the biggest individual manufacturer in Android, and you see the potential for Android is quite enormous.

MICROSOFT

And in Microsoft Windows Phone 7 news. The life over at Microsoft seemed peachy in February, when the world's biggest handset maker, Nokia, announced it will terminate the world's biggest smartphone OS, Symbian, and end its partnership with Microsoft's long-term rival Intel to develop a next generation OS, MeeGo, and rather switch to Microsoft's severely underperforming OS, Windows Phone. The early projections were suggesting that Microsoft would end up as one of the big 3 smartphone operating systems in the big race (with Android and Apple's iPhone). Ironically, just as recently as 2008, Microsoft HAD been one of the big 3 smartphone operating systems, but that lead was squandered by the meddlings and mismanagement we typically associate with CEO Steve Ballmer.

Now some were projecting that Microsoft would end up with 20% market share, ahead of Apple, behind only Android. If that fantasy was perhaps possible in the early reckoning, it is now utterly impossible. Not only have the retail channel revolted against Nokia Symbian phones, destroying its market dominant position, so that at the end of this year, Nokia's smartphone market share can be discovered with a good microscope, in the mid-single digits; the latest news is that Microsoft's WP7 is on its own reseller boycott.

Why is that? Its Skype, Stupid. Microsoft purchased Skype, perhaps a clever move for Microsoft the corporation, time will tell. But it was the death-nail to Microsoft's ambitions in smartphones. Mark my words: No carrier will subsidise Microsoft WP7 phones that come with Skype. Voice calls account for 70% of mobile operator/carrier revenues, and 40% of their total profits. Skype would instantly destroy all that, like the fixed landline carriers/operators have witnessed. The mobile operators are not that stupid to subsidise their own death. And we see how vital a handset subsidy is, come on, even Microsoft has to know this, because it was a lack of subsidies that killed Microsoft's own phone project the Kin phones - the fastest death of any new phone brand ever, six bloody weeks!

The San Francisco Chronicile and PC Week and other sources are now reporting that the resellers have put all Microsoft based smartphones on boycott. They will switch the customers to Android phones instead. Already Microsoft in desperation has resorted to selling its current stock at the cost of one penny per phone and they are still not moving. That is desperation. Microsoft WP7 went from 'one of the big 3' to 'last of the bunch, worse than even toxic Symbian' in the eyes of the resellers. This is not because of anything in the software or the platform or the apps or the ecosystem. It is because Microsoft bought Skype, the company all mobile operators/carriers hate. Microsoft WP7 died that day. And incidentially, if there was anyone over at Nokia who was hoping that Microsoft will revive a Nokia resurgence, that wish died on the day Microsoft bought Skype. This is why the fast-moving HTC (who has an option, after all, idiot Nokia CEO torpedoed his own options in February, what a silly man to put all his eggs in one untested basket) is already now shifting its emphasis from Microsoft to Android. They see the market reaction and do not want to be victims of a reseller boycott. Nobody is boycotting Android, made by the 'Do No Evil' company also known as Google.

I think that is the big news from most of the big players in the Electric Boogaloo year 2. I will return of course with more news as they emerge and we'll be doing Q2 results when the big companies start to report quarterly results in some weeks.

To Save Nokia Would Take These Steps - Urgently As In Right Now!

Ok. Lets try to save Nokia. What should Nokia do?

There are two gigantic problems. If Nokia was a person, it would be in the hospital in the emergency room, where a little while ago it had stopped breathing, and now also the heart had stopped. Nokia's doctors would need instant emergency assistance to get the heartbeat back, and to get the patient breathing. Then after that, for the patient to stabilize at least that much, that it need not be in the emergency room anymore.

TWO DISASTERS SIMULTANEOUSLY

I explained the two problems. The problem over the past two months or so, has been that the reseller chain (mostly the mobile operator/carrier customers of Nokia) had stopped selling Nokia smartphones. In effect the retail channel has started a Nokia smartphone boycott. What few Nokia smartphones are now selling, are sold with enormous discounts so Nokia's corporate profit engine has stopped performing. As Nokia warned us a few weeks ago, where it was supposed to have something like about 600 million dollars that Nokia projected for profits in Q2 only two months ago, to about zero dollars Nokia now says in its profit warning two weeks ago.

And there is a severe knock-off effect, that Nokia's non-smartphones (ie 'dumbphones') are also selling far less than expected this Q2, partly due to the reseller boycott, and partly due to overall Nokia brand collapse.

The second problem (ie the heart suddenly stopping) is the news in the past few days, that Nokia's share price has fallen well below the critical level, where now Nokia shares are so cheap, that Nokia would be worth more if it was split up and sold in pieces, than if kept together as one entity.

WHAT CAUSED IT

So, Nokia resellers are boycotting Nokia. Why? It all started on February 11, when CEO Stephen Elop stupidly announced that Nokia would replace its current Symbian operating system with the Microsoft Phone 7 (now called Windows Mobile 7 ie WP7) operating system, while Nokia had no such phones to sell or even to demo to prospective buyers. This announcement also included the end of Nokia's evolution path from Symbian to Nokia's brand-new operating system, MeeGo, an open-source, Linux based, touch-screen optimized 'next generation' smartphone OS, that Nokia had been developing with Intel. Nokia's related Qt development tools and the Ovi store lost their value as assets in the Symbian and MeeGo strategic vision. This vision had gained strong Nokia Symbian developer support, and Nokia shareholders had rewarded Elop over the first about half year of his CEO tenure, during which Nokia share price had grown by about 10% up to February 10.

Stephen Elop witnessed the smartphone sales collapse and the severe dive in Nokia share price (which has today lost over half of its value from February 11), and Elop responded with several CEO errors that have further angered his distributor channel, the carriers/mobile operators. Elop has launched dual SIM card phone, said he will not use the traditional Nokia smartphone development teams who have made smartphones that the operators/carriers on all other 5 inhabited continents have loved to sell (except in North America where only about 1% of Nokia's smartphones were sold). Instead he said the first Microsoft WP7 based smartphones from Nokia would be designed 'in California' and would be designed to appeal to US consumers - which obviously is not the preferred way for the 99% of Nokia branded smartphones that used to be sold in the other markets outside of North America. And now, the latest CEO blunder was to talk about Skype for Nokia WP7 phones. The carriers/operators hate Skype. We now hear that since Microsoft announced the Skype deal, apparently several of the carrier stores are now also actively steering buyers of (non Nokia branded) WP7 phone buyers to select rival phones using Google's Android OS. 

Meanwhile today we learned that Nokia's CTO has been sent on indefinite leave because he had disagreed with Stephen Elop's WP7 strategy. And already 3 ratings agencies downgraded Nokia stock. The major analysts are mostly projecting far more decline in Nokia share price value. Some major analysts are now targeting Nokia's share price to fall to less than half where it is now.

NOKIA OBJECTIVE

Nokia needs to achieve two difficult objectives under these very hard times. First, Nokia share price value decline has to stop. Nokia share price has to recover at least about 10%-20% from the current levels (still 30% below the recent peak of early February), for the danger to dimish that Nokia might be sold for its parts and split up.

Secondly, Nokia has to get its reseller channel to stop the Nokia smartphones boycott and recover at least partially the sales of Nokia smartphones and at least partially the lost dumbphones sales, so that Nokia's handset unit can deliver modest profits in the 2% - 5% range for Q3.

So, we have to somehow convince the carriers/operators to stop their Nokia boycott, and also to get the share price to recover at least somewhat for now. That would bring Nokia back from the brink of extinction. This is how I would do it.

FIRE ELOP, CANCEL MICROSOFT

So, obviously, the carriers are boycotting Nokia primarily due to Stephen Elop's idiotic statements from February 11 and since. And what little affection they may have had of the Microsoft WP7 smartphones, clearly vanished when Microsoft bought Skype. Nokia cannot recover smartphones sales (and thus cannot recover profits) until the resellers stop the boycott. And there it is not enough for Elop to apologize or to try to backpedal any of his statements. Now the situation is truly that bad, that Elop has to be fired and Nokia has to cancel the Microsoft phones.

But also, remember, its not enough to get smartphone sales back, Nokia also needs to get the share price to stabilize and turn to a modest recovery. So how to handle Elop firing?

I would have Nokia Chairman Jorma Ollila call an emergency press conference. In it he would make the following announcements: CEO Stephen Elop has been fired (or perhaps it might be worded that Elop has 'left the company') due to disagreements about the smartphone operating system strategy. And that Elop is no longer in Nokia's employ. The job of interim CEO would be taken over by Jorma Ollila in the interim period while Nokia seeks a new CEO on a fast schedule.

Jorma Ollila is the nearest thing to the gold standard, in the eyes of Nokia investors. If he made a 'return' (a little bit like Steve Jobs returning to Apple) - even if only for the interim period - this announcement, to me, combined with the firing of Elop, would help stop the decline in the Nokia share price. But that is not enough obviously. We need the smartphone sales to recover.

Then clearly, Ollila would announce Nokia has cancelled all plans to launch any Microsoft WP7 based smartphones. And that the current smartphone development projects around WP7 would have been terminated effective immediately. These are absolutely vital steps and unless Elop is fired and Microsoft WP7 smartphones cancelled, Nokia cannot recover.

HOW TO RESUME SYMBIAN SALES

Currently, even if Nokia said 'read my lips, no WP7 phones' - that would not restore Symbian smartphone sales. Nokia would have to make a very powerful statement about returning to Symbian (and made by Ollila obviously).

So, first, say Nokia returns to Symbian platform. That is not enough. The only way Nokia carriers/operators and the sales staff at retail stores to return to selling Nokia Symbian smartphones, is if the sales people and carriers/operators truly believe, that Symbian is going to be long-term viable.

How could that be? The Symbian OS had been losing market share. Even after the well-selling latest edition of Symbian, the S^3 version; the overall sales of Symbian had been losing market share. That was all before Elop destroyed the credibility of Symbian.

Here is my 'gimmick'. What if Jorma Ollila announced that Nokia returns to Symbian, but not just to power current smartphones, that to show how totally committed Nokia was to Symbian, Ollila would commit Nokia to migrate all of its dumbphones running Nokia's S40 OS, to Symbian! This would bring over 100 million new handset sales to Symbian - per quarter (after the migration was completed) per quarter. Bear in mind, the nearest rival to Nokia smartphones, Apple's iPhone, only sold 18.7 million smartphones in Q1, Apple's best quarter ever. So this announcement of Nokia's shift of all dumbphones to smartphones, would at least in theory, propel Nokia/Symbian to an almost unassailable lead in smartphones. But understand, that cannot be done in a year or even two. If Ollila committed to migrating its total dumbphone unit to Symbian by a very aggressive year, and I'd say by end of year 2014 - this would be a bold, dramatic and feisty move. Suddenly Nokia would have regained its mojo!

Note, that whether Nokia actually migrates all dumbphones to Symbian by December of 2014, or if Nokia would end up missing that target by some months, it nonetheless would be a massive goal, and if Ollila said it now, that - and perhaps only that - could jump-start the stalled Symbian sales.

Would it be costly? You betcha! But no matter what costs, that was Nokia's long-term goal anyway, for perhaps a 2016-2018 target, so this was not that crazy as it may initially seem. Obviously Nokia would then have to pursue this target very vigorously, and if in 2014 it seemed that some of the cheapest handsets could not be met to this target, Nokia could simply abandon those cheapest phones, to very modest revenue and profit 'damage' while this announcement now in 2011, would help save Nokia.

And the typical 'blah-blah-blah' about this Symbian transition commitment, that this was the unanimous commitment of Nokia's Board of Directors; and that the next CEO would be committing to this target also in public, etc. Note, this bold target - where the scale of how huge Nokia's smartphone production would then become - would change the Nokia smartphone market share picture totally - and would help recover some Nokia share price.

But it is clear, that Symbian is not viable at the high price end of Nokia smartphones into 2012-2013. Nokia needs a new migration strategy now, and Microsoft WP7 cannot be it.

ANDROID NOT AN OPTION

I know that many of my readers would say this is the time for Nokia to go with Google Android OS. Many investors would also welcome Android. But Android now would mean Nokia would have to delay Nokia's next generation smartphones by another year to 18 months from now! Nokia knows Symbian was on borrowed time back before February 11, and is far more wounded now, after the Stephen Elop debacle. No, Android is not it. The only viable migration for Nokia, from Symbian, is obviously to MeeGo. For that Nokia still owns the Qt developer tools which support both Symbian and MeeGo. And Qt will also enable developers to make apps for Android, so in a way, Nokia's MeeGo (and Symbian) would be 'compatible' with Android. Not completely compatible, but MeeGo and Android would be now pitched to Nokia sales channel, developers, investors and employees, as kind of cousins.

Ollila would also reverse the other silly decisions Elop had made, such as the ending of Ovi brand, which Ollila would restore. He would announce Nokia's maps, carrier billing etc would not be made available to Microsoft, nor any WP7 partners/rivals like Samsung, SonyEricsson and HTC. 

ANSSI FOR NEXT CEO?

Ok. Then the 'next CEO' consideration. Ollila should announce that Nokia would seek to hire a new CEO very rapidly. It could have been (and perhaps should have been Anssi Vanjoki. I think Anssi would be a great Nokia CEO, in particular in how he handled the N97 problems, the N8 and Symbian S^3 launches, making sure the two were ready before they were sold to the public. Anssi is far more dynamic and entertaining as a public speaker than most Finnish execs. He's the nearest thing we Finns have of a 'charismatic' executive (but not in a Steve Jobs level haha).

However, this is not the right time for Anssi. Nokia now needs someone who is not seen as a Nokia insider. Nokia now needs to restore its retail channel trust, so the new CEO would need to be particularly favorably received by the mobile operators/carriers.

But I don't think Anssi would even do it. He's plenty wealthy. He has a new job. But Nokia would really need him now. So lets assume Jorma Ollila manages to get Anssi Vanjoki to return to Nokia, temporarily, as co-CEO in the interim period to help run the Nokia in deep trouble, together with Ollila, until the new CEO has been hired. Nice idea? Anssi could for example instantly take over the recall and redesign of the failed E7 flagship phone, and even more importantly, to oversee the rapid launch of Nokia's first MeeGo phone (the N9) which was ready for launch in January but killed by Elop only days from launch.

HOW DO YOU GET ANSSI?

I honestly think that no number of astronomical shares, stock-options, cash, bonuses, would get Anssi Vanjoki to agree to come back to such a lousy job. To fix Elop's mistakes, and then to have step aside when the new CEO is hired. But I have an idea.

Imagine if Ollila would offer Anssi Vanjoki with the ultimate reward. Yes, obviously pay him royally well and give massive stock options and give bonus-incentives. But the gimmick. What if Ollila privately promises Anssi that Nokia will name its next flagship phone after him! The Vanjoki. So Nokia would have two flagships, the Nokia Communicator and the Nokia Vanjoki, released with updated editions on alternate years. And that Ollila would give Anssi carte blanche to design the first edition of the 'Vanjoki' which would be priced in the above-iPhone scale, and Anssi could then use whatever form factor he wanted and put in whatever features he wanted. Imagine, the first phone of the industry, named after the man who came in to help save Nokia... (Nokia really needs Anssi now, this is how to get him)..

SO WHO AS ACTUAL NEW CEO

And what of the new CEO? Not someone from California from the IT industry. We have now seen what a Microsoft guy attempts to do (whether Elop or Steve Ballmer) or someone like Steve Jobs at Apple (I am not suggesting Jobs would ever for one second consider the job, I just mean this is the thinking of West Coast US execs) - they all want to bypass the carriers/mobile operators! So while the investors would like an American, any US IT guy would be seen as another threat.

No, what if Nokia said, half of all mobile phone users are in Asia. And Nokia's distributor chain is the mobile operators/carriers. So wouldn't it be the best way to soothe the hurt feelings of the carrier community now, if Ollila said that the next Nokia CEO will be hired from the top management of a mobile operator/carrier - from Asia. Someone like say Neil Montefiore of Starhub (formerly CEO of M1) of Singapore. A Nokia-friendly CEO who is super-hyper-competent, in ultra-competitive customer-oriented Singapore. A country where already today 75% of all phones are smartphones! Isn't this like the obvious way to restore Nokia's management to the right path, and rapidly heal the rift between carriers and Nokia?

WILL NOT RECOVER NOKIA TO 2010 LEVELS

Note, this is an emergency procedure. Nokia currently is about to die. Nokia needs to get the share price back up, and must get the carriers to stop the Nokia boycott. 

Even before Elop messed up Symbian, there was trouble in selling Symbian based Nokia phones. After the above, there is no way Nokia's smartphone market share could recover to the 29% levels it was before the February 11 silly Elop announcement. But I think Symbian sales would be partially recovered. To what level now? Maybe 10% or 15% or at best 20%. That is still massively worse than what it was in Q1 at 24%. And then in the near term, Nokia would suffer enormous costs of forcing the expedited shift from S40 based dumbphones to Symbian.

Symbian is an old system. Its app development is very hard. The Qt development tools are still under development themselves, so not all things work there yet. But this is now the best strategic option left for Nokia.

Nokia has to fire Elop. Nokia has to end the Microsoft partnership. No ifs, ands or buts. That will only stop the downward spiral of Symbian sales, market share, revenues and profits (ie losses). But if Nokia did all the above moves, I do think Nokia would have some reasonable chances to recover. And Nokia would start to sell MeeGo phones before the end of the year (likely already in Q3) and forcing dumbphones to Symbian, Nokia would actually still potentially challenge Android for biggest smartphone maker. A costly and resource-hungry move, but at this point, there is no other option.

Jorma Ollila has to step in, and in an ideal world, Anssi Vanjoki would join him for the short term. And the next Nokia CEO would come from an Asian mobile operator/carrier. Then in the mid-term, Nokia could actually become quite competitive once again.

But remember, Nokia's problems of the past were mostly execution and marketing, not phone design or software or ecosystem. And even here, an CEO coming from the carrier/operator community (especially from Asia) would bring far more urgency and marketing-customer focus to Nokia compared to what it has had in the recent past.

This is not the way to get Nokia back to a leader position. This is the way to stop the two disasters today, and get Nokia distributors to stop their boycott of Nokia, and to get the stock market and shareholders, to restore some faith and trust in Nokia.. 

Why Nokia Board Decision to Fire CEO Stephen Elop Is Now Urgent

I hate to make this blog only about Nokia, but Nokia is the industry's giant and it has seen an unprecedented crash in its market. We may see the end of Nokia during the next few months. This is the big story in tech right now, and as a former Nokia employee, and as a Finn, it pains me to see the company in such as state. Obviously I do have to cover the story.

So I have told you in past blogs what is the meaning of the Nokia profit warning and how relates to the Nokia smartphone sales for the rest of the year. Then I wrote why we now know the biggest error CEO Stephen Elop made, was not the decision to select Microsoft, it was his timing of that decision which now is destroying the company. I then examined the statements and actions of CEO Stephen Elop since the February announcement of Microsoft, and found that he is acting in a delusional way, refusing to face reality.

After a few days, I had the time to do some deeper analysis of Nokia's quarterly results, and found that the numbers tell a far more disasterous story than has been reported yet in the mainstream press. Nokia's own numbers tell us that their Q1 was worse than most analysts ended up reporting. I followed that story with how Stephen Elop's actions are now impacting Nokia concluding that Nokia's smartphone sales have collapsed since the Q1 results, because the Nokia reseller channel has started to boycott Nokia. What is worse, I found that Elop, rather than attempt to restore reseller support, has now poured gasoline onto the fires, and is angering those resellers even more, through what can only be called pure contempt of the Nokia distribution channel. On this I have called Elop unfit to run Nokia. And yesterday, I posted the blog explaining, that where Stephen Elop has gone on record stating that the big picture 'war' is not about hardware or software, it is about ecosystems (on which I agree) but then, that he has destroyed a vast and vibrant ecosystem and abandoned its replacement, the world's most complete, modern, open and powerful ecosystem; and replaced it with the weakest ecosystem possible. This I have called incompetence.

NOKIA IS NOW IN CRITICAL STATE

But why is this urgent now. Why so many blogs about Nokia in a row? Because, as I have hinted a couple of times, there is one over-riding crisis facing Nokia now, its worst disaster ever, and it is an urgent critical crisis. The market share situation I talked about in the above has a time window of about a year. The profit problems have a time window of about a quarter. This critical crisis has a time window of possibly as little as weeks, could be as little as days.

The reason is that Nokia's share price has falled below a dangerous threshold. Nokia analysts now calculate that Nokia Corporation would be worth more, if it was sold and split apart, than as a whole.

If Nokia was a patient in the emergency room, the ECG has just hit 'flatline'. You know, the heart beat that goes 'beep, beep, beep' is suddenly just a flat tone, beeeeeeeeeeeep. The heart has stopped. If Nokia does not get emergency assistance now, it will die.

What do I mean in the real world. This is obviously not a stock market ./ Wall Street blog, but we will have to discuss this now, from the angle of the share price. Nokia's share has falled 46% from its recent peak from just before CEO Stephen Elop made his ill-timed announcement of Microsoft partnership. Yes, Nokia share price has fallen almost to half what it was just a few months ago.

That decline is not the issue. It is the level where it is now. At this level, Nokia is worth more, if split up and sold in pieces to rivals. So, who would want NokiaSiemens Networks (about a third of Nokia's revenue). That would probably be of considerable interest to the Chinese networking rival, Huawei which would instantly become almost twice as big as its nearest rival, Ericsson. And through the NSN purchase, Huawei would gain very valuable carrier/operator contracts and installed bases of networks that will need upgrades and expansions.

Then who would pay for Nokia 'dumbphones'? (about a third of Nokia's revenues) It could be very interesting to ZTE of China for example, who just with Nokia's dumbphones unit would leapfrog LG and Samsung (and some analysts said Q1 Apple also was bigger than ZTE) and make ZTE the biggest handset maker in the world. More than that, it would give ZTE the world's biggest handset component purchasing juggernaut, and the world's biggest distributor channel with its carrier relationships.

Who would pay for Nokia's Navteq unit? That could probably be sold at a premium for some major US West Coast tech giants who have recently gotten the 'Location-based' bug and would probably pay a nice premium for the mapping and mobile advertising unit of Nokia. Navteq is far smaller than the other parts mentioned here but still alone would be one of the biggest Location-Based Service businesses on the planet.

And then the 'crown jewels' ie Nokia's smartphone unit (where nearly a third of Nokia's revenues come from). That could be interesting to someone like HTC of Taiwan, who would instantly leapfrog Samsung, RIM and Apple and become the world's biggest smartphone maker overnight.

Under normal conditions, Nokia was a reasonably healthy giant corporation and most tech rivals could probably not afford to buy Nokia. Now the price is so low, that the big giants could very easily swallow Nokia and take it simply for its mobile engineering competence and its carrier relationships and sales force. So we've already seen rumors of Samsung, Google and Microsoft considering a Nokia buy-out.

That alone is worrysome. The alarming bit is that 'split up' scenario. Normally, even with today's share price, a relatively small rival like ZTE or HTC could not afford to buy all of Nokia. But if Nokia's parts are worth more if split than when kept in one piece, suddenly a very modest-sized rival could put together the financial package, buy all of Nokia Corporation, rapidly sell off the parts they don't want, and end up getting the part they wanted for what in effect would be a huge discount for that remaining part.

The more the share price falls, the more close we get to this date, that we see Nokia being sold.

I'm not going to speculate here now about who could, or should, or should not, buy Nokia. I am warning the Nokia Board that Stephen Elop is driving Nokia's share price to 'junk' status by his actions, specifically the recent steps that have so angered his distributor channel that Nokia smartphone sales have stalled and other Nokia dumbphone sales are collapsing. As he's angered the distributor channel - the mobile operators/carrirers - that also means that NokiaSiemens Networks sales are hurt very severely.

The Nokia share price has dived under the critical threshold. Now Nokia is a legitimate take-over target and the likely buyer will split up the company we knew as Nokia. This is why the Board of Management, led by Chairman Jorma Ollila have to fire Nokia CEO Stephen Elop now, while there still exists that entity we have known as Nokia. If they do not act soon, Nokia will be cut into pieces and gone.

PS Nokia can be saved. It takes decisive action now, by the Chairman Jorma Ollila, but he has to act now, where there is some moderately competitive company still left to 'save'. Every day they wait, every day they lose more market share and abandon more revenues and drive Nokia deeper into the red. There is no more time. But yes, I will post my view of what needs to be done now to restore Nokia to at least moderate health (ie get it out of the emergency room..). I hope to post that for you tomorrow.

The Ecosystem Myth and Stephen Elop's Alternate Universe at Nokia

Nokia CEO Stephen Elop wrote in his 'Burning Platforms' memo what he felt was wrong with Nokia. This is very reasonable-sounding stuff from Nokia's new CEO, to help explain why Nokia was so much in trouble. Lets be very clear, and first copy his exact words here. This is what Stephen Elop wrote about ecosystems and Nokia:

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

Since that 'Burning Platforms' memo, we have heard on February 11, that Stephen Elop decided to end Nokia's own smartphone platform, Symbian, the heart of Nokia's current ecosystem. He also announced Nokia would not proceed into the previously-announced migration path, to the newest smartphone operating system, MeeGo. Instead, Stephen Elop announced that Nokia would replace Symbian with Microsoft's new Phone 7 (since renamed Windows Phone 7) operating system for smartphones. We should assume, that he felt WP7 is more suited for the 'war of ecosystems' against Apple's iPhone iOS ecoystem and that of Google's Android etc.

So it all sounds great. The bizarre thing that happened between then and now, is that Nokia developers have abandoned Nokia's platforms and even more alarmingly, are not embracing Microsoft's WP7 ecosystem instead. So lets examine the evidence. How do the three systems compare.

OPEN OR CLOSED

Nokia's original Symbian operating system is an open source operating system. It was built with the support of essentially every major mobile phone maker (Motorola. Sony, Ericsson, Samsung, Siemens, Panasonic etc). (Note, Apple's and RIM's and HP's and Microsoft's OS's are not open source)

Nokia's intended replacement operating system, MeeGo, was also an open source operating system, that Nokia developed with Intel.

The selected operating system Microsoft WP7 is not an open source operating system, it is very closely managed and controlled by Microsoft and Nokia would have no control in that evolution. To me this does not sound like Nokia changed to a better ecosystem. Maybe its just me. Maybe it gets better with the developers.

DEVELOPERS

Nokia's old' operating system, Symbian had a vast army of developers, using the system which is notorious for being very clumsy and difficult to develop for. But there was a large army, literally hundreds of thousands of developers worldwide who knew Symbian development. (note, Apple and Android have big developer communities but Symbian is far bigger than RIM, Microsoft, Palm, bada etc)

The new intended OS, MeeGo, was built on industry-standard tools based on Linux, for which there is ample available programming competence. There are hundreds of thousands of developers competent in Linux.

The selected Microsoft WP7 OS is not using industry standard tools and is not Linux based. Any developers would need to learn new skills. The total developer community is only measured in the tens of thousands, far less than either for Symbian or MeeGo.

APPS

Nokia's Symbian platform has been around for more than a decade and has a vast array of apps and services. Its Ovi store had become the worlds' second most used app store, generating downloads that only Apple's iPhone App Store could exceed. (Obviously Ovi store had more downloads than app stores of Android, RIM, Palm, bada, and Microsoft both OS's combined)

The intended MeeGo ecosystem would be using Nokia's Ovi store and could access Ovi apps and content, and if designed using Qt the common tool for Symbian and MeeGo, the apps would run on both platforms.

The selected Microsoft WP7 platform has the smallest number of apps and its app store is the least-used app store of the major internationally launched smartphone platforms.

MIGRATION PATH

Nokia's Symbian has traditionally had a migration path and Nokia even built a migration from Symbian to MeeGo via its developer tools called Qt. Thus any apps now developed for Symbian would also run on MeeGo. The developers of Symbian were particularly pleased with this extra effort that Nokia had invested in its ecosystem.

Nokia's intended OS, MeeGo would then benefit from the migration of most current Symbian content.

The selected Microsoft WP7 operating system did not have a migration path from Symbian. It did not have a migration path to or from MeeGo. It did not even have a migration path from the previous Microsoft OS, Windows Mobile. The previous Microsoft developers were particularly upset that Microsoft refused to support them in migration.

ANDROID COMPATIBILITY

The old Nokia operating system, Symbian, did not natively have any compatibility with Google's Android, but through the Nokia developer tools of Qt, any Qt developer could create apps for both platforms. In this way, recently, Symbian developers through Nokia's Qt, had acquired a partial compatibility with Android. (note no other ecosystem except Nokia's Symbian and MeeGo had this with Android, not Apple, not RIMm, not Palm and not either of Microsoft's OS platforms)

Nokia's intended new OS, MeeGo was built on Linux just like Android, and was an open source OS just like Android; thus most software modules etc would be compatible and in many cases actually interchangable. In any case, Qt the Nokia development tool allows app development for both platforms, simplifying greatly application development work.

Microsoft's WP7 is not compatible with Android. Its not even compatible with Microsof't's own previous OS, Windows Mobile.

MAP SUPPORT

Nokia's Symbian was built to include Nokia Ovi map support, the most used mobile phone mapping solution on the planet, and free to users. (Far bigger ecosystem than anyone else except Google)

Nokia's intended MeeGo operating system had full Ovi map support.

The selected Microsoft WP7 operating system did not have Ovi map support, but it would be added, which would remove a unique Nokia benefit, and gift it free of charge to Nokia's big rivals, Samsung, LG, HTC and SonyEricsson.

CARRIER SUPPORT

Nokia's Symbian was expanded through the Ovi store to provide full carrier app store support, with carrier-billing, the preferred billing and payment option by all app developers. Ovi had become the app store with by far the biggest carrier-billing reach, passing over 100 carriers/mobile operators who supported Ovi carrier billing. (By far the biggest on planet)

Nokia's intended MeeGo ecosystem had Ovi carrier support built in.

The selected Microsoft WP7 ecosystem had no carrier billing support, but it gained that through the Nokia partnership, thus all the work Nokia had done to build the widest reaching carrier ecosystem was now gifted to Microsoft.

ADVERTISING

Nokia set up its mobile advertising arm in 2008 and has expanded that considerably now through Navteq. (Nokia started this far before Apple and Google. RIM, Microsoft, bada, Palm etc have nothing to match)

The intended MeeGo OS would benefit from all Nokia advertising developments including Navteq.

The selected Microsoft WP7 OS did not have any meaningful advertising platform, an area where Microsoft was seen to severely lag Google, Apple and Nokia. Now Microsoft gains the Nokia ad platform compatibility in upcoming WP7 versions.

CARRIER INSIGHTS

The Symbian ecosystem has had from day 1, the full support of NTT DoCoMo as one of the founding members, the Japanese mobile operator/carrier giant, who started the whole mobile industry and invented the mobile internet and launched 3G, near field, WiFi mobile phones etc. (this is a Nokia trademark, no other manufacturer ecosystem except the two from Nokia have carriers/operators as partners)

The intended MeeGo ecosystem had from the beginning the support of China Mobile, the world's largest mobile operator, alone twice as big as all USA carriers/operators added together.

The selected Microsoft WP7 ecosystem is not supported by any carrier/operator.

END USERS

And then on end users. The Symbian platforms has passed 400 million units sold (vs about 200 million iOS and 100 million Android and 20 million all flavors of Microsoft). The Symbian system on Nokia Ovi app store has over 200 million active handsets (vs about 100 million iPhone and under 70 million Android and under 10 million Microsoft of all flavors). And Symbian Ovi store active user base has grown past 60 million. (this is by far the biggest on the planet, arguably the single biggest 'element' of any ecosystem, the end-users)

Nokia's intended MeeGo system had not launched by February 11, so it had no active users and no devices of any kind in the wild. However, the MeeGo OS would benefit form compatibility with Ovi, so for any developers counting the accessable market for MeeGo, they could in many cases count the full population of Ovi users.

But Microsoft's WP7, one year from launch, has not passed 10 million total devices sold. It does not have 10 million active users. And none of the past Microsoft or Nokia/Ovi users would be compatible with the current WP7 version.

LANGUAGE SUPPORT

Nokia's older Symbian and the Ovi store had developers in most countries and especially the Ovi store was supporting the most languages of any app store. (by far biggest of any ecosystem)

The new intended MeeGo OS with Ovi would have the same international language support as Symbian and Ovi.

The selected Microsoft WP7 OS has the least international langauge support, is essentially only a USA based ecosystem.

MONEY

And on Symbian and Ovi Nokia had launched Nokia Money in 2009. While not specific to Symbian or Ovi, the two were compatible with Nokia Money. Nokia furthermore committed in 2010, before Stephen Elop was hired, that all Nokia smartphones (ie on Symbian) from 2011 would have 'near field' technology which is vital for mobile wallet applications, as developed first by Symbian partner NTT DoCoMo in Japan. (note Google is now doing money integration. RIM just started near field. Apple might have NFC support in the next iPhone. No money or wallets on Palm or any Microsoft OS ecosystems)

Nokia's MeeGo was set to be all NFC enabled, by Nokia plans prior to Stephen Elop.

Instead, Elop selected Microsoft WP7 which does not have NFC handsets nor NFC support currently. Elop even cancelled many early Nokia NFC smartphones.

WHAT HAS ELOP DONE

He talked the talk. He did not walk the walk. Stephen Elop inherited what was by all accounts the world's most open and most wide-reaching ecosystem. He said an ecosystem must be more than devices. He said it needs apps, developers, maps, money, advertising, etc.

If your argument is that the ecosystem is the decisive factor for winning in mobile in this decade, as Stephen Elop seems to suggest, and many in the mobile industry believe; then look at what he did.

I am not talking which OS has the best user interface or which OS is the easiest to use, or which OS is the cheapest to make or which OS has the most handsets. If we consider only the ecosystem, then consider the following:

Symbian has more apps than WP7. Symbian has more developers than WP7. Symbian has more users than WP7. Symbian was open source which WP7 was not. Symbian had carrier billing support that WP7 didn't. Symbian had an actual carrier onboard to support its evolution that WP7 didn't. Symbian was co-developed not developed by a monopoly like WP7. Symbian offered a migration path which WP7 didn't. Symbian even had somewhat a level of compatibility with Android (via Qt) which WP7 didn't. And Symbian with Ovi had the biggest language footprint and biggest Ovi maps support.

That, what was arguably Nokia's first attempt at an ecosystem, call it Nokia's prototype, was then evolved into MeeGo, where the development was with Intel, on the open source platform built on Linux (something Microsoft didn't have) and where every benefit included the above, or added even more ecosystem thinking that Microsoft didn't have, including obviously most of all, a friendly migration path from Symbian, and Linux software module compatibility with Android (again, something WP7 didn't have).

If Stephen Elop says its a war of ecosystems, he owned the world's best ecosystem now. I am not saying that Symbian was the easiest to develop to (Android and iPhone are far easier) but as a whole, open source, carrier billing, languages etc, Symbian was the best ecosystem.

And let me make one USA-specific comment here. I know American developers mostly didn't even know Symbian was alive anymore haha. But remember, only 7% of the planet's mobile phone accounts are in North America. That part of the world where 93% of the planet lives, the other 5 inhabited continents - Nokia is still today the biggest OS platform, Ovi is by far the biggest app store, on all those continents. In China, in India, in Brazil, in Russia, in Indonesia etc, its not the iPhone App Store ecosystem. Try to find IPhones in India for example (where Blackberries outnumber iPhones by 10 to 1). Until Stephen Elop annouced the death of Symbian on February 11, the best app store and smartphone OS by number of users, and number of apps - in al those huge markets - was Nokia's Symbian and Ovi. Do not make the mistake of thinking what has happened in the USA will happen elsewhere. As Ovi had focused on language support and carrier billing - it was a far more sustainable ecosystem in especially the non-English speaking countries like China, Russia, Brazil etc etc etc.

THE SURRENDER-MONKEY

Stephen Elop tossed all that aside. He talked the talk that its a war of ecosystems. Did he walk the walk? No. He had the biggest army in that war, and one that was being prepared for the very cutting edge of everything anyone could ask for in ecosystems, from open to Linux to compatibility to migration path. Stephen Elop tossed it away, and replaced it with the weakest army, WP7. Did he select MeeGo, which is everything Symbian was, except far easier for developers, and even more open and even more standardized with the industry? In fact, MeeGo is by far the most open platform of any smartphone OS and ecosystems counting all the new ones today.

No. Stephen Elop wanted to surrender in the war. He selected the most restrictive, most limited, least successful, most anti-developer, most anti-carrier ecosystem out there. In Microsoft WP7, when considered as an ecosystem, Nokia was going backwards, and all benefits of the Microsoft-Nokia partnership would indeed help build a better ecoystem but not for Nokia. All gains would go to Microsoft, using Nokia's assets and years of work, to fast-track the Microsoft OS and ecosystem to be more viable. This was not a decision made in the best interests of Nokia. Not if ecoystem is the decision criterion. The benefaciciary of Elop's decision, if thinking ecosystems was all Microsoft. That is why we have to consider Stephen Elop the Microsoft Muppet. He is being controlled by his former boss Steve Ballmer, the Microsoft Muppet Master.

If you think ecosystems, Nokia has thrown away the strongest current platform, and instead of replacing it with an even better one, Nokia has instead selected the weakest ecosystem out there. I think this is evidence of Stephen Elop's incompetence as a Nokia CEO and is another reason why he needs to be fired now, while it is still possible to reverse that decision, and save what is left of Nokia's decade-long work into building an open source based true multiparty ecosystem.

There is more to this saga. The time for Nokia is running out. I will return with the real crisis of the moment in the next edition of this study into the biggest management failure of the mobile telecoms industry, as we count down to the firing of Stephen Elop, CEO of Nokia.

The Patient Heart Has Stopped. Now the Doctor 'helps' by starting to strangle the patient too (Stephen Elop incompetence)

So we now know more about Nokia. Its not just that we've seen that Nokia the 'patient' has had a heart attack, and its heart has stopped (sales has stalled) - when we look at Doctor-In-Chief, CEO Stephen Elop, we now see that this 'Doctor' is attempting to fix things by strangling the patient!

Note, it was Stephen Elop which caused the initial shock, the heart attack. It was Stephen Elop's February 11 announcement of the end of Symbian that effectively killed the sales of Symbian in the sales channel. What Nokia has since seen, is a sales channel revolt, in effect a boycott of all Nokia phones, not just smartphones. Check this out.

ALL NEWS IS BAD NEWS

The blood is now everywhere. This is what we read everywhere. Tero Kuittinen, a Nokia analyst writes that Nokia smartphone sales are “eroding rapidly” and the crash is happening even as the phones are now “steeply discounted” and the sales channel is simply “phasing out” Nokia sales with “no carrier support”. That is carnage. If it was just one source, maybe we could dismiss it. But read what we hear from The Street who write about Nokia smartphones now saying “carriers are yanking the support of Nokia smartphones” and the higher-priced flagship phone successor to the N8, the E7 is said that its “launch is a disaster”.

And then Mobile Today reports on Carphone Warehouse (Europe’s biggest handset retailer) saying that Nokia premium phones like N8 and E7 are disappointing “despite the N8 getting off to a strong start at the end of last year” (ouch! Talk about snatching defeat from the jaws of victory!) and then from neighboring Orange store, Mobile Today quotes sales saying “Nokias are currently the worst selling handsets in the store”.

Not the worst-selling ‘smartphone’ but Nokia is now the worst-selling phones of the UK. This in one of Nokia’s traditional stronghold markets, the UK, where often 5 and sometimes as many as 8 of the top 10 bestselling phones have had the Nokia brand. April was the first month ever, when the Top 10 was devoid of any Nokia handset, no smartphone, no dumbphone. That has never happened as long as records have been kept in the UK market for top-selling phone brands. CNBC reported on 1 June that several mobile operators/carriers worldwide are now refusing to sell any Nokia smartphones.

The retail chain has spoken. They are sending a message to Nokia HQ. No price discount, no new model, no marketing gimmick, no apology by the sales rep, the regional sales manager, the global VP of sales, not even a total retraction by the CEO is now enough. The retail channel is strangling Nokia in a death-grip choke-hold. They will not let go, until Nokia Board of Directors fires the CEO and reverses the stated strategic direction to Microsoft.

Understand what this means. Nokia cannot survive even to the end of this year, if its retail channel is in revolt. Nokia does not have any meaningful levels of its ‘own’ sales, it has even closed most Nokia flagship stores (which only sold a tiny fraction of Nokia products). Nokia needs its distributor network, in fact Nokia’s distributor channel is the biggest in the world, and thus Nokia is most dependent on it. They have now grabbed Nokia by the hair, and pulled Nokia’s head under the water. Nokia is drowning and alone, it cannot recover. Nokia needs its distributors to be willing to let go, let Nokia catch a breath of fresh air. To get some Symbian sales back during 2011.

PLATFORM DEATH IS A SPECIAL DEATH

We have seen enough of these platform deaths in technology, to know how it goes. Anyone remember the short battle between Blue Ray vs HD DVD? Once a platform dies, it dies fast. Or we can go back into history, look at Sony's Betamax. It was technically better than VHS in every single generation, better sound, better picture, better slow motion etc. And at one point it was the bigger platform. One could have forgiven VHS for throwing in the towel, but VHS did not need to become as good as Betamax. What VHS needed, was to become 'good enough' and it devastated Betamax. But when Sony finally announced it was shifting from Beta to VHS, that killed Sony Betamax VCR sales overnight.

We have seen this movie before! The difference is in the Japanese version of the story, the platform is given its chance to fight, and they do not surrender when they were the biggest. Sony abandoned Betamax when their market share ws down to about 5%. But now we see how Hollywood would remake that Movie, in Stephen Elop's directoral debut. The blockbuster featuring sexy WP7 will kill of evil villain Symbian not when it was finally dead at 5%, no, Elop kills Symbian was when was still the biggest OS, and making profits, and growing sales (and most astonishingly, even managed to grow Nokia Average Sales Prices of smartphones - by a MASSIVE 15% in just one quarter. That is amazingly strong performance) ...and then to replace it with the smallest and weakest OS out there.

So small in fact, that Microsoft WP7 is currently not just selling less than similarly new bada from Samsung (bada sells more than twice as well, even though bada only has one handset maker and Microsoft WP7 has a family of them, including Samsung by the way). Microsoft's WP7 is so weak, that even though Microsoft has tried to kill off the older sibling, Windows Mobile for almost a year, WinMo still outsells WP7. That is how bad it is. How does WP7 compare to that dinosaur they call Symbian? Well, Symbian even after Stephen Elop took a lesson from Dick Cheney and shot Symbian in the face, Nokia alone on Symbian still outsells all handset makers who make Microsoft WP7 phones in Q1, by what.. 15 to 1 that is what!

And most insultingly, even in this, the worst quarter of Symbian ever, those non-Nokia 'other' Symbian makers, mostly Japanese handset makers, who mostly do not even fit into the bottom of the Top 10 biggest phone makers, they manage to sell more Symbian based smartphones - yes - than all Microsoft WP7 based smartphones in the past quarter, combined. The Microsoft WP7 family includes Samsung and LG, both Top 3 sized giant handset makers. What is wrong with this picture?

NOW ELOP IS SPITTING IN THE FACE OF THE DISTRIBUTORS

And then we get to the painful part. So, maybe February 11 was a mistake. Why is the situation getting worse for Nokia, not better? What is the clever CEO now doing? He saw that his house was on fire, he went and bought gasoline. He saw his patient was choking, so he fed the patient poison. When he saw his friend was starting to drown while swimming, rather than go save him Stephen Elop released the sharks! Look what the sharp Nokia CEO is now doing, to win over the hearts and minds of hte carrier community, his primary sales channel.

Stephen Elop announced that Nokia will release dual SIM phones. Nice, you say. I’d like one of those please. Yes. This is perfectly in line with his ‘West Coast’ philosophy, by which the consumer preference will win. So guess what. Nokia announced dual SIM phones back in 2009. Why haven’t we seen them? Because the carriers/mobile operators said they don’t want them (carriers/operators fear dual SIM phones will promote promiscuous behavior by customers to switch between networks).

So, Nokia has had this ability for two years, and has not released those phones. Now, after Nokia’s phone sales have stalled, the CEO waves that red flag in front of the carriers/operators - that next Nokia will bring those very same upsetting dual SIM phones to the market (Nokia has already launched the first such phones in India).

And look what is happening with another West Coast thinking-company, Apple. Apple wanted to bring the ‘virtual’ SIM card to the iPhone 5. The carriers said, ‘no way.’ Apple had already designed the iPhone 5 to run with no SIM card, and now is delayed in launching the iPhone 5, to rapidly redesign the iPhone.

It is the carrier who decides. The carrier/operator (and independent phone retailers) are the channel that Nokia needs. If the channel rejects Nokia’s phone(s), the phones die.

Nokia knows this, because that was what killed the Nokia N-Gage. Microsoft learned that lesson because it was not good or bad software that killed the Microsoft’s Kin. It was killed by the carriers. The same is true of Google’s ‘iPhone killer’ the Nexus One, the phone so great Google called it the world’s first superphone. Killed by the carriers. And now, even Apple is not strong enough to push a virtual SIM. That is how severely carriers/operators take the SIM card issue.

And Nokia’s new smart boy CEO announces proudly that Nokia is bringing dual SIM phones to the market. Smart move, Sherlock! Would you like to promise us next, that we will be greeted as liberators, too?

WINNING WEST COAST DESIGNS

Then the bizarre news we had last week, that Stephen Elop has assigned Nokia’s first Microsoft phone project to the West Coast California designers. Note, Nokia’s ‘own’ designers from mostly Finland, have managed to produce world-beater phones, that are the most desirable phones on 5 of the 6 inhabited continents, and driven by which Nokia has always sold more smartphones than anyone else. Always! That is an unbeaten winning streak of the Superbowl champions.

Read my lips. Smartphones designed by the incompetent Finnish designers of Nokia have an unbeaten winning streak, every single quarter ever – including this latest Q1 of 2011, Nokia’s ‘Finnish-design’ smartphones have outsold all others on the planet. And if you take Elop’s favored ‘West Coast’ Design, in fact, you can take all brands of smartphones of the United States, all Apple iPhones, all Motorolas, all HP/Palms, and all Dells and add them together - Nokia outsells them all – combined! Yes, even in this latest quarter after the CEO tried to kill off Symbian, these ‘poorly designed’ Finnish Nokia designs still managed to outsell all US based smartphones added together. That’s how well Nokia designers know and understand their market, their end-users, and the needs of the carriers/operators. An unbeaten streak of 14 years, 56 quarters in a row. Who knows how to design smartphones?

Stephen Elop took the Superbowl MVP quarterback and team off the field, and brings in a third string quarterback who has never won anything - and gives that team the project to design Nokia’s most important phone ever - the first Microsoft Windows Phone 7 based smartphone. Now, in the past week or so, that team is even given more pressure, where Stephen Elop has cut their development and testing time where originally they were told to ship the phone in Q1 of 2012, now Mr ‘I know Nokia faults are in execution… not’ Elop is causing a certain flood of design flaws into that very same first, most important handset.

This is what is meant, when an organization does not learn from past mistakes. Anssi Vanjoki would not have committed this error.

The carriers/operators of the world know what kind of designs tend to come from the West Coast, with the California thinking. Its duds like the Palm, the Kin, the Nexus, and for example the Motorola Rokr. Meanwhile yes, the iPhone? Yes, the original iPhone 2G jesusphone was indeed a big hit - in America, where 7% of all mobile phone subscribers live. The original 2007 design of the iPhone 2G was so much a failure in the rest of the world, that it was not a hit phone on even one other continent except North America. The original ‘West Coast’ design iPhone 2G was literally obsolete for the most advanced mobile phone markets like Japan (Where Symbian is considered fully competitive.. bizarre). This is the design ‘tradition’ that California-Dreaming Stephen Elop wants for Nokia and its global carriers/operators.

The operators/carriers on those other 5 continents where 93% of all mobile phone subscribers live, know very well, that Nokia’s normal designers know how to make highly desirable phones that their domestic customers want. And that American designs do not cut it. But ‘I know better’ Stephen Elop now flaunts new California-design smartphones for them.

ULTIMATE DEATH-NAIL: SKYPE

And if there is something carriers hate more than Apple’s iPhone App Store or virtual SIM cards or dual SIM cards, or ‘American’ designs for phones, the thing carriers/operators hate the most, is Skype. They hate Skype with a vengeance. Why? Because the carriers witnessed how easily Skype destroyed their fixed-landline telecoms cousins, and where Skype might not take all traffic, it devastated the revenues and profits of that robust industry. All existing Nokia senior managers know, that to offer Skype for carriers is tantamount to offering them a drink labeled as poison.

And what is our clever little darling Stephen Elop now promising the world? That Microsoft’s new WP7 smartphones will include Skype. His Muppet Master, Steve Ballmer is proudly crowing about how Microsoft will use Skype to build its eco-system.

Again, please don't misunderstand me. You and I may want to have Skype on our phones. It may come some day. But trust me, the carriers will not be letting the biggest phone maker flood their market with Skype phones replacing the carriers' cash cow - voice calls. Won't happen. The players who will eventually bring Skype in, will be the smallest of the disruptors, not unlike how Blackberry sneaked beneath the radar to bring Blackberry instant messenger to challenge SMS today. The carrier will not allow Nokia and Microsoft to do this. Not with the brand they hate the most, Skype.

Its like building an eco-system for plants, and bringing it out to space, and setting it out of the spaceship. Into the vacuum where there is no life. Steve Ballmer has killed Microsoft WP7’s chances as a smartphone OS, with this Skype malarkey.

If you want the ultimate proof that your phone will not ever be supported by carriers, put on unrestricted Skype on it. The Grand Genius Stephen Elop is jumping from one CEO failure to yet another, and compounding the problem every time. So first he shoots himself in the foot. Did that hurt? Yes? Sorry. Let me get a bigger gun and shoot again. Pain? Sure. Thats good. Now let me get a bazooka to really shoot myself in the foot.

POISONED HIS OWN WELL

Stephen Elop may have been the best candidate Nokia’s Board saw when they were interviewing for a new CEO in the summer of 2010. We will never know. He may have had brilliant ideas and views for Nokia. He may be a fantastic manager and brilliant motivator (although all sources seem to suggest the corporate morale at Nokia has never been as demoralized as it is now). He may have wonderful secret plans to launch Nokia into the next century. Maybe he knows how to do teleportation and time-travel with a mobile phone (using Microsoft software no doubt). He may be the sharpest knife in the drawer. But he has by his own actions killed the distributor channel support for Nokia. Stephen Elop has caused the cardiac arrest which now grips Nokia. The distributors have put Nokia smartphones on a boycott.

Stephen Elop has not learned from that. He has not reacted with haste, attempting to save Nokia. He is now thinking like a Microsoft Muppet, what is best for Microsoft. In that process, Stephen Elop has seen a patient whose heart has stopped, and rather than try to revive it, he has now started to strangle that dying patient. Stephen Elop is killing Nokia. He is angering his distributor chain with every move he makes.

He is incompetent to run a company in a period of change, if he is unable to change to changing conditions. He is unfit to run Nokia whose business depends totally on carrier support. His strategy has seen wholesale rejection by the channel, they now have Nokia in boycott. Not just Nokia smartphones, Nokia dumbphones are struggling. What little Nokia can sell, is sold with massive discounts. I know a dead parrot when I see one, and I am looking at one right now. That parrot is definitely deceased. It has passed on. This parrot is no more. He has ceased to be. Its gone to meet its maker. He's a stiff! Bereft of life, it rests in peace. .. this is an ex-parrot. (substitute 'career as CEO' for Parrot if you consider Elop's chances now).

That was a bit of an update from happy Nokia news. Next will be the episode about why the catastrophy is life threatening now, not next week, now. More on that as soon as I get a moment to blog again, hopefully within the next day or so.

Am Ready to Call it: Apple iPhone world's biggest smartphone maker Q2 of 2011

I have just called it in the related Nokia blog (Sorry for urgency, am onboard plane about to take off). But yes, congratulations Apple! I am the first analyst to call it, for Q2 it seems very clear that Apple ends up selling more iPhones than all Nokia branded smartphones, and thus Apple has in exactly 4 years from launch, dethroned Nokia and become the world's biggest smartphone manufacturer (note Android family of smartphones is bigger, but no single Android supplier is nearly as big as Apple). Congratulations Apple!

Pls see the other blog today for the math from Nokia explaining how this is possible. We now wait for the official numbers to see if it was close or a blow-out. I expect roughly 17% vs 14% market share blow-out by Apple.