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« The Patient Heart Has Stopped. Now the Doctor 'helps' by starting to strangle the patient too (Stephen Elop incompetence) | Main | Why Nokia Board Decision to Fire CEO Stephen Elop Is Now Urgent »

June 08, 2011

Comments

Herchu

Elop believes that Symbian ecosystem sucks and can't be improved in time. With that premise in hand there aren't many alternatives. It's MeeGo, Android or WP7. Google didn't let Nokia be THE partner; MeeGo, as we now know, was nothing more than lab test devices; Microsoft gave Nokia lots of cash (*). Hard not to sympathize with Elop.

Of course we are left with the truth value of the first premise. You seem to give Symbian more value than many in this regard.

(*) It would be very interesting if we can learn a lot more that it was said and written about this three events (Google negotiations, Microsoft agreement and MeeGo's state of development). Please, write some posts about them from someone that knows Nokia well ;-)

So Vatar

Herchu, we know that Elop said that Nokia will receive billions from Microsoft. We do not know how many billions, and what the terms and conditions are. Without knowing more, I would discount these "billions".
What we do know is that the stock-market punishes Nokia. Since the Feb 2011 announcement of Symbian's death (burning platform) and WP alliance Nokia's market cap lost around $20 billion, more than 40% of its value. $20 billion lost in less than 5 months.

Now is this Elop's fault? AFAIK he was brought in to turn around the steady loss of shareholder value (downwards since 2007). It has not happened, on contrary, the downwards spiral has accelerated.

It now looks that the financial markets think that time is running out for Nokia. While MS has the deep pockets and cash cows in Windows and Office, Nokia lost their most important profit maker, their smart phone business. WP's performance is dismal, and while WP will sell more phones if and when Nokia starts to deliver WP phones, I have a hard time to see how Nokia can sell anywhere close to 20 Mio devices per quarter.

And I fail to see which other elements of Microsoft's ecosystem can bring in a similar or better amount of money to Nokia.

Elop has to go. And yes, the board needs to take consequences too. However, it might be already too late. Maybe the best outcome now is to break up Nokia and sell the pieces. This is truly sad.

cycnus

Tomi,

Great analysis, and i think that Elop wouldn't select any other OS than Microsoft OS because he's from MS. He's decision is not objective.

Nokia/Symbian is not strong in USA, it would be best for nokia not to select a CEO from USA because he/she would not understand the real value of nokia.

And I'm really affraid if Espoo didn't understand the problem with the monkey they hired, Nokia would be really finish by the end of 2011.

Nokia were doing great, and as in any other product in the world, when the new competition coming in (first iphone, then android), the leader market share will erode. So, it's not symbian fault. it's the American media FUD.

I'm really sad that nokia has fallen into this American media trick. Nokia should listing their share on UK or China or HK rather than USA.

Toni

About Meego, Elop said that problem with Meego was that they cannot bring lowend meego powered devices fast enough in the future. Just to clear some things.

We will see, in what state is Meego, in Nokia N9/N950 device.

Niilo

I think you are right to beat up Elop on what he has done, but to say that the platform was not burning before 2-11 is just not true

Symbian was a doomed operating system from the moment the iPhone launched.

Nokia then failed to get behind Maemo/MeeGo. I had an N900 and loved it, expected it to get more apps and support and then nothing. According to Nokia insiders I know, Symbian was just politically too powerful to lose its primacy on the roadmap.

Eric

I can see why embracing WP7 would be an interesting long-term strategy. After all, Nokia/Symbian was already very challenged early last year, long before Elop's burning platform memo (and even before Elop joined Nokia). And WP7, although not yet mature, seems to have some solid foundations to provide an enjoyable user experience. Plus, choosing an external provider allows Elop to trim the company down (we might argue if this is good or bad, but I suspect it rates high in every 'CEO 101' handbook).

I can also imagine why Meego is not such a good horse to bet on. It had been in the pipeline for far too long with little result, and I suspect many 'execution' issues in bringing the product to market (having two cooks in the kitchen probably didn't help either).

However, what I can't understand is why announcing the death of Symbian so long before any WP7 Nokia phones is ready? (Tomi: I know you have already blogged on that topic) In fact, why kill Symbian at all: even if WP7 Nokia phones are successful, Symbian would have been a powerful platform while waiting for Nokisoft phones, and for low-end devices in just a year or two!

My 2c

Eric

Oh, and the most important: thank you Tomi for sharing your views! ;)

Olivier Barthelemy

I agree with most of the comments
1- You seem to overstate Symbian's success as a mobile phone OS. I don't know about marketshare, but most reviews I read about Nokia's recent phones are not very good. More precisely, reviewers broadly like the hardware, and dislike the software.
2- There also didn't seem to be a lot of momentum. Pretty much all non-nokia Symbian OEMs had either deserted, or hedged their bets by working with other OSes. Nokia seemed to be the last Symbian holdout.
3- The "mobile OS" part of the equation, which Symbian didn't even solve, is not even the most important one. You also need developpers, and an ecosystem. Contrary to your assertion, WinPhone is superior for developpers, with both a better known toolchain (VisualStudio) and more developpers. I don't know what the alleged 220.000 Symbian devs where doing (compare AppStore size, Symbian is nowhere near as big nor good), unless it takes 20+ more time to do the same app in Symbian as in a modern OS.
4- On the "ecosystem" side of the equation, Nokia was barely hanging there. They had just closed some of their music services, and it's been a while since I saw anything from Nokia listed as "first in class", except maybe Ovi Maps
5- Finally, you have an extremely narrow-minded view of what a mobile ecosystem is. It also includes Tablets and media players (nokia has none), and, in the end, non-mobile stuff: PCs, consoles... of which Nokia has none, either, nor does it have any access solution - were we supposed to install Symbian on our netbooks ?

In the end, and think Elop's big mistake is timing. He's used to MS's monopoly power, where partners have to go along willy-nilly, and if that means waiting for a year or a software cycle for MS to clean up their act, well... the partners just have to wait. Not so for Nokia. In the year it will take for Nokia to replenish their product line with WinPhone handsets, Nokia'll be wiped out by other OEMs, especially if they had been stuffing the channel before. Elop should have tried and kept the Symbian sales alive while switching to WinPhone, instead of shouting that all current Nokia phones are dead-ends. They even could have tried an "obsolescence insurance" thing, with guaranteed deep discounts on the upcoming Winphone line for all current Symbian buyers. Expensive, but probably necessary.

Gilles Monterey

I think this post is too biased in favor of Symbian, but it does not subtract too much from its truth. Actually I see some chance that the Elop-strategy might work for short-term, if they come out with several WP7 phones this year. But there is no sign for that. A MeeGo (or Maemo 6) device might come, though.
I think what will actually happen is a mix: Nokia will make both a Windows Phone and a MeeGo phone this year, and will reconsider its strategy with regard to Meego. Too bad it's too late for the talent bleed. Even if a total turn would be announced, is there any capable one still with Nokia to execute it?
For sure, Nokia has been having a lot of issues with R&D efficiency, a great deal because its structure and management style, and that has not changed too much. So whatever life-saving action is taken, the company needs a much deeper transformation than a technology change, actually such a radical one that it would be practically equivalent with a death and new start. I don't yet see the brave genius who could do this for Nokia. But I would make an attempt with Eric Schmidt ;)

KPO'M

Tomi, did Elop pass you over for a job? I don't understand your single-minded desire to see Nokia dump Elop. Regardless of whether the timing of the Feb 11 announcement was a mistake, firing the CEO now would be disastrous (yes, things can get worse). Nokia is contractually obligated to Microsoft, and going back to Symbian would be costly, as well as foolish. Developers wouldn't trust them. The carriers won't suddenly start buying up lots of Symbian phones, and consumers would be left confused again.

Matthew Artero

Tomi, aren't you placing too much emphasis on apps? Didn't we learn from Jon Rubenstein that only the first few hundred apps matter? I'm joking of course. I hope I made you laugh.

I think anyone who manages real estate can see your point. Yes it's true if we rip out the old and renovate we get higher rent. But the cost of doing that and maintenance costs of the new upgrades means that the higher rent is actually less profitable.

I think one can look at the old Nokia products as a house in the right neighborhood even though it is not the most luxurious house. Now Nokia doesn't have the neighborhood or the house. When before it at least was half-way there.

Hoi Wan

I Agree with the sentiment, but not the analysis. It's looking at it from a surface point of view.

- Largest army of developers.
On Symbian or J2ME? How come this vast array of developers could not produce apps as effectively as the iOS and Android ecosystems? Even if the dev numbers are higher, it's all about converting them to produce apps in the ecosystem. Given the potential market size , this is very poor performance

- Apps (second most used store)
Considering the active user base, why is the conversion rate of active users so low? Again poor performance in conversion. Is it because most devices do not have direct access to Ovi unless they upgrade their firmware? In which case why are upgrade rates so low? Is it because the majority of this active base not engaged in installing apps?

- Lastly US Developer <> US mobile base. Apps made by US developers can be used worldwide. Yes you will argue that apps by Rovio etc are not US, however if we're talking about gross numbers and market size, getting those numbers up is important for any ecosystem.

Given the above, the argument really is can WP7 perform better than Symbian in the above criteria. (ignore iOS and Android for now). Not just in whole numbers but in conversion ratio.

Tomi T Ahonen

Hi All

I am working to respond to a huge overload of replies to the series of blogs about Nokia. I will respond to each of you individually and you can see on Saturday I started with the first several dozen comments. I will return soon to respond here too

Tomi Ahonen :-)

Tomi T Ahonen

Ok first set of replies

Hi Visitant, PhoneBoy, Timothy, Michael, Virka, Staska and Chris

Visitant - I have understood that the maps will come to the MS WP7 environment. I may have misunderstood, but its my understanding.

PhoneBoy - thanks. Yeah, any one of us here visiting this blog would have done a better job by now. But its not being helped by his former muppet-masters, after Microsoft bought Skype, now this one new remaining platform was set on fire. No, not set on fire. What is the term I want? Nuked. Thats what Microsoft did. They dropped an atom bomb on the life of Microsoft Windows Phone operating system as a viable option for operators/carriers. It will never be subsidised, because even if Steve Ballmer (we all trust you Steve) promises that Microsoft (the evil empire) will never ever in a million-cazillion years do a Skype phone, the moment Microsoft has the critical mass, of course they will. And the carriers are not stupid. They monitor Skype closely. They will not let Skype in, not on a Microsoft-Nokia platform. So whatever 'hope' there once was, that Microsoft might create in a third ecosystem, that died with the Skype purchase. With friends like these, who needs enemies, eh? It really does look, from the sidelines, that this is a concentrated effort, orchestrated by Microsoft, to deliberately set a world record for how quickly a tech company can be destroyed. Its like the missing movie called 'Three Stooges Manage a High Tech Giant'.. Utter sheer mismanagement and incompetence. But don't get me started haha..

Timothy - thanks! And ouch ouch ouch yes! Why not. Why in friggin hell not? There were so many great options that have been destroyed by the Microsoft Muppet.

Michael - good points. First, I totally agree, the keys are held by teh carriers. Microsoft didn't know this, or really, they should have known this after 10 years of attempting to make smartphones.. And they learned that lesson very painfully with the Kin. Is this now Steve Ballmer's revenge on teh carriers, that he feels, if you didn't support my Kin phones, I will bury you! That Steve Ballmer thinks he can buy Nokia at a discount and then use the combination of Microsoft and Nokia (and Skype) to somehow defeat the carriers? Haha, then we'd see the end of Microsoft too, but that could actually be part of why this bizarre play is being staged for the world to enjoy.

Vikram - I hear you. I think you have been reading US based analysts and their views. The facts are, that before Stephen Elop killed Symbian on February 11, it was the folloing - the world's largest smartphone OS system by new sales (said all analyst houses except Canalys, and they all ridiculed Canalys for bad math for Q4 numbers). Symbian was growing, not shrinking. When counting installed base, Symbian was more than twice the size of its nearest rival, Android - more than twice the size! The Nokia Ovi store was the world's second best-selling app store behind only Apple. Now, I am not claiming Symbian was the strongest and newest of the platforms - that was arguably MeeGo - but it was very powerful back in January and if Elop had let it thrive, it would today have something like 27% market share, generating about a billion dollars of profit per quarter to Nokia. Everybody knew Symbian was not the platform of the future, but MeeGo was. So Symbian was for Nokia, what DOS was for Microsoft. MS offered a migration path from DOS to Windows, and transferred its global lead in operating systems from DOS to Windows, even though Apple's Macintosh was far better than Windows. Nokia could have done that, reasonably well, and ended with one of the biggest platforms in smartphones around 2015. Probably not the biggest (Android) but far bigger than number 3 (bada) or 4 (iPhone) or 5 (RIM) or tiny 6 (Microsoft)...

But please Vikram, go study the facts and numbers, then come back here to discuss like an adult, ok?

Staska - I am aware Ovi is not Symbian and Symbian is not Ovi. I hope I never said that in the blog but it may be that this impression came across. Symbian had for example several Japanese handset manufacturers supporting it, and like you say, Ovi was also available to support Nokia featurephones on the S40 operating system. With that, your comments are totally valid.

Chris - I appreciate the honesty and truly that you wrote that. Yes, we may disagree on some points, but regardless, this is a true travesty what Elop is now doing to Symbian/MeeGo/Ovi and the whole Nokia ecosystem. As you sawm the Nokia CTO resigned in protest just a day after your comment for that precise reason (he is technically on indefinite leave). As to placeholder.. What doesn't make any sense is for Elop or Microsoft to be part of that kind of switch. If Elop wanted to keep MeeGo in any way viable, he'd not have killed Meego launches and see all top staff at MeeGo resign at one point or another. If Nokia ever goes 'back' to MeeGo, it is due to desperation, not that it was planned, and that path is now severely damaged also by Elop.

I am certain that Elop will be fired, unless Microsoft itself buys Nokia. If Nokis is bought by anyone else, they make it part of the deal, that Elop is not part of Nokia, he has done such total damage in his short tenure. Separately, if Nokia can avoid being bought and split up, then they will have fired Elop within days or weeks of now, and thus Elop won't be part of the Nokia future either. But if Microsoft buys Nokia, expect Elop to be Microsoft's new CEO when Ballmer becomes its next Chairman...

Thank you all for the comments, please keep the discussion going, I'll return with more replies

Tomi Ahonen :-)

Herve Leger Asymmetrical Neck

Of course we are left with the truth value of the first premise. You seem to give Symbian more value than many in this regard.

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well, you got a lot of imformation about Nokia, Respected. i admit that you know much about Nokia. article is with great information.

Office 2010

The second level of Customer Behavior market researh data comes with Communication. Previously with any communication technology and media consumption technology, there was no way to connect the two. We had our letters and postcards, our telegrams and (fixed landline) telephones.

Tomi T Ahonen

Second set of replies (am at June 8)

Hi viulan, HCE, xizzhu, Ashwin, Randall, A reader, MIP and Yuri

viulan - we agree, cheers!

HCE - Good point, and I've said before that Elop couldn't have killed Symbian without explicit permission of the Board (and that when Elop was hired, the primary question was not what to do about Symbian, it was how to save Nokia, something had to be killed anyway; there was going to be blood..)

What I take such passionate exception to, is how blatantly Elop is now pursuing an agenda which serves 100% Microsoft's long-term interest, but is not in 100% Nokia's interest. Like the Symbian reseller boycott, like the killing of MeeGo after the big buzz with the N9 launch, like the celebration of Skype etc. He is consistently picking the wrong side of the arguemnt, that which further hurts Nokia and is at best 'partially' to Nokia's gain, but is always 100% to Microsoft's gain. Same is true of the ecosystem now, all gains go to Microsoft, not to Nokia.

I do think most of the 'real damage' to Nokia the brand, the company, the employees, the developers, the share price and thus the owners of Nokia etc - has been 'tactical' decisions and statements by Elop. Like just now in June, when the N9 was released, that Elop had to go and in three separate steps, ensure that MeeGo is killed, and then burned, and then buried - ie first as the industry was abuzz with N9 hysteria, he kills that with the WP7 phone 'announcement'. Then to ensure no MeeGo can ever rise from the ashes, he says 'even if MeeGo is a success, there wont' be another Nokia MeeGo device' and to finally guarantee no MeeGo success, Nokia announces that MeeGo based N9 will not be sold in any of the markets currently BOYCOTTING Nokia Symbian phones and where Nokia's smartphone market share has been the strongest - Western Europe ie the big 6 countries of West Europe - UK, Germany, France, Italy, spain and the Netherlands. Those - obviously - are also the launch countries of the WP7 phones by Nokia. So yes, I agree with you HCE that the Board is also responsible for the death of Symbian but this kind of deliberate murder of MeeGo, that is pure Elop and he is being mean. He is not playing nice. Imagine - Nokia has its OWN developed OS and platform, Nokia releases a 'flagship phone' and the N9 achieves better buzz than all previous flagships E7, N8, N97 and N96, going back to 2007 - and what does the CEO do with the hottest phone on the planet in June. He says, even if its a success, Nokia will not support its own child, it will kill its own child and adopt Microsoft instead. This is Elop's behavior not that of the Board.

xizzhu - completely agree with you but now look at Nokia. Inspite of this huge advantage, Nokia is destroying MeeGo.

Ashwin - good point. I maintain that after all the damage that Elop had done to Symbian (and MeeGo) the unanticipated catastrophy to Nokia was that Microsoft bought Skype. Now the Microsoft WP7 strategy is dead in the water. It will NEVER fly. Nokia CANNOT recover to 20% market share if the carriers refuse to support Microsoft. And for Microsoft the phone business is trivial, so they won't abandon Skype for the sake of Elop and Nokia. Microsoft know they can whenever they want, just swoop in and buy all of Nokia and own it. So they don't care. No, the Microsoft WP7 strategy is now dead and the sooner Nokia management (especially the Board) understand this, and rush to embrace ANY other platform, the sooner Nokia can be rescued. But there is no point in imaginging how to save Nokia using WP7 because that is not tenable. IF Nokia is still an indepedent company in 2012, and if by the end of hte year most of their smartphones are on WP7, then mark my words, Nokia market share in smartphones is measured in the single digits. But I am pretty sure that Elop is fired long before that and Nokia abandons the Microsoft path. They are hearing from the carriers right now from the channel. That strategy is no longer a viable option. It was in February. It was still in April. But in May Microsoft bought Skype and this strategy option died.

Randall - thanks. And yes, there will be some individual tools and elements which will be relevant, like Visual Studio. But yes, like you say, it doesn't change the big picture.

A - thanks. First, remember that for a decade that was the case. When new OS's came along like Palm and Windows Mobile etc, there was interest but Symbian utterly ruled the landscape with far bigger market share than Android has today. It was not until the iPhone came along, and showed that Symbian was not 'modern' and needed a total update, that the partners disagreed what should be done and in that fight, Nokia knew it had to move fast. The 'normal' Symbian way of attempting consensus was nowhere near fast enough. So Nokia bought out all the partners - paid them to leave - and then it was Nokia's 'own' OS to control. Even then to appease the partners, Nokia said it will continue as a foundation, not under Nokia control but rather built into an open source platform. And early on, it looked like many Symbian partners liked this ie handset makers like Samsung, SonyEricsson, Sharp, Fujitsu etc and NTT DoCoMo stayed with Symbian. But during 2010 the non-Japanese partners eventually all departed Symbian because Android was so much better for them, evolving much faster and offering a far better user experience (until Symbian S^3 came onto the market by Q4, by which time all except Nokia and the Japanese were left).

So yes, you are right, and it actually did happen that this powerful ecosystem was vibrant and strong, and had five of the 10 biggest handset makers supporting it - and when counted by market share of their dumbphone production, the Symbian family had a 'bigger army' than Android even, until the bad economy and Android's strong growth (and probably also a competitive distrust of Nokia haha) meant that the last non-Japanese partners to Nokia in Symbian left. Remember also, that the Ovi store was a Nokia strategy, not a Symbian strategy so the Ovi, Qt and MeeGo paths from Symbian served only Nokia, not the other partners. This is probably a bit reason why Samsung decided to invest in building its own OS, bada.

MIP - I totally agree with you, and yes, isn't it ironic that the most open OS and ecosystem, MeeGo that was co-created by the handset manufacturer most invested in the most open of any platforms, is now abandoned by Nokia in favor of the least open most restrictive platform (arguably, although some would say Apple's iPhone is the most restrictive platform).

Yuri - excellent point yes about Silverlight and Windows 8. It is bizarre about Microsoft, seeing that they managed the 'very cumbersome' and costly transition from the DOS platform to Windows with hardly losing any market share and establishing a dominating powerhouse in the far bigger Windows era PC ecosystem (And utterly crushed Apple in the process) but now they refuse to learn and go doing that time and again, eliminating any chance of cross-platform support and migration paths. Bizarre!

Thank you all for writing, please keep the comments coming

Tomi Ahonen :-)

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it to get more apps and support and then nothing. According to Nokia insiders I know, Symbian was just politically too powerful to lose its primacy on the roadmap.

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