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« Why Nokia Board Decision to Fire CEO Stephen Elop Is Now Urgent | Main | In Other 'Bloodbath' News: Recent Developments in the Smartphones Contest »

June 10, 2011

Comments

Alec

This just shows how every phone manufacturer is at the carriers' mercy. They had Symbian as its cash cow, now it's Android. However you try to get them back it isn't going to happen.

Same thing can be said about WP7. I walked into several stores here in the UK and pretty much any customer that who was looking at WP7 phones were pulled away by the salesmen to the Android phones. I asked them "Why?". The genereal reply was similar to this: "It's buggy, has a weird interface and generally I advise Android because that's what I use". That doesn't spell much success for WP7 on the frontlines, does it?

Carriers also aren't interested in selling WP7 phones because there are limited value-added services they can tak onto them post-sale (like own app markets, for example). They already have a phone with a limited ecosystem - an iPhone - so why would they need another? I also fail to see how Nokia's tarnished brand would play well with an OS that got its very first update so royally screwed up.

Now, on to MeeGo. What MeeGo offered was something fresh, there was excitement around it, just like it was with Android. People (and Symbian-bashing blogs like Engadget) were actually looking forward to it hitting the market. There was a certain geeky mindset already well-formed around it, creating its own sort of hype at the prospect of another Linux-based OS wrapped into Nokia hardware. What we've got instead is a big 'meh' because people already know what WP7 is and guess what? It doesn't sell.

I do agree with your position on ditching WP7, but it's too late - another indecisive move would be the last nail in Nokia's coffin. They just have to push ahead now with what they have and become just another mobile arm of Microsoft. Sorry, the Finns have lost their company.

I just hope there would be another brave soul (probably Intel) who'd pick up MeeGo where Nokia has left off and put out a product that can compete with Android.

Also, I hopethat some day we'll get away from carriers pulling the strings so they just become the dumb pipes as they are and compete solely on that basis.

virgil

Tomi, I generally like your articles, but seriously, let it go.
I know it hurts, but Nokia is already dead. Let it go, mourn it in private if you wish... but let it go. You cannot help them, chances are nobody can.

Sergey

Sounds like Toni's suggestions are much easier implemented by starting a new Nokia company - the existing corporate is likely too far down the path of no return (tied into the MSFT deal, Accenture deal, staff have been let go, etc.). With some determination, an immense amount of luck and signficant capital it might be possible to assemble the pieces to create Nokia-Symbian while Nokia-Wm still continues under Elop. (This has been done before - in everyone's favourite parallel industry, Volvo Trucks and Volvo Cars are separate from each other).

And by the way, to suggest that an IT executive is a wrong person to lead a mobile devices company is lunacy.

Operator power is changeable, iPhone was the key differentiator for ATT even though they had a crap network so they needed Apple just as much as Apple needed operators. And remember what happend to wired telecom providers

Michael Demetriou

You know Alien Dalvik is a program that was showcased on the nokia N900 and subsequently can be run on MeeGo and provide compatibility with android apps. Nokia could licence this and provide a very nice kickstart to their meego phones. Thousands of apps at the launch!

Adrian Bunk

"Nokia share price has to recover at least about 10%-20% from the current levels (still 30% below the recent peak of early February)"

Nitpicking:
A recovery of 20% from the current level would be 40% below the recent peak (20% of 50% is the same as 10% of 100%).

gzost

Tomi - again with the Symbian/MeeGo myth? Some of the truth seems to have gotten through to you, since you now admit that there are major problems with Symbian, but it's much worse and deeper than that: Nokia is not able to execute on software development.
This is not a fault at the level of the software engineers. They did some really nice things with Maemo. There are some nice things about Symbian. Nokia Betalabs has some great projects. Among the ~10k software engineers at Nokia, there are brilliant people. There certainly are a lot of very capable people. But the execution is abysymal. This is because there are huge problems in management. Nothing is going to change that in the short term, and Nokia doesn't have another 12-18 months for another reorganization. Not that there's that much hope it would work this time around - the last few rounds didn't improve anything much.
The market share didn't show it (artificially proped up as it was through the first three quartes of 2010), but Symbian was collapsing before Feb 11th. Nokia knew it wasn't cut out for today's market. It had already been decided to phase it out, starting at the top end of the market that Nokia had completely ceded to others post the N97 desaster. With the Symbian^4 project failing, the timeframe for this was shortening. Even the replacement, gradual, update-components-as-soon-as-possible strategy that replaced it isn't being executed.
MeeGo, the planned replacement for Symbian, was, by all accounts, not ready to ship, not ready for the mass market. Nice idead, but nothing finished. The Intel connection and shift from Maemo to MeeGo seemed to delay things more than it helped. And while Intel had the standing, the profit makers and the stamina to wait another year, or two, until they have mobile-ready products, Nokia doesn't. There's only the now in mobile, the world's most dynamic market as you yourself say.
So Nokia was already running on thin air, beyond the cliff, at the beginning of 2011. Momentum would have carried it a bit further, sure, the Symbian^3 phones could have sold in higher volumes than they presently do. The current complete collapse was not a necessity. The timing of the Feb 11th announcement, as well as the wording, may have been problematic. But there was a need for Nokia to get some new ground under its feet - and soon.
The choice here was Android or WP7 - pure and simple. webOS could have been, but Nokia didn't buy Palm. BlackberryOS wasn't an option - RIM has its own problems at the moment, and Nokia would have gained nothing from joining them it this. There was no easy choice - not in February 2011. Irrespective of whether you think the current strategy is wrong, and badly executed: Going back to a strategy that Nokia has proven it can't execute, i.e. Symbian with MeeGo migration, won't do anything but completely ensure the fall.

BTW, more on the problems specifically with Symbian:
http://gzostinthemachine.wordpress.com/2011/06/08/the-symbian-myth/

Adrian Bunk

"The only viable migration for Nokia, from Symbian, is obviously to MeeGo."

Tomi, there's one additional damage after Elop's announcement you miss:

Many of the good engineers have left Nokia.

I am not talking of the Symbian and Qt sellings - I assume they could be reversed at an affordable cost.

It is not hard for good IT people to find a new job, *many* people have left Nokia, and the best people left first. I am seeing many people who were 4 months ago working for Nokia on MeeGo now working for Intel, but also for many other companies.

If MeeGo should (again) be the future of Nokia, how could Nokia quickly regain the engineering required for that?

Marc Nathan

Tomi, good posts but like many here state - time to let it go.

Stephen Elop is not the problem. It is a valid question if he is the solution - I do not know.

But a few points:
- He decided on the Qt/Symbian/Meego decision soon after he came on board. Excellent decision, energised developers, energised employees. Not the action of a person who had the decision to kill Symbian (and maybe Meego) in his contract, as you state.
- He responds to every employee's email to him and to posts in the internal blogs/discussion forums. And not just with a Thank you, heard you message. He does engage. Not the action of a CEO who does not care about the company's future.

Bringing back Symbian - goodness gracious no! Meego, maybe, with Qt offering the transition. With a pared down version for the S40 substitute - could be a winning ecosystem.

Also, your analysis on the Board not knowing about the Feb 11 announcement is not tenable. The Analyst/Media briefing for Feb 11 was set months ahead and the agenda communicated as revealing Nokia strategy. So, unless the Board consist of plain dumb fools (and I am sure even you don't think so), they knew the Strategy change would be announced on Feb 11.

The Feb 11 announcement, with the benefit of hindsight, was probably a mistake. But, it was part of Stephen's open communication policy. You suggestion to keep a decision (death of Symbian) or actually lie about it does not fit with the Nordic (nor Nokia's) culture of openness.

To me, the point you missed - Stephen was hired because Nokia needed software leadership. He did not use it to solve the Meego product problems.


In making the decision and the Feb 11 announcement, he no doubt depended upon the rest of his management team to advise him on the impact to sales. (Again, remember that is not the expertise that he was hired for) He was probably advised that consumers buy Nokia for it being Nokia (and not because of OS), which is a valid conclusion. However, the sales and marketing team obviously did not understand the channel impact. So, who should be fired - not Elop!

Of the leadership team, Anssi left way before the decision. It appears the CTO has left now, though not clear if he has or the reason. Since the decision, the only person significant person to have left is Torres, who headed Meego. He was not even the next level to CEO or on the working board. Clearly, the rest of the management, who should know this business and its impact much more than Stephen, clearly agreed with the decision to change strategy, announce, etc. Or they are a bunch of hypocrites who are continuing for the sake of money.

So, here is my suggestion for a solution:
- Fire most of his next level, especially those who advised him wrongly of the impact of the Feb 11 announcement on developers, operators, retailers, etc.
- Cut prices on Symbian phones (it is going to be loss anyway) and make it attractive enough for those who want their first smartphone (aka higher end S40 segment). That is similar to your suggestion to get S40 to Symbian.
- Accelerate WP7 device even more. Even better, find alternate OEMs to develop them in parallel, maybe even before Mango release, so the sales channel can get a Nokia WP7 much sooner.

That is what I would do if I was in his chair. Unfortunately, I am not.

GeorgeZ

this thing about pushing S40 phones to S60 with an OS could have worked in 2007-2008
Nowadays ownership of a mobile phone is an ordinary thing even in Brazil, Indonesia, China and India.
These 3rd world countries are genuinely on the path of becoming world leaders. The next phone after an Nokia 1200/1280 wil be a cheap Android not a symbian phone. This train has left the station...
technology will make components cheaper ..
A ZTE Blade/Skate with apps beats every Nokia in value for money (even in Europe) these new buyers couldnt care less about Android privacy issues/ weak battery/ worse camera etc.they want the apps and not the ovistore apps...

suju_k

Tomi, I have read your articles and found that you are an expert. Out here you sound more like a fortune teller.

Nokia is in the place it because of the previous management which failed to see change and a whole bunch of fanboys (actually old men) who critized apple for what it was doing.

Nokia is dead, there is very little they can do against the current of android,apple,samsung and htc. This is the new world order.

The truth is Nokia failed to leverage on this world domination...just like the hare and the tortoise story.

Louis

This post is a little kooky, but probably irrelevant at this point: http://reut.rs/iWgqp4

former n900 user

Look at your own misjudgments and you know why Nokia is in such big trouble. Just in December 2010 you wrote this in response to a Nokia critic:

4 - "Arrogantly insist they are ok, and will dominate smartphones." Ok, Robert Scoble. I put you to task now. Are you Robert, seriously suggesting, that in 2011, any handset maker will sell more smartphones than Nokia? They will sell about 36%- 38% of all smartphones this year (when the N8 was seriously delayed most of the year). Their nearest rival is RIM, which you claim is also in trouble - who will sell about 16% to 18% of all smartphones this year. And the next biggest smartphone for the full year 2010 will be Apple, who will sell something between 15% and 17% of all smartphones. Are you Robert seriously suggesting Nokia will somehow not sell far over 30% of all smartphones next year? You know this market Robert. Are you suggesting that somehow the 'suffering' RIM can overtake Nokia, or somehow even more bizarrely the 600 dollar iPhone can outsell Nokia smartphones that are available in 3 times as many networks on the planet, and sell for less than 200 dollars. Are you seriously suggesting Robert, that Nokia will somehow 'not dominate' in smartphones next year? What are you smoking this evening, haha, Robert, that claim - while perhaps arrogant, is also true. Nokia is utterly dominating the global smartphone space, and they will also utterly dominate next year. Nothing on the horizon is threatening Nokia. All major analysts have already said that Apple's iPhone smartphone market share had stalled this year and is on a plateau or declining. So who is now the rival to eat Nokia's came? Hmm, Robert? Who? HTC perhaps? Or Samsung? Or Motorola? You gotta be kidding. You know Nokia is set to dominate into the near future. Maybe you don't like the arrogance of they saying it, but you know its true."

Your own words Tomi... your words...

Aki

I don't know but if Nokia does eventually end up firing Elop, and dumping WP7 in favor of Meego and Symbian, i think they should also dump Meego and go back to Maemo and deliver step 5 of 5 which could've have been ready by now. Especially since it was, in my opinion, a revolutionary and really a feature packed OS that left Android and iOS in the dust. OPK should've never made the partnership with Intel. Maybe he could've said for example, " you work on Moblin, we work on Maemo, and with this Qt framework, we could share our apps!". There was no need for Nokia to completely restructure Maemo to Meego. Harmattan would've been an aggressive OS and something that would've competed with iOS and Android on all levels. That would've brought back the image as well as confidence for Nokia. That and they should've been more aggressive with their marketing.

mirmit

I'm doubtful the scenario draft here has a single chance or being run for real. I'll love to, as I'm pationnate about Symbian.

However, Symbian's problem is clearly Nokia's execution fault. Being part of the device creation ecosystem, I have to confess it's a mess. Each bug found somewhere is fixed by the product team, so when Nokia is working on 10 devices, it wouldn't be surprising to have at least 6 differents fixes.

Most of the problems are outside of the system itself. More at the addaptation layers for the specific hardware, or at the UI level.

Being used to Nokia additions to Symbian, the general feeling was an intern has done the job during the Finnish summer, when all reasonable people were away for vacation.

When a device manufacturer uses an existing platform, with the proper supportive software for the OS, as HTC using Qualcomm for Android, a lot of the pains are removed. This is what will happens to Nokia when migrating to WP7, and might allow them to finaly execute in a reasonable timeframe.

It generaly take 24+ months for Nokia to come out with a new phone on Symbian while Korean like LG's can do the same job on Symbian in less the 15 months.

Nokia has a big issue at making devices and this is due to the approach they takes, and it would be hard to change this.

On a side not, I've read here and there about a project at Nokia to rewrite S30/S40 in Qt to have it run on Linux. Once the UI has been written in Qt, it could be ran on Symbian as well.

However, this is a similar but radicaly oposite approach than the one you are sugjesting.

Jim Karras

I have to agree with others here: you're just mourning over a corpse. Nokia is already dead; we're all just watching it now, like a slow motion car crash.

It's best to just accept that throughout business history, some technology companies just get passed by, in fact it happens quite often. Just look at the constant churn of old guard/new guard companies in Silicon Valley.

Anyway, for me, Nokia's last chance to save itself *as an independent company* with their own ecosystem, was when they ignored the big fat meatball hovering over the plate, to use a baseball analogy, with the opportunity to purchase the scraps of Palm and more importantly, its patents and *webOS*. Huge, huge, HUGE missed opportunity.

Narender

Your thoughts are excellent and i appreciate them. Being a nokia loyalist i only want to tell that please make yourself heared to nokia's chairman,who is the only person right now who can save nokia.

Weave

I find the talk of Nokia 'failing' quite bizarre.

Maybe they weren't succeeding on the scale they were used to but they were still making billions (thousands of millions) of Euros in profits. I wish my company was such a big 'failure', I'm quite chuffed about making hundreds of thousands.

Sure Samsung and Apple may have overtaken them but losing the number one spot is not the same as being finished.

Nokia are now no longer masters of their own destiny and that is much worse than no longer being number one.

How many of the people on this board pontificating about MeeGo have actually tried it? It's good! I actually quite like Android but I was really looking forward to having a fully-leaded Linux distro on a Nokia phone. I hope the rumours about LG, ZTE or Huawei picking up the mantle turn out to be true.

l34k

Take a N8
Take a HTC trophy 7

Compare for 1 month

You will understand why Symbian is dead.

The only alternative was Meego but is dead too.

So between man piss himself to keep warm in winter and be warm at home (hell?) Elop has made ​​a choice.
Expect 2012 to end a good decision ... Symbian had 3 years since the n97 !

So Vatar

At this point it's much less a technology / OS decision than you guys make it to be. This is not about Symbian/Maemo/Meego/Qt/WP7/Win8/Android anymore.

Symbian might be good or bad, however it has been mismanaged for years, definitely in terms of touch screen OS since 2007. And no, this one cannot be blamed on Elop.

Microsoft's WP system might be good or bad, it definitely has not gained any market traction. And it is currently primarily geared towards the American market, the market where Nokia had not anything to lose at all!

This is about mismanagement.

Elop mismanaged the transition to a new OS. He mismanaged badly. And there is no sign that he is capable to turn the ship around.

This is how bad it is: Wall street now expects losses for Nokia in at least Q2 and Q3. And then? If Nokia continues on the current path, they will be gone for good. This ship sinks faster than Elop can crank out Windows Phones.

Phil

I really love this place, lots of knowledge (like the wise Marc Nathan and some good insight from Mirmit).
I actually don't agree with a lot of stuff but I'm not gonna get into it just for the sake of the discussion (which, btw, I like much), but I want to leave a couple of crude facts that someone here is ignoring and can change the general direction of the conversation:
1) Of the 1 billion people on the planet buying Nokia each year, 995 million have no freaking idea of what we're talking about, so...no, february announcement has nothing to do with sales; it has a financial meaning, but nothing to do with sales. Want proof? Ask any (I mean any) of your friends, relatives or people in the streets if they know what was Nokia February announcement; you'll discover they don't even know who Elop is.
2) So why sales declined? Same reason they were declining before. Why they declined even more? Same reason why Android 18 months ago was irrelevant and now rules the market: it just takes time (but now, in a shop, all you can see is a hundred different models of Android at any price point). Want proof? Talk to 10 of your acquaintances who once had Nokia and changed their phone in the last 6-12 months: they will say "I wanted a phone that could do more and this one I didn't pay much" (with the exception of the minority who went iPhone, that will enthusiastically say "this is so much better!").
3) So why Nokia featurephones are also in the mud? That's actually false. It depends on the market. I can't answer this one 'cause in my market (Italy, which is a pretty important one) it's not happening (salesmen in the shop say "we keep on selling them like candies"), and I've read here that Brazil is the same (Italy and Brazil are very different markets)...but I know something about the way you sell stuff to shops and can guess how this could be true somewhere: Samsung is becoming stronger and stronger (just because they have a great strategy, let's admit it, but Android has played its role) and they can leverage their power ("if you take 1000 featurephones I'll make 40% discount on Galaxy S II"); plus, phones here are mostly sold in megastore, which also sell TVs and other stuff on which Samsung is leader and they can propose great deal there too. Obviously these techniques can't do magic, half of that billion Nokia fans just go into the shop and ask for "Nokia", if you propose something else they are gonna punch you in the face :) So, I guess we're gonna see featurephones decline somehow, I doubt strongly, but let's not forget that there aren't only straight lines in market segmenting; in fact there's a pretty common phenomenon that works like this: "I can't spend 500$ for a smartphone so, if I have to buy a featurephone, I'm gonna spend 30 bucks but...if you gimme a smartphone for 120$, then that I can spend", and here you can see how Android has made a mess in the phone market :)

Now, enough with the facts, here's my brief opinion: Nokia won't change direction, they'll go Windows Phone and all will go well. I actually think it will go better than any analyst is forecasting. I'm sure 2011 will be a bloodbath (and, almost immediately, analyst will write worse and worse projections for 2012, 'cause they do their job the only way they can: following math), but my very personal unprofessional forecast for 2012 is that it will go splendidly for Nokia. And I have no problem in thinking that 2013/2014 could even take Nokia back to leadership.
Oh, I forgot to say that I'm not a Nokia fanboy. I've had cellphones since the day they've come to market, never used (or even liked) Nokia.

I'm always pretty surprised how people can ignore psychology in marketing. They ignore it, then something unpredicted happens and all go "oooh, we forgot psychology effect!"...and a moment later they're ignoring it again :)
Now hear me out: Nokia is not only the strongest brand in the world of telecommunications, it's a brand so horizontally strong that you have to talk about Coca-Cola and Nike if you wanna look for something similar. Nokia has been first love for the great part of the world population (and still is the only love for many of them). All those people who went Android and iPhone will literally drool at the sight of the first Nokia that plays the game at that level, and will buy one as soon as they're out of their contract. So...for all the neysayer, you may be right (what do I know, not my field of expertise), but the psychology effect can kick you in the arse one more time :)

And I don't even wanna go into the ecosystem stuff (this *is* my field of expertise, don't even try to argue, I just know more) and the fact that Microsoft next year is gonna drop one billion PCs with Windows 8 (which will be a Windows Phone perfect companion, especially if you buy a tablet) and will aggressively push their phones till the moment you either buy one or shoot yourself in the face :)
Yeah, 'cause, I almost forgot, in this game there's Microsoft too. Nokia + Microsoft. It's not like we're playing tic-tac-toe in the park with our buddies. We're so used to these companies and their "polite branding" that we tend to think that they're just gonna try and see what happens. Truth is that if you get in the way they're gonna slap you so hard you'll wonder why your eyes are still in their cavities :)
Samsung and Apple know better. They're preparing for a pretty harsh war. This game hasn't been won by anyone, yet. It hasn't even started.

Phil.

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