Nokia Q2 Results 2011: 15 Years after Inventing the Smartphone, Finally The King Is Toppled: By Who? Apple's iPhone of course

Nokia Q2 Results are out. 15 years after inventing the smartphone in 1996 with the iconoic but outrageously expensive Nokia 9000 Communicator, and selling more smartphones than any rival every single quarter since then, we have now seen a moment in history: The king has been toppled. And that was done by who else, Apple and the iconic iPhone.

Imagine going back in time, and witnessing the success of the first mass-produced automobile, the Ford Model T. Ford did not invent the car, that was Daimler-Benz (ie Mercedes Benz). But while Daimler-Benz started with the world lead, it was the Ford Model T which made the car affordable for mass markets. Or take Apple the PC maker. It was once the world's biggest computer maker by volume of desktop computers. Then along came Charlie Chaplin in an IBM advertisement for the IBM PC, which ran away with the PC market (and propelled Microsoft to become the biggest software company). Those are iconic moments in industrial and technology history, are studied in MBA classes worldwide.

Now we are witnessing that kind of historical moment in technology, and this transition will be studied in MBA case studies in business schools for this whole century. Mobile phones are the most widely spread technology on the planet (3x bigger than TVs, 4x bigger than PCs, 5x bigger than cars, etc). And Nokia is the biggest phone brand, and all phone makers and major analysts agree, that the future of mobile phones is smartphones. So remember this July of 2011. This is truly a big moment and we are witnessing history.

Q2 RESULTS CATASTROPHIC FOR NOKIA

We have the Q2 Results from Nokia. As so many expected, the results are brutal. Nokia's new CEO Stephen Elop's bizarre timing of his (very misguided) Microsoft strategy have devastated Nokia smartphone sales. As Nokia faces global reseller boycott of what now are perceived as obsolete Symbian phones, the sales of Nokia Symbian smartphones have collapsed. With it so have revenues, average sales prices and profits also all crashed in world-record-setting style. What a way to go, Stephen Elop! You will be famous - or should we say more accurately, infamous.

Nokia just reported their total sales of smartphones for Q2 was 16.7 Million smartphones. That gives Nokia a preliminary market share in smartphones of 15% (was 24% in Q1 only three months ago!)

The unit sales of smartphones are down 31% from just 3 months ago in Q1 when Nokia still sold 24.2 Million smartphones.

I also want to mention that Stephen Elop says in the Q2 results document that the 'challenges' were 'greater' than he had expected. ??? So. Anyone studying technology business at university will learn of the 'Obsorne Effect' of what happens to your existing products if you announce a superceding product. The current product sales will collapse. This is not rocket science and only an incompetent fool would have been taken by surprise by the crash of Nokia's smartphones after February 11. Now we have a good comment on Twitter from Nick Doulas @nickdoulas who said 'Osborne Effect to be forgotten in history, replaced by Elop Effect: much larger failure by comparison." Excellent, funny and also, sadly, completely true. Oh, and this delusional Stephen Elop now dares to suggest that in Q3 Nokia will generate about a zero profit from the handsets unit? What? After we remove the one-time payment of IPR royalties from Apple, Nokia handsets unit actually generated one BILLION dollars of a loss in Q2. That is his 'starting point' now. And what does Elop do in early July? He CUT the prices of Nokia smartphones. That pushes Nokia deeper into the red. One Billion dollars of losses is not enough for Elop. He wants to establish his mark. He wants to be sure, his world record will never be bested. He wants to go down in history as the most incompetent CEO ever.

DESTRUCTION OF PROFITS

The smartphone unit which made over 500 million Euros (over 700 million dollars) of profits per quarter as recently as six months ago, has now crashed and reports an operating loss! And please understand, this is not the bottom. The situation is going to be far worse in Q3, Q4 and Q1. Nokia has already in early July responded to the global market collapse by cutting prices across the board, as much as 15% from its top phones. If your smartphone division is making a loss - and you then cut your prices by 15% - you are ADDING to your losses MASSIVELY. While this blog is not a finacial analysis blog, we should point out that this new Microsoft strategy and Nokia's catastrophic performance has been so strongly punished by Wall Street, that Nokia's share price earlier this week hit a 14 year low (and while I am no forecaster of share prices, haha, I think the continuing flow of bad news about Nokia smartphone market shares, average sales prices, revenues and profits/losses, will hurt the share price severely in the weeks, months and quarters to come).

WE ARE WITNESSING WORLD RECORD DESTRUCTION OF A BRAND

The real comparison of Nokia's crazy shift in smartphone strategy cannot be done to the previous Quarter, ie Q1 of 2011, because the market collapse started in the middle of that quarter. The comparison of Nokia's current malaise has to be compared to the last full healthy quarter before that fateful announcement of February 11, so we have to go to Q4 of 2010 for comparisons. What was life like before Stephen Elop started to destroy the brand most widely spread on the planet (more people use a Nokia phone than drink a Coca Cola, than wear Levis's jeans, than tell time on a Timex watch, than wear Nike running shoes, than smoke Marlboro cigarettes, or write with a Bic pen). 

In Q4 of 2010, Nokia sold 28.3 million smartphones and had 29% market share. The average sales price of Nokia smartphones was 156 Euros or about 210 US dollars. We have since learned with Nokia's new financial reporting also about the smartphone division profitability, so in Q4 Nokia smartphones made a profit of 548 million Euros (715 million US dollars) which gave a profitabilty of 12.5% for its smartphones unit. Obviously this is nothing like as spectacular profitability as Apple does with the iPhone, but Apple is not Nokia's primary competitor, and of Nokia's main competitors (who sell globally both smartphones and simpler 'dumbphones') - LG, SonyEricsson and Motorola have all been struggling to do any kind of profits. Only Samsung of Nokia's main rivals is consistently profitable in its handsets unit. And up to now, never has Nokia reported a loss in its handset unit.

Also understand how Nokia was doing at the time. The 'conventional wisdom' mostly led by US based analysts who tend to view the global market from what they see in the US domestic market - where yes, Nokia had failed years earlier and was a bit-player - suggests that Nokia was 'in decline' before Stephen Elop announced his Microsoft Strategy and that Nokia was doomed without it. That sounds great but does not correspond with the facts. I deal with the facts here, not myths. The fact is - go ahead and check the numbers - Nokia grew unit sales of smartphones from Q3 to Q4 in 2010. Yes, Nokia's 'obsolete' Symbian was growing, not declining. It was the world's bestselling smartphone OS well ahead of Android until Elop assassinated Symbian in February. Symbian had half a dozen manufacturers still supporting it including several Top 10 sized Japanese smartphone makers.

To understand how bizarre the Microsoft Windows Phone 7 decision is - all handsets makers who made Windows Phone 7 handsets - were outsold by those Symbian makers who are NOT NOKIA !  Yes, the 'other' Symbian makers ALONE outsold all Microsoft Windows Phone manufacturers. But yes, where was I? Nokia? How much did customers love or hate Nokia's Symbian smartphones in Q4? They loved Nokia so much, that the average sales price grew by 15% from Q3 - a Nokia record jump in ASP in one quarter AND the total revenues of Nokia smartphones grew 22% from the previous quarter. This is not a platform on fire, unless by 'on fire' you mean - it was hot and growing and generating profits.

How much profit? We didn't have the numbers back then because Nokia did not break out its smartphone profitability until now. But now we can see, that In Q4 the Nokia smartphones unit generated 548 million euros of profits - and yes, the profits grew from Q3 by a massive 64% !!! Yes. Nokia's Symbian phones were so much 'on fire' that they grew unit sales, they grew revenues, they grew average sales prices and they grew profits. They grew profits 64% from the previous quarter! This is the 'goose that lays the golden eggs' which was truly and thoroughly killed by Stephen Elop on 11 February 2011. Now the smartphone unit generates a loss of 146 million Euros.

So yes, its a widely repeated myth that somehow Symbian was killing Nokia and Symbian didn't have life in it and customers were abandoning Symbian etc. All utter rubbish. You read the facts and see, Symbian was a powerful, world-leading operating system, totally updated and modern by its S^3 version that was on for example the N8 smartphone. Yes, Nokia was developing Symbian's replacement, called MeeGo, but Nokia had years of lifespan left in Symbian, where Symbian is particularly well suited for modest power, modest CPU and modest memory requirements of low-cost smartphones.

Understand how enormous Nokia was just six months ago. As a smartphone maker when measured by units sold, Nokia was bigger than Apple and Samsung added together (its likely Samsung has also passed Nokia in size, as Nomura has already calculated. We will not know Samsung Q2 results until 29 July). Nokia was the run-away market leader smartphone maker in all continents but one (North America). In China (world's biggest mobile phone market) Nokia was reported to have 72% market share in smartphones in 2010; in India (The world's second biggest market) over 60%. Now we learn that Nokia's market in smartphones in China has collapsed to 22% and similar in India. European major markets have seen Nokia smartphone sales collapse anywhere from around half lost to as much as three quarters lost in just a matter of five months.

So now, with Q2 results, compared to the time before Stephen Elop's ill-timed announcement of its Microsoft alliance ie Q4 results, we know how bad the damage has been. And because the announcement was on 11 February, we know that the crash in market share, average prices, revenues and profits has happened in under 5 months. With Stephen Elop at the helm, we have seen Nokia destroy half of its total market in smartphones.

Lets understand how significant this is. This is not like the carnage that caused the death of Motorola (and the company to be split) or the destruction of Palm (that caused it to be sold to HP) or similar disasters in mobile telecoms. This is truly the world record for market share capitulation not just in mobile or tech; it is brand destruction world record - in any industry, ever. Toyota's damage with the brakes in its cars, BP's oil spill, British Airways worst quarters fighting with labor disputes; etc have not slashed market share by half in only five months. Nokia and CEO Stephen Elop will go down in history as the notorious and misguided names that destroyed the best-known brand on the planet. This is management stupidity in the scale of Coca Cola's 1985 launch of New Coke.

THIS IS ONLY BEGINNING OF THE NIGHTMARE

We can now update the first projections to how badly Nokia will bleed market share to the end of 2011 when the first Microsoft Windows Phone 7 based Nokia smartphones will start to ship. That level is definite to hit single digits but I will return shortly with that full analysis. It is FAR WORSE than anyone had projected so far, and Nokia cannot recover to its pre-February 2011 levels, not even half-way with Microsoft, because of the severe problems with the Microsoft partnership. So please understand what I am saying - some analysts have bravely and optimistically projected Microsoft and Nokia to get something like 20% market share in 2012. That is utterly impossible now. That is a fantasy. The facts now show that Nokia will never recover its smartphones using Microsoft OS, to that kind of levels.

I was one of first analysts to project that the Microsoft announcement would cause a collapse of Nokia sales, and that Nokia smartphone sales this year would hit a level of 17 million sales per quarter, and the average sales prices of smartphones to 116 Euros. My blog was called by many colleagues as "too pessimistic". Now we have the first meaningful facts ie Q2 results. And Nokia is nearing those numbers already. I felt that level would be seen by Q4 of this year, not Q2. Thus I was being too optimistic! The situation is far worse than even I could have guessed. But now we can make a revision and more accurate projection for the rest of the year and into next year. I have just updated my projection with the new number for 2011 Q3 and Q4. Spoiler alert: Nokia's market share will crash to 7% by Christmas.

MICROSOFT IS COMPLETE ILLUSION AND WILL NOT PAN OUT

(Quick comment about Microsoft and why what once looked like a good strategy for Nokia is now a recipe for a disaster. It starts from the design of Microsoft WP7 operating system which is typically Microsoft-ish 'resource hog' so it requires more powerful chips, much more memory onboard the phone, etc. So Nokia is now making losses in its smartphone unit, using Nokia's own well-known, well-fine-tuned manufacturing and design processes, using its own software. Then when it shifts to Microsoft, the costs and manufacturing and design of new Microsoft phones is far more costly to Nokia than it was with Symbian phones. And with Symbian and MeeGo, Nokia did not have to pay a royalty. With Microsoft Nokia has to pay a royalty for every phone. Thus we have far greater costs to Nokia smartphones on the new OS.)

(Then we have Microsoft's own admission that the operating system is failing in the markets - Steve Ballmer Microsoft CEO said that Windows Phone market share which was tiny in 2010, is now ... tiny. Far worse is the average sales price. Don't expect fancy high-end expensive 'iPhone killer' smartphones from Nokia, like the sexy N9. The average sales prices on Windows Phone will be slashed - thats not what I say, that is what Microsoft says - that smartphones on WP7 next year - will only earn half - half - of what modern smartphones are sold for - so Nokia costs go up, the complexity goes up, the customer experience - delays in using the phone - go down; and the price that Nokia can expect from those new phones go down - to half their current level. If you thought Nokia profits were bad recently - they will be FAR WORSE with Microsoft based smartphones.)

(This Microsoft alliance sounded great to some analysts looking at it in February. By now that we know much more of it, and all facts say this is suicidal move by Nokia and is not sustainable and will be abandoned just like HTC did with Microsoft, and LG did, and Motorola did. And add on top of that misery, now we learn in late May/early June, that the carriers have revolted against Microsoft in a reseller boycott after Microsoft bought Skype - carriers hate Skype - and then add the point that Microsoft's other handset makers are now deserting the platform and shifting their production to ever more Android. The Microsoft strategy is utter folly by Nokia, but I will do a more thorough analysis of that option shortly on this blog. Stay tuned). 

(Incidentially - when the analysis is done thoroughly, it is clear that the Microsoft option is certain death to Nokia. There is no chance for that to now rescue Nokia. Thus every penny spent on any Microsoft evolution is totally wasted. And because Nokia has to transition away from Microsoft as soon as possible, this is going to be enormously painful. Nokia desperately needs to distance itself from Microsoft now. But Microsoft needs Nokia desperately to remain relevant in mobile. While Elop has said there were no talks of Microsoft buying Nokia, if Nokia moved away from the WP7 operating system, Microsoft could panic and rush in to buy Nokia, especially now that Nokia's parts are worth much more than the share price. Now consider Stephen Elop and his loyalties? What a challenging conflict of interest is it, to abandon Microsoft or to drive Nokia into the ownership of Microsoft? Elop has to be fired right now, because he will not look at Nokia's best interests)

WHAT COULD SAVE NOKIA? MEEGO

So what to look for. If Nokia fires its incompetent CEO Stephen Elop and hires some smart CEO from the carrier/mobile operator community, that would be a good start. Then if Nokia abandons the moronic Microsoft strategy, that would be a strong signal. Symbian has now been damaged so badly by Elop that it cannot recover but Nokia has a real chance, if it goes full speed with MeeGo, its home-grown OS. The MeeGo based Nokia N9 smartphone is shortly starting to sell. It is the best-received Nokia smartphone ever, utterly loved by the early reviewers. But idiot Stephen Elop refuses to let the N9 be sold in most markets where Nokia is now bleeding - like the UK, Germany, France, Spain etc - and major international markets like, haha, can you believe it, Elop refuses to release the N9 in India for example!.

And what is even worse, there is a SECOND already fully designed Nokia premium smartphone running the amazing MeeGo OS, called N950. And Elop refuses to release that phone to any markets, and it is only given to some developers. How mad is that? The reviewers who hate Nokia and love Apple, are now comparing the N9 and MeeGo to Apple's iPhone, commonly called the jesusphone based on my blog from 2007, and now those analysts are calling the N9 and MeeGo as the god-phone.

Unlike Microsoft Windows Phone, the MeeGo OS was designed to take advantage of Nokia's competences and components and designs. Thus a MeeGo smartphone by Nokia can take advantage fully of Nokia's competences rather than be crippled like early phones with Microsoft. The MeeGo OS is fully supportive of Nokia's current 400,000 strong app developer community via Nokia's development tools Qt, something Microsoft is not. MeeGo phones are capable of high-end devices at high prices (something Microsoft says WP7 is not capable of). MeeGo production costs would be less for Nokia, and made in Nokia's own factories (The first Microsoft phones will be made in Taiwan by subcontractors! Imagine the lunacy of that CEO decision, when Nokia's own factories are running at half-capacity, he goes and hires an outside factory to make the Microsoft phones. What will that do to Nokia brand value when we hear of suicides at sweat shops, while Nokia's own smartphone factories are idle). And on and on and on.

If the early reviewers are even partly correct, Nokia is sitting on the biggest hit they have ever had. The N9 and MeeGo (and N950) could be to Nokia what the iPhone was to Apple or what the Razr was to Motorola. IF there ever was a time when the N9 was needed - it is now as Nokia profits have vanished. And what a HUGE profit engine would the N9 and N950 be to a market starved for competitive Nokia premium phones! The first Microsoft phone won't ship until the end of the year! But the N9 and the N950 could ship now! Yesm now. In Q3. Both of them! And Nokia has smartphone factories on idle. But the clueless Nokia CEO, Stephen Elop (aka the Micrsoft Muppet) - refuses to release the N9 in most of Nokia's biggest and strongest markets, and only offer the N9 in very limited release in 29 countries, many of which are small countries like New Zealand, Singapore and Norway. And he is not even allowing the N950 to be sold. And get this - this from the CEO of Nokia - he told Finland's biggest newspaper, Helsingin Sanomat - that even if the N9 with MeeGo was a huge hit, Nokia will not make more phones on MeeGo. Who is he working for? This from the Nokia CEO? 

If the CEO of a company has a hit product and restricts its sales - he is actively destroying shareholder value - it is not only 'cause' to fire him without compensation, it is breach of duty and the shareholders should sue Stephen Elop. Any Nokia Board Members who don't voice a call of no confidence for the CEO are suspect to collusion with the traitor and must also be fired and sued. (but I will return with the full scoop on the MeeGo and N9 and N950 later, including some financial modelling on what their impact could be to profits if launched broadly)

ALL HAIL APPLE

So, Nokia invented the smartphone. It had held the global lead in smartphone sales for 15 years. That has been a nice long run. It didn't have to end this rapidly - and certainly Stephen Elop will go down in history as the notorious saboteur CEO who destroyed his own brand and market - but there is a particular poetic justice in who is the new boss.

Apple was once the biggest PC maker. Then came IBM who took it. Apple saw its market erode was on the brink of bankruptcy making losses in the middle of the 1990s. By that time a Finnish phone maker decided to merge the pocket computer and cellphone and invented the smartphone. Then during the 2000s decade the PC makers all agreed that modern smartphones were indeed computers. With Steve Jobs at the helm, Apple joined the smartphone races very late in 2007 with the radical, iconic and all-altering iPhone and its iOS, app store and ecosystem; and in only four short years Apple displaced Nokia as the bigger smartphone maker (we cannot say for certainty if Apple is only bigger than Nokia, or if Apple is biggest smartphone maker - because Samsung might report bigger results as well). Nonetheless, it must be a good feeling over at Apple that their smartphone strategy succeeded in only 4 years to topple the global giant smartphone maker, Nokia.

And now when we add together Apple's Mac shipments, and iPad shipments, and iPhone and iPod Touch shipments - Apple actually sells more 'computers' than any other computer maker including HP, Lenovo, Dell, Acer, Toshiba (and in smartphones Nokia, RIM/Blackberry, HTC, Samsung, etc). So the king is dead, long live the king! Congratulations Apple. The jesusphone did truly change everything in mobile. Only four years to topple the giant. Wow. We were witness to history.

A TALE OF TWO STEVES

I want to mention also the two Steve's. When Apple was making losses, they brought back Steve Jobs, who rescued the company, turned into a powerhouse which now makes astronomical profits. Then we have Stephen Elop, who came to Nokia when it was making the biggest profits among the traditional handset makers (excluding those who are pure smartphone-makers like Apple, RIM and HTC). So Elop took profit-making juggernaut Nokia - and he destroyed it so it now makes massive losses, while slashing prices to make even more losses (and refuses to release profit-making MeeGo phones). So yes, Steve Jobs is the hero of all technologists. Stephen Elop is the evil opposite of Jobs. Where Jobs turns loss-makers into profit-powerhouses, Elop takes profitable giants and guts them. Hey. Am I the only one who is stunned that while Stephen Elop's Microsoft strategy clearly killed Symbian sales, why are dumbphone sales so badly down? Simple answer if you know anything about brands. When the CEO torpedos his own premium brand Nokia smartphones - that hurts ALL Nokia branded phone sales. Yes, Stephen Elop, you Microsoft Muppet. You must be fired and sued and barred from any executive position in any publically traded company. You are a disgrace! Your name will be synonymous with total corporate destruction from the inside - and by the CEO. Shame!

There will be several update blogs to these Q2 numbers. First up, you may want to see how the most accurate forecaster of Nokia performance now updates projections for Q3 and Q4. Yes, it won't be pretty. I will also return with projections for Nokia-Microsoft alliance smartphone market performance in 2012-2013; with the explanation why Microsoft is now a dead end for Nokia; and why Stephen Elop must be fired now. But read the Nokia market projection first.

Comments

[James]

While the Osborne Effect is one way to look at it, consider how the Mac transition from Motorola to Intel proceeded. There were rumors flying around for quite some time that such a transition was in the works but Steve Jobs always keeps these things well under wraps until he is ready to let the world know about them.

On June 6, 2005 Jobs announced the transition. At that time they had an add-on board that would plug into the Power PC Mac and allow you to start development for the new Intel Macs. They had also been building Mac OS X for both Power PC and Intel to make sure it would be ready when the first models came out. On January 10, 2006 they had the first two models ready to ship and would allow you to trade the development board in for one of the new Macs. In addition, the new Intel Mac OS included an emulation program that allowed you to run the older Power PC programs.

This is a far cry from the Nokia and Microsoft models for upgrades. Visual Basic 6 to Visual Basic .NET was a complete change that upset much of the development community. While .NET allows Microsoft to port their programs to any new hardware, it currently only runs on x86 and locks programmers into their development ecosystem (that is why most people still use C++ and MFC – I use C++ and Qt). MS is slowly using .NET in some internal projects but the majority of their office suite is still C++ from what I understand. On the mobile side the difference between WP6 and WP7 is likewise a major jump. It remains to be seen what Windows 8 for desktop will bring (due to ship next year by some estimates).

Elop is clearly out of his league when it comes to product transitions. There was no reason to kill MeeGo and I clearly believe that the deal with MS required that they kill it. MS rarely injects money into another company without some restrictions. The only other reason would be for Elop to prevent MeeGo from taking shares away from WP7 and thus make his decision look good to the board (provided WP7 takes off as planned). That is possibly why the N9 is delayed.

[Stefan Wessels]

My sentiments exactly, on the developer end it's also this case: http://stefanwessels.blogspot.com/2011/07/nokia-throwing-out-baby-with-bath-water.html - they are going all Osborne/Elop on S40 too, telling us Qt is coming, but encouraging us to use Java "for now".

[swap]

Many people on this page of comments share view point as mine. Yes from developers point of view Symbian is crap. Merging Maemo with Intels Goblin made them start everything from scratch. Harmattan UI was already in the works it had to be adopted for new MeeGo. MeeGo is clearly not your everyday OS while Symbian was. When Elop arrived things have gone beyond any repairable level. And he never said he killed MeeGo but it's just that he's putting it in labs for improvement. Feb.11 also tells that he's preparing something to 'disrupt' mobile industry. WP7 is just to keep phones coming. I'm not expecting any proprietary smartphone OS from Nokia before 2016.

[Giles Harris]

Tomi, I know this is not really your thing but I'm really interested to find out what the Finnish people think about this whole Nokia disaster. Nokia has been Finland's biggest bringer of foreign finance and a huge icon in that country. What will Nokia's demise mean for Finland?

[shavy]

My question to Tomi..

Have you really tried the N9? Have you tried Wp7 OS?

I have seen the Meego and used Wp7 OS. I believe one big reason elop kill meego is because both OS are very very similar interms of appearance and function.

Reviewer love the N9 but are developer pouring their hearts out to create apps for N9?

Meego will eventually died.. reason being, the OS is too similar to Wp7 OS.

When u are steering into a new direction, there are bound to be blood being shed. 6 months is too short to asses elope result.

[teklemon]

To Peter
By your measures Rebeca black must be better than Lady gaga (in terms of hits on You tube), unfortunately running the business is different.
Go to Meego's website and see how many OEMs have committed their futures Meego, compared to Android? Meego might have been the pride of old Nokia, but the truth is that it was terribly late and has tremendous risks, no matter how well it is made. Thats the whole argument about building an echosystem vs joining an echosystem. You may argue WP also has no big echosystem, but that depends on from which angle you are looking at it.
In future, will mobiles be an extension of computers?
Will tablets be an extension of mobiles or computers?
Will PCs be replaced by tablets and mobiles? if yes what about an easy transition for consumers?
What position will Nokia be if MSFTs Windows everywhere strategy succeeds?

Meego doesnt even deserve a chance as the PRIMARY Nokia platform and to host the 3rd echosystem on it, but I agree again that it should have been kept as the second one, as a "revamped Symbian OS".

[parastar]

shavy, I was thinking exactly the same, M$ has to expand their eco-system to mobiles too, so far they failed miserably. they found Nokia being in trouble and made a deal. If for a moment forget Nokia and look what is in the interest of M$, then it is very clear to see why Symbian is going nowhere and for the same reason Meego/QT has to die, the same for Ovi, and maps.

Under that deal Elop and BoD act this way, N9/950 will be released (in selective markets to make sure it has no impact for WP) and will fulfil a contractual requirement with Intel, and I guess it is the same reason that Rich Green left. Bear in mind that the way N9 is released not as a pure Meego device, no support, no new devices, is not doing any good to Meego itself.

The fact that Nokia is doing so badly is almost irrelevant since M$ has money to poor in and cover temporary losses. Whether M$ will succeed or not with their eco-system plans is another matter.

[teklemon]

Even though an iPhone and a old Nokia "smartphone" are still assumed to be in the same category of "Smart phones" there are huge differences in how Nokia saw the smartphone segment and Apple saw it.
Apple created a new segment, I believe, even though we bundle all phones generally as Smartphones even now. Apples and Android phones are Smarter phones. Voice is a commodity, so are e-mail and generic web-browsing. Smarter phones for example introduced great intuitive touch interface, multiple home screens, advanced applications like online gaming, Social networking, apps for multimedia, 3D, intelligent navigation, advanced browsing etc etc.
Nokia never had a phone like that before Apple created the Smarter phone segment. Android responded, and Nokia still has not.
Intuitive GUI is the one thing that Nokia always lacked (as a starting point, there are many). Even when RIM was selling phones years ago on their intuitive user interface merits, Nokia never cared to improve the monolithic Symbian GUI. Now, poor Mr Elop has to answer for all those years of neglect and complacence.

[peter]

tomi, you might have to clean up your blog immediately. elop agents are trying hard to ruin it.

[peter]

teklemon, your IF is too big, for which MS has tried for 10 years and failed miserably.

You've already seen China and Europe consumers left Nokia in favor of android/iphone4 immediately after crap Elop announced the abandon of symbian in favor of WP7.

That's fact exactly as Q2 result just disclosed.

Elop has to go away or Nokia will go away pretty soon.

[peter]

Baron95, my argument is based on fact not delusions.

Steve Jobs did not admit that iphone4 had the reported problem: bad antenna design, easily broken case. he took action to save iphone4 well by giving free rubber case to solve the two problems.

b/c if Steve Jobs knew if he had admitted these problems, iphone4 would have finally lost the war to n8, period.

At the same time, n8 competed well against iphone4. loyal Nokia consumers and prospective nokia customers kept buying n8 for its strong camera/gps/flash support though browser was weak. it sold 4 millions n8 in Q4 alone and more in Q1.

then here came the criminal ceo Elop told the whole world, n8 was a crap, we wouldn't support it, we are going wp7. n8 lost the war immediately.

Elop was hired to fix the weak broswer and in-consistent UI of Sybiam 3, instead, he abandoned all gems Nokia accumulated for 10 years.

the result of Q2 has manifested how worst execution from Elop could obtained. 50% down of smart phone sales in China.

Elop has to be fired immediately or Q4 would be even worse. He promises a break even, that's another pure cheating. he will come later by issuing another profit waring for sue if he is kept as ceo of nokia.

Fire elop, go meego is the only way to save nokia.

Poster Peter disclosure: American, owning Nokia shares, owning Nokia devices, Microsoft devices, long term microsoft partner and developer.

[shavy]

Peter,

Why is meego the only way to save nokia?

Elop approach to obselete Symbian OS a direct(no brainer)way.

Any CEO that nokia board hire will still obselete symbian, but maybe in a discreet way.

In my opinion, elop just not experience enough to handle the situation.

[peter]

tomi, while most people think Elop is a Trojan of MS, I believe, though looking like a Trojan initially but actually, Elop works for big short sellers from Wall Street. Can you look into it ?

[Jonathan]

@carlos Apple is in very good shape in the computer market because of the Macs, not because of iPods or iPhone.

True that Apple was almost bankrupt, but that was 5 years before iPods and 10 years before iPhones. They (Steve Jobs, and the new NeXT influenced management team) turned the company around in the 5 years before iPods.

@tomi Resurrecting Symbian would be foolish. It is the root of the Nokia high end problems. Trying to make Symbian into an OS for modern internet phones rivalling Android and iOS was a wrong call, it cost Nokia too much money and especially time. They should have done a clean start, preferably before iPhone or at least soon after. To Maemo or something that was designed properly for the new era.

@peter Please do not bend the timeline or twist the facts. The antenna in iPhone 4 is *better* than before unless you make the death grip. In normal usage, it is not an issue. The buzz around it and Apple's reaction to it happened in July, N8 shipped in volume late in the fall, October/November timeframe.

Please provide source for your a N8 sales numbers. Even if they are what you claim, N8 would not have won the war against iPhone 4. The iOS platform is *much* bigger than iPhone 4 sales (iPod Touch, older iPhones) and the software selection and quality is better. It is not about devices any more, not after 2008 or so, it is about the platform.

I happen to have an N8 on my desk as we speak. It is nice for Symbian, but it is about 1-2 years behind the competition (the hardware was that old, because delays of Symbian development), in terms of CPU speed and display resolution. Actually, it is far worse than N900 that shipped a year before N9, in both those respects.

Also the current software is quite craptastic, poor browser, poor keyboard, slow. Anna should make things better, I do not have Anna yet on my N8, it should ship "soon".

The N8 is not an Elop era product, it was designed and implemented (with the horrible delays) in OPK era. And as I said earlier, it takes a long time to turn a ship the size of Nokia. The state of matters now is the result of decisions done in late 2009 - early 2010 the latest. The product cycle is *long*, the strategic decisions of the board that OPK and his staff implemented are the reasons behind the mess Nokia is in.

They saw iPhone and Android, they assessed them wrong, and did wrong moves to counter, and were really really slow. Rest is history.

I am not claiming Elop and his management team have made perfect moves, far from it. But a lot of their moves have been forced by the state of affairs because of the bad strategy and execution of the past years. Just thank Ollila, OPK and rest of the gang. And obviously the strong uptake of iOS and especially Android is a big part of the equation too.

[darwinphish]

@Everyone that bashes Symbain: No matter what you think the future might have held for Symbian, the simple fact is that before "The Announcement" Nokia was making quite a lot of money selling Symbian smart phones. That they were doing this with ~$200 phones tells me that Symbian was still a good option for the lower end of the market. People only spending $200 are not otherwise buying iPhones, high end Android phones, WP7 phones or even the N9. The low end smartphone market is still very healthy and will likely continue to be for some time. There is no good reason for Nokia to simply abandon this market (whether by design or by poor execution).

I can see the rational behind moving to WP7 to compete in the higher end of the market and the jury is still out on whether Nokia will succeed with this plan. However, nothing running WP7 will be competitive at the low end. Giving up on this market, which again was quite profitable for Nokia, is where Elop/the Board really messed up.

[peter]

shavy, if symbian can handle 800x480 or above and comes with better web browser and full support of flash 10.3, then it can compete in middle to high end range against android. the most difficult work is a better web browser for symbian, all others can be easily handled by average software talents. but Elop has already laid off all symbian engineers and shift support team to accenture, it is already over.

1. Meego/Maemo can compete head to head with android and iOS. it is free;
2. Set back MS WP7/8 into one smart phone product line; (return MS money to MS and cancel the partner contract);
3. Leave android option open;

Let customers to choose which OS they want, then produce what they want.
Fire Elop now, Investors, carriers and consumers all want this clown to go away, or better put into jail. Nokia share price will surge to the heaven immediately due to shorter sellers squeeze.

[Carlos]

@Jonathan, I know about Steve Jobs returning, Next, OSX...

what I meant was that without the famous "halo" effect, Apple would not be in the good shape they are now. I live in Spain, now you can see some Apple presence in computers, but a couple of years ago it was very difficult to see a Mac. Of the people I know that have a Mac is because they are happy with their iPods/iPhones.

[peter]

Yes, Stephen Elop, you Microsoft Muppet. You must be fired and sued and barred from any executive position in any publically traded company. You are a disgrace! Your name will be synonymous with total corporate destruction from the inside - and by the CEO. Shame!

[PERUS]

@darwinphish and @Jonathan: Agree with you guys.

Symbian is a also nice OS for mobile-phone, in that sense that the core and engine are well planned and work fine on machine with limited resources (that's the part which developed by the Symbian Foundation). But when it comes to the UI (i.e. Avkon) the whole sources are simply a mess (the part which developed by Nokia's incompetence developers or mostly externals/subcontractors).

I was there when they were planning and developing several UI alternatives and its rendering engines (from AVKON, scalable UI, space UI, Web runtime, eSWT, Orbit, Hitchcock and so on, just ignore those words if you're not familiar with) but what is the results now?

It seems that within Nokia under OPK, if you want to have a project, you just need to be a product manager who can talk much about nice stuff and able to create a nice looking power point presentation, present it to the executives or directors and you'll get the project, just hire many externals to do the coding work and couple of UI/UX designers for the UI.
Doesn't matter if it would take 3 or 4 years, at least you can present a small nice looking results and define an optimistic road-map every half year. When it comes to the final deadline, you can still blame another team which is doing another dependency component or even the hardware...
And at the end of the days, some guys here are still believing that Nokia could still be the leader of smartphones and mobile phones with the existing OS and such company-culture?

It's very difficult to have an alternative OS for low end devices. Currently Nokia has only S60 and S40 but for how long? The threat comes from low-level Android devices and soon maybe a cheaper iPhone variants?

Nokia has to be better prepared and can't simply rely on Meego/Harmattan since you can't simply produce many low-level devices with it in one year.

And yes, it was Elop's mistake to "give up" Symbian and Meego immediately at Feb 11th, he should better say something like: "We are planning to have WP7 as smartphone OS besides Meego, and will considerate and decide to take one of them as a main smartphone OS based on future market results. Symbian S60 will become a next billion OS bla bla bla...".

[James]

@PERUS: "The threat comes from low-level Android devices and soon maybe a cheaper iPhone variants?"

When I think of low-level devices I think slow processor, very small screen and possibly not touch enabled. Android uses Java for the UI and may not work well for this environment due to poor efficiency. Apple doesn't seem very interested in this low profit area so I doubt we will ever see iPhone Lite. Likewise, WP7 uses an abstraction layer for the programming and may not run too well on the low end either. Only Apple iOS and Nokia Symbian/MeeGo use native instruction languages for applications which offer the high execution efficiency needed for these platforms. Silverlight and Flash could work fairly well at this level if they are properly optimized.