How Bad Will Nokia Q4 Be in Smartphones? Worse Than You Thought

Lets start today with Nokia and smartphone market shares for Q4 now that the first Microsoft Lumia phones are selling in some countries. I was one of the first to offer quarterly forecasts for Nokia smartphone market share performance this year, right after new CEO Stephen Elop announced his Microsoft strategy on February 11, 2011. This blog article will give you a preview of roughly what to expect out of Nokia smartphone performance in Q4 of this year, the Christmas period.

When I wrote that long blog where I forecasted catastrophic crash of Nokia market share this year - and many experts said that I was being too harsh on Nokia - I also wrote that it was my 'best case' ie most optimistic scenario. I was proven wrong - the reality did turn significantly worse than even I was able to forecast at the time. As that February forecast was my 'optimistic' scenario, and we had disasterous Nokia results out of Q2, I did an update of my numbers which we can now call my 'pessimistic' scenario. What turns out - is that actual Nokia Q3 performance was almost perfectly the mathematical average of those two forecasts. See how it went for Q3.

Original (Optimistic) Forecast:

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 16% . . . . . . . . . 21.0M . . . . . 126 . . . . . Euro 2.6B Euro

Revised (Pessimistic) Forecast:

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 11% . . . . . . . . . 13.0M . . . . . 138 . . . . . Euro 1.8B Euro

Actual Nokia Performance

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 14% . . . . . . . . . 16.8M . . . . . 131 . . . . . Euro 2.2B Euro

Mathematical average of my optimistic and pessimistic forecast:

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 13.5% .  . . . . . . 17.0M . . . . . 132 . . . . . Euro 2.2B Euro

Wow. That is not bad haha.. The average is so near, it could be used for actual management of the company haha, in terms of paying sales bonuses, approving budgets to hire staff, etc...  (and well, I tend to know this industry pretty well haha)

So. We don't need to make any corrections now for Q4. We can see that if we use the two forecasts, my pessimistic and my optimistic views, and calculate their mathematical average, we get a reasonably good short-term forecast one quarter ahead. So what do we get for Nokia smartphones in Q4?

My Optimistic (original February) forecast
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . . 12% . . . . . . . . . 17.0M . . . . . 116 . . . . . Euro 2.0B Euro

My Pessimistic (updated) forecast:
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . . 7% . . . . . . . . . . 11.0M . . . . . 134 . . . . . Euro 1.5B Euro

Mathematical Average and thus likely Nokia Q4 actual performance forecast:
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . . 10% . . . . . . . . . 14.0M . . . . . 125 . . . . . Euro 1.8B Euro

That is what the Elop Effect caused for Nokia in just over ten months. Nokia took a 29% market share and voluntarily destroyed it, and will end this year with 10% market share (all Symbian smartphones plus all Windows Phone 7 based smartphones plus even all MeeGo based N9 smartphones - combined!). This is by a wide margin the biggest destruction of a world-leading market share not just in mobile phones or telecoms or tech - in any industry ever! The unit sales have been literally halved in a year when the industry grew by far more than half. To hold onto what little it can, the Nokia average sales price (ASP) has fallen dramatically and Nokia's smartphone unit sales revenues per quarter have crashed to less than half they were at the start of the year. Obviously as I predicted, not just Nokia's smartphone unit went from making huge profits to making losses, but even all of Nokia was plunged into loss-making and as I predicted, the dumbphone unit would be the only (slightly) bright spot left for Nokia. It is, as I wrote on February 15:

Nokia will change to become only be a low-cost, low-brand provider, somewhat like the K-Mart of handsets. Nokia, the Easyjet of smartphones. Yes, Nokia will probably still be the world's biggest handset maker at the end of this year, but its quite possible Nokia will no longer even be the biggest smartphone maker.

I AM A NOKIA FAN (while not fan of new CEO Elop and his management style)

I love Nokia. I come from Finland, I have always had at least one Nokia branded phone in one of my pockets, often both of my phones have carried the Nokia brand. I am an ex Nokia executive and Nokia was so good to me, they made my first book an 'official' Nokia book, sold on the Nokia website. They have also kindly been a reference customer of mine as I became an independent consultant, what was now ten years ago. (PS for that nonsense going somewhere on the web that I was 'disgruntled' or 'fired' haha, in that case Nokia would never have used me in public to represent them or do events for them etc as they have for almost a decade).

I weep inside when I read that above prediction from February, and find it all came true. As we know, not just Apple has overtaken Nokia as the world's biggest smartphone maker in Q2, now in Q3, Samsung leapfrogged both and became the biggest smartphone maker and relegated Nokia to third place. Just before Elop announced his Microsoft strategy still in February of this year, Nokia was bigger than Apple and Samsung combined in smartphones. We have witnessed the world record in self-destruction of a global and market-leading brand. As I said from the start, this will be the standard case-study for MBAs of the future to study on how NOT to run a company.

Lets be clear, there are many who will say 'but Tomi, Nokia was in trouble before this.' Yes. Nokia was so much in trouble that yes, in the biggest economic crisis of our lifetimes, where all other full-portfolio mobile phone manufacturs like Motorola, Samsung, LG and SonyEricsson (by full-portfolio I mean obviously those handset makers who make both premium smartphones and lower-cost 'dumbphones' ie its not appropriate to compare a full-portfolio maker like Nokia to a pure smartphone maker like Apple or HTC or RIM, just as it would not be the right comparison of Toyota vs Ferrari or Porsche. Toyota's primary rivals are Ford and Volkswagen etc, and Nokia's primary competitors are Samsung, LG etc).

But yes, among full-portfolio handset manufacturers - all of the rest of them reported losses in their handset units at some point - only Nokia reported solid profits in its handset unit in every single quarter up to when Elop took over. Nokia which invented the smartphone and thus started at 100% was of course seeing a decline in its market share, that is inevitable in any competive situation as Apple now is witnessing with tablet PCs for example. But yes, Nokia did not perform perfectly through the troubled times of the economic downturn - when many companies went bankrupt (Shearson-Lehman) or needed government bail-outs (General Motors), Nokia corporation reported profits in every quarter bar one, when its networks unit pushed Nokia briefly into losses - even then the handsets unit was very healthy. Yes. Nokia's then-CEO Olli-Pekka Kallasvuo (OPK) did witness a dramatic loss of Nokia share price, roughly losing half of its value, over a 3 year period. And he was fired, and replaced by new CEO Stephen Elop who came from Microsoft.

WHEN YOU EXCHANGE SUCCESS FOR FAILURE, JUST CALL IT ELOP

In his first five months, executing Nokia's old strategy, Elop witnessed a growth in smartphone sales (yes, growth!) and an increase in its ASP (so the growth was not phony achieved by price cuts) and an increase in Nokia smartphone unit profitability (which means the increase in sales was not achieved by marketing gimmicks either). Elop had a hit phone in the N8 - a phone voted for example as the best phone in its class for the year 2010 in Britain - and the best touch-screen version of Symbian ever made. He saw his flagship business unit - the future of phones is smartphones - grow unit sales by 7% (yes, this is true! check the facts!) in just one quarter, and increase his average sales price by a Nokia-record of.. 14% ! (wow!) and increase the profit contribution of his smartphone unit by a staggering Nokia record of ... 64% !!!!

This was the proverbial goose that lays the golden eggs. He had growth in sales, increase in average prices and most importantly a record-setting jump in that unit's profitability. Where the smartphones accounted for a quarter of Nokia's handset unit sales, and a third of Nokia Corporation total revenues (remembering that the networks unit delivers also a third of Nokia revenues), the smartphones unit alone delivered half of Nokia's total profits. This was the goose that lays the golden eggs.

The Nokia owners rewarded Elop's early stewardship of Nokia by increasing Nokia share price by 11% since he took over, up to February 10, 2011. By any measures, Mr Elop was proving to be a success at the helm of Nokia.

Then he imploded. He initiated the Elop Effect (both announcing the obsolescence of his existing products like the Osborne Effect, and compounded his mistake by calling his own products rubbish like the Ratner Effect).

This is what Elop achieved. He took 7% unit sales growth per quarter (compounded it would be 23% over three quarters) - and instead he gives us a loss of 52% in unit sales. He took a growth in ASP of 14% per quarter (compounded would be 48% over three quarters) and instead gives us a decline of 14%. He took quarterly sales revenues of 4.3 Billion Euros (6 Billion US dollars) and instead he now gives us sales revenues of 1.8 Billion Euros for Q4 (2.5 Billion US dollars) so he has already cost Nokia 3.5 Billion dollars of revenues per quarter! (yeah, Mr Most-Incompetent-CEO-Ever is costing Nokia now 28 Billion dollars of revenues per year!) How big is that? In the current Fortune 500 Global issue, those abandoned revenues alone would have produced a company ranked as.. number 343 among the biggest global giants! Thats the size of Ericsson (globally) what Elop has destroyed already! Thats more than Time-Warner or Oracle or Lenovo or Alcatel-Lucent. For its 2010 revenues, 28 Billion dollars is slightly less than Google! Imagine your CEO destroying so much of your company, it wiped out the equivalent of Google!

And the biggest crime is profits. He exchanged a growing reliable profits unit which earned 548 million Euros (767 million US dollars) of profits per quarter ie 2.2 Billion Euros of profits per year (3.1 Billion US dollars of profits) and replaces it with ... a LOSS of 130 million Euro (182 million US dollars). That is of course an annual level of a loss of 520 million Euros or 730 million US dollars. The total transition means he's personally caused damage to Nokia shareowners worth 2.9 Billion dollars bottom-line profit already! (just in smartphones, I am not even talking of the other damage in other units).

How is this CEO allowed to remain in office? The share price? When the Nokia share price lost half in a three-year period, previous CEO, OPK, was fired. Now from its peak in February, right after Elop announced his mad Microsoft strategy, the Nokia share price has been in free-fall. It is now under 4 Euros and has lost half of its value in ten months! HP's CEO Apotheker was ruining his company and the Board promptly fired him. Why is Elop still standing? Is Nokia's Board asleep at the wheel?

NO SILVER LINING FROM MICROSOFT PHONES..

If there was some silver lining in this, then perhaps he should be allowed to remain in charge. But there isn't. Nokia has a legitimate hit phone, called the N9, running on Nokia's own new OS called MeeGo, which is highly desired and receiving global praise. The CEO refuses to sell it in most of Nokia's major markets.

What he instead is pushing is - due to his Microsoft legacy no doubt - the flawed Nokia Lumia 800 phone that runs the severely incomplete Microsoft Windows Phone 7 OS. The Lumia 800 is the only Nokia smartphone that they will sell this year. It is only available in a few countries and not on all networks there. The sales reception has been mixed, the pundit reviews mixed and the Lumia 800 is far from the saviour that Nokia hoped for. Most of all, because it is not sold in all Nokia markets and by all Nokia carriers/networks, it cannot hope to match the previous Nokia record for a new phone launch, the N8 from a year ago. (Please please do not be deluded about the mad Microsoft strategy. It will NOT rescue Nokia. A year from now, Nokia and Microsoft based smartphones will have something like 8% market share. Read this to understand why that is what we now face)

So be prepared for these numbers when Nokia reports in late January. Expect total Nokia smartphone unit sales to be very close to these:

Mathematical Average and thus likely Nokia Q4 actual performance forecast:
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . 10% . . . . . . . . . 14.0M . . . . . 125 . . . . . Euro 1.8B Euro

Note also - if Nokia market share is this low, Nokia will fall further, definitely below HTC to fourth place, and might even fall below RIM/Blackberry to fifth ranking in smartphones. A year ago Nokia towered over all others. As RIM itself is also struggling, I cannot be sure if that happens, but you heard it here first, that Nokia will now during Q4 fall further from third place to fourth place at least, among world's biggest smartphone makers.

Elop has mismanaged his company in every turn he has had, not just in the mad Microsoft strategy but in refusing to sell his legitimate hit product, the N9, and even more criminally, refusing even to sell - while he is manufacturing it in small numbers - the sister product, the N950 also running MeeGo. I have calculated that if only those two phones were sold globally and only on normal Nokia channels - if Nokia was run by any sane CEO - Nokia would now be reporting a modest profit in its smartphones unit, not a huge loss. This is incompetence in management and sheer pig-headedness. Since the N9 and N950 are true flagship phones sold at far higher price points than the Lumia800, they would not even cut into Lumia sales, but because of the outwardly family resemblance of the N9 and the Lumia800, at least Nokia would gain a flagship product effect to have the N9 help Lumia800 sales. He is incompetent! The Microsoft Muppet.

Please understand what I say, and what I am not saying. I am not claiming Nokia was not in need of true changes, I wrote how to fix Nokia on this blog (the problems were in execution, not on the platform). I am not claiming that Nokia should have stayed with Symbian - I was writing long before there was a guy named Elop at Nokia, that Nokia was indeed on the right path to shift away from Symbian, to its own new OS called MeeGo - which we now can see is indeed the best OS out there, this side of the iOS on the iPhone (and some have even called the N9 running MeeGo a better phone than the iPhone! That is rare praise indeed).

So when Q4 results come in, we will hear that Nokia smartphone market share crashed further to about 10%, and Nokia's ranking has fallen to fourth place in the best case, or as bad as fifth place. The Nokia unit sales are literally down to half they were only a year ago - this while the industry had its best year of hypergrowth ever - and Nokia average sales prices hit a record low. The total revenues of the smartphone unit will be down to 1.8 Billion Euros generating only about a fifth of Nokia's total sales. And profits? The smartphone unit will continue to be in the red and all of Nokia will struggle to achieve zero profitability for the end of the year Christmas quarter.

That is what Nokia smartphone market share looks like for this current quarter. I will return with other thoughts about how the Nokia strategy is imploding in other ways, from sales management to brand to loyalty to ecosystem. But lets post this blog first.

Comments

[n900lover]

karlim:

Well, this is getting hilarious. For almost year you guys have hearth attack every time tomi says that Q4 2010 marked turnaround for nokia symbian sales, repeating to death that that christmas was just random bump, symbian is old and uncompetitive and on fast slide into irrelevance regardless of what Elop did.

And now, right here on this blog, you declare that "the trend Nokia has decidedly broken" based on one quarter of data which even doesn't show reversion of trend. And the funniest part is that what broke this trend is - wait for it - symbian! Yep, that crap os which forced Elop to immediately go with wp7 to save nokia, now somehow managed to grow from ashes.

This isn't just fanboyism, but looks more like good old astroturfing. But as I said, I'm eagerly awaiting yours analysis Q4 lumia results, that will be something to watch.

[Jippu]

This would indicate that decline of Symbian started long time before Elop announced MS strategy. This is only for China but similar thing was happening elsewhere too.

http://paidcontent.co.uk/article/419-heres-how-android-has-destroyed-symbian-in-china/

[n900lover]

cycnus:

I'm responding although I'm not tomi, but who is perfect, right?

I think this idea tha ms has some sort of ecosystem nokia could use for its advantage was nonsense from the start and xbox is prime example of it. Consoles have totally different user interface, if you want develop game for both devices you are actually creating two different games and you must work very hard to make them concurrently playable in the end compromising both with no effect, because people will always play Skyrim primarily on console (or pc) and angrybirds on smartphone. At best there will be two separate worlds, one with xbox players and second with mobile players, with just game scores and overall tables on start screen in common.

Besides ms has currently about 40 millions of users on xbox live, that isn't even two quarters of sales for nokia (well, wasn't before Elop happened) so this bit of the deal is another gift for ms, because smartphone hw is becoming faster and faster by the day and consoles will be endangered spiecie in short time, with pc for top performance, smartphones (wifi connected to tv) for everything else. Really, nokia doesn't need xbox(live) at all, but for xboxlive nokia is one of its last chance (but this is true for whole ms/nokia deal, of course).

[Earendil Star]

Regarding market cap... interesting topic!

Apart from the fact that market cap depends... on the market... since share price is its fundamental driver... (that's why benchmarks are used when measuring success...)
Apart from the fact that market cap change depends... on the specific dates you choose...

Fact is that:
Last time Nokia had market cap > 200 bn (approx 225 bn - estimate on share price) was back in 2000... Do you remember the Internet/High tech bubble?
OPK became Nokia's CEO in 2006... with a Nokia market cap of approx 75 bn...
OPK, as CEO, after one year in office (as TH Elop today)... witnessed a DOUBLING in Nokia's market share value.
How the heck were 200 bn in market cap distruction by OPK calculated????
Please stop making up nonsense arguments only to justify untenable allegations.

Now let's go back to something more serious.

1) If Nokia holds up, it will be thanks to Symbian, not certainly to its Lumias. Check the figures (Q3 & Q4 estimate).
It was no coincidence that TH Elop had to change his original strategy and re-offer Symbian support & development, which originally had been scrapped.
MS realised that Nokia was dying and had to intervene to stop the premature demise by offering renewed life to Symbian with Anna and Belle.
Again, just another nail in the coffin for the arguments that Nokia -without WP7- would have miserably failed, à la RIM.

2) It's ludricous to purport that -if adopting Android- Nokia would be one of the many, while -if adopting WP- Nokia would distinguish itself.
Nokia's choice of WP puts it in the same league of the other OEMs shipping WP on their phones.
Exactly as would have been the case if it had adopted Android.

3) What is really shocking is that almost nobody is saying what is really happening.
The actual truth is that IT IS WP that is distinguishing itself by being able to exploit Nokia's brand, NOT the other way round.
If WP will have any success with Lumia, it will be thanks to Nokia's strength worldwide (e.g. brand, carrier relations, etc.), not to WP appeal.

THE REAL BURNING PLATFORM WAS WP, NOT NOKIA or Symbian!

Nokia might now be saving WP (if everything goes according to MS's plan), but the opposite message was sent through.

This is the power of MS: money, PR, ability of putting its trolls in the right places at the right time.

Bottom line: terrible fate for Nokia, good bet for MS.

[custom research paper]

I think this is really a very nice post.

[karlim]

@N900Lover

I'm glad you brought that "trend decidedly broken" thing up.

Yes - I fully agree with you it's way too early to talk about major change in trends based on one quarter data. This Q3 halt/slowdown in Nokia smartphone unit shipments decline will either be followed through in Q4, or not. Only then we can start talking about changing trends. And, depending on actual numbers, probably even then we'll have to use some qualifiers, because even two quarters can be an anomaly. Based on Q3 numbers - I can only say that it is an indication that the rapid decline trend may be broken. We'll see one way or another in about 40 days when Nokia reports Q4 results.

I used that "decidedly broken" line deliberately, to show how absurd it is to base far reaching conclusions on just single quarter data point, which may or may not be an anomaly. And to see if any of old Nokia fans here pays attention, and will call me on it.
Glad you obliged :)

But it is strange that you happily accept the same one quarter based conclusions from Tomi without ever questioning him. And I'm talking not only about Q4 2010. I'm talking about this very post also. And Tomi's 14 million Nokia smartphones forecast, which you do not question. Despite it being solely based on a one time coincidence of Nokia's Q3 actual numbers falling in the middle of Tomi's "optimistic" and revised "pessimistic" forecasts. And despite the fact that since Feb. 11th Tomi has been wrong in forecasting Nokia quarterly sales every time he did it.

[cycnus]

Hi all,

I was thinking the success of Apple iphone/ipad is NOT about apps or hardware.

If we're talking about the hardware, apple hardware is WAY behind android now (720p) or Nokia (12MP Carl Zeis), but it's about some overlook specs, and Nokia WAS the king of this until apple come in, and got sabotaged by the American CEO.

First.... before apple time
Nokia could win the battle of the phone because ..... Polyphonic ring tone, MP3, Snake???, Clock on the phone, GPS, Camera, better camera, good camera, exchangeable cover.... and so on....

Right now, what people want is smooth touch screen UI. and that's why apple is winning because it's OS were build for it.... but with the introduction of DUAL CORE and QUAD CORE it's really change the game, as one core could be use for UI, and the other core for anything else.....

And that's why apple try to make SIRI the next big things, and google have the conversations mode (translating voice on real time) also as the next big things.

This is where nokia kind of a bit lost..... they don't have the next big things....
they have the best GPS.... but android is also not far behind...
they have ESPN for Nokia 800????.... what??? ESPN??

[n900lover]

karlim:

I'm glad you finally noticed this! I actually anticipated your move and consequently immediately recognized that you planted the phrase deliberately into your post, so I played along and continued with my plan by not including any comments on tomi's numbers, deliberately, to allow me, now that you responded as I was expecting, to underscore my point. Which is that it doesn't matter if it will be 11 or 14 million units, the problem is with whole wp strategy and with ms itself.

Unless ms is going to completely change itself, in short term this show will end with sales of couple of tens milions wp phones at max, as ms is using last bits of innovation from n9 and finances generated by symbian, before nokia is swamped by ms ideology. And then wp/windows 8 will crater.

[Esau]

The reason why Android was not a choice is Navteq. More precisely Nokia was investing too much (5.7 G€) in maps. Android comes with Google Maps and there is no use of Navteq maps in Android environment.

Actually Navteq is losing its value all the time and Google is one of the players causing that. Google is quite self-contained in maps nowadays. See the tiny copyright text at the bottom right corner of Google Maps and you can see mostly (c)Google around the world and even in US. The wiki style Open Street Map and its ecosystem are also providing a free alternative for many potential Navteq clients.

I think maps were playing an important role when considering between Android and Windows. Elop had not ruined much at that moment and the coming Microsoft partnership disaster was not visible then.

[jack]

Tomi, During earnings call HTC has forecasted that they will ship only 13 million smartphones in Q4. A month later they have issued a profit warning that their Q4 sales will come in 25% below expectations. Which probably means that they will ship only 10-11 million smartphones in Q4.

[Review]

Tomi - one fact i can never accept from your theories that Nokia would have been fine with Symbian... I have the N8.. and it sucks big time compared to the big OSes.. Even with the recent Anna version Symbian is bad.. just so damn difficult to use it..

and coming to Meego - I tried using a Meego phone.. first impression.. except the Hardware - the software is the same old Standard menu of icons.. nothing different.. no widgets... no customizable home screens.. and worst thing..outlook doesnt sync contacts.. now how will these create passion amongst the youngsters or enterprise users to create a compelling thought to buy a Meego phone...

I m not WinPhone is the best there.. it atleast gives a life line.. to me without Windows Phone Nokia is a goner.. soon to be sold company like they are doing Vertu now.. With Windows Phone it gives them to fight back.. Mango is a fantastic OS.. simple, different & good user experience...

I can understand probably your frustration is coming from the fact that Elop killed the Finnish Home grown OSes.. hey thats the fact.. Symbian sucks & is behind Apple or Android by 5 years now...

[sample research paper]

liked everything very much:)

[Earendil Star]

Just how people like cherry picking and ignore using financial data properly...

OK, let's take OPK from July 2008 to October 2010 (when THT Elop took his place), and let's forget that before that he had presided over a Nokia boom, and let's forget that the iPhone was released in 2007. Let's also benchmark against the Nasdaq (well, you know, in 2008/2009 there was something called "The Great Recession").

The gap between Nasdaq and Nokia (ADR) opened in mid 2009 (before that they were faring similarly), and ended up at 60% approximately (actually 61%).

Let's do the same with THT Elop, from October 2010 to present. Oooops... gap is also 60% (actually 63%)...!!!

By the way, it's % change that counts, not absolute value when comparing fairly...

So, what's the point being made here?

I am not denying OPK failed to react timely to the iPhone. For this he was rightly or wrongly ousted. But he had no easy task: first he had to acknowledge the challenge (easy to do in retrospect, but difficult at a time when Apple was Mr Nobody in the smartphone space and Nokia firmly n.1 worldwide), then to react trying to maintain Nokia's independence (yeah, at the time this was still a concern...). The strategy was slow but had its merits, and recognizing Symbian resilience in Q3 2011 (as opposed to RIM, for example), it could have even worked.

On the other hand, THT Elop failed Nokia totally. He destroyed its ecosystem, zapped its independence, and for what? For a third party OS that is faring last in the market.
Result: Huge gambit that might still fail (which means terrible risk management). Furthermore, Nokia is now just an OEM and MS subsidiary.
No way Nokia can ever hope to go back to the profits it made in the past.

Yet THT Elop might be considered successful (at least so far), if you look at him for what he is: a MS employee carrying on MS's agenda.

[Captain Anonymous]

@Baron95:

"Why didn't Nokia buy Android before Google? Why didn't Nokia buy Palm Web/OS before HP? Why didn't Nokia buy QNX before RIM? Why didn't Nokia align itself with Amazon? They did nothing under OPK/Jorma."

That's not strictly true. They went on a shopping spree with little idea of how to integrate their purchases into a coherent whole:

http://en.wikipedia.org/wiki/List_of_acquisitions_by_Nokia

However, they also figured out, eventually, that partnering was the way to go with services. It could be argued that Yahoo! was an unfortunate choice for that.

[Ansii vanjoki]

Under OPK everything is so Slow and meego was one of the project in that time

[Kalle inventor of many things, accomplisher of nothing]

What killed Nokias dominance? Well it was the humble HTTP stack, which made the browser slow and thus people flocked to other guys who just happened to look at their crap and made it work. If N8 or 5800 or any other Nokia phone had had a decent browser Nokia would be fine. iPhone still has a crappy and limited interface. Two things that separate it. It crashes seldomly, browser is nice and screen has high resolution. You say wait that is three things, but then again I was already picking and choosing.

[JonathanN]

Super post! Just like your blog professionalism! Keep up the good work.

[@rodrigottr]

FINE...

Ok... I don't know about you guys but I have a feeling most of people aren't here because they want to get informed or to debate about the future of mobile industry. They just want the thrill of stating their opinions and defending their beloved brands and that is making this debate so poor, exhaustive and ridiculous...

Whenever Tomi writes about anything else besides Apple or Elop, like how Mobile is changing things in Africa, he is just ignored by most people here and that makes me wonder: how people who don't really understand or care about the true impact of mobile technology on peoples lives can know about smartphones when smartphones is just one only and single type of product inside what is mobile.

It strangely seems that since Apple created the iPhone, only 4 years ago, suddenly everybody who has an iPhone or Android phone became mobile specialists!! It doesn't matter anymore if the guy writing above has more then 10 books about the subject! If you read Gizmodo and Engadget then you're already a specialist!!

JESUS!

And then these people just come here with all their pre conceived ideas, 100% based on personal passions, and not even once open their minds to change their views one little bit...

Guys...

If you have your personal passions, AT LEAST, DO LIKE TOMI AND STATE THEM! Tomi is Finnish and has a past on Nokia. Is completely understandable why he could have a passion about it and he is not hiding it from you. He is showing that to you but also showing the reasoning of why he believes Nokia did the wrong move. But if we are here to really develop a debate and not just confront the best ideas we find to defend our passions we pretend to hide then we should DO THE SAME and state WHICH ARE OUR PASSIONS AND WHY ARE THEM OUR PASSIONS!

As I did it here, many and many times before, I loved old Nokia because they used to make good and strong phones, easy to use and completely open to user's desire to explore it deeply in the way he thinks is the best for himself. In my opinion Nokia was a truly Community Dominated Brand.

I also hate Apple because it does the opposite and controls the device more in Apple's favour then in the owner's favor. Even if the owner is the guy who pays the bill. Which in my point of view is absurd. Anyway...

I'm an open source advocate and my belief of why Nokia should have stayed with MeeGo and Qt is because I believe the more open, the more flexible and the more the ecosystem empowers the user and other players the more the ecosystem has adoption.

That, is obviously a belief not a proven fact. It makes sense but in some times it works like that and on some time it doesn't. In the case of Android, for example, that belief makes perfect sense since was Android's flexibility that made Android attractive for OEM's and Carriers and then users.

The reason why I believe Nokia will stay on this death spiral is because Microsoft's strategy for mobile is aiming the wrong objectives. Their strategy is not based on exploring Mobile possibilities but ensuring the best Microsoft products will be linked on only one ecosystem specially designed for the benefit of Microsoft not OEM's, not carriers (remember skype?), not users, even when they depend on OEM's and carriers to deliver the product to the end consumer. No matter if this ecosystem doesn't makes sense (like console games + office + mobile) and if it doesn't generates value to the user. Their goal is making the ecosystem connected to other Microsoft products and also locking the user into this ecosystem. And for making that possible they must make their mobile OS very closed and controlled and that kills the flexibility I love and I believe is necessary for generating value to the user and other players and making this ecosystem rich and adoptable. And that is why I hate WP strategy. Besides that I hate and always hated Microsoft because of this same behavior wherever they put their hands on. Complete parasites who never worry about generating value to the user. Anyway...

Until now what Tomi said is exactly what is happening to Nokia and Microsoft. Their ecosystem has weak adoption and weak relevance due being so unfriendly to other players that not microsoft.. No matter how good or bad is the OS (and yes I tried the WP OS and liked it! it doesn't reminds me to nothing ever made by microsoft!). WP OS has a crappy sales channel as Android is evidently carriers favorite. It has no Mindshare, as Microsoft killed Windows Mobile and the windows brand is also a bad memory to bring into mobile. In OEM's Android is also evidently the favorite, except for Nokia. But while in the US Apple has strong own branded stores Nokia hasn't even a partner carrier. In Europe Nokia is stronger but has already lost a lot of territory in carriers and minds. In japan and developing countries what can we say? Terrible market loss in china and too expensive handsets for India and Brazil and others.

For those reasons going with Microsoft was the wrong move. For that reason going STRICTLY with Microsoft was the worse move. Going strictly with Microsoft and killing own baked OSs was a even worse move. And going strictly with Microsoft which by then and until now has an irrelevant ecosystem, and prematurely killing the largest ecosystem which was also own baked is definitely stupid.

And so many wrong moves coincidentally together makes us think. What if they where not mistakes but if they really intended to do that? What if they aren't the product of an incredibly dumb mind but the product of a incredibly smart mind dedicated to objectives that are not what they should be?

[n900lover]

Poifan:

First, ms isn't stronger partner, actually it's the weakest from them all and just this simple fact renders the whole teaming up absurd.

Sorry, but apps will be always central, and more so as smartphones are becoming main general computing devices. No single company is able to program everything and compete with milions dedicated programmers worldwide, ms is downplaying apps just because it massively lacks in this area (well, in what area he doesn't).

You can control xbox from your phone, that's great. Only questing is who would do that when there is special controller? Are you going to throw away mouse and keyboard when ms releases similar app for windows? And I guarantee to you in few years there will be industry standard way to beam video from your smartphone to tv, so any proprietary locked format tied to xbox is just pointless exercise in old ms thinking. Funny that meego was on its way not just into smartphones and tablets, but crucially also into tvs, cars and other smart appliances. But for ms windows and office is the central thing and smartphone is just accessory designed to boost their main "ecosystem"

Btw, letting the ethical, philosophical and legal questions aside, this standard ms strategy of maintaining users by locking them up in deliberately incompatible formats and systems, limiting their choices, works only when you created the market and you have 90 % share of it for two decades, not when you are ten years late to the party, have ~ 2 % share and decreasing. But ms doesn't know better and apparently Elop is ms brainchild.

[Poifan]

n900Lover, a couple of clarifications. I WISH Nokia could have gone the open route with Meego, it would have been the right move 2-3 years ago. But not being able to deliver until 2011 they were too late. For better or for worse, the dominant players (Apple and Android) are locking in their customers with extended ecosystems that client only players like Nokia and RIM can't hope to compete with. Apps are important, but it's a checkbox item, not an innovation at this point. WP7 has many more blue chip apps at this point than Symbian or Meego.

I'm no big MS fan, but I think your hatred of them is a bit over the top. There is a standard for connecting devices already; it's called DLNA and it's what Microsoft uses between devices and pcs and works with non-MS products like Televisions, AV Receivers, and Nokia phones. It's Apple with AirPlay that is playing with incompatible formats and interfaces. And MS can't be so proprietary if their biggest play, PCs allow both critical Apple (iTunes, iCloud) and Google (Chrome, Android dev tools) components to work on their platform.