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« Mo Mobile mAdness - Ecosystem-Elop Sells Nokia Mobile Ad Unit (??? - True!) | Main | No Straight Lines: an open access participatory book »

February 10, 2012

Comments

Nth

Tomi, one year later, in NASDAQ ( http://www.nasdaq.com/symbol/nok/interactive-chart ) we can see how the share prices went from 11.7$ to 5$ in one year. A ruin for trusting investors.

gzost

Qt on WP - nice idea, but the first thing Microsoft always does is push its own developer tools and runtimes. Further the announcement was about the now - and WP was (and is) a work in progress. Porting Qt would have been a sideshow that detracted from more important projects. The same goes for a Symbian application compatibility layer.
Additionally:
Compatibility layers are never easy. The historically grown muddle that is Symbian would have been very hard to pull of on another platform. Just look at all the little problems that Symbian has running Symbian applications across devices and different versions of the OS.
Compatibility layers cost - processor cycles, RAM, battery drain. Hobbling a new OS with these disadvantages, when smartphones are constrained on all three fronts would have been a recipe for disaster.
Compatibility layers don't solve the interface issue. Symbian and WP have completely different UI look & feel. Symbian applications on WP would have felt alien.
Compatibility layers can't add abilities that the underlying OS doesn't have. File access, some bluetooth services, background processes - a lot of things were just not possible on WP, and the best effort at a compatibility layer would not have enabled applications that depend on these abilities to run.
Compatibility layers take time. Even the time until the launch of the first Nokia WP devices would likely not have been enough to achieve what was technically possible.
In short: a compatibility layer would have been an incredibly costly effort that would have enabled some applications to run in an alien environment, often working badly and at odds with the entire rest of the OS, and would most likely have been too late to have any effect.
Microsoft were far better off putting their efforts in improving WP. At the time of the announcement at least, for Nokia the better strategy was to extract what value there was still in Symbian, and concentrate their efforts there.

ZeeGo

Loved your memo of the burning platform memo. I love Nokia too and my heart breaks when I see a Trojan Horse (Elop) welcomed in this precious Finnish treasure chest. His agenda seems to be to run the Nokia stock down to the point where Microsoft can acquire it with pennies...

Everything that Elop has done has gone wrong. The recent announcement of layoffs (1000 people in one tiny town) will destroy more than just Nokia stock. Many young professionals' lives will take a turn from bad to worse..

Someone needs to save Nokia. Who will it be ?

If Nokia cannot be saved.. I suggest the former Nokians come together and form a new company that can take on anything... Including Microsoft dumbphones..

cycnus

@Zeego

I have the same feeling as you. but the problem with your idea is patent. The new company would not have any intellectual property to fight nokia/microsoft.

right now, only google can fight nokia/microsoft.

cycnus

@gzost

search google.... QT android
a SOLE (1 person) developer make QT compatible with android in 1 year on his SPARE TIME.

if nokia want to make QT compatible with WP is piece of cake. especially when QT is compatible with WM (windows mobile).

cycnus

@Baron

of course Microsoft offer is better than Google offer, because Microsoft doesn't have any good things. It's like when in war, Microsoft offer anyone to be his partner and giving tons of gold because Microsoft don't have any weapon. Where as Google has great ecosystem.

When Elop choose Microsoft and said he choose MS because MS can offer Nokia better deal, it just like saying "hey, we're gonna corporate with those looser because with MS we were the star, but if we gone android, we're just another guy.", in which he meant, MS sucks.

Klas

I also think that qt on WP7 is a long shot, but however there may be a chance for qt since there is quite high probability that the developer story for WP8 is going to change a bit when they change to the minwin kernel and migrate to WinRT developer API:s.

Also a as a interested bystander in the mobile world it was a very interesting epic rant to read, even though I disagree on several points. Personally I feel that Elop made the right call to move onto another platform, and for Nokia WP was a better choice since the Android space already very crowded commoditized where margins seems to be vary thin. You only have to look at the latest quarters from HTC to see this. This has probably been great for the customer but not that good for manufacturers, for example Apple may only have a market share in the smartphone space of about 20 % but up to 80 % of the profits in the industry. However, Nokia may suffer the same problem as Android manufacturers in the long run since they are no longer in control of their own platform.

If Nokia's option were to go with Symbian/Meego or WP7 then the real battle would have been between Meego and WP. Had they gone the Meego route Symbian would probaly have had a longer shelf life than it looks now, but the question is whether or not Meego would have taken of. Personally and to clarify as a Swede interested in smartphones there weren't many phones between 2007-2011 that interested me before the N9 and Lumia N800. The N900 in 2009 looked interesting but was clumsy in comparison to Android phones such as the HTC Hero, Galaxy Spica and the iPhone 3GS. In the short term Meego would perhaps have sold better than WP, but with Microsoft's deep pockets and fierceness competition from iOS and Android the Meego platform would probably have stagnated in a couple of years.

cycnus

@Klas

go to gsmarena.com, and watch top 5 phone of the day stats. you'll be amaze to see that N9 always in there between top 1 - 5. Whereas the Nokia 800/710 only show in there for a brief 3-5 days after introduction. After that, no one really interested in it.

Choosing WP7 is NOT the same as choosing android. In android nokia could also control the outcome because android is open source and manufacture can innovate (read: change the UI, etc.... see kindle fire), whereas in WP7 there is no room for differentiation (read: only become the OEM of mickysoft).

J. Vahe

Nokiaa tuntematta ihmettelin "tiedottamista" jo tuoreeltaan. (Kai täällä joku sentään suomeakin ymmärtää?) http://vanhanaikainen.blogit.kauppalehti.fi/blog/22372/nokian-tiedottamisesta

Earendil Star

I remember when I first read about the "Burning Platform" memo, I was left puzzled that a supposed Nokia CEO was obsessed with Apple and Android only, instead of also focusing on Samsung, its closest competitor, the one with the structure most resembling its own.

Nokia has always had little in common with Apple, whose strategy relies on a single phone and very closed and integrated system consisting of hardware, software, apps, media.
Nokia had also no reason to be compared or opposed to Android, an open platform for phones benefitting from Google's free offerings.
On the contrary, Android should have been viewed as and option for Nokia, just as it was for Samsung.

Nokia has always been a phone & telecommunications company similar to Samsung.
With its own very successful ecosystem and with a good innovation history.
Despite what trolls may say, you cannot remain number one for a decade or have Apple paying royalties for your IP, without the ability to innovate, just as Tomi says.

The usual fanbois are saying that Nokia could do nothing (else than choosing WP) and that its future was doomed.
Yet, Samsung, a company very similar to Nokia in the phone arena, was able to prosper very well in the same environment...
Which means that Nokia could have done very well also, by adopting a similar strategy...

By the way, why is everybody comparing Nokia to RIM? RIM is a very distant example from Nokia, a company with a very limited range of offerings compared to Nokia, a very peculiar ecosystem (BB) and with a focus on business customers!
Actually, RIM is a cherry picked example, useful only if your aim is to say that Nokia's trajectory should have necessarily been on the decline if it had continued to pursue its planned strategy (OPK's).
In fact Nokia's Q4 was the first sign of the success of OPK's strategy, and nothing to do with THT Elop.

Why all this confusion?

Fact is, that another aim of the "Burning Platform" memo was that of OBFUSCATING REALITY.
In the memo, Nokia was being depicted as an entity that:
1) had to build / catalise / join an ecosystem -> yet it actually had total control of the FIRST ECOSYSTEM worldwide (including hw, sw, apps, maps, ip, brand, carrier network, you name it)
2) had Apple & Android as its main competitors -> yet its most close competitor was Samsung (which is not even mentioned in the memo)
3) could not improve in execution -> which apparently is not true, because now even the trolls are saying its execution has vastly improved with THT Elop.
If this is true, then it could have improved also in its Symbian and Maemo strategy, and why not, with Android.

The fact is, that when THT Elop speaks in the memo, his words must be interpreted as those coming from a true blue softie: "We" does not mean Nokia, it means "Microsoft", in relation to "WP"

He is confessing that... WP WAS THE BURNING PLATFORM! Because everything he says only makes sense if it intended as referring to WP.

Where would WP be if it currently had NO NOKIA support? NOWHERE! This is the truth!

THT Elop was the Navy Seals guy sent by Ballmer to storm another platform (Nokia's), setting it to fire and forcing its people to jump in the cold sea.
The cuckoo pushing the eggs and birds from another bird's nest: Nokia's!

Clearly, it is MICROSOFT that wants WP to become the "third ecosystem", with iOS and Android.
It could not have been Nokia: it was already the incumbent. It already had the FIRST ecosystem!

Just think: Nokia, despite all its difficulties, had lots of options to choose from.
Adopt WP. Adopt Android. Adopt a mix of platforms. Anything.
Did Microsoft and WP have this flexibility? NO WAY. Microsoft DESPERATELY needed a CAPTIVE PARTNER, a well recognised brand to adop WP EXCLUSIVELY.
Otherwise WP would have simply added another OEM to the many it already had, with NO SUCCESS in the market WHATSOEVER!!

So: why was Nokia's negotiation with MS so weak? How could it be "conditioned" to do anything by Microsoft?
Remembering that at the time (and today still) WP WAS A HUGE FAILURE IN THE MARKET!?
Nokia had NOTHING to lose from letting WP & Microsoft go:
- one possibility could have been to go on with its Symbian / Maemo / Meego transition, as Tomi so vehemently suggests.
- another could have been to join Android, that was a much better fit than WP in the first place (better HW SW compatibility with Nokia's legacy ecosystem). And no, sorry fanbois, WP does NOT offer any "differentiation" advantage to Nokia (another huge lie being told). With both Android and WP, Nokia becomes a simple OEM. Yet, with Android, Nokia could have maintained a lot of flexibility and still have pushed its REAL ecosystem (like Amazon is doing with the Fire).
- a third could have been to adopt WP in the US only, as was suggested earlier on. An extension of its long standing partnership with MS, but in no way a TOTAL capitulation to MS and WP.
- a fourth could have been to adopt a mix of the above
In NONE of these common sense scenarios Nokia's fall would have been as brutal as it has been ACTUALLY and TO DATE owing to THT Elop moves! NO WAY!

Yet its negotiation with MS was so weak, that it succumbed to any MS's wish, managing to get NO CONCESSIONS BY MS WHATSOEVER!
And sorry fanbois, MONEY GIVEN BY MS TO NOKIA DOES NOT COUNT AS CONCESSION BECAUSE IT IS SIMPLY SUPPORT FOR WP! Marketing costs FOR WP, not Nokia.
Go and look back at the pictures of THT Elop's announcement (with Ballmer as guest star). It will immediately be clear what was going on: Ballmer was still acting as THT Elop's CEO.

One final note: as you may have noticed, I have NEVER said that Symbian, iOS, Android, WP, Meego was BETTER or WORSE than iOS, WP, Android, Meego... BECAUSE IT DOES NOT MATTER AT ALL!
VHS was worse than Betamax, yet it succeeded. The Mac was better than the PC, yet the latter succeeded.
SUCCESS derives from many other factors than simply being "better" or "worse". "Better" or "Worse" is just advertising, fanboi speak. nothing else.

cycnus

@Earendil Star

Nice, but i just want to add something, why only releasing WP7 in the USA... if nokia gonna have 2 platform, why WP7 + with Symbian/Meego or WP7 + android.... Why not Symbian/Meego + android... People of the USA choose android over WP7!!!!

khim

@Baron95: Elop was not "venting frustration" or making poorly thought-out remarks. Everything is part of the plan and very carefully orchestrated. That is how the game is played at that level by the pros.

Oh, sure. On THIS point I agree 100%. The fact that it's 1001th repeat of the same plot does not make it less fascinating.

The story is always the same:
1. Microsoft finds itself in tough position for one reason or another.
2. To save it's hide it finds struggling competitor and forms "strategic alliance".
3. "Strategic alliance" pulls Microsoft's bacon out of hot water, but somehow, ALWAYS WITHOUT MICROSOFT's FAULT fails to do the same with competitor.

There are small variations: sometimes Microsoft actively fights it's former partner (example: IBM - with DOS and OS/2) and just wins "because it's better", sometimes it backstabs it (example: Apple - with Excel and Windows), sometimes it just refuses to deliver critical piece (example: GSI - with Fahrenheit).

I can recall only one time when this gambit failed: second coming of Apple. Microsoft was in hot water with DOJ and desperately needed a phony competitor - the one which was easy to remove later. Foolishly Microsoft went to Apple (perhaps because it had no other choice: all other competitors were dead at this point). Steve and Bill shacked hands and signed "strategic deal" for five years. As usual after five years of dragging it's feet (award-winning MS IE 6.0 was released for Windows in 2001 but even in 2003 Mac still only had MS IE 5.1 without support for XSL, weak DHTML, etc) the time to "accidentally" kill Apple have come... and Microsoft found out that Steve have very, very, long memory: right after the end of five year period instead of dropping on it's knees and begging Microsoft to continue it's "support" Apple presented Safari. Microsoft was not ready to openly confront Apple (because it was "on probation" - as weak as it was just simple refusal to support his only viable competition was too much to try) thus it started "slow sabotage campaign" (MS Office 2007 was only released in 2008 and removed VBA support, for example). We don't know what happened after that but my guess was that after few "friendly" talks between Steve and Bill Micrsoft decided that it's not ready to fight Apple to death. VBA return was promised right away, but in vain hope to stiffle Apple's growth it was only actually delivered in 2011.

Now, back to smartphones. Sure, the game Microsoft played with Nokia (plant shill, sign cabal agreement with trivial "concessions", use "partner" to save your own hide, either kill "partner" when it's no longer needed or leave it to die from blood loss) was brilliant. They even had talks with Google to make everything look more natural! Top-notch game, one of their best. It quite literally saved dying WP7. Will Nokia die or will it survive as a shell of it's former self? Who knows, who cares. Nokia's fate was determined back in September 2010. Microsoft will never allow it to live. It didn't plant shill to see repeat of disastrous Apple story. At best Nokia will be Microsoft's OEM with tiny margins but more likely it'll just die.

But if you want to say that this game was played in the interests of Nokia... then I beg to differ.

@Baron95: Nokia is getting on the order of $250M/quarter from Microsoft, plus special concessions that no one else gets.

WHAT concessions? The right to spend Microsoft's money to advertise Microsoft's Metro? Sorry, this is usual Microsoft's tactic to pressure it's partners: you must do ads of the format we assert or else your sop is withdrawn.

We hear about these amazing concessions every day, yet somehow noone can point what exactly they include.

@Baron95: Google offered nothing to Nokia - just standard terms.

Well, yeah, but...

@Baron95: It is laughable for anyone to think Microsoft would ever allow Qt for Windows phone. You must not know how Microsoft competes and how fiercely they are controlling the Windows Phone developer ecosystem.

So... you are saying that all these AMAZING, SUPEREXCLUSIVE concessions Microsoft don't even include basic stuff? Basic stuff which Android offered from the start? Gosh.

This is stupid. Of course Google felt there are no need to offer any concessions: it's basic offer was ALREADY BETTER then what Elop got from Microsoft with all these "AMAZING CONCESSIONS". I think Google understood what that means: Elop never seriously considered Android. Negotiations with Google were only needed to cover Elop's personal backside for the time when Nokia will die and (or when Elop will be pushed aside - it'll get it's golden parachute, but still will need something to avoid personal lawsuits).

@Earendil Star: They have learned their lesson from Apple.

Heh. So even you admit that healthy Nokia is ABSOLUTELY not in Microsoft's interest: when WP7 will not be platform on it's death knell Nokia will be killed. It'll be easy to do because at this point Microsoft's breadcrumbs will be the only thing keeping it alive. If THIS is what you wanted to say then again: we 100% agree. This is brilliant Microsoft's game. And why not? They are pro, they've had decades to polish it to perfection.

elm70

@Earendil Star -> Excellent comment

@Baron95: Is your little Windows Mobile business that put you some much passion of inventing and change the true in order to support Elop? Or you are directly paid my Microsoft, or some American Lobby ?

Anyhow, I appreciate you stop to wrongly mystify my statement that "Nokia is controlled by American Funds", these funds have huge interest in Microsoft and other American business. As posted before, with link, Dodge + Capital Group, have more then 10% of Nokia shares.

Now, the Memo of Elop, is a clear prove that his intention was to make noise and shock, create a sense of urgency, and in this atmosphere he want to present the new alliance with Microsoft.

Anyhow, Elop did not decided anything, Elop has been chosen by the Nokia "controllers" (the American Funds), for be the new CEO, it was already decided at that point Nokia will have to support Microsoft, it was mandatory for Microsoft get a leg inside the smartphone business, that is also connect to the table business, that is what is taking away money from traditional home PC and laptop-netbook business.

Elop when was nominated CEO was not having any recognition any skills, any merit for become Nokia CEO, at time the #5 most valuable brand in the World ! Elop has been nominated CEO of Nokia just because his good relation with Ballmer, and probably since he was already used by American Lobby in the past for their dirty jobs.

His management of Nokia, with the leaked memo with the collapse of Nokia share value, with turning a profitable company, into a money losing company (without money from Apple and Microsoft, Nokia would have closed the 2011 with a huge deficit), assuming that the company share holder that has the control, are acting in the interest of the company ... in this normal context, Elop as CEO would have been kick out of Nokia the same day that he present his strategy.

Remember, the market sold so many stock of Nokia at the new Nokia strategy, that in few days Nokia lost 30% of capitalization !
This alone tell clear that the chosen strategy was not good for the health of Nokia !

So, if does not make much sense to speak as trojan horse, as good or wrong decision, as how good could have been Symbian or MeeGo ... fact is that fragmented share ownership of Nokia, a sleeping government in Finland, this did help Americans, with "little" money, to take the control of Nokia and made it a slave of Microsoft and American Lobby interests.

Tchuss

e_lm_70

ps: About comparing RIM with Nokia, this is unfair, RIM is losing market share, but is not really selling less unit compared to the past, and on top it is still a profitable company, while Nokia smartphone division is losing money since Q2 2011 (even big money without the IPR from Apple), after Elop self boycotted the Symbian and MeeGo production of Nokia.

No Plan B

Earendil Star: You have 100% agreed with my observations on the subject of Nokia's "partnership" with Microsoft. I struggle to see how anyone who is fully appraised of the situation can fail to acknowledge the capitulation of Nokia's CEO in this Microsoft deal.

BTW, I have read reports that Microsoft has been known to pay people to say positive things about their products in web forums and blogs.

cycnus

@baron95

Thanks god that you were not on UN (United Nation). If you were, I bet you would disband UN and let the anarchy begin. You will let all the country with money and power enslave the small/poor country.

It would be the biggest scandal if Microsoft sabotage nokia for it's own benefit. It would result that microsoft be split into several small company.

and what you said as the game, it's an anarchy and very decisive. If you were the head of the company and you think like that, I won't buy any product from your company at all.

karlim

@Earendil Star @elm70, @cycnus

(Damn the comment system here. Splitting it into 4 parts. 1/4 to start)

None of opposing Tomi here insist that Windows Phone was the only option. I, for one, fully agree that all the options Earendil listed were available to Nokia at the time.

Where we disagree, is the motivation for Windows Phone decision. You insist that nothing, but the Elop/Balmer conspiracy, can explain it. Adding some nefarious American funds and bankers to the equation.

(Btw, how is that working out for those plutocrats. Any significant rise in MSFT stock, that trumps destruction of capital Nokia seen last year? And before you start talking about $5-7 rise we see from last year - are you sure that’s because of Nokia deal and MSFT mobile division which is losing money, and not for profits and future outlook other divisions delivered?)

I simply can not see how such conspiracy can work in real life. Elop did not make the decision of this magnitude in vacuum.

Nokia's board had to be fully briefed about it and all the considerations and reasons for it. During previous 4-6 months, before the deal, when the evaluation process was going on and future strategy options were considered - they were considered at the board level too. Yes, we know that the final board approval came only on the last day. But that approval wasn't any last day surprise/sandbagging surprise by Elop. That was just a final approval of the final draft of what Elop agreed with Balmer, probably with some points to agree to and some other where board won’t ever sign off on. .

At worst, if there is any conceivable way how Elop could have kept the board in the dark about MSFT deal and Nokia’s level of commitment before that- Google’s senior VP Vic Gundrota tweeted early on Feb. 9th that Nokia decided and told Google to take a hike, and they are going with Microsoft.

So board members had at least 2 days to take action. They did nothing.

And all, or at least the majority of the board, agreed to the final decision to go with Windows Phone and drop Symbian/Meego. Agreed to all the terms of the deal. Not a single member resigned in protest to it

karlim

(1/2) Then we have Nokia Senior Management/Leadership team. Most of that team signed off on the new strategy too. Only Alberto Torres resigned or was fired when strategy was announced. A single executive level guy from all of Nokia to resign abruptly, in protest or to be fired. We do not really not know which. For that kind of change in strategy. No one else.

CTO Rich Green left months later. It might have been because of new strategy, it might have been not. We don't know - I heard from several people that it was totally unrelated to it, but I won't insist.

So all of these Nokia board members and most of senior Nokia execs - all of them, for some reason,signed off on the decision to go with Microsoft.

After examining and discussing all the alternatives. And with the total access to all the internal numbers, projections and other things inside Nokia. They had real numbers on Nokia Symbian sales, not shipments pushed into the channel - the actual sales numbers to consumers. The had the true info about the real state of Meego. They had access to best in the world analyst reports about mobile industry trends, which we see only a fraction getting into public domain. They had access to, from what I’ve heard, amazingly detailed competitor intelligence, including models, specs and UX analyst reports.

All of them, for some reason, signed off on the Nokia Microsoft deal. Without lifting a finger (like a leak to the press) to sabotage the deal.

Why do you think they did it?

It can not be for financial reasons/money. Most of them are already rich enough, and will not risk their reputations for some additional cash. If there was some foul play, at least a few of them would have resigned. Or, at least, leaked something to the press. None of them did it.

It can not be because they are dumb. After all, many of those people are the same ones who brought Nokia to the top prior to 2007. Including Jorma Ollila, Nokia's Chairman of the board and former CEO.

R

karlim: "Any significant rise in MSFT stock, that trumps destruction of capital Nokia seen last year?"

They don't have to be trying to make MSFT rise. They could be trying to keep MSFT from falling.

Everybody agrees that Mobile is the next major battlefield in computing, and Microsoft was missing out.

Perhaps the shareholders saw their NOK holdings gradually going down, anyway, and decided to sacrifice one stock to secure the future of the other stock.

karlim

@R Well, that "perhaps" and other stuff trying to find theories and ways this Elop/Balmer/U.S.Funds conspiracy thing should/could work... Especially with a Finnish government involved. That's what makes me so skeptical. I couldn't find any data to support that.

And, btw, isn't Finland a true democracy? With freedom of press and parliamentary committees and commissions, with ways to bring it to EU level where there's no love for MSFT, etc;?

Don't you think they noticed the stuff Tomi is writing about? Checked it and decided that all of that is, frankly, crap? Why else would at least opposition and opposition supportive press stay silent when Nokia is firing thousands of people in Finland? Or do you think U.S. funds bought the whole country?

Sorry - Tomi's system won't let me post anything longer then this now, and there're still 2 more parts of my rant to go :)

karlim

Hmm. There is some time out thing here. Here goes part 3/4 (sorry - there was numbering mistake in previous one)

Then we have Nokia Senior Management/Leadership team. Most of that team signed off on the new strategy too. Only Alberto Torres resigned or was fired when strategy was announced. A single executive level guy from all of Nokia to resign abruptly, in protest or to be fired. We do not really not know which. For that kind of change in strategy. No one else.

CTO Rich Green left months later. It might have been because of new strategy, it might have been not. We don't know - I heard from several people that it was totally unrelated to it, but I won't insist.

So all of these Nokia board members and most of senior Nokia execs - all of them, for some reason,signed off on the decision to go with Microsoft.

After examining and discussing all the alternatives. And with the total access to all the internal numbers, projections and other things inside Nokia. They had real numbers on Nokia Symbian sales, not shipments pushed into the channel - the actual sales numbers to consumers. The had the true info about the real state of Meego. They had access to best in the world analyst reports about mobile industry trends, which we see only a fraction getting into public domain. They had access to, from what I’ve heard, amazingly detailed competitor intelligence, including models, specs and UX analyst reports.

All of them, for some reason, signed off on the Nokia Microsoft deal. Without lifting a finger (like a leak to the press) to sabotage the deal.

Why do you think they did it?

It can not be for financial reasons/money. Most of them are already rich enough, and will not risk their reputations for some additional cash. If there was some foul play, at least a few of them would have resigned. Or, at least, leaked something to the press. None of them did it.

It can not be because they are dumb. After all, many of those people are the same ones who brought Nokia to the top prior to 2007. Including Jorma Ollila, Nokia's Chairman of the board and former CEO.

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