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« Some Cases of Mobile Advertising Excellence from Around the World | Main | How To Surrender War of Ecosystems - Nokia's Elop Sets Ever More Platforms on Fire: Nokia Money killed today »

March 08, 2012



Windows 8 tablets will be failure. Win8 Desktop version is a mess. Unifying all different form-factor/purpose devices under one UI scheme is idiotic. Another fiasco waiting to happen. Maybe we will see the last of MS after the debacle. Btw, MS is a bureaucratic monster no better than Nokia, if you know anything about MS.

Henry Sinn

My punt is "a few months" before there's blood on the street. Elop's blood.
Something has to break - soon..
How mad is mad?

How long do you give him?

How long do you give him?


Blackberry was also growing like crazy until the point that it wasn't and is about to hit freefall like Nokia. Meego was never a competitive OS and Nokia would have fallen just as fast.

Does anybody sincerely think that Nokia was going to keep their market lead with their terrible OS's if Elop wasn't around. The Nokia freefall was about to happen which is why the Nokia Board approved everything Elop did. MeeGo and Symbian are not competitve OS's in any sense to iOS or Android.

As for tablets, the reason why Nokia is looking at Tablets is because there is an integrated ecosystem that they need to compete with in iOS. If you buy an iPad, you are more likely to buy an iPhone with iCloud, compatible apps etc... which hits Nokia - and others - directly in their core market in smartphones. Tablets are a more defensive move because of the market size - as you rightly point out Tomi - but they are necessary.

Tomi T Ahonen

Hi all, lets do this in two parts, as Baron ran a whole litany of nonsense

Baron - ok, once again. I appreciate your opinions, you are entitled to them but you know I deal with facts. And where we have facts, opinions are pretty pointless. So just quickly - Elop clearly outlined his future plans ie strategy forward. Tablets have FAILED for EVERY pure handset maker. Only PC makers have managed to make success out of tablets. Some coincidence perhaps? But would be suicidal for Nokia to divert valuable R&D resources to tablets now, when their vital smartphone unit is bleeding. As to what might happen, anything might happen. I am warning tablets and eReaders are suicidal move by Nokia, will go exactly like Moto and RIM - if not worse.

That tablets sold in electronics stores and department stores, is irrelevant to Nokia sales - because MOST Nokia handset sales is via carrier stores - and you know this Baron. Why this silly point? QWERTY - facts again. Go visit India and China, tons of QWERTY phones. I deal with facts.

Why Nokia is failing now is ONLY one reason. Because Elop shifted away from moderately successful - but IMPROVING strategy on Symbian and MeeGo. Nokia was GROWING unit sales, GROWING revenues, GROWING average sales prices and most importantly GROWING profits until Elop announced his mad switch away from that, now since Feb of 2011, Nokia declining unit sales, declining revenues, declining average sales prices and increasing LOSSES. Everything that was (moderately) good (but becoming better) has turned to disaster. Nokia's share price grew 11% in the first 5 months Elop was in charge executing that old strategy, they have fallen 55% since he changed the strategy. The facts - Baron I deal with facts - are that it was Elop's comprehensive change to Nokia strategy that caused this damage. I said so last year in February. Why don't you go Baron and read Nokia's 20-F statement.

I do totally agree with you that Nokia used to have a slow-moving culture. It did not ruin Nokia but it did mean Nokia was slow to capitalize on many opportunities. That was what I wrote here a year ago that Nokia had to fix. That was what Elop was hired to fix.

Ford? I list several car companies and you list one. You can't generalize from one example if I list several. Give me some more. Most car makers are going in the opposite direction and you know it Baron.

I really am hesitant to bother to reply to your childish comments Baron if you don't at least attempt to stick to facts. Now I'll move to the others who commented

Tomi Ahonen :-)

Tomi T Ahonen

Hi imhods, Henry and Vikram

imhods - I hear you, but I am not so quick to say Win8 tablets would be a failure overall. A good PC maker/laptop maker like say HP or Toshiba or Acer or Lenovo could well do good tablets too. They all are enviously looking at Apple's massive profits and want some of that.

I agree Microsoft is notoriously bureaucratic. But they also are in the game for hte long run and I am far more confident they will continue to dominate the legacy PC side of the ICT industry, unfortunately that is the diminishing portion of the industry. As Apple is now talking of the 'post PC era' haha..

Henry - I so totally agree with you. I keep trying to do my part here on this blog and I know often my articles here do get mentioned at Finnish papers and every so often picked up by some UK and US news services but the outrage is not there. Other tech giants have fired incompetent CEO's for far less than what Elop has done to Nokia. I am hoping Nokia's Board would want to save Nokia and fire Elop for incompetence. Lets see if that happens before Nokia as we know it, is gone.

Vikram - have you seen the reviews of MeeGo? The actual user reviews of the tech press are universally glowing, very often saying not only that its the best phone and OS ever by Nokia, but often saying the N9 is the best phone ever and MeeGo is better than iOS. This is not my opinion, it is what actual tech reviewers write about MeeGo. Lumia gets nothing like it from actual users. And now the 808 PureView shows the real power of Symbian, the tech specs on that phone are years ahead of what Windows Phone can deliver. Symbian was not long-term sustainable, I agree, but unless Elop did his hara-kiri suicide move last February, Symbian would easily have outsold Apple and Samsung in 2011, Nokia easily continuing as the biggest smartphone maker. But I agree, not long-term viable - that is what MeeGo was for, obviously. Is it NOT moronic in your mind, that Nokia CEO refuses to sell the MOST DESIRABLE Nokia phone ever - right now when Nokia's smartphone unit is generating a loss?

As to tablets and competing with iOS. Vikram, you didn't get my point about Porsche vs Toyota. Nokia's primary competitor IS NOT APPLE. And Nokia would be supremely idiotic to abandon all of its markets to focus only on Apple and attempt to mimick Apple. Nokia can do far FAR far cheaper phones than Apple can hope for - that is where the next billions of phones are sold. Nokia can do far more EXPENSIVE phones than Apple, look at the 808 PureView for example. If you Vikram think that Nokia should target Apple and not Samsung, Nokia will die. Nokia's real rival is Samsung, the biggest competitor that can more-or-less match Nokia's broad product portfolio and global sales footprint at nearly 600 carriers/operators. Only Samsung.

Thank you all for writing

Tomi Ahonen :-)


I always thought Elop opted for Windows Phone 7 to gain marketshare in top end segment of the market but now he is doing completely opposite of it. Two out of four Lumia handsets are Lower end smartphone and priced to compete against Symbian phones.
Look at the recently launched Lumia 610 which has a 800Mhz processor & 256mb RAM which lower than the current gen Symbian phones and leave symbian even S40 is now coming with a 1GHz processors.
I won't even call Lumia 610 a proper smartphone because it can't even multitask, Nokia its 2012 cheap phones like Galaxy Y & Nokia 500 can multitask with similar specifications why can't your Lumia 610 can't.

I find very stupid of any current Nokia feature phone user to upgrade from S40 to Windows Phone 7.

* 1st there is no familiarity between the two UI's. Symbian & MeeGo looks much more familiar to S40 and makes easy for user to upgrade and learning them is much more fast then WP7.

* 2nd upgrading from S40 to WP7 users are end up loosing functionality rather than gaining.
No bluetooth file transfer.
No USB copy paste.
No USB on the GO.
No file downloading via browser (except few formats).
No memory card support.

* 3rd better Android phones in the market at less price and better hardware.

WP7 strategy is utter failure for Nokia and no one is willing to buy phones with stupid looking Metro UI atleast real Nokia fans prefer to buy N9 or PureView.

laszlo kovari

Elop was hired without a concept for any kind of strategy (corporate, business, product). He didn't bring a concept and the board hadn't had have any...and since creating one never became a priority the game has shifted automatically and entirely to the product domain which is a game they can't win precisely because there is no concept behind the moves. Typical: time for reflection under pressing circumstances when there is no time.

Tomi T Ahonen

Patrick - I removed your comment as it clearly had several statements that were already refuted in the original blog article. Please read the blog article FIRST, then please repost your comment after that. I know you made several good comments and you probably didn't know I have a rule here, that any comment that reflects that the person didn't read the blog will be automatically deleted. Please repost after you read the above blog, not only the exchange between Baron and me here in the comments.

Tomi Ahonen :-)


"Tablets are a tiny market niche compared to all portable PCs"
That was before the iPad.

Another prediction:
"the day when the tablet market (by units) will exceed that of traditional PCs will come sometime in the fall of 2013."


about N9, how good N9 is?
For a platform that were cosidered DoA (Dead on Arrival),
N9 is rank 13 in GSMArena:
How good Lumia 800? not even half good in user interest.

How good Microsoft Platform were?
Microsoft just kill the WM Marketplace, and tell the user to move on to WP7.
Would this ex-MS fanboy buy/upgrade to WP7/WP8? Probably?
But I'm sure a certain percentage of them will be outraged by this decision and switch platform.
and PS: In WM you can sideload apps, but in WP7 you must download app from Microsot Marketplace.


The analysis could be a bit more nuanced.

1. The famed "ecosystems" are not about mobile phones, but about computing: phones, tablets, PC, gaming machines, MP3 players, TV, e-book readers. Apple is present in most of these, and unifying its platforms. Microsoft is too, and doing the same. Google is inconsistently present in several of these. Samsung manufactures PC, tablets, phones, TV, and doing well. I also thought that RIM forays into tablets was madness, but in retrospect I think they were trying to extend their ecosystem which was becoming too exiguous; to survive as a major, leading player, one can no longer be limited to mobile phones.

This being said: Nokia has little experience outside phones (e.g. 3G Booklet), which it probably lost when the people involved departed anyway, and precious few resources to extend its product line-up. So tablets would be useful and even necessary to regain dominance, but it is a no-can-do at present.

2. Paring down the product line-up is probably a good thing if and only if it is accompanied by a re-balancing of the portfolio. Many similar touchscreen slabs, but very few qwerty terminals, and a disappearance of communicator-style and traditional keypad devices. Nokia could indeed pare down the first category to avoid duplicates (they already cancelled the 600 for instance), and provide a few more models in the other categories.

3. Location: unclear what Nokia really wants to do there. Navteq is really good, but has not been exactly a profit maker, for instance. They could start by using this asset a bit better.


ComScore numbers out yesterday last qtr USA # 13yr+ smartphone subscribers Windows Phone share drops 1% from 5.4% to 4.4% (Symbian drops only 0.1%)add to that the disaster that is TANGO with it's 1990 feature set and restrictions, PLUS the Nokia credit downgrade. A clear indication that Elop and his strategy are DOOOOOOOOOOOMED!

Oh and the N9 bug tracker was closed yesterday = Elop really killed MeeGo


How good is Meego ?
It's Linux based, and Linux proved to be reliable and quite versatile : one can see it in servers, in PCs, in few cellphones, in medical systems and even in ovens or avionics. I think this os' range can be trusted.

I have a N9, that was a pain in the... that was painful to get, from Australia as my contacts in Russia couldn't easily access it (thank you Stephen for closing 95% of Nokia stores, you exactly know how to get products to your customers!).

What's incredible with Meego, is that it's highly customizable... but what's sad is that most of this personalization is hidden if not de-activated; it has a FM transmitter, but it's unusable : no antenna no interface. It has a front facing camera, but nothing to use it. It can have a dynamic wallpaper, but one has to go deeply in the terminal or download a 3rd party program to use it.
OS updates are managed erratically (as for Symbian), as many consumers complain.

Everything is done to kill the OS, to make it less desirable than it is.

Now Microsoft : I can't predict MS' future.

It has a strong base of customers, CEOs, IT directors who are not courageous enough to spend money on changing the OS, preferring to stick to Windows, even if it's as expensive (most companies I know in two continents still use venerable XP, not ready to change for Vista, 7 or even 8.)

However, everything is possible; remember what happened to GM, despite their captive customer pools (administrations) in North/Central Americas, in the UK and in Australia?
Why couldn't it happen to Microsoft (what is quite scary considering what happened to SAAB, and what could happen to Nokia) ?

Windows is still strong, but Microsoft is making a lot of mistakes :
Most of time, they don't know their own products as they come from other companies they bought before firing all their employees (MS-Dos, Microsoft Project, Sharepoint, add ons in Windows, Microsoft Flight Simulator... just look at who registered patents before they bought them, and you'll see.)

The latter case - Flight Simulator - is significant; it used to be one of the best existing simulators, and MS decided to bash it, firing people working on it. Some years later, they release MS Flight which is unliked and misunderstood product.

So MS did a lot of mistakes lately, and Apple, though still a small player in PC sales is growing slowly, but surely, even in places where it's not expected (China, Wild Russia...)

What I think Stephen Elop (and Microsoft) didn't understood about Nokia, is that we - customers - like it for the same reasons we used to like SAAB (except SAABs used to be too expensive to most people) : they used to make brilliant and innovative products, full of details that could please users even if they weren't of primary importance.

Now Nokia is BBB- rated with a negative outlook, which means it will be hard for the company to invest without Microsoft's help.

The patient is kept artificially alive by Microsoft, but sooner or later someone will turn the respirator off... and believe me, the affection I have for the company is much more painful to me that the thousands of Euros I lost buying Nokia shares.


@vladkr: "It has a front facing camera" - in fact, with PR1.2 you can make video call using the FFC via GTalk (at the moment).
See e.g.:

another patrick

I didn't read the blog but only the comments and because I post a comment without reading the blog I break your f***ing rule so could you delete this comment MoFo?


Nokia’s risk factor: Windows Phone could “significantly impair our ability to compete effectively in the smartphone market”

Outlined on Page 13 of the report are Nokia’s risk factors, and they are many. The company acknowledges that Windows Phone may be a precarious investment, and though it is earning $250 million every quarter from Microsoft in exchange for Nokia’s smartphone commitment, the company is weary at best of the plan.

"Our plans to introduce and bring to market quantities of attractive, competitively priced Nokia products with Windows Phone that receive broad market acceptance and are positively differentiated from competitors’ products, both outside and within the Windows Phone ecosystem are subject to certain risks and uncertainties, which could, either individually or together, significantly impair our ability to compete effectively in the smartphone market."

The report goes on to say, in no uncertain terms, that unless Nokia can pull a rabbit out of a hat and make Windows Phone an attractive ecosystem for developers, the chance of the company regretting its decision to get into bed with Microsoft is pretty high.

Finally, perhaps the saddest and most emotional paragraph ever written in an annual report:

"In choosing to adopt Windows Phone as our primary smartphone platform, we may forgo more competitive alternatives achieving greater and faster acceptance in the smartphone market. If the benefits of the Microsoft partnership do not materialize as expected, more competitive alternatives may not be available to us in a timely manner, or at all."

If you’re interested in a candid look into Nokia’a current headspace, this SEC filing a great read.


More Microsoft risks, from Nokia's report:

"Our partnership with Microsoft is subject to certain risks and uncertainties, which could, either individually or together, significantly impair our ability to compete effectively in the smartphone market.

A further change in smartphone strategy could be costly and further adversely affect our market share, competitiveness and profitability. Risks and uncertainties related to our partnership with Microsoft include the following:

• The agreements with Microsoft may include terms that prove unfavorable to us.
• We may not succeed in creating a profitable business model as we transition from our royalty free smartphone platform to the royalty-based Windows Phone platform due to, among other things, our inability to offset our higher cost of sales resulting from our software royalty payments to Microsoft with new revenue sources and a reduction of our operating expenses, particularly our research and development expenses.
• The implementation and ongoing fostering and development of the Microsoft partnership may cause disruption and dissatisfaction among employees reducing their motivation, morale and productivity, causing inefficiencies and other problems across the organization and leading to the loss of key personnel and the related costs in dealing with such matters. [THIS IS ALREADY HAPPENING]
• We may not have or be able to recruit, retain and motivate appropriately skilled employees to implement successfully our strategies in relation to the Windows Phone platform and to work effectively and efficiently with Microsoft and the related ecosystem.
• New business models require access and sometimes possession of consumer data. If we do not have such access within our own control, this may hinder our ability to pursue such opportunities.
• The implementation and ongoing fostering and development of the Microsoft partnership may cause dissatisfaction and adversely affect the terms on which we do business with our other partners, mobile operators, distributors and suppliers, or foreclose the ability to do business with new partners, mobile operators, distributors and suppliers. [THIS IS ALREADY HAPPENING]

We have a number of competitive strengths that have historically contributed significantly to our sales and profitability. These include our scale, our differentiating brand, our world-class manufacturing and logistics system, the industry’s largest distribution network and our strong relationships with our mobile operator and distributor customers. Going forward, these strengths are critical core competencies that we bring to the partnership with Microsoft and the implementation of our Windows Phone smartphone strategy. Our ability to maintain and leverage these strengths also continues to be important to our competitiveness in the feature phone market.

As discussed above, however, the Microsoft partnership and the adoption of Windows Phone as our primary smartphone platform are subject to certain risks and uncertainties. Several of those risks and uncertainties relate to whether our mobile operator and distributor customers and consumers will be satisfied with our current strategy and partnership with Microsoft going forward. If those risks materialize and mobile operator and distributor customers and consumers as a consequence reduce their support and purchases of our mobile products, this would reduce our market share and net sales and in turn may erode our scale, brand, manufacturing and logistics, distribution and customer relations. The erosion of those strengths would impair our competitiveness in the mobile products market and our ability to execute successfully our new strategy and to realize fully the expected benefits of the Microsoft partnership. [THIS IS ALREADY HAPPENING]


Baron95: It would be interesting to hear your views on Nokia's potential in location based services? Clearly protecting the Navteq acquisition (made before Elop took over) plays a part here.


Tomi, I appreciate that you gather mostly facts. But facts look at the present or the past, not the future. One needs to perceive trends from the facts that may help forecast the future.

Facts are like the scores and statistics in sports. One can look at them and try to forecast the future. But it's just as important to look at how the game is being played to figure out how it will be played in the future.

I say all this because I think the mobile market is changing. Even you say that someday, almost all phones will be "smartphones". And you based that on a trend that you derived from facts (growing unit sales). But we need to also look at what is driving those unit sales. And at the increasing diversity and range of smartphones. The difference between a low-end smartphone and high-end featurephone today is much different than it was 4 years ago. So what is being measured by smartphone unit sales is changing.

So to keep this short, I believe that the ecosystem is becoming a more important driver of profitable smartphones, as Baron and anobserver have pointed out. And that's why Nokia has chosen Windows Phone and is interested in tablets. More later.

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