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March 28, 2012




"I think there is no such things as Chanel Stuffing. This term were created by Elop in order to cover his incompetence."

It's amazing the things people will believe just to not to admit they are wrong or make up the reason not to blame themselves for poor investment decisions.

They insist on things like "there's no such thing as Channel Stuffing - Elop invented it". Instead of simply entering the term into Google and getting directed to this article there:

And if you'd try - Elop could have wrote it - just check the "History" link there. The article was created in 2005 with the last edit in 2009 - way before Elop came along.

As for RIM/Nokia comparison - me, Baron and others here have insisted on it long ago. And its just amazing how the last quarter proved us right. It's a mirror image of what happened to Nokia a year ago. A continuing decline and market share losses throughout a year, mitigated by gains in emerging markets. With management in denial. A big, unsustainable jump in Q4, and then a crash in Q1 next year.

The only difference is that the strength of Nokia was always the hardware they made - and it is still important nowadays. And a board who saw the need to change 18 months ago. So it still has a chance to survive as an independent company. RIM - with its secure QWERTY keyboards, e-mail and BBM as its key competitive advantages. And a year late to see the need for radical change - not so much


Baron95 and Karlim,

I agree that Nokia was in a slow path to death.

The problem is that Elop accelerated it, with a poor strategy and a terrible execution.

On the strategy side, I mentioned a lot of times: change *was* necessary, but Elop shouldn't have made an exclusive deal with Microsoft. WP7 could be adopted, yes, but he shouldn't bet the future of the company on an unproven operating system. Elop should have adopted Android (which allows far more differentiation than WP7), and, if there were resources for that, develop WP7 as a second option.

On the execution side, I think it is obvious: Elop declared Symbian dead far ahead of the time. He declared that the company future would be WP7 months before he had any products to show. Why did he do that? Because Microsoft needed that. WP7 was in a death spiral, and needed a big announcement. He did it to help Microsoft... er, "the ecosystem".


- Nokia was in a slow path to death, but Elop accelerated it.

- He started with a poor strategy, aggravated with a terrible implementation (the "Elop effect").

- One year later, we are not sure if Nokia will survive.

- And, recognizing that WP7 was a mistake, all expectations lie on Windows 8. (Which is another risky bet).

We can't put *all* the blame on Elop; Nokia had problems before he arrived. But instead of improving the company's prospects, he put Nokia in a much harder position -- tied to a burning platform (oh, the irony), and having to revive alternatives that Elop tried to kill.


Speaking of only touch screen phones and phones with keyboard, I predict a renaissance of phones with keyboard. People will miss the tactile response of a keyboard and a virtual keyboard takes up significant real estate of the display so that often only the edit text widget is visible. There is another benefit of having a slighter thicker phone with keyboard. As people demand better image quality of the camera, the camera housing cannot be reduced without compromising the image quality too much. We have already seen that the camera is bulging out on several popular models. By having a keyboard, a portion of the body will slide out while a portion will contain the camera housing. This way a quality camera can be combined with a keyboard without a bump. Also adding a keyboard will enhance the internet browsing experience as there is no invading keyboard.

A good example of this is Blackberry Torch with a slide out keyboard but is a bit head of its time and the specs are not all that good. So this trend will begin about a year from now when the thin phone trend is fading.


I think I've previously agreed with most of what you wrote: Elop has made several strategic and tactical mistakes. I think Elop should've announced WP7 for a new series of smartphones, aimed at countries in which Nokia had no presence (US, Japan), while touting Symbian upgrades for a while longer. (He could then kill Symbian after WP7 or W8 really got going.)

I'm not sure if picking Android would've helped, or if he really had a choice of both (MSFT resistance). MSFT might not have given him a choice either to keep Symbian alive, but he could've fought back on the grounds that keeping a large user base for the subsequent WP7 transition would be to MSFT's benefit.

But as karlim wrote, we should give credit to Nokia for taking action sooner than RIM. There is a small possibility that RIM's ecosystem-partnership plans turn out to be a better approach than Nokia's partnership with MSFT. But we'll have to wait and see if there are actually any helpful partners out there for RIM.


Like others here, I have a few issues with calling Qt an ecosystem. But besides that, I have some doubts about those sales and installed base figures. As far as I know, Qt does not run on S40 and I don't see how you would reach the high numbers you provide without including that. Even if S40 supports Qt in the future, it'll be more of a matter of new S40 versions being able to support it, rather than Qt being able to run on any S40 device. In other words, the millions of S40 phones out there today do not and will never run Qt. Do correct me if I'm wrong about this.


It appears Nokia's big push for the Lumia 900 in North America will include 3 ads aimed squarely at the iPhone (somewhat taking a page from Samsung). I think that may be the wrong target. Apple users are pretty loyal, and unlike Samsung, Nokia isn't starting from a position of strength. Samsung didn't launch the iPhone attack ads until after it had garnered a substantial share of the Android market.

Perhaps Nokia would be better off aiming for the Android crowd. After all, even if they do take Tomi's advice and spin off the Lumia division, to maximize the proceeds it would help if Lumia has at least moderate success in the US. AT&T seems to be behind it, but since they are also the biggest seller of the iPhone in the US, Android seems to be a better target.


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The center of the Shenzhen electronics market is on Huaqiangbei Road which you can get to through the Futian Crossing via the Lok Ma Chau crossing. The stuff at Luohu is just for the tourists and it's a terrible place to buy electronics.

One thing about shanzhai factories is that they started out as "knock-off" factories, but they are no longer mostly in that business. You can get decent reliability by buying from the same retailer since they know which phones are of good quality and which aren't, and in any case, the phones are cheap enough so that if one breaks, you can get a new one and it's still cheaper.

The reason that MTK phones are interesting is that with fast development times, cheap new MTK phones have features that second hand phones do not. Just this evening, I spotted a new shanzhai phone with a 5 inch screen, Android 4.0, dual sim, with TV and radio. The shanzhai phones in HK are killing the branded phones as far as price/performance goes. Even the reliability is a positive for tech geeks like me. I want the latest technology, and I'm willing to be a beta tester to get it.

@cycnus If this shanzhai company can put a better R&D, have their own brand and quality control, they could emerge to became the small player (but bigger than what they were now).

In China, Shanzhai companies put no effort into branding and QC is minimal. The thing about Shanzhai companies is that they change the structure of the cell phone industry in China. They just assemble the phones, and the design is done elsewhere. However, by using standard chips and software, it's possible for a ten or twenty person phone assembler to feed money back to MediaTek and Google were the heavy design takes place.

Now whether this structure will work anywhere other than Mainland China is an open question. There is some effort by some shanzhai companies to market phones in Hong Kong. However there are so many companies that one of them will come up with something successful.

@SK Tomi focuses on market share with a certain minimum profit to stay in business. The justification is the standard platform requirements - market share brings developers which makes the platform useful and interesting to consumers and therefore viable and vibrant helping the platform owner and developers. A virtuous cycle.

This is why I think the shanzhai factories are interesting. They've outsources the platform to google and mediatek, meaning that you can manufacturer cell phones with ten people in a room.

@SK Essentially I think we will see something similar, the low end phone will imho NOT be called an iPhone Nano at all but something else ...

It's going to be a difficult thing to pull off. Either you sell the new phone in the Apple store or you don't. Either it runs iOS or it doesn't. If you put it into that matrix, it's going to be tricky.

Having said that, Apple has done one very, very clever thing which I don't know is intentional or not. From a distance, it's impossible to
tell if someone has an iPhone 1 or iPhone 4s. What this does is create a resell market in used iPhones. There is a market for used iPhone by people that want the "brand image" without spending so much money.

Tomi T Ahonen

(am on March 29 comments)

Hi Anton, Baron, Manish, Chris

Anton - Thank you! About Nokia's future, no I don't see them near-term as Palm, because of the dumbphones. Nokia's smartphone market is vanishing in every region but the dumbphones keep selling very well. Nokia is still easily the world's biggest handset maker. So I see Nokia's future becoming ever more like Dell, tiny profits on huge volumes of just hardware when the industry is going software and services.

Baron - Motorola's handset unit was collapsing. The company was split into parts, many sold, and the handset unit went to Google. I see exact parallel to Siemens going to BenQ and Palm to HP.

As to me losing my credibility, haha, I lost it years ago. YOU my dear friend and favorite online pest, Baron95, you might lose your credibility if you continue with the silly postings here in the comments haha

Manish - I mention the profit share occasionally, but it is not the means for determining whose platform has best reach - this blog is not a financial analysis blog to help investors, this is a mobile digital convergence blog to help mobile DEVELOPERS who don't care one toss how big Apple's profit is, they care how many pockets they reach if they develop for iPhone or Android or bada or Java or SMS etc.

Chris - 'development environment' haha, you say potato, I say tomato.. As to WP at end of year, I think its safe to say MS will have well better than 2% market share haha. Even if things go catastrophically badly at Nokia and the rest of the WP manufacturers all but bail on WP, they will still have something like 5% safely at end of year. And Ballmer can spin growing from 1% to 5% in one year as the best thing since sliced toast

Tomi Ahonen :-)

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Even the reliability is a positive for tech geeks like me. I want the latest technology, and I'm willing to be a beta tester to get it.

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What this does is create a resell market in used iPhones. There is a market for used iPhone by people that want the "brand image" without spending so much money.

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One thing about shanzhai factories is that they started out as "knock-off" factories, but they are no longer mostly in that business.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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