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« Congratulations Mike Short for CBE Honours at Queens Birthday in UK - here his Foreword to my 3rd book | Main | And What Do We Do With Our Mobiles? Some New Survey Data Tells More »

June 28, 2012



Tomi do you think Nokia will sell less smartphones than RIM in Q2?
If i remember well, Nokia sold almost the same as RIM in last quarter, both at 11.x.


RIM's platform is burning. Let's see how they handle it different from Nokia.


RIM went the other way than Nokia, they put all their stakes in their in house developed SW and solutions. The transition to their new OS based on QNX is a really huge threshold get over which has delayed them a lot. I think that this will pay off and they still will be a contender. At least they haven't become a prostitute like Nokia.

In this market RIM have to expect to have a pretty low market share and live with it. They should adjust their company so that it fits their market share and slowly try regain what they have lost.

The Petty Tyrant

It would be interesting to see a comparison of how many employees each phone manufacturer needs in order to sell their phones per quarter.


2013 is just too late, die hard fans will love BB10 but it will quickly fade away. This is basically WebOS all over again, but it will linger longer since RIM has nothing to fall back on


RIM lays off 1/3 its staff? But you need all your staff to roll out a new OS.

Adrian Bunk


You are wrong when you write "So yes, falling from 18% market share to 5% in exactly 24 months, means Blackberry has managed to shred seven out of every ten customers it had two years ago."

It does not, your statement would only be true if the size of the market stayed the same during that time - which is not true here.

In absolute numbers, it is more like RIM lost 3 out of 10 customers it had two years ago.

And absolute numbers are what matters here: If RIM would still sell the same number of devices at the same ASP and employ the same number of people than two years ago, then RIM would be as healty today as it was 2 years ago - even though the market share would be less than half of what it was back then.


RIM will survive thanks to Indonesia, where they have over 50% of market share (population 240M, 4th most populous country) with hordes of BBM fanatic users. The new CEO also seems to handle Asian markets lot better.


While the world's smartphone users went for full touchscreen phones with big screens RIM clung to its old formula of small screens with keypad on the same facial. Companies which can't read and follow consumer trends will be punished. However RIM's decline although sharp is not worse than Nokia.


LOL. RIM followed Tomi's prescription/advice to the letter.

Physical Keyboard.

Native, in-house, differentiated OS/Ecosystem.

Lots of HW variations at different price points for "world markets".

Best platform with the best keyboards for Tomi's beloved SMS/mobile messaging.

Bandwidth efficiency for world markets.

Differentiation for Enterprises (Security) and Consumers BBM.

Yet, it is failing. Ouch!!!

Now we will see how that prescription/advice works when RIM needs to continue investing billions in native SW/Ecosystem development with dwindling sales. It is certain death.

Mr. Elop, of course knew that Nokia sales would collapse. He knew that sooner or later the sales could not carry the Symbian+Meego+Maltemi+S40 development costs, and he let someone else do the SW. They may still die, but they can linger much longer with lower development costs.

RIM has no such option. They will die the second they stop spending massive amounts on internal OS/Ecosystem development.

That is what happens when you get disrupted (Apple) and fail to keep up with the responses to the disruptor (Samsung/Google).

Very predictable. Smart money has departed RIM and NOK a long time ago. Only emotional Canadians, Emotional Finns/Europeans, emotional fan boys are left holding the stock (besides the obvious speculators of an asset/corporate sale).


@Ninvestor, true, Tomi was hailing RIM as the true mobile success story as late as 2010. While it is true that Android's rise coincides with RIM's fall, and Samsung's rise with Nokia's fall, I don't think it is fair to say the iPhone had nothing to do with it. Android is the only OS out there other than iOS that people actively seek out. People settled for Symbian, and to a large extent there are still people who settle on Android.

So the bottom line is that Apple created the first phone and mobile OS that people actively sought out, rather than settled for, in massive quantities. This sent a lot of the OEMs into catch-up mode, including Nokia and RIM, but at the end of the day the only successful alternative that developed was Android, and so it was the biggest beneficiary.


And the worst part, is that RIM and Nokia's decline are feeding into each other in a perverse negative reinforcement loop.

For example, any company interested in acquiring assets (e.g. IP/Patents), is sitting tight to see which one gets more desperate sooner. The price/patent is probably going down. The smart money (Google) already got Motorola's patents. Apple and Microsoft already loaded up on Nortel patents (and Nokia's in the case of MSFT).

Anyone thinking RIM or Nokia assets (like IP/patents) will fetch top price is delusional - that is why the stocks of both are depressed.

I'd not be surprised if RIM opens at $7.50 and Nokia at $2 tomorrow. Both pretty close to liquidation value.

And to think we are only 3-4 months away form iPhone 5, 4-5 months away from JellyBean and Windows 8, Windows 8 RT.

If anyone thinks any other ecosystems will be viable beyond OS X/iOS, Android and Windows 8 a year from now, they have a nasty surprise coming.

Leading Analyst

To be honest, I have never understood the success of BlackBerry.

They were able to productize their emails service to the Americans, who at the time thought that pagers are the uber mobile technology. Hell, even Jay-Z rhymed that "On the country side my BlackBerry still connects" - that was pretty hilarious punch line for a non-american :D

It is amazing how far they were able to fly with this concept. The monoblock-QWERTY was the coolest thing for a few years (Nokia E71 alone sold gazillions) but then quickly died as the trend changed to touch based devices. The devices have always been bad in terms of SW and HW.

Earendil Star

Again astroturfers gone wild.

What is the company that mimicked Nokia's tactics and success, but more efficiently? Samsung.
So, when comparing different strategies and their results, please compare Nokia with Samsung, not RIM.

RIM is a very special beast. They had their success in the corporate world with their very special form factor (full keyboard phones) and capability of being always connected to their email servers, particularly Exchange. This then also spread, for a limited time, also to consumers. I clearly remember when the Pearl came out, it was a cult phone to possess.

Then the iPhone came out, and after a while the paradigm shifted to all touchscreen devices AND to consumers.
Google, which was developing Android à la BB, immediately understood the world was changing, and transformed Android in an iPhone clone. And it ruled thereafter.

RIM tried to respond to this trend with the Storm, but the OS was wanting. Then they went for QNX, but there they failed to deliver: execution, execution, execution! Meanwhile, they tried with the Playbook, that was initially flawed because it could not connect directly, without a BB, and was lacking native email support (!), then when things were improved it was too late to make a change.

Summarizing, we had a company that was very concentrated in a form factor, and was unable to successfully transition to a full touchscreen experience and from the enterprise to consumer.

On the othe hand, Nokia was a completely different beast. Nokia was present on ALL form factors. It was VERY SUCCESSFUL with consumers. AND they had a viable alternative platform & ecosystem ready at YE 2010: Harmattan.

Then, the crazy (for Nokia) choice of adopting WP7 came (yeah, the stopgap POS MS itself is discontinuing after less than two years from its initial October 21, 2010 launch, which itself was discontinuing the previous WM platform).
Nokia chose the smallest OS out there, with the smalles ecosystem, produced by a company that had tried for a decade to matter in mobile unsuccessfully. A company known for bloated software, no innovation (unless when forced by competition), and the tendency to backstab its partners. Furthermore, they chose a platform that annihilated any possibility to differentiate (given the rigidities of the MS approach for WP), and that had NO compatibility whatsoever with their existing production structure (hence the need to outsource HW production to the likes of Compal). So, if Compal is making the HW, where is the Nokia advantage? Why should MS feel obliged to help Nokia, now that it has stolen all it could from Nokia?
Nokia not only partnered with the loser, but also put itself in a terrible negotiating position with it, after giving it all the farm for free. Total fail... or success, depending on what you thing the real THT Elop agenda was.

So, summarising:
1) RIM had a limited offering and a focus on the enterprise, then tried to go the full touchscreen way and consumers, but failed to execute.
2) Unfortunately, the new management is still not improving execution (given the new postponement for QNX), hence their ongoing (and possibly now final) failure.
3) Nokia was very different. They were turning around and had a transition strategy that was ready to deploy. They were strong with consumers and internationally. Their problems: execution, plus they had a negligible presence in the States.
4) Nokia chose (or was forced) to abandon its original and successful strategy and to adopt WP7 EXCLUSIVELY.
5) Catastrophe ensued.

Would the improvement in execution in the original Nokia strategy have worked? We will never know. It was Osborned on February 11, 2011 by THT Elop. The expert in corporate terminations.

Was the WP7 alternative strategy that was put in place successful? This we know for sure: it was a CATASTROPHIC FAILURE for Nokia. Sales have failed. The OS has failed, terminated after less than two years. Nokia's share price has failed.
Yet this was a fundamental lifeline for the WP platform. It was kept into relevance (otherwise it would now be at < 1%).
It was fundamental for MS. It got mobile SW and HW know-how. Carrier relations network. Patents. Maps. Clients.
At what price? Well... for FREE! What a bargain.

Should Nokia have never considered WP? Well, not necessarily. A deployment in the US only, while co-operating with MS (but making NO FREE GIFTS WHATSOEVER), could have been tried. Why not? Even better, they could have gone Android. A much better OS. Years ahead of WP. An OS that allowed for differentiation. An OS that allowed keeping one's own ecosystem (check Amazon or B&N).

Again (and my dear trolls, do not hope I will tire to repeat it), the fishy thing was not necessarily the choice of WP itself (although it now appears a crazy move after WP7 was Osborned by MS itself, and a suspicious move since many are saying that THT Elop KNEW WP7 was a stopgap OS...). The fishy thing is that:
1) Nokia chose to adopt WP7 EXCLUSIVELY
2) Nokia gifted all its competitive advantages (SW & HW know-how in mobile, Carrier Connections, Patents, you name it) to MS

Why did they do so?

Was it because WP7 was a better platform? No. It was so poor it's already dead, killed by its own father, MS.
Was it because WP7 was a huge performer? No. Were it not for Nokia, it would now have faded into oblivion.
Was it because WP7 was the only available strategy? No. I already listed all the other options Nokia had.
Was it because WP7 allowed to differentiate? No. This is a lie. WP7 allowed no differentiation by design, plus it was very limited and could not even support advanced things such as NFC, Pureview Cameras, etc. (which... Symbian! could handle).

Why did they do so? This is the question. And now they are dead.


I think it is misleading to only look at number of phones shipped. Instead we should look at the sell-through rate. It is also not such a good idea to compare just one quarter with the previous.

Let me give you the numbers:

Q4 2011
Blackberries shipped 14.9 million
Sell through 14.5 million

Q1 2012
Blackberries shupped 13.2 million
Sell through 13.3 million

Q4 2012
Blackberries shipped 11.1 million
Sell through 13.6 million

Q1 2013
Blackberries shipped 7.8 million
Sell through 10.5 million

It makes sense to compare Q4 2012 with Q4 2011. Based on shipped numbers there's a decline of 25%. Based on sell-through rate, the decline is "only" 6%.

Then we compare Q1 2013 with Q1 2012. Based on shipped blackberries, there's a decline of 40% (!). Based on sell-through the decline was 21%.

Also RIMM did increase its net cash position from $2.1B to $2.2B from the previous quarter, so they are not heading for bankruptcy anytime soon. They did grow subscriber base from 77 million to 78 million, they did stabilize the decline in North America.

I also find it very possible they sold less phones as people would be waiting for the BB10 before making a new purchase (which they expected to be released this fall).

Overall the situation is not good for RIMM, but it is not as bad as you may suggest. Of course the shorters will manipulate and twist the facts now in an effort to drive share price lower. As an investor in RIMM stock I think now is a good buying opportunity for the long term.

Earendil Star

PS: just to be clear in one of the statements I made in my previous post: when I wrote Nokia should have gone Android, I really meant ALSO Android, as a Plan B, with an Android focus on the States. Symbian + Harmattan should have continued to be the main OSs. Exactly as Samsung is doing with Android + Bada / Tizen, just the other way around.

In this way, Nokia would have continued to be the master of its own destiny.
And given Samsung's success, they would have stood a good chance of succeeding with a similar strategy.

Instead, they chose to put their fate in the hands of MS. A rounding error size company in the mobile space.

Why did they do so? This is the question. And now they are dead.

Sander van der Wal


Elop and the board already knew sales in Europe had collapsed. The in-house replacement wasn't going to be ready in time. So they switched strategy.

Apart from that, no disagreement.

N900 owner

Reuters is suggesting one option for RIM is to join the Windows Phone ecosystem in a partnership with Microsoft. RIM and Microsoft decline to comment, but that sounds familiar somehow.

What do you make of that? Is it likely or FUD?


Reuters writes that RIM is considering an alliance with Microsoft

Hopefully that is just a rumor sourcing from Redmond. If that is true, I am even more confused. What is the actual power MS is using to blackmail poor mobile companies.


RIM will likely license and adapt QT from Nokia

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