The Final Reckoning: Burning Platforms Memo Damaged Nokia: Wiped out $13B revenues, Destroyed $4B profits in just 12 months

I really hate doing this, these Nokia blogs make me so sad. But this is history, we have to record it, the facts have to stand. Yes, the Burning Platforms memo was released in early February of last year, but its true cost could not be calculated until now. Now, that we have seen four consecutive full fiscal Quarters of Nokia performance. So this is the Final Reckoning blog about the costliest management memo ever issued. The Burning Platforms memo plunged Nokia into an interminable crash-dive of its smartphone sales (a collapse that is still continuing today 16 months later) and cost Nokia in the immediate next four quarters - 12 months - a massive 13 Billion dollars of lost revenues, and 4 Billion dollars in profits wiped out. So lets examine the issue and call into court, the case of Nokia vs Elop.

Please note, this blog article was written before Today's big layoffs, profit warnings, executive firings etc. I reposted a short comment to fired Nokia staff here: To Fired Nokia Colleagues. And I wrote my first short immediatel update about Nokia news today here: It is worse than I thought. 

Also to my Finnish readers (a few words in Finnish) - Moi! Tama blogi taitaa olla ekaa kertaa kaikilla Suomen suurilla uutislahteilla nyt, Maikkari, YLE ja Verkkouutiset viittaavat jo suoraan tahan artikkeliin (och sa HBL !). Taloussanomilla on minun haastattelu, ja Kauppalehden ja DVD Plaza keskustelusivuilla on myos vilkasta keskustelua tasta artikkelista. Tervetuloa kaikille, olen entinen Nokialainen ja entinen Elisalainen, nyt asun taalla Hongkkarissa teknologia-kirjailijana. Kaikille Suomalaisille, lukekaa taman artikkelin jalkeen myos minun lyhyt kommentointi tana-aamuisista uutisista. Esim Ulm uutiset Saksasta ovat 'mielenkiintoisia' jne. (now we return to English)

Some of the facts are not in dispute. The Burning Platforms memo did cause irreparable damage to Nokia smartphone sales. The matter is accepted by CEO Stephen Elop himself - he openly admitted to the Nokia Shareholders conference in May that yes, his Burning Platforms memo did damage Nokia Symbian smartphone sales. So there is no argument whatsoever whether the Memo was good or bad - it was devastating - and Elop admits it damaged Nokia smartphone sales. But how much did it damage Nokia. Now its time for the Final Reckoning. One last blog about the costiest management memo of all time - which was the first in a long series of managment blunders by Nokia's new CEO, Stephen Elop, the most incompetent and damaging CEO of any Fortune 500 sized company in corporate history, which he then added to in what I call the Elop Effect, and then continued with some bad edicts (the naming mess), to feuding with the retail channel, to some strategic whoppers like refusing to release to Nokia's best markets, Nokia's best-loved handset ever, the N9 which runs on MeeGo, to poisoning Nokia carrier relations, to the botched launches of the Lumia series running on Windows Phone. But this blog is not a catalog of Elop's Errors. It is about the Burning Platforms memo, only. Lets go to the evidence. (First to the witness stand: The accused, Stephen Elop:)

ELOP ADMITS MEMO DAMAGED NOKIA SALES, THEN LIES TO COVER UP EXTENT OF HIS ERROR

So lets start with the admission. The Nokia-oriented MyNokiaBlog covers Elop's admission in the best English-version text that I have seen of this part of the Nokia Shareholder's meeting, but this is not a verbatim quotation of what he said, it is reporting of what he said (and unfortunately for this passage, we do not have video). MNB writes:

"On Symbian and the Burning Platform memo. Asked about did he think it hurt Symbian, Elop said he believes it did hurt Symbian. He was being frank about it. He maintained that Symbian was undeniably on a downward trajectory and was being rejected by more and more markets in their assessment before February 11th." 

So Nokia CEO Stephen Elop has admitted 'being frank about it' as MNB comments - Elop admitted that yes, his believes yes, the Burning Platforms memo of early February 2011 did hurt Nokia Symbian sales. So first, there is no question, no argument, no debate anymore on this issue. Nokia CEO has himself admitted his own Burning Platforms memo did damage Nokia's smartphone sales. Period. Case closed. (Judge: Did you break that window. Accused: Yes, I did, but there was other damage to the house that had been done before I broke the window.)

But Elop is Elop the silver-tongued devil who has to spin things. So he then tried to give lies to cover his tail. He claimed (according to MNB reporting)  "Symbian was undeniably on a downward trajectory and was being rejected by more and more markets in their assessment before February 11th.: 

PAGING TRUTH POLICE

(The prosecutor steps up with some cross-examination and some devastating rebuttal evidence.) Was it? Here are Nokia official results, the latest full quarter for which we have data, Q4 of 2010, just before the Burning Platforms memo and in official Nokia documents dated January 27, literally two weeks before the Burning Platforms memo was released:

Quarter 3 2010 Symbian based Nokia smartphone sales: 26.5 M units and 3.6 B Euros revenues;
Nokia smartphone Average Sales Price 136 Euros, profits in smarpthone unit 335 M Euros

Quarter 4 2010 Symbian based Nokia smarpthone sales: 28.3 M units and 4.4 B Euros revenues;
Nokia smartphone Average Sales Price 155 Euros, profits in smarpthone unit 548 M Euros

The Nokia Symbian based smartphone sales grew - not declined, grew - unit sales (the first measure of performance). The Nokia Symbian based smartphone sales grew - not declined, grew - revenues (the second measure of performance). The Nokia Symbian based smartphone sales grew - not declined, grew - average sales prices (the third measure of performance). And Nokia Symbian based smartphones grew - not declined, grew - profit (the fourth and last measure of performance). By every measure that the industry uses, Nokia Symbian smartphone sales grew from Q3 of 2010 to Q4 of 2010, literally the last full quarter before Elop released his Burning Platforms memo. When he says "Symbian was undeniably on a downward trajectory" - Elop was lying. Blatantly lying. His own numbers from Nokia official Quarterly results tell the opposite story. Nokia Symbian smartphone sales by EVERY measure grew (this was long before any Microsoft smartphones existed at Nokia). And they grew not just a little bit.

Nokia Symbian smartphone sales by units sold grew not just a little, they grew 7% in just one quarter. In most well-established businesses to grow 7% in one year is considered good. What of revenues? The smartphone unit grew revenues not just a little, they grew by 22% in just one quarter. The average sales price - which traditionally for Nokia had been falling by 7% per quarter, as Nokia pursued the mass market low-cost smartphone customers - reversed the decline and grew not just a little, they jumped up by a Nokia-record of 14% (effectively 21% reversal from trend, enormous leap in one quarter) and best of all, the profits? The Nokia Symbian smartphone unit profits jumped grew not just a little - Nokia smartphone unit profits grew by a Nokia record leap in any one quarter of 65% !!!!!

Mr Elop. You are a liar! Nokia Symbian smartphone sales were not anything like "undeniably on a downward trajectory." Shame on you, a CEO of a publically traded company. You should be investigated for misleading your shareholders! But maybe his second comment has merit? MNB reported that Elop continued his excuse lies by saying Symbian: "was being rejected by more and more markets".

Was it? (the cool prosecuting attorney gets up with a new line of questioning and more damaging evidence) Nokia Q4 results tell a different story. Nokia does not break out the smartphone/dumbphone mix per region, but the overall markets by the 6 reporting regions for Nokia reported as follows: for unit sales, five out of the six units reported an increase from Q3 (Europe, MEA, China, APAC and LatAm). Only one region saw a decline (North America). That region had been declining for a long time - and its rate of decline had slowed in Q4. Meanwhile, what of the revenues? ALL SIX of Nokia's reporting regions are quoted with an increase in sales revenues. And to be very very clear about this - Nokia specifies the difference in discussing the average sales prices (which for Nokia dumbphones were flat but like I said, set a Nokia record in growth for smartphones). Nokia writes "The 14% sequential increase in our converged mobile device ASPs was driven by an increased proportion of higher priced converged mobile devices in the fourth quarter."

If none of your regions report declining sales revenues - AND your dumbphone price is flat - and your smartphone price is driving the increase - that means your smartphones were driving the sales revenue growth in Q4. Mr Elop, you are a liar. The Nokia Symbian smartphone sales were not 'being rejected by more and more markets'. They were only being rejected in the North American market. That is not 'more and more markets' it is 'the one and same market only' - in all other markets Nokia reported both a unit sales growth and a revenue growth! And your Q4 results say clearly, while the dumbphone prices were flat, the smartphone sales prices jumped. Nobody was 'rejecting' Symbian sales! 

So we have the facts. Elop admits his memo did damage Nokia smartphone sales in February 2011. He tried to give lies to cover his ass, he was wrong. 

Case closed. Elop's Burning Platforms memo did damage Nokia sales, Elop himself admits it did so. He tried to weasel out of it by telling lies, we are having none of that. Even if his assertions were true, that there was a general decline and some regions were failing, it does not remove the fact, that Elop admitted to the Nokia Shareholders meeting that yes, his memo did damage Nokia Symbian smartphone sales. His admission stands. Yes. Elop is found guilty as charged. He admits his fault and culpability. The Burning Platforms memo did damage Nokia smartphone sales. (The prosecuting council steps up and says, If it pleases the Court, I would move to suggest a verdict of cazillion dollars awarded in damages..) Now how can we measure how much damage was done?

BASE CASE

If you asked me, what is the fair base case to use, I would take the last full quarter (Q4 of 2010) before the Burning Platforms memo, and take the trends of that period, and project from there. So if Nokia smartphones grew 7%, the reasonable assumption is that the 7% rate would continue into 2011. If all things stayed the same, then Nokia would continue about 7% growth rate each quarter in 2011. That is one way to look at it, and I think it would be a fair way. Another is to take the recent historical rate. If we take the average quarter-on-quarter growth rate, in the previous two years, that had averaged 10% growth per quarter, across the 8 quarters. This would to me also be a fair measure of where to compare. 

Some say that the smartphone business is so volatile, it is impossible to forecast. While it is true, that the Nokia Q4 2010 sales growth was driven in strong part by the very warm reception of Nokia's N8 smartphone (a widely aclaimed award-winning touch screen smartphone with a superior camera. The N8 kept being among bestselling smartphones in many of Nokia's best markets still one year later, winning accolates as late as January 2012). During the next year or so, Nokia had no manufacturing disasters in Symbian smartphone sales. It had no exploding batteries, no antennagates to stop Nokia sales. No, instead, several even better, highly anticipated and well-received smartphones were in the pipeline, the E7 released in January of 2011 and the superbly award-winning superphone the N9 (running MeeGo) released later in the year 2011.

Maybe the competition was so fierce with superb devices it simply took the market by storm, like say the Motorola Razr in 2004 or the original iPhone in 2007, when arguably one new phone model changed the industry and everyone else would have to copy or die. This was not the case into 2011. Blackberry had hit a wall, its Blackberry 10 OS was suddenly delayed. Apple was for the first time delaying in its update model not releasing the newest iPhone model in June (the iPhone 4S) but rather in September. Every sensible person can accept that if Nokia was growing sales in the period just before the Burning Platforms memo, and there were no radical phones to change the whole industry like the Motorola Razr in 2004 or the iPhone in 2007 but Nokia's own products proved very solid, award-winning and loved, and more hot phones were coming out that also were well received - the assumption of growth is fair. It would only be a question of how much growth.

But I am the judge in this story, and its not fair for the judge to also be the prosecuting attorney. Lets not take Tomi Ahonen's own view of what might be fair for Nokia performance in year 2011, lets try to find the best trusted expert source(s) that are independent of this squabble we cover here. Lets go and get the consensus opinion of the industry analyst houses. What did Gartner say? And Canalys? And Abi? And iSuppy? and IDC? (Stategy Analytics unfortunately does not have a specific quote in 2010 about Nokia or Symbian forecasts/projections). This is what the big independent handset industry analyst houses - all of them except Strategy Analytics - said about Symbian or Nokia. Four of them had a forecast about Symbian in 2010:

Abi Research said in February 2010 that Symbian would remain the biggest smartphone OS through year 2013.

Gartner said in September 2010 that Symbian would remain the biggest smartphone OS through year 2014 and would have 30.2% market share that year challenged by Android.

IDC said in September 2010 that Symbian would remain the biggest smartphone OS through year 2014 and would have 32.9% market share that year challenged by Android.

iSuppy said in August 2010 that Symbian would remain on top for at least 5 years.

And what of Canalys? They did not forecast Symbian but they commented on Nokia (which is only part of Symbian sales so its share is smaller than Symbian). Canalys said in November 2010 that Nokia would continue as the world's biggest smartphone maker in 2011.

Thats it. That is as close to consensus as possible. All five say that either Symbian or Nokia will continue as the world's biggest smartphone OS/maker into the future, from a minimum to the end of 2011 for Nokia to as far as end of 2015 for Symbian. Not one big handset analyst house who specialize in this industry, suggested Nokia (or Symbian) would fall from being the world's biggest in year 2011.

But the analyst houses did expect Symbian to decline. Only two of the six had a number and both were for year 2014, Gartner 30.2% and IDC 32.9%. Lets use these two, and their average, 31.55% as the target percentage for year 2014 for Symbian. Where was Symbian sales in year 2010? 39.1%. So if we plot a straight line decline in market share for all Symbian smartphones from 2010 to 2014 we get this rate:

2010 . . . . 39.1% (actual)
2011 . . . . 37.2% (projection)
2012 . . . . 35.2% (projection)
2013 . . . . 33.4% (projection)
2014 . . . . 31.5% (projection)

The consensus view of the big analyst houses in year 2010 was that Symbian would continue to dominate the smartphone market. The average of the published numbers was that the Symbian decline would be of the rate of 1.9% of market share points lost per year, declining gradually from 39.1% in 2010 to 31.5% in 2014. And by this projection, the 2011 full year Symbian market share number would be 37.2%.

Now that was Symbian, which included Japanese Fujitsu, Sharp etc sales. What of Nokia? Nokia's Q4 2010 market share was 28.5%. Lets assign the same rate of decline, ie 1.9% market share points per year to Nokia as the consensus view of the industry experts in 2010. And that would be almost 0.5% on average decline in market share per quarter (4 x 0.5% = 2.0% so I am now a bit too negative about Nokia but lets let that 0.1% go to keep this simple in terms of the math. This is the worst case scenario, clearly, in reality Nokia would have done far better than this)

We get the following Nokia Quarterly performance expectation by the industry analysts in year 2010:

Q4 2010 . . . 28.5%
Q1 2011 . . . 28.0%
Q2 2011 . . . 27.5%
Q3 2011 . . . 27.0%
Q4 2011 . . . 26.5%
Q1 2012 . . . 26.0%

That is our base case. This is not Tomi's view. This is the published, clearly consensus view by the leading expert analyst houses, five of six who had issued Nokia or Symbian-specific forecasts during 2010, and all agreed. Nobody with a history of global handset reporting had suggested Nokia smartphone sales would suddenly collapse in 2011. The above numbers are totally consistent with the average of the two analyst houses who gave a specific Symbian market share forecast for year 2014. This is what 'any monkey' could have done by simply continuing Nokia's existing strategy in 2011. This is that level, what Elop admits he damaged with his Burning Platforms memo. This is what we will now compare to. This is the base case. And now lets go to pictures. (The prosecuting attorney wheels in a slide projector..)

SETTING THE NOKIA PLATFORM ON FIRE

So now lets do the Final Reckoning for the Burning Platforms memo and how badly did it damage Nokia. So we start with Nokia Smartphone market share. You'll remember, just before the memo, Nokia was literally bigger than its two nearest rivals combined - a massive competitive advantage and something Ford or Toyota or Coca Cola or Pepsi or Airbus or Boeing would dearly love to have. And here in Blue is what the industry consensus view suggested Nokia would do in 2010. Then compare to the red, the actual:



Source: TomiAhonen Consulting June 2012, from company and analyst house data in the public domain
This chart and its data may be freely used and shared


So yes, Nokia actual performance collapsed. This is not normal. This has never happened in any management catastrophy, in any Fortune 500 sized company that led its industry, not by natural disasters or management mistakes. This level of damage did not happen with Toyota when it had brake problems. This did not happen to Coca Cola when they launched New Coke. This did not happen to Exxon or BP with their oil disasters, etc. Never in any industry, ever, has there been this kind of total comprehensive collapse in market share by a market leader. In literally 12 months, Nokia lost half its market. It continues to bleed since, has lost 7 out of 10 customers it had. And what triggered this loss? The February 2011 Burning Platforms memo. The fall is exactly following from that event. Elop himself admits, his memo damaged Nokia sales and no analyst house expected any Nokia collapse - and none had in any way warned about any meaningful fall, on the contrary, all were in agreement Nokia would run away as the biggest smartphone maker into many years into the future.

And if you'd like to see that in actual smartphone sales, rather than market share. Here is the same above picture translated from market share to actual unit sales, based on real market data for the six quarters involved. Again Blue is Expectation by Industry Analyst House consensus and Red is actual Nokia performance under Elop after the Burning Platforms memo:




Source: TomiAhonen Consulting June 2012, from company and analyst house data in the public domain
This chart and its data may be freely used and shared

(The peak is Christmas 2011 sales.) Note the Blue part of the picture is obviously also now showing the loss to Nokia. The opportunity cost of this decision. How much did Elop destroy with his memo. That is massive...  

So how many is that? In the 12 months that can be clearly identified after the Burning Platforms memo, ie from Q2 of 2011 to Q1 of 2012, Nokia abandoned 75.8 million smartphone sales. To understand how enormous this loss is, when you add all 2011 smartphone sales by Motorola, SonyEricsson and LG combined, that is only 68.7 million. Yes. Elop's memo wiped out the equivalent of total smartphone sales per year of total Motorola plus total SonyEricsson plus total LG, combined, and even then its not enough to cover the damage by his memo. Or to put it in another way, if the missing phone sales only for Q1, Q2, Q3 and Q4 are added to actual 2011 Nokia sales, Nokia would have sold 130.9 million smartphones - Nokia would have still towered over Apple's iPhone which only sold 93.1 million units in 2011.

And remember how Elop promised 150 million more Symbian based Nokia smartphone sales to come, when he announced Microsoft Windows partnership on February 11 of last year? Look at the graph - the blue part is where that all went.. up in smoke. No, the 150 million was never going to happen. And Elop has since admitted yes, the 150 million won't happen after all.

HOW MUCH MONEY?

And now, lets see if we can't calculate the cost.. We did know what the Nokia ASP (Average Sales Price) was for Nokia smartphones in 2011. Now, using the real ASP will artificially depress the total revenue and total profit calculation - this is again a low-case, least bad calculation, the reality has been worse. What do I mean? I mean that as Nokia's market share collapsed in 2011, Elop reacted by across-the-board price cuts - price dumping in effect, to try to halt the market share decline. Remember, in Q4 the ASP was growing at a Nokia record level powered by the N8 - and before more expensive superphones like the E7 and N9 were even launched. So the fair expectation would be that the ASP would grow in 2011 or at least hold steady. But we have no fair, independent opinion on what that ASP should be. And while I could make educated guesses, there is no independent source to use. So yes, this will not cover the full extent of the damage, but lets take the actual Nokia ASP as it fell, and use that as the calculation. This is how much revenue Nokia lost in the 12 months, the first four full quarters of Nokia smartphone sales, after the Burning Platforms memo.




Source: TomiAhonen Consulting June 2012, from company and analyst house data in the public domain
This chart and its data may be freely used and shared

(The revenues are in Euro. And the above Q4 2011 and Q1 2012 include the 250 million dollar infusion of cash by Microsoft, which Elop assigns to this unit. So if you measured true customer-paid revenues, ie the real sustainable 'business' income by Nokia selling smarpthones - it is even worse, to the tune of one quarter of a million dollars less per quarter in the last two quarters)

So yes. This is the damage. In the full four quarters that followed after the Burning Platforms memo, Nokia's smartphone unit lost .. 10.5 Billion Euros !!! (13.2 Billion US dollars) in lost smartphone sales. This was sales that Nokia owned, Nokia had in its hand, all industry experts were in consensus that Nokia would gain. And Elop came in, issued his memo and that is the cost. In 12 months, his memo wiped out 13 Billion US dollars or Nokia revenues. This is by a wide margin, the costliest (and dumbest) memo ever written. And Elop is the dumbest and most incompetent CEO ever to have released it. He admits it damaged Symbian sales. Now we measure. Yes. 13 Billion dollars of revenues destroyed. Yeah, I'll accept your plea, defendant Elop - yes, you did damage Nokia. How big is 13 Billion dollars? Thats pretty much HTC if you want to compare.. Yes. Elop has already destroyed a whole HTC out of Nokia's smartphone sales revenues. But this is not really the extent of the damage. It is worse than this.

The effect is not reversable. We can't just go back and say, hey, I didn't mean it, please forget the memo. The world's handset retail channels went into global Nokia sales boycott immediately, and Nokia has been complaining about the retail channel reluctance to sell Nokia ever since. Elop again admitted retail problems to the Nokia Shareholders Meeting in May of 2012. So he caused the problem, but he can't fix it now. So what is the true extent of the damage? It is not cumulative damage so far. No. Its worse. It is the latest quarter - times four. This problem was caused by Elop and cannot be undone. So how bad is it? The real cost - under these very Nokia-positive assumptions, from now until forever, per year - is this bad:

ACTUAL DAMAGE TO NOKIA FROM NOW INTO PERPETUITY:

Q1 2012 lost revenues: 3.7 Billion Euros
Times four quarters = 14.8 Billion Euros
is in US Dollars: = 18.5 Billion US Dollars

Elop's actual damage done by the Burning Platforms memo, forever into the future is 18.5 Billion dollars per year. In the first year, or first full 12 months after the memo, it was only growing to this level, which is why the first year damage was 13 Billion dollars. So how big is 18.5 Billion? That is almost a full RIM, Research In Motion, the Blackberry maker whose 2011 revenues were 19.9 Billion dollars.

WHAT OF PROFITS?

And yes, then what of those profits? Again, we can't use real Nokia profit margins as they crash-dived as the Burning Platforms memo was released and the Nokia Symbian smartphone family became instantly toxic in the market. But we can't use the Nokia-record-setting jump in profitability either. I think the only reasonable number we can use, is the last published Nokia profitability number - as this was also in line with Nokia guidance. What was that? Nokia didn't break out the smartphone profitability at the time, but changed its accounting principles in 2011 and issued backward numbers so we can see it. So the profitability of the smartphone unit was 11.6% in Q4 of 2010. Lets use that as a standard level through this period and this is what Nokia's profits should have been (in Blue) and then compare to the published reality (in red)




Source: TomiAhonen Consulting June 2012, from company and analyst house data in the public domain
This chart and its data may be freely used and shared

Yes. Nokia's strong profits in its smartphone unit - Q4 of 2010 Nokia smartphone unit profits were 510 million Euros or 637 million US dollars in the quarter. Multiply that four times and Nokia's smartphone unit was producing profits at an annualized level of 2.5 Billion dollars just before the Burning Platforms memo. Then came the Memo. Note that with this calculation, we have to handle positive and negative numbers. If Elop causes a 510 million Euro profit to swing into a 200 million Euro loss - he caused 710 million Euros of damage to Nokia profitability (bearing in mind, there are other units that Nokia also have, which may generate a profit like the dumbphones unit, that would then perhaps off-set this huge loss).

So how big is the damage? Sit down before you read this. The last 12 months, the first four full quarters after the Burning Platforms memo, Elop admits he caused damage to Nokia smartphone sales. How bad? The actual total loss of what Nokia should have done, and now has managed is.. 3.17 Billion Euros (4.0 Billion US dollars). He destroyed 4 BILLION dollars of PROFITS in the first year after his Burning Platforms memo. It shouldn't be called Burning Platforms, it was the Burning Profits memo. Four BILLION dollars!!! Profits!!!

4 Billion dollars of profits in year 2011 would have ranked you 130th biggest company in the Global Fortune 500 by profits!!! Four Billion. Four Billion-with-a-B??? Lets put this in context a bit. In the past 12 months, Elop's mismanagement burned profits that were more than the total profits earned by say.. Nissan Motors globally, or Home Depot, or China Life Insurance, or Boeing, or Deutsche Bank, or UPS or Walt Disney.. 

But again, that was last year, when the damage was happening. Now there is no going back. How bad is it really? When we take the last quarter - Q1 of 2012 - and multiply that by four, we get the residual damage that Nokia's shareholders can wistfully remember they once had, but Elop destroyed in one memorable memo, this is the level of the damage:

ACTUAL DESTROYED PROFITS TO NOKIA FROM NOW INTO PERPETUITY:

Q1 2012 destroyed profits: 941 million Euros
Times four quarters = 3.8 Billion Euros
is in US Dollars: = 4.8 Billion US Dollars

Yes. 4.8 Billion dollars of profits annually, is forever lost to Nokia, thanks to the Burning Profits Memo by the most incompetent CEO ever to run a Fortune 500 sized company. How big is 4.8 Billion dollars in profits? It would rank as the 99th biggest profits in the Global Fortune 500 in 2011 !!!!  Ahead of Toyota total profits! 

How can I put this into context? I know. Lets look at a day. Elop got paid 7.9 million Euros last year for his 'management' contribution to Nokia 'performance' (including his signing bonuses) according to Finland's largest newspaper Helsingin Sanomat. That is 9.9 million dollars per year. How valuable is he to his company. His mere existence since February 2011, has destroyed Nokia profits at the rate of a million dollars - every two - hours - of every single hour of a 24 hour day, of every single day, weekdays, weekends, and holidays included, for the full 12 months of the full year. Yes. Two hours, another million of profits destroyed. And this damage is irreversable. Yes. He has caused profit destruction worth 4.8 Billion dollars per year, or 13 million dollars every single day he continues as Nokia CEO. Isn't it time to fire this clown? 

WILL NEVER KNOW HOW MUCH MORE DAMAGE ELSEWHERE

It is clear this one memo launched Nokia's death-spiral. I have been able to do a fair, if very conservative analysis of how much the Burning Platforms memo and its follow-up actions have cost Nokia in the smartphones unit. But there is more to Nokia (or was) than is smartphones. The Burning Platforms memo caused damage to Nokia retail - again this is not in dispute, Elop has frequently mentioned this problem and admitted to it at the Nokia shareholders meeting - but the retail channel sells more than the smartphones side of Nokia. Nokia's dumbphone ("featurephone") sales have also suffered. How much, that would be impossible to calculate without Nokia internal numbers. Nokia had seen a gradual decline in its total handset market share which peaked at nearly 40% in year 2006. There would also be damage to the total Nokia brand - again, we have seen the brand value and brand ratings agencies lower the Nokia value but that is impacted by much more than just this memo. There were many other businesses that were cut by Elop when the damage started, from firing tons of Nokia staff, to outsourcing whole units like Symbian development, to selling units like the Vertu luxury phone unit, to ending many software and services projects like Nokia mobile banking and Nokia mobile advertising, to selling Nokia patents. If Elop had not been forced to cut Nokia costs severely as the whole profitable smartphone business side collapsed, these other parts of Nokia business would probably have been spared or pruned down far less. So lets be clear, there was FAR MORE damage to Nokia, than just to the smartphone unit, but those other parts will be nearly impossible to quantify. Certainly the dumbphone unit would suffer when the premium smartphone unit is hurt, but also likely the NokiaSiemens Networks unit would be relatively safe and the effects would be more of a nuisance than real damage to their business. But wait. Let me show you the picture that really makes me cry. Yes. It is worse than all that even. This is the ultimate proof of management failure.

THE SNATCHING DEFEAT FROM THE JAWS OF VICTORY GRAPH

This is what makes me weep when I think of my former employer Nokia. So, many in the conventional wisdom think that the iPhone killed Nokia's smartphones. They don't know the facts. Yes, the iPhone did kill off many rival smartphone makers like Palm and even smartphone platforms like Windows Mobile. But every year of iPhone's existence - Nokia grew smartphone sales. Here is the scary part - every year (obviously up to year 2010) Nokia added more smartphone new sales - new customers to Nokia, using Nokia branded smartphones - than Apple did add to new users to the iPhone. Yes. That is the facts, m'am. You think the iPhone was the standard of excellence in smartphones? Yet Nokia added more new Nokia smartphone customers every year than the iPhone managed! In 2007, in 2008, in 2009 and yes, in 2010. In 2010 Nokia sold over 100 million smartphones, Apple only sold 48 million iPhones - very literally, Nokia was more than twice the size of its nearest rival !!! But that is not the perfect execution part. This is.

Nokia was winning the technology disruption. Nokia was winning the transition! Nokia invented the smartphone. Not just the original smartphone concept as a business tool. Nokia also invented the consumer smartphone (and the gaming smartphone, arguably what the iPhone is now with Angry Birds etc). Nokia was the first to call its smartphones computers. Nokia launched an app store years before Apple. Nokia was doing all this VERY profitably. Nokia was not blind-sighted by history, which often happens when a rival has a radical idea and alters the total game like with world's biggest computer maker IBM when the little PC makers like Apple turned a garage industry into real business and IBM had to rush to catch up, and never really did. Or like world's biggest portable music player maker Sony when Apple's iPod changed how we listen to music. IBM didn't invent the PC, they had to scramble to try to catch up. Sony didn't believe in MP3 player technology like in Apple's iPod and didn't bother to launch a Walkman based on that technology. But Nokia did see, as the world's largest handset maker, that the handset industry would be revolutionized by smartphones - Nokia invented the technology, and then re-invented it and re-invented it several times more, never once relinquishing the global lead in the industry - all the while doing this profitably.

Many technologists liked to compare Nokia's 'troubles' as a legacy handset maker to Apple which only makes the smartphones in the iPhone line or RIM which also only made smartphones. That is not a fair comparison, the smartphone is the premium profit product in the industry. Nokia was the world's largest manufacturer of basic 'dumb' phones. It is as misleading as comparing Toyota profitability per car to Porsche profitability per car. Completely unfair comparison. Nokia had a massive sourcing, manufacturing, distribution and sales organization juggernaut - that was built to sell basic dumbphones. That all needed to be ... migrated ... from dumbhpones to smartphones. This is like IBM, which had to adjust from being a mainframe computer making to the seller of PCs. They fought those wars bravely for about two decades and decided they can't do it profitably, and sold their PC business to Lenovo. IBM failed in attempting its transition from a legacy mainframe computer maker to a PC maker (they are now primarily a software and services company, so they abandoned their primary business and switched to something else).

Nokia saw the future and decided to make its own future. Nokia was along the way in migrating its company from being the world's biggest basic phone (dumbphone) maker to the biggest smartphone maker, all while being profitable and never losing the lead in either category. This is like how Microsoft managed to transition from the biggest computer operating system maker in the text-based era of DOS to the Windows and mouse-click era of modern personal computers, never missing a beat. But even there, Microsoft didn't invent that transition (which was invented by Apple with the Mac).

So here is my gripe. The real rivals that Nokia can only be fairly compared to, are the other giant handset makers of its time, Motorola, Samsung, LG, SonyEricsson and others, who made both dumbphones and smartphones. They had to 'transition'. They had to 'migrate'. They had to evolve. And what happened - Motorola already died in the process and the SonyEricsson partnership broke up, with Ericsson exiting. All four of the rivals had reported several quarters of losses in their handset unit in attempting this transition. Except Nokia. Nokia never once reported a loss in its handset unit, while leading this transition from dumbphones to smartphones (until 2011 obviously after Elop). So here is the graph to end all Nokia graphs.

THE NOKIA SNATCHING DEFEAT FROM THE JAWS OF VICTORY GRAPH:



Source: TomiAhonen Consulting June 2012, from company and analyst house data in the public domain
This chart and its data may be freely used and shared 

 

Here is the story. Nokia was ahead of the global average handset migration rate to smartphones. This is particularly impressive, in that there were many pure smartphone makers (like Apple, RIM, HTC, Palm etc) which pushes the average migration rate even higher as a target. Nokia furthermore was the only legacy handset maker who had reported a profit in every quarter of every year in its handset unit while attempting this costly and very disruptive transition. None of Nokia's traditional legacy handset maker rivals managed this up to when Elop took over. What makes it even more special, was that Nokia achieved this even during the worst economic crisis of our lifetimes.

Now look at that graph. Nokia's dumbphones-to-smartphones migration rate had stayed safely, consistently above the red line - the global smartphone migration rate for the industry. Bear in mind, Nokia did this profitably. If Nokia continued on this path, it would own this industry and be heralded as one of the very few tech giants to survive a generational transition and was able to lead both the time before the paradigm shift (dumbphones era), and still lead the industry after it (smartphones era).

What happens? Elop issues his Burning Platforms memo, and the most important trend for Nokia's long-term viability - the migration rate to smartphones, turns from growth to decline. Immediately Nokia's migration rate falls below that of the industry average and keeps falling. Today, after Q1 2012 data, Nokia's migration rate is down to 14%. It was at its peak 24% !!! Nokia is literally regressing. Nokia's CEO Stephen Elop, the Microsoft Muppet, the most incompetent CEO in management history, snatched defeat from the jaws of victory! Nokia is literally going against history. Its like the BBC, after launching television, does it successfully, and then sees other broadcasters appear, to decide no, we won't bother with this 'talkie-radio' television thingy, we go back to just doing basic radio. Its like Boeing, after launching the 707 jet airliner, looks at some Douglas DC 8 jetliners and after selling more jets than McDonnell Douglas, decides, no, we don't bother with this jets fast comfortable airplane nonsense, we go back to propeller-driven passenger airplanes that were nice and slow and bumpy and uncomfortable! Imagine if Sony, Panasonic, Toshiba and Philips, after inventing and launching the DVD, would then decide, no we would rather sell the cranky clunky VHS video recorders instead of these DVD players. I mean. What analogy can I think of, which is this crazy? RCA television manufacturer (or Sony or Philips) deciding after taking a national lead in selling color TVs, suddenly decides, no, lets go back to black-and-white TV. This is pure regression! This is what Elop has 'achieved' for Nokia. They now are progressing - look at that curve - down the trend where their migration rate from dumbphones to smartphones is going backwards!!!! (yes, I told you this will be another painful blog for me to write..)

Ok. That is what I wanted to get out today. Yes, Elop admitted his Burning Platforms memo was so destructive, it truly did damage Nokia smartphone sales. Elop is such a spineless coward, he tries to hide behind lies (no, Nokia Symbian smartphones were not on a downward trajectory when he issued his Memo). But here is the analysis. The first full four quarters, 12 months, that we can measure Elop's damage is now finally visible. The evidence is in the above. He threw into the garbage 75 million smartphone sales, he destroyed 13 Billion US dollars of revenues and caused losses of 4 Billion dollars to Nokia profits. In reality the damage of his Burning Profits Memo was even worse - his legacy is that Nokia's smartphone abandons forever 18.5 Billion dollars in revenues and 4.8 Billion dollars of pure profit. This guy should not be allowed anywhere near any corporate office! He is the black hole to profits! And yes, he took the best-performing strategy of any legacy handset maker - I am not saying all was well at Nokia, other parts of Nokia were suffering and Nokia had definitely had problems long before Elop came in, under previous CEO Kallasvuo especially - widely reported problems. But Nokia problems were in its 'execution' but not in its strategy. Elop was hired to fix those execution problems, not turn a profitable company and run it over the cliff. So yes, Nokia is no Apple, nobody is. If you compare any company to Apple the other company looks bad. But compared to Nokia's true rivals - Motorola, Samsung, LG, SonyEricsson and other full portfolio legacy handset makers - Nokia had the best strategy, and was the only one who was on a profitable path while ahead of the global migration rate to smartphones. 

Before the Burning Platforms memo, in 2010 Nokia towered over its rivals like very few companies have ever managed in a Fortune 500 size scale. Nokia's smartphones sold more than 2x those of the iPhone and more than 3x as many as Samsung. Today only 18 months later, Nokia is a third the size of the iPhone and one quarter the size of Samsung's smartphones. Never, ever, in any industry, has a global market leader collapsed this comprehensively. This is a world record in destruction of a market leader. Understand what that means. Elop has set a world record in management failure. He is a world record holder in the most incompetent CEO that has ever been. Not just the worst CEO now, but of all time - that is what 'world record' means - and this collapse of Nokia is BY A WIDE MARGIN the biggest collapse of a global Fortune 500 sized company, who was the market leader in its own industry. I have been asking my readers to come up with any example of such total collapse in 12 months in economic history - never been done. Never. This is the worst management failure of all time! And it was not caused by a tsunami or earthquake or national revolution or exploding factory. It was caused by Stephen Elop. He started the destruction on a February day in Espoo when he released his Burning Platforms memo.

And don't write that Nokia was in trouble before, ya-ya-ya. The 'problems' that Kallasvuo the previous CEO presided over were peanuts compared to the catastrophy orchestrated by Elop. Look at the evidence, mi'lord. Nokia was GROWING on EVERY measure up to the last quarter just before the memo. This suicidal dive started in February with the Burning Platforms memo (and obviously, he then added to that error with ever more management mistakes chronicled on this and other blogs).

IF SO, IS THERE CORRABORATING EVIDENCE?

When Elop started, in the first five months of his leadership, Nokia's share price had climbed 11% and at its peak was worth over 8.40 Euros and hitting 11 US dollars - yes, this was under Elop. He managed a strong return to Nokia (while 'executing' the previous strategy better than Kallasvuo - I was very supportive of his early management on this blog). Yes, Elop achieved very strong growth in Nokia shareholder value if you grow the share price 11% in only 5 months, that is good executive management. Nokia's ratings by all three ratings agencies were one notch below perfect in early February.

That all came to an end in early February of 2011. The Nokia share price started tumbling on the Burning Platforms memo and has fallen 74% since then. Today two of the three ratings agencies rate Nokia shares as junk and the third only one notch above junk. When he started, Nokia was Finland's most valuable company, it is no longer even in the top 5. Nokia, once Europe's biggest tech company was forced to delist from the Frankfurt stock exchange. When he started Nokia was one of the 10 most valuable brands on the planet. No more. By every measure this guy is the biggest flop ever seen in management history. But most of all, if you set the world record for destruction of market share - and you fall from being twice as big as your nearest competitor to one fourth the size of the world leader - you are not just a fool, you are an idiot. And need to be fired. 

(here endeth the lesson today..)

UPDATE - The Nokia News are out. Two short blogs:

lease note, this blog article was written before Today's big layoffs, profit warnings, executive firings etc. I reposted a short comment to fired Nokia staff here: To Fired Nokia Colleagues. And I wrote my first short immediatel update about Nokia news today here: It is worse than I thought. 

UPDATE 2 - Now (one day later) I have written the full analysis of the news


FINALLY

A couple of thoughts. If you want to understand where the mobile industry is headed, I am the most accurate forecaster of the mobile industry (plus an author of 12 books on the industry that are referenced in over 120 books by my peers). I was for example the only analyst to accurately call in February 2011, that Nokia's year-end market share last year would end at 12% (most thought I was far too pessimistic, some clueless 'experts' actually suggested Nokia to be above 20% haha). I was then again last summer the most accurate forecaster to call Nokia's share now in Q1 to be at 8% (again no other published expert last summer dared that low a number). I am not infallible, no forecaster can be, but I am also honest when I am wrong and will discuss every past forecast, and where I went wrong, so I think I also have some integrity (most of my peers who make silly forecasts, try to hide from them as if they somehow had vanished). So if you need some guidance to the mobile handset market - you might like to see this, the TomiAhonen Mobile Forecast 2012-2105. 

SPECIAL RULES ON THIS BLOG ARTICLE ABOUT COMMENTS

(my regular readers know when this happens) If you want to leave comments - this time I will be very specific. First of all, since Nokia's current Director of Communications John S Pope (you may remember, one of the villains in the infamous Dell Hell social media fiasco written about in many books) has accused me of fabrications in public (on Twitter, last month), I am considering Nokia and Microsoft to be hostile towards me. (I wonder why?) I report the truth here. But yes, because Nokia and Microsoft are waging a dirty campaign to discredit me (among many other dirty tricks Nokia has adopted from Microsoft's nasty tricks bag), I will not tolerate any Nokia or Microsoft troll comments.

If you try to argue Elop didn't say this or that - don't post it here, post it at the original blog that I quoted from, like My Nokia Blog. I will delete any comments that try to alter history. Same for Nokia quarterly performance. Read the quarterly results and this blog. If you have evidence to the contrary, it has to be in the public documents, else it will be deleted. The same for the forecasts for Nokia 2011 (the base case of this blog). Since we have five of the big handset analyst houses all in agreement in 2010 (and there is nothing from the sixth suggesting anything opposite) - I won't accept any 'opinions' from some pundits about whether someone thought in 2010 that Nokia might suffer. The facts - the facts - are that five of six handset analyst houses, whose day job is to analyze the handset industry, all agreed Nokia and Symbian will continue to dominate the smartphone industry for years to come. Your and my opinion is irrelevant at this point and unless you can show a legitimate handset analyst house quote of an alternate view published in 2010, else it will be deleted.

I welcome discussion on this blog, but I won't tolerate any abuse on this point, because of the accusations that Nokia's Director of Communications has made. Thus I will be extra diligent and any of the slightest deviations of my commenting policy will be deleted without mercy. Your comment must illustrate you have read the full blog posting. Your comment has to deal with THIS topic - this time it is Nokia market share, average sales prices, revenues and profits, and how much Elop has cost Nokia - I will not tolerate any discussion about iPhones, Androids, Blackberries, Samsungs etc, except where specific to Nokia performance in this period in this blog. And you have to be polite to my readers, so no rude comments. But with that, yes I welcome your comments..

Comments

[J.O. Aho]

Thanks for the excellent sum up of the Elop-effect, it's horrifying to see a sum as big as 4 milliards.

Quite expensive to be part of the "3rd ecosystem".

[bjarneh]

Although the Elop legacy speaks for itself, the board of directors are responsible for hiring this guy. The sudden shift on Nokia's part from their home grown Symbian/Meego to Windows Phone, had to be their idea, Elop has not gone rouge, he has just failed to implement their strategy.

At some stage this probably sounded like the safe choice; Meego would leave them all alone, while Windows Phone could potentially become a big platform since plenty of others (at least at the time) had promised to make Windows Phones.

One aspect of the N9/Meego saga which I have not seen discussed on this blog is that Meego sales could have been much stronger, if the device was launched when it was ready. A friend of mine (who works at Qt/Nokia) had at the time been working on Qt/Meego for 2.5 years, he and his team was expecting the N9 to be launched in April 2011. Note that most of the Meego/N9 team was fired in February, so there was no ongoing development holding back the N9.

Nokia then manages to wait for another 6 months while the device is ready, and while they have no Windows Phone alternative ready, before they launch the N9. They basically wait until they have their own Lumia 800 ready before they start selling it (1 month before I think), i.e. they wait for their own competition before they launch it, this obviously hurt the N9 sales, since it missed out on its spot alone in the limelight.

[Tomi T Ahonen]

Hi JO and bjarneh

JO - very good point yes.. Not only do you have to pay a license to Microsoft, but yeah, it might cost you a couple of billion in profits per year above that..

bjarneh - very good point and even I have not covered that dimension of the MeeGo fiasco. There was also the first MeeGo handset ready to launch in February at the Mobile World Congress which Elop killed just days before (and again someone over at MeeGo Nokia resigned in protest) - so this was the original launch phone for MeeGo which was totally terminated by Elop. They could have had two phones to sell in the Spring..

Thank you both for comments

Tomi Ahonen :-)

[nokdown]

Dear Tomi,

I only hope for Elop to announce his resignation today.
Unless, someone sends the Finnish police to arrest him before he makes further statements to damage Nokia :)

I agree with all of your analysis, I like the way you make it very explicit with facts to back up your statement.

However, today's announcement will be nothing new.

If Elop is to make the announcement, there will be nothing new.
Do you expect Elop to announce his own resignation?
Do you expect Elop to announce his repentance ?

I hope only for Elop to announce his resignation:
- that is the only best event that can happen to give us a sign that Nokia can get better.
- Nokia is resilient, mainly due to (I was at Nokia for 7 yrs and left 10 yrs ago) internal process and corporate culture is geared to change
- Nokia still have capacity, hardware designs, source code base, products, intellectual property.
- distribution channels will certainly get back to work with Nokia, if they jumped quickly to Samsung (mainly due to Nokia abandoning the market) the distribution channel can jump just as quickly back to Nokia.

[Dared]

Great article as always Tomi :)

Like Bjarneh said - Elop killed more potential profits by killing the N9. One interesting point to consider also is that the profit margin (so i've heard) was much higher on the N9 AND it sold more than the lumia (with its lower profit margin) in its first quarter. So that in itself goes to show Elop's incompetence at running a company (company = a firm realising profits for both the firm and its shareholders)

Given the fact that Elop clearly mislead the shareholders with his burning platform memo - and that we have the proof here, this might make the court case against Nokia/Elop very interesting!

[nokdown]

OMG

Elop to announce withdrawal of Nokia 808 PureView, with the strategy to move PureView Technology to Lumia effective immediately!

Tomi, pls make sure Finnish police have an arrest warrant for Elop, to be delivered before he makes any further announcements.

There is no need for Elop to announce his resignation (to all Nokia employees in Finland), any other board member or exec can announce Elop's resignation.

[nokdown]

Any sane judge in Finland should find your information as sufficient grounds for issuing an arrest warrant.

Think about Finland's economy.
Tomi, you still have family in Finland, do you want to send them food parcels from Hong Kong ?

Think about all the unemployment in Finland, economy will be back to soviet collapse era.

ps: Sorry for the multiple posts.

[Tomi T Ahonen]

Hi nokdown and Dared

nokdown - haha, yeah, me too (hope Elop announce his resignation effective immediately). I am afraid its going to be massive layoffs (possible ending of Nokia operations in some big Nokia towns like Oulu or Salo). Might be Nokia HQ move to America too (next to Microsoft). He might try to sound nice by promising to take 1 Euro salary for next year (meaningless gesture, as he already took that 8 million Euro salary and bonuses last year)..

but I totally agree with you, if Nokia had management that employees trust, and a CEO that the carriers/operators and retail channel trust - and it made some sensible moves like reducing its focus on Windows for now - Nokia could recover fast. With this CEO and his strategy, Nokia dies..

Dared - totally true yes. I calculated the same myself but haven't seen the profitability estimates in the public domain by anyone for the N9. It does make sense, it was built in Nokia factories (early Lumia was built by Compal of Taiwan) using all Nokia standard parts (vs Lumia) and N9 was in every market highly rated and did not need big discounts to sell whereas Lumia prices collapsed within weeks of launch. By all logic - not to mention higher sales price too - N9 should have far better profitability than Lumia line.

nokdown - don't say that! (PureView) - gosh, I almost had a heart-attack haha.. Yeah, I wish I could somehow influence the Finnish media to at least cover the story, I doubt the Finnish police much care what this guy in Hong Kong writes haha...

(PS am wishing 15 minutes before event starts, we hear its going to be by Nokia's new Chairman - and Elop won't be seen - and he'd announce Elop has been fired effective today...)

Thank you all for the comments

Tomi Ahonen :-)

[nnine]

Hi Tomi,

thank you for your analysis!

Personally, I care less about Nokia, but I am angry because of Maemo/Meego. That is a real loss.

A smartphone, which I carry around everywhere where I go and which has GPS and always a network connection, which can access my private wireless lan, my contact list, family photos and other stuff, which has a microphone, camera, and other sensors, should - in my opinion - be controlled only
by me and not by some third party. Especially not third parties whose business it is to spy on me or to control what content I can access and how. While not perfect, compared to all the alternatives, Meego was the only platform which was not completely hopeless in this respect.

Not even to speak about the community around Meego/Maemo or other cool stuff like this:

http://www.engadget.com/2010/03/19/niko-the-n900-powered-lego-robot-looks-poised-to-take-over-twi/

http://graphics.stanford.edu/projects/camera-2.0/

Compared to all this, I wonder what kind of shallow person one has to be to get excited about tiles
(really just icons which can be updated icons remotely).

Two suggestions:

I think you should show a graph with unit smartphone sales for all vendors which goes back further in time similar to this (but updated):

http://www.yugatech.com/mobile/recent-smartphone-shipments-show-gainers-losers/

That graph makes it pretty obvious that Nokia was shipping smartphones before apple came along and that it was still doing well until Q1 2011.

And I would prefer not to have linear interpolation between the points when showing data which refers to integrated sales for each quarter or market shares derived from such data. (Because if you draw a continuous curve, then it would make sense if the area under the curve corresponds to the integrated quantities.)

[Olaf]

Hmmm, Tomi, got my problems seeing you taking Q3/10 to Q4/10 as the only truth. The step between Q3 and Q4 is usually the highest for each market. Later you take that excuse for the higher sales in 2011, so you should be fair with this in 2010 too. So it doesn't make sense to take that highest one and extrapolate this to all quarters of 2011 then. You should have compared year to year. Of course you should also look at other things (incl. competitors activities) in that time - it's a changing market...

Did that memo called any sleeping dogs? I guess so. On the other hand, it clearly shows that these analysts basically buy everything that has a management summary.

So the real question is, what was necessary. As far as I remember, there was a change going on in the mobile phone market and it still is. The question is, how well did Nokia by that time and how well they would do in future. If you realize at a point, that you need to change your strategy completely, then communicating this will always somehow hurt your existing business. On the other hand ear to the street said already for some time that Nokia is loosing ground, it was not considered competitive in the smart phone market. And if your customers think this, you _will_ lose. Maybe a year later, but you will. So it is important to make the change early enough to not lose ground completely, like now RIM does.

Also my impression of Nokia was that of a huge, slow, self picturing something, that lost contact to the outside world. It would spit out device after device, but was not able to compete in the upcoming battle that would soon reach the whole world. Yes Elop could be North America focused, but hey, this is where the strongest competitors started and it gives you a look into the future.

So I'm sure there were enough mistake done, however I considered that memo first of all as a wake-up call to each and everybody in and around Nokia, that times have changed and there's no way to move on like before. And I think that was totally the truth.

[nodevel]

Sorry, I messed up the fields - I placed my e-mail address instead of the name. It should have been just 'nodevel'. Please, remove or edit my previous comment. Thank you! (And Thank you for analysis too).

[JD!]

I dont see tomifan posting today! He must be hiding under his bed tonight.

[Lavv]

Truly a sad day for Nokia.Job cuts can reduce costs but to an extent only beyond a certain point they are detrimental to the companies effort to stay alive and produce.
Salo is down and out,No more Made in Finland Nokia phones,it seems Compal it is for Nokia manufacturing.sad very sad

Although lets for arguments sake assume that Nokia wanted to move away from Symbian desperately and had no Meego/Maemo stuff ready(which was actually claimed but look what a stunner N9 is). Even then Elop's decision is plain and utter stupidity.WP was around in Feb 2011 and any one serious enough would have told you how much WP lacks in basic functionality as compared to Symbian.

Replacing Symbian with WP7 is like replacing a well functioning Honda Car with Ford Model T.

A much much better choice would have been Android(Assuming of course no Awesomeness we have seen in Meego/Maemo was there,the closest in terms of functionality to Symbian.

It seems like Nokia would be gone before Dec 2012 or on life support by MSFT to keep WP alive,but by then BB10 device would be there(which has N9 like interface) and Tizen the successor to Meego would have at least one device plus the iPhone 5 and some upgrades to S3,so no matter how we see it,it is curtains for Nokia as an "independent" company and very soon to be an OEM/factory for WP and shortly thereafter DEAD!!

Thanks MSFT for killing the world's most trusted brand in mobile.

[JD!]

Its either RIP Elop or RIP Nokia.

Just hoping its not too late :-(

[Alin]

@Lavv, for Microsoft was an easy thinking : force the biggest mobile brand to sell WP or kill it!

[Nuno Brito]

We can make a difference if we all post comments on google+ using these tags as sign of protest:
#FireElop
#SaveNokia

We need to save this train from wrecking.

[WarOnMicrosoft]

Lets hijack Elop and shit on his face while we play loudly some Microsoft elevator-music into his ears, HaHa also throw him with rotten eggs from Central Market Place, Helsinki its near his resident and douse his clothes with water from Cholera-basin near said market place, HaHa

That will teach him!

[jcamdr]

From http://press.nokia.com/2012/06/14/nokia-announces-executive-changes-renews-leadership-team/ I get the feeling that Elop is acting like a dictatorial king, changing his staff as soon as there don't magically brings to his the unrealistic goals he set to them. he can't admit that his strategy is doomed and will scarify everyone to save his life. Can't believe that this can continue this way legally.

[Saitonne]

Wow as a Kenyan... Nokia lost it.. they fired their whole Kenyan team and have a skeleton team. HTC and Samsung are busy eating up Market share that was easily Nokia's. If they lose us the rest of the emerging markets will be fast on our trail...

[Nokia Fan]

Sad to say this, being an ex-Nokian myself and don't wish to ridicule the situation. I think the WP team made a record today and the headline should be - 10K Nokians smoked by Windows Phone.