What Do We Now Know, after Nokia's Latest Profit Warning & Layoffs - The Titanic Deck Chairs Moment

I have a question for you. How many times do we get to hear Nokia CEO Stephen Elop say "its more challenging than I had expected" and "the sales channel is not supporting our products" and "I can't give you a long term outlook" in reporting these profit warnings and every more disasterous Quarerly results, that his claim of "we are proceeding well along our strategy" starts to sound hollow. At what point does the CEO lose his credibility.

I think Elop lost his credibility yesterday. I will tell you why, and its that tired cliche of the Captain of the Titanic rearranging deck chairs while his ship is headed at the visible ice berg. But lets not go there yet. Lets first review what we now know that we did not know yesterday.

HUGE LAYOFFS

Nokia announced 10,000 layoffs. I am very sorry for my many Nokia colleagues and friends who are now involved or fear that they might be losing their jobs. 3,700 of the jobs will be lost in Finland, and announcing this right before Juhannus, the midsummer celebration and start of Finnish summer holiday season - recognizing, Nokia had not told the labor unions about these coming layoffs, so they now start the negotiations of how to fire 3,700. That means many of the people who do lose jobs, will find out when they come back from vacation. And how many is that? I think Nokia has about 15,000 people employed in Finland now, so it would be about one in four who will lose their jobs. Happy holidays indeed. What a cruel way to deliver the devastating news.

The layoffs will hit globally about 1 in 5 Nokia employees. Think about that. It means that as an average, everyone who works at Nokia will know very closely several people who will be fired. This will be a huge blow to the morale of those left at Nokia. And like someone mentioned at Twitter, this is very cruel at those who had listened to the new CEO last year in February, and took the jump with him, off the "burning" platform and into the icy waters. Now it looks like the CEO got out of the water, got himself a rifle, and starts to shoot into the water, to kill any Nokia employees he can find who hadn't drowned yet.

But the layoffs were totally expected. As Nokia's Q1 results were so horrid and the sales kept falling for five consecutive quarters since Elop's Burning Platforms memo (the costliest management memo of all time) of February 2011 - as the company total sales fall, and the company is already unprofitable, there have to be cuts. The easy cuts had been made already, now it means deep, painful cuts. And it looks like Elop thinks one in five Nokia still-remaining employees must be fired now, just for Nokia to continue on.

The layoffs may help some Nokia investors trust the stock price but I think these cuts are now far too deep, gone on far too long, cutting into the meat of what was left of the strong base of Nokia. There is no fat to trim. Nokia cannot cut itself into a winner. This is the wrong path. But I am not the CFO, I have not seen the internal numbers and it really isn't even the point. Lets get to the Captain and his actions.

END OF MELTEMI

But I want to mention one thing. The layoffs in some offices including closing Ulm in Germany means the end of the Meltemi project and the end of the Linux and open source dream at Nokia. Meltemi was the sister OS platform to MeeGo, as a Linux based smarpthone operating system, but designed for ultra low cost handsets, to help Nokia migrate from S40 and S30 based 'featurephones' to smartphones, in the under 40 Euro/50 US dollar price range. This is a price point where Windows Phone cannot reach. The license of Windows Phone is about half that alone haha.. Windows Phone (and Windows 8) is a huge resource hog (as Microsoft software is also traditionally) meaning the equivalent device, like a smartphone, will need more CPU power, more memory, more storage, more supplemental processors etc, to do the same task as more efficient software (like Android or Symbian or MeeGo).

Meltemi was to be the most efficient smartphone OS to allow very low cost components and minimal specs to make very low cost smartphones - for Africa, for India, for hte Emerging World. It was the project Mary McDowell was known for and until recently Elop seemed enthusiastically supportive of bringing smartphones to the Next Billion. Nokia's market share in smartphones in 2010 was over 80% in Africa, over 70% in China, over 60% in India and over 50% in Latin America. This was a very promising future for Nokia mid and long term viability.

That died yesterday. Linux was invented in Finland by Linus Torvalds, our Bill Gates of Finland so to speak. There is a huge programmer pool of talent around Linux in Finland and the open source philosophy is very strongly embraced by so many in the global tech space from esteemed tech gurus in mobile like Ajit Jaokar and Tony Fish (authors of Open Gardens on that very topic) to yes, the hacker community that is very vibrant for example in Finland. Nokia had a huge amount of good will out of its long-standing support of both open source and Linux. That died with the closings including Ulm (and the departure of Mary McDowell).

We heard of a new profit warning and a worsening of another profit warning. The previous profit warning for Q2 ie this current quarter, was that it should be about the same as the loss-making Q1 (-3%). Now we hear the losses will be worse (ie bigger losses than -3%). That is very bad news when the CEO told us in April that he thought Nokia was proceeding well with his strategy.

PROFIT WARNING

And then we heard the new profit warning. That now Nokia tells us that even Q3 will be unprofitable. And Nokia tells us that the handset unit is suffering and the profit margins in the smartphone unit are the worst-performing (this is where that 'proceeding well' part of the Elop strategy is centered, with Windows Phone powered Lumia smarpthones). And we heard - once again, that while Elop loves his Lumia phones, for some reason the retail channel is not selling them. Yeah. Big news big fella! Wasn't this the same thing you told us last year in April, and last year in June, and last August, and September, and this January, and this April? Wouldn' t it be about time you, the CEO did something about this chronic problem that is exactly the same every quarter - that Nokia retail channel is not selling your smartphones? Didn't you learn anything in the past what, 14 months?

We learned that Vertu the luxury mobile phone handset unit had been sold (it had been on the sales block since January at least, so this is not surprising news). What was surprising was the purchase of the - however it was phrased strangely - assets of the Swedish cameraphone imaging tech company. So this was a Nokia subcontractor already? And on a day you fire 10,000 people you say, oh, and I bought myself some new toys too. Isn't this just a little bit seeming like a cruel parent who is punishing his kids on Christmas? On the one hand on this day you fire thounsands and sell one of Nokia's 'crown jewels' and then you don't use any of that money to cure Nokia's troubles (in sales) you rather go buy some tech toys? And this from a vendor who already was a subcontractor? What? This was worthwhile effort of your time Mr Elop, or that of your senior staff, to go find someone to buy, with all the money you now save with the thousands you fire? I think your priorities are wrong, Mr Elop. But again, lets stick to the point. So what else? There were top management changes. Ok. Who and what? 

MANAGEMENT CHANGES

Mary McDowell, Niklas Savander and Jerri DeVard will leave. Mary was in charge of the dumbphones unit of Nokia. Niklas was in charge of Markets. Both were long term veterans of senior Nokia management. Jerri was the Chief Marketing Officer, who joined a year ago to the top position and was former Microsoft colleague of Elop.

What can we read out of this? First, that now with Mary and Niklas, the exodus of top management talent in mobile handset wars has been expelled by Elop. The total Jorma Ollila collected Dream Team of the best mobile handset talent has fled or quit in protest or been fired. What did they know? They helped Nokia grow to take 40% of the global handset industry (profitably). They helped discover all the trends we now hold true and dear, that Nokia did first, like smartphones, cameraphones, gaming on phones, app stores, mobile banking, NFC, cloud computing, social networking, mobile advertisig etc. These were not always done best in execution - ie Nokia was notoriously slow to capitalize on those - but compared to Nokia's traditional full-portfolio handset makers, Motorola, Samsung, LG, SonyEricsson etc - Nokia was miles ahead of them.

And even compared to the pure-smarphone players like Apple, HTC, RIM, Nokia had been fighting very well in all those wars, with that Jorma Ollila assembled Dream Team. That train was run off its rails during the biggest economic crisis the world has seen in our lifetimes - that killed many Nokia rivals like Palm and Motorola - but Nokia never produced one loss-making quarter in its handset business during those hard times. Yes, the previous CEO Olli-Pekka Kallasvuo did make many mistakes and was duly fired for being a poor boss for Nokia, but this second tier of Nokia generals were among the best in the world. If Elop had been willing to keep them, listen to them, use their insights, we might be closer to the 40% in handsets and smarpthones, rather than 20% in handsets and 8% in smartphones were we are today. And definitely Nokia would still be profitable today..

Elop clearly makes amateur management mistakes (colossal ones like the Burning Platform memo but also enduring ones like his enthusiastic support of Skype last June, that angered so many of the global carrier community). If he was thinking of Nokia's best interest and trusted his mangement team, he would have listened, like how many of his team urged him to stay with MeeGo. But he rather clearly prefers to expell any strong voices and minds, and wants a feeble cardre of Yes Men to rubber stamp his dictatorial edicts.

ARBITRARY PUNISHMENT

So what of Jerri DeVard? This is the most bizarre. She came with him. She was an American to help change the 'too Finnish' Nokia. She was ex Microsoft and an Elop colleague. How could Elop hire her and give her the CMO job, if she was not qualified? Why was she fired/let go. I mean, the Lumia launch has been massive and global and visible, arguably oversaturated, not failed. Every story about Lumia launch countries was superbly impressed by how vividly the Lumia marketing was visible! Elop has said time and again that it is the sales retail channel that is refusing to sell Nokia smartphones. The problem in Lumia disappointing launch now is not a lack of marketing - gosh, they gave away free Xbox 360 videogaming consoles with Lumia purchases in the UK for example - they booked New York's Times Square for one of the most flashly launches with live music. What did she 'do wrong' if the problem is - repeatedly said by Elop - the problem is retail sales. That is not her job! That is the job of the head of sales, not the head of marketing. Did you walk into a handset store, Mr Elop, during the Spring as Lumia was launching? I did, from here in Hong Kong to the UK on the other side of the planet. Lumia was blasted everywhere. Giant floor-to-ceiling sized markeing materials. Lumia MARKETING was everywhere. The sales dudes and dudettes weren't selling Lumia, but the marketing was there!

So we now see what Elop does. He identifies, even in public, a clear problem. Then he takes decisive action. The brave CEO boldly fires someone! Elop knows where the problem was so he.. fires someone else. Michael Schumacher, you have caused a crash in this Monaco Grand Prix. We will punish.. Lewis Hamilton for it, he was in the pits changing his tyres and nowhere near the accident. This is 'sanity'. This is a 'fair' boss? He recruits you to join him in the new company, and then a year later fires you? For what? For the failures of the sales department that is not in your control! What a cruel boss.

HOW TO ANGER YOUR CUSTOMERS EVEN MORE

Then what of the new guys coming in? I really don't know anything about Timo Toikkanen, Tuula Rytila or Susan Sheehan. I do know Juha Putkiranta, he was around back way in the day, so he is long term Nokia and been in increasing positions over time, its about 'his time' now for this level of a senior position. But Chris Weber for global head of sales. This is a totally boneheaded move. This is taking the red flag and waving it at the raging bull. This is sheer madness. Chris came from Microsoft with Elop. Chris was named US sales boss. Microsoft had already had a difficult relationship with the carrier community worldwide before last year. Those relationships were severely made worse when Microsoft bought Skype last May. Then Microsoft (and Nokia) were attempting to bully the carriers with the Lumia launches and then threats with the Skype integration. Still now in May, Elop admits to the Nokia shareholders meeting that Microsoft is trying to bully itself onto the carrier platforms with Skype threatening that Skype will come in any case.

What is the result? Nokia's CEO Stephen Elop himself admitted to the Nokia shareholders meeting now last month that all Microsoft Windows Phone smartphones are experiencing reluctance by carriers to sell them. Some have refused to sell any Windows phones altogether. Not my words, Elop's. The carriers hate Skype. They hate Microsoft now, because Microsoft gives Skype deep pockets and 1 Billion PC desktops on Windows 8, to threaten the very survival of the carrier business. 60% of the revenues and 50% of the profits of the carrier community come from voice calls - whose single biggest threat globally is that very same Skype. Then 30% of revenues and 45% of profits to the carriers comes from SMS text messaging - which is ALSO threatened by Skype. International calls are the most lucrative part of voice calls - that is what Skype is focused on. And then videocalls? The future of '3G' services - even now this week we heard Apple finally gives the next iPhone 3G videocalling ability on its Facetime. And yes, videocalls? Hugely cannibalized by.. Skype. And yes, it was Elop who specifically explained to the Nokia shareholders, yes carriers fear the revenue loss posed by Skype.

Skype is poison to the carrier business. We may love Skype as consumers. The carriers hate it. They hated Skype before last year, when it was 'only' 900 million users globally as a little threatening rival. Now that Microsoft owns Skype, Skype is far far more dangerous to the very survival of the carriers. And when Microsoft adds 1 Billion desktops to Skype, it just makes things so much more threatening. This is the ultimate poison pill. A cyanide capsule. So yes, right after Microsoft bought Skype, the Windows based smartphones were put on a sales boycott globally, as reported in various newsmedia and Ballmer himself has admitted Windows Phone sales have been below expectation (and he demoted some Windows Phone senior management).

The past Microsoft Windows Phone execs have talked of how much the carrier relationships of Microsoft got worse in 2011 and even Elop said now in May of 2012, that yes, it is explicitly because Microsoft owns Skype (not because Lumia phones might have Skype - they don't, and some even can't use Skype like Lumia 610). And we've seen the Windows partnership deteriorate because of this. Dell, LG and Sony have quit making Windows Phone based smartphones - for example Dell specifically said its because the carriers don't want to sell Windows. And HTC said they are shifting away from Windows Phone to Android? Why, because carriers don't support Windows sales. Samsung? Didn't say why, but is shifting from Windows Phone to bada, Android and soon also Tizen.

And Elop again now yesterday said in the conference call to analysts that yes, Nokia has a retail problem, that Windows Phone sales have been disappointing. Bloomberg quotes Elop yesterday saying Nokia Lumia sales have been "slower than we would like." This is the same Nokia Lumia smartphone sales whose stategy was strong and Elop was so confident in just what, in April? The same Lumia that had been having such a strong launch, accoriding to Elop just weeks ago? Tech Crunch which listened in on the call reports it like this "Elop pointed out that Nokia was still having issues with retail salespeople." Those sales people were "reticent to recommend Lumia smartphones to potential buyers." (reticient means unwilling or silent) And Tech Crunch quotes Elop directly as saying: “The challenge in all of this is breaking through the strength Android and Apple have in a retail environment, we aren’t getting the traction we prefer.”

SELF-INFLICTED WOUND

Before the Elop Effect there was no 'strength' that Android or Apple had in retail. You walked into any telecoms retail store on the five continents where Nokia did well (not in North America obviously) and there were stacks of Nokias and the retail staff ran at you to sell you.. a Nokia! Nokia was famous for dominating the retail environment. Not just competitive, dominating it. This was regularly listed as one of Nokia's biggest strengths, when analysts wondered, how could Nokia, with clearly older technology smartphones on Symbian, outsell Apple by 2 to 1, and Samsung by 3 to 1 globally? Yes, that is true. As recently as 18 months ago, Nokia was outselling Apple iPhones - I mean yes, Nokia smartphones, Nokia Symbian based smartphones - were outselling all iPhones by 2 to 1. More than 2 to 1 in fact. And all Samsungs by 3 to 1. Where did this retail environment domination disappear in the past 18 months? The sales dudes and dudettes who had so loved Nokia did not suddenly all retire last year? All throughout China, India, Brazil, Russia, Germany, Mexico, Indonesia, Australia, Egypt, Nigeria, Spain, Italy, France, you name it. The global handset retail environment WAS Nokia. The others begged for tidbits in the retail space. The carrier top management had to give special bonuses to help LG or SonyEricsson or Samsung or HTC or RIM to sell, when the customers asked for Nokia and the sales was all too eager to give it to them.

This is what Elop owned in January of last year. The world's best reseller channel globally. The best carrier relationships (except in North America) and the bestselling dumbphones AND the bestselling smartphones on all five inhabited continents where on that continent you do not have six strong domestic handset rival manufacturers (like they do in the USA).

AGITATE THE WOUND TO MAKE IT HURT EVEN MORE

So the problem was caused by the Elop Effect. What did Elop do since? He could have tried to fix things. He didn't. He made things worse by feuding and taunting the carriers from yes, celebrating Skype, to taking Micrsoftian bullying tactics to Lumia launch orders - so much so that some European carriers were complaining outloud about this last Autumn (almost never happens that these come into the open). And now, Elop finds that his Nokia sales guy quits so what does he do? Did he take the most experienced, most trusted, longest-serving, fully superbly competent and accomplished Nokia senior salesdude to run his global Nokia sales? Someone who is known personally by the major carriers, who goes playing golf with them and takes them to the FIFA tournament and the Formula One races year after year, knows the wife and kids, etc? The grand old man type of person in Nokia sales. Someone whose trust is beyond dispute at Nokia sales?

No. Elop appoints his stooge, the Microsoft dude, Chris Weber as his top sales gun. What a moron (Elop, not Weber). Why on earth would you do this? If you Elop are so insecure you need your fellow Microsoft Muppets around you, then don't appoint this total novice never-sold-a-handset-in-his-life until last year guy as your top sales guy, to go sell to companies BIGGER THAN NOKIA like Vodafone, China Mobile, Telefonica, America Movil etc... He is the very personificiation of Microsoft. Everything the carriers hate.

And his normal tactics were of course learned at Microsoft to then bully, threaten, intimidate and lie to the carrier community. This has only made things worse. No. If you Elop have ruined carrier relationships, you don't send in your clone. Then you send in the 'anti Elop' the exact opposite, you know, Good Cop / Bad Cop. You send in the nice guy. The one who has been with Nokia sales so long his blood has turned from red to Nokia blue. That guy! You don't send in another Microsoft Muppet to anger the retail channel!!!

LETS LEARN FROM KALLASVUO

Ok.. Now what do we learn. Elop told of how he now plans to solve the riddle that is the carrier sales boycott against his phones. Elop has decided Nokia will offer us... cheaper phones! Ha. That means more damage to profits. As Nokia is already generating a loss - it means bigger losses. Didn't Elop just give us the third profit warning in 12 months? And his smartphone unit is now five straight quarters of making losses. Losses that are now increasing? And Elop's answer is .. yeah, I will get better sales by cutting prices. BTW the Lumia 610 - cheapest so far - is so weak, it can't do Angry Birds or Skype. What is your cheaper Lumia 510 not be able to do? Voice calls and messages? So we carry it in our pocket so we have what, a nice square pocket watch with alarm, perhaps?

LETS FOLLOW THE MOTOROLA STRATEGY

So did you like the movie called 'Fall of Motorola' but felt it was a bit too slow? You'd like to see the same movie remade but just to run faster? I've got that for you. This is what ZD Net reported of Elop's strategy now in sales. ZD Net writes without a hint of irony on the obvious contradiction in Elop's mission:

While the aim is to get more Lumia devices into the hands of consumers, Nokia will in fact narrow its direct sales and marketing efforts to select markets, palming off less significant ones to distributors to be managed through a central hub.

Wow. That is Elop's strategy. We will get more Lumias into the hands of our customers, by reducing sales and diminishing our presense. This is the very last desperate act of a global handset maker who is about to die. This is how Siemens... died. This is how Motorola... died. This is how Palm... died. You find you can no longer afford your global sales, you cut the sales force and then wonder a few months later, why did your sales fall even further...

Maybe I got it wrong? Surely Elop cannot be this much a moron? Or did I. Here is ZD Net reporting more with direct quote from Elop: “We’re deliberately going through a cycle of concentrating on some markets at the expense of others.”

So Nokia is going to increase sales by reducing sales. Aha. That sounds ..illogical. If you thought this company can be saved, and now among his 10,000 people Elop is firing willy-nilly all around the planet, is the last Nokia competitive advantage, its sales superiority - a sales force so strong, they were beating Apple while Nokia smarpthones ran Symbian for heaven's sake. And beating the iPhone like a rented mule, Nokia outsold the iPhone by 2 to 1 for gosh sake when Elop took over. No. This company is dead now. This is the last act of a despeate man. 

WHAT ABOUT MAPPING

Ha, what was that? So Nokia's CEO - really, the CEO, says he will now use Nokia navigation and mapping to rescue the company? Isn't this the same Nokia that bought - and owns Navteq, a purchase of 8 Billion dollars five years ago that never turned a profit in Nokia's ownership? And now in this environment of falling handset sales, a change in operating systems, mass layoffs and retrenching from global sales, somehow Nokia can turn the perennial turkey, Location-based services (the worst-performing mobile service category of all time) suddenly into a 'winner' ? Wow, give me some of that crack cocaine you are smoking Mr Elop. So just as we hear Apple adding its mapping stuff to the iOS with TomTom, you can somehow now suddenly turn the loss-maker into a profit engine? Wow, cool? Happy that you were able to tell us this magic dust and how it works, Mr Delusional. 

SO WHAT DID WE LEARN?

So we know that Elop can look at a problem for 14 months in a row, and come to the conclusion his strategy is fine and while retail sales is the problem, he can solve it by firing staff, closing factories, buying suppliers. Then that Elop doesn't like any critical or informed feedback, he wants yes-men (or women). He has no safety net left, all knowledgable top staff have fled, resigned in protest or been fired. Elop thinks his carrier relationship problem can be fixed by appointing the most unacceptable guy to run that. He fires his former confidant and colleague who did the right job in marketing - because of problems in retail sales she had nothing to do with. This means no mid-level or senior manager can trust the psycopath in charge, he is not behaving rationally and any rational subordinate obviously is planning to leave Nokia soon if they haven't already gotten out of there (most of the best minds left soon after Elop was exposed to them).

We see here is the Captain of the Titanic who sees his ship is headed towards an iceberg. He could attempt to correct course, to shift direction. But he refuses to deal with the big problem (retail sales boycott) he rather goes to rearrange the deck chairs like selling Vertu and buying, what was that Swedish company again, Scalado. He sells more handsets by reducing sales. He turns loss-making Navteq suddenly into a profit engine. Sure. Why don't you just solve the sales boycott, Mr Elop, which would only take two things - terminate the Windows Phone Lumia project - and fire yourself (and take that Weber dude with you).

MEANWHILE IN REAL WORLD

I said last year in early June, right after Microsoft had bought Skype that there would be a carrier revolt about that. The boycott appeared within days and was reported widely. Elop admitted to the Nokia Shareholders meeting last month that a year later, after Microsoft had met with the carriers - often with Nokia - they could not break the boycott. LG, Sony and Dell have ended their development of Windows Phone smartphones due to the carrier refusal to sell them. HTC and Samsung are shifting to their alternate platforms. Only Nokia CEO is pigheadedly steadfast in his madness. I don't care that the past year we have seen a sales boycott. This time we do the same thing, and we expect a different result!

So lets see what we see from the people who are not insane in the membrain. Lee Simpson at Jeffreys comments on Lumia sales now: "disapointment." Michael Genovese of MKM Partners says they have inspected stores and found "No one is buying Nokia's Windows Phones". (where is your Windows outselling iPhone widely reported BS story now, haha). Well, there is of course America. Or is there? CNet has done a study of Lumia US invasion, and dug round, and found: "Despite a mountain of hype and support behind it, Nokia's Lumia 900 was no blockbuster." They report that since the launch, "the momentum and buzz has faded."

Mr Elop gave the Lumia launch the biggest budget ever seen at Nokia. Elop said in October of last year that Lumia would get 3 times bigger launch marketing budget than ever seen in Nokia's history for any new phones. That is now gone. So then? By January Elop was back to blaming the sales channel. The Register reported that Elop said "Dumb salesmen are hurting us" in its headline. That was reality. Now lets examine the alternate reality inside Elop's head. How does a delusional CEO deal with those facts:

In February 2012, in an interview to South Africa's Business Day, Elop was saying that "Nokia’s future was secure." (SECURE? Company generating record losses and his sales have failed) And Business Day writes of Elop that "his optimism about Nokia’s future was based on a new strategy he unveiled in February last year." Perhaps worst of all, in the same interview Elop was asked about Samsung as a rival. Elop said he "would not lose sleep" over Samsung!! This was in February 2012. Nokia had been the world's largest handset maker for 14 years. In March 2012, only weeks after this article, Samsung would pass Nokia to become the world's biggest handset maker. Oh, and in those smartphones, when Elop took over 18 months ago, Nokia was 3 times bigger than Samsung. Today Samsung is 4 times bigger than Nokia in smartphones. Good thing you kept your eyes on the ball, Chester. Not losing sleep! Nice that you went shopping for Swedish imaging makers and Norwegian software makers and selling a factory in Romania, rather than focus on your biggest rival and help Nokia compete.

Yesterday the Nokia share price fell 18% in one day, the biggest fall it has ever had. The share price had climbed 11% in the first 5 months when Elop was in charge, when he executed the previous strategy. After his magnificent new strategy unveilled in February 2011, Nokia share price has fallen by 74%. Today we heard that Moody's has joined the two other ratings agencies downgrading Nokia to junk. All three ratings agencies rated Nokia one notch below perfect when Elop took charge. I think we can see the pattern here. The Captain sees the iceberg. He knows he could save his ship. But he would rather go fire 10,000 engineers and buy a Swedish company. He's rather rearrange the deck chairs. Full Steam Ahead! 

Comments

[Kenny]

Leading Analyst said, "You praise MeeGo. I have tried it, and the 1st use experience is simply awful." and "However, nobody can deny the fact that Nokia Lumias offer a nice user experience".

Switch MeeGo and Lumia in the above descriptions, Leading Analyst and you would have got it right. I have a N9 and swipe UI and multitasking is simply delightful. Meanwhile I've been hanging around WP forums and it tells a different story. Besides the many restrictions and limitations of the WP7.5 OS, Lumia users have a particularly horrid experience due to the innumerable hardware defects and firmware bugs. The Lumia is a rushed product and it shows.

[bjarneh]

There are two sides to every story, as much as this looks like a failed OS switch on Nokias part, it may just be the best attempt at stopping Linux as the dominant mobile OS ever made. Very soon the dominant mobile OS, will in fact be THE dominant OS as smart-phones will dominate the desktop pretty soon.

As a free software enthusiast this annoys me quite a bit, but it is hardly surprising. Microsoft and other companies who make their living from proprietary infrastructure will fight free infrastructure like Linux. FreeBSD/OpenBSD and other BSD projects will be exploited or left alone, the GPL makes this exploitation impossible, this is the threat.

MeeGo and its sister project Meltemi cannot be killed by such tactics, the code is free, and thousands of free software developers have been stepped on, they will not forgive nor forget. Nokia can take away their salary but not their pride, this is a game they cannot win. It may look easy for a big company to squash a group of free software developers, but history tells a different story.

[eduardo]

Tomi, do you think the abandonment of Meltemi will have any effect on who might buy Nokia?

[cycnus]

Tomi,

I wonder if you're blood is also blue... LOL

I think Elop is a coward, liar, and criminal.

A coward... because if he really think Meltemi should die, he should done that in Feb 2011, so it won't burn nokia cash....

It's really sad to see Meltemi die, if OPK still around, or Ansi Vanjoki lead nokia, Meltemi - Meego would really kick ass.

[Allan83]

Hi Tomi! Hope you read this comment of mine. I changed the name of both person to protect them from other people. I found a blog site that pertains to Windows phone and Android and found a comment. A comment from what he calls himself a Nokia employee and an interested blogger to the future of Nokia

Nokia Employee: Shave

This

"I don’t think it was just a decision that Nokia’s board or Elop made, but one that was influenced by the whole culture of the company. Many Nokia employees probably couldn’t see themselves using Android. I guess that feeling was worth more to them than saving the company in a practical manner."

is an utter insult.

Since when do the EMPLOYEES of an international corp have ANY influence on the strategy or wahtsoever.
What are you smoking?

I am a Nokia employee and i do not know one colleague who had influence in this OR would have thought it is a good idea and support such nonsense.

MS was never a favorite in the "NOKIA culture".
vice versa ... always proud to deliver an OS developed in Europe as a choice.

Interested blogger: art83

Shave if you are really are a Nokia employee then answer this question truthfully and without fear. What do you think will be the saving grace for Nokia is it the Meego Harmattan, Windows Phone or The latest Iterations of Symbian?

Nokia employee: Shave

Meego / Symbian, but never Windows Phone.

No Nokia employee admire Microsoft, because of their bad culture or gene. They are simply killing Nokia by injecting Elop (a MSFT employee) into our Nokia.

But, I also agree that Meego / Symbian cannot compete with Android in long run. But, our CEO must have continued them as they are in demand and slowly introduce Android and WP phones as well, just like how Samsung operates. But, this is not possible in our Nokia because of Elop, a Microsoft mad virus.

After that end of comment conversation.

[jiipee]

Tomi,

there was very interesting comment at My Nokia Blog:

"Originally, Meltemi was developed in collaboration with subcontractor called Nomovok. In spring 2011, all subcontractor contracts were terminated. Meltemi development was continued in Oulu and part of the work was transferred to new location in Ulm,Germany (possibly because the termination of the Bochum plant was proved to be extremely expensive operation). If Nokia had continued to use subcontractors instead of moving the development to new people in new location, the Meltemi phone would have been ready last January. It is possible that McDowell got fired because she could not deliver the Meltemi phones in promised schedule.
Meanwhile, the Android phones have become cheaper and are now competing in the same price points the Meltemi phones were planned to operate, which could be a reason to cancel the Meltemi project. However, Elop has not admitted anything yet. It could be that the Meltemi work still continues in Oulu and the reason to close the Ulm was that they were just incompetent. Nokia still continues to develop QT and now that Symbian is buried, the only reason would be that there will be another QT compatible OS coming. I hope that Maemo/Linux work still continues, but I’m getting more doubtful all the time."
http://mynokiablog.com/2012/06/15/no-meltemi-what-about-smarterphone-what-is-there-beyond-s40-what-of-qt/comment-page-3/#comment-594983

The above sounds plausible and fits to what was said about subcotracting. If this is true, the new strategy caused serious delay in delivering competitor to Andoid in low price segment ie. Meltemi. And it would have run Qt. Imagine China Mobile selling N9 alongside with Meltemi phones.

It is evident that Nokia themselves killed the low price segment themselves. How long it will take to get WP to the lower price segments 6 months - 12 months?

[Pom]

Tomi, when you calculate the profit/loss for the NAVTEQ purchase, don't forget that *if* Nokia hadn't bought them, they would have to buy the maps from someone else right now. Moore's law makes sure that GPS chip price goes down, but there's no corresponding law when there are only two companies in the entire world that can provide global maps. It is entirely conceivable that NAVTEQ would've been scooped up by a competitor, and the map license fees would be pretty extraorbitant right now.

Assume a $5 map license/device, then consider how many devices Nokia has shipped (and assumed they would ship back in 2007, when they were still the undisputed leader). You will quickly realize why Google started their own, very expensive, mapping division.

[Kenny]

jiipee, WP isn't suitable for the lower price segment. It's not just the cost of the phone itself it's the whole ecosystem. WP revolves on having a PC which can install Zune and data connection for file transfers using SkyDrive. Zune will only transfer photos, video and song files. Any other files including MS office and pdf files need a data connection to transfer to the phone. This means the phone also need a data connection.

This means that users need a reasonably modern PC which can run Windows XP SP3 as a minimum. If you do not have a data connection for the PC Zune will not even install.

As another reader pointed out, WP is designed for affluent Western countries and trying to shoehorn it for emerging countries where even stable electricity is a problem won't work.

[Johannes N.]

> "- You praise MeeGo. I have tried it, and the 1st use experience is simply awful. Worse than Symbian and miles behind WP. As a native Linux it is very open and powerful for the hard core nerds, but that represents only 0,0001% of the users."

This is complete nonsense. I have both here and used the N900 for 18 months. The N900 with Maemo still had some Geeky aspects and rough edges. The N9 with MeeGo is perfect for a newbie phone user. In terms of user friendliness, this is an amazing achievement.

> "A platform that cannot properly integrate with the leading service platforms (for exp. Google) is a dead horse."

It is integrated better than many others. For example, the N900 already had full integration of Google talk. And it synchronizes nicely with outlook, for the record.

> "Moore's law takes care of the decreasing price points for all smartphone platforms."

You don't have a fuck of a clue.

Read that:

http://www.gotw.ca/publications/concurrency-ddj.htm

Processors will NOT scale as before with increasing clock rates. Power consumption and heat both become too high. Since several years, Moores law applies only to the number of gates on new chips. On the desktop, we have already more and more processors and this will stay with us. This means that software needs to become truly parallel. Parallelism means that software must be designed for it from the fundamental level. It is often software technology which is used on supercomputers.

Windows is full of legacies and it will probably never be able to do that well. This is because, for example, one of the most fundamental mechanisms in Windows is the message queue - which serializes events and prevents parallelism. This overwhelming burden of legacies is the reason why now every new Windows version feels sluggier than before. They just cannot profit much from more processor cores. The only gain is from running the ubiquitous malware on another CPU.
In contrary, Linux platforms like MeeGo do not need to do multicore now - MeeGo is way more efficient than Windows Phone 7. But when it needs to, Linux has a rock-solid base of doing symmetric multiprocessing and running on big iron supercomputers and mainframes like IBM zSeries for more than 14 years.

On the OS level, this applies especially to storage. Flash memories are becoming larger and larger and file systems and data volumes are becoming more and more of a bottleneck. File systems like Linux' btrfs are becoming a huge advantage - and that's not something some idiots will develop quickly in a few months if pressed hard enough.

And one of the points most important for consumers is now battery life. This is directly related to multicore CPUs which replace high clock rates by parallelism.

As I need to repeat: You don't have the slightest clue.

[n9rocks]

iPhone =Jesus phone
N9 = God phone

Sorry, but to state anything else is plain proof you never actually tried the N9!

[JP]

My understanding is that Jerri wasn't hired by Elop. It was Niklas who did it before Elop started. For some reason she started after him, giving the impression he brought her, but the truth is he didn't want her from the beginning... Maybe he didn't want to overrule such a hire right after starting and he ended up tolerating it... For some time as we can see now.

[cycnus]

Next Nokia shareholder meeting could be even more interesting than before...

I just hope someone in the meeting yell:
"Fire Elop!!
Elop is criminal!!"

[Henning Heinz]

So what do you believe Nokia expected from Elop when they hired him? That he pushes Linux and Symbian?
I don't think so. They hired Elop because they believed that the best strategy to survive is to cooperate with a company that has tons of money and wants to push its mobile operating system.
This is what Nokia expected and this is what he did, with all consequences. And this is the reason why Elop is still on board and many others have gone. He did what Nokia asked for and he executed. Do you really think Elop was not asked what he is going to do before they hired him?
And then there is Android. The shining star that make so many mobile companies happy. Really? True, Samsung is very successful with Android but does it work well for Sony, Motorola or other vendors selling Android mobiles? Do they earn tons of money comparable to what Nokia made 3 years ago?
When Samsung went with Android they very well recognized that Android is not enough and invented Bada and now Teezeh (they also have some proprietary dumb phones). Samsung is just doing great in many ways.
Nokia has other plans and this means that big parts what make the Nokia of today are becoming redundant. You don't need great software developers if you just buy your software. You don't need great hardware developers if the specs come from the software vendor.
You need less sales people if you decide that you are giving up whole market segments.
Now you say that Elop is probably the worst CEO of all times. Maybe he is but he will make a fortune while leading Nokia. We will earn more money than anyone who is writing a comment here. He will also make some of his closest friends quite happy. Who can claim that they made some close friends millionaires?
When there comes the day when Elop has to resign, his final pay cheque will only become bigger the worse he performed. It is a sad story for all those people working at Nokia but there are many Elops around.
Elop is not the biggest problem anymore. Nokia needs a new owner not a new CEO. They need a new strategy and if the strategy is clear it does not matter much who is the CEO. If the strategy is just Android then things will only become worse. Android would be Windows Phone but without the Microsoft money. RIM made some of the same mistakes Nokia did but at least they now have a plan that could work.

[kirill]

Tomi, i think only good news yesterday was news about Savander and McDowell. these two had a very strange path at Nokia. they were in charge of something, screwing up and then getting new higher job and salary all the time.... Mary was in charge of eseries, it was peace of shit, she left it (then eseries became ok), but she become responsible for corporate development and we lost direction. same thing with Niklas. so, it was definitely they should be fired instead of Anssi 2 years ago...

[AtTheBottomOfTheHilton]

I really like the comments that has information from current or previous persons who has worked for Nokia. In not only the facts that interesting but also the internal morale and opinions of the people there. As more and more people are sacked we will get more information what is really going on. So if you know someone who works or worked at Nokia, ask them what is going on there an about their personal opinion.

Nokia, is beyond saving and there is nothing that can be done right now unless there is a intervention from the Finnish state that stops all this. What makes me angry is how Microsoft kills competition in anti-competitive way. Please start over and compete with Microsoft again so that they know that their Nokia coup was in vain.

[WindRider]

To all the posters hinting that there is another linux bassed OS in the works: there is not. The future for the bottom end is S40 and the Asha line, probably with Smarterphone UI.
Meltemi was never open source like MeeGo/Harmattan. That project is now over, and will never see the light of day. The Qt asset will be sold off, Meltemi shelved.

[AtTheBottomOfTheHilton]

@WindRider

Qt will never be sold because in the wild Qt can compete with Microsoft. Microsoft has Qt where it wants it to be, safely at Nokia in a box collecting dust.

Also, Linux based phone OS is certainly dead at Nokia. However, that doesn't stop anyone from creating one outside Nokia and I think this is what will happen. Microsoft is losing credibility all the time because they are lying all time and treat their customers like crap. People avoid Microsoft like you try to avoid a friend you know is a serial killer. This friend might be nice to you but you avoid the person anyway because you never know where you have that person.

Actually, if Nokia (the consortium, not Nokia phone company) has some interest left they should invest in a new OS company. Who knows, it might be a success.

[Earendil Star]

It is now certain that WP8 will not support current Lumias.

This means that what MS & THT Elop did is even worse than I had originally thought.
To Nokia and to consumers.

Practically, they shoved this BS OS to Nokia and consumers, with a huge marketing effort including wild astroturfing, knowing very well it was just a stop-gap to buy time.
A transition OS, with no upgrade path, just to have the name "WP" in the news.
Just think what would have happened if MS had to wait until end of 2012 competing against ICS and iOS 6 with WM...!

Again further evidence of the utter disregard by MS of consumers and partners.
OK, nothing new, but another blatant confirmation that they are ruthless and so far in the mobile space worthless.

I wonder whether MS disclosed to Nokia's board that WP was a stop-gap thing.
They first made Nokia wait one year from THT Elop's appointment to the first crappy Lumia phone.
Now another year is passing by before the first WP8 device comes out.
Two years were lost in the process and probably Nokia's own survival.

I am utterly disgusted.

[Ted T.]

Elop may be a bad manager, but this "Nokia/Symbiam" was doing just fine against the iPhone nonsense is just silly.

Please explain how Nokia would have done better than RIM --'they stuck to their guns, they didn't fire their old management (until just now), no burning platform memos and no legacy dumb phone business to drag it down. Yet RIM is every bit as dead as Nokia -- more dead in fact, because a desperate Microsoft may well keep Nokia afloat for a long while.
Elop was absolutely right about one thing -- the writing was on the wall, without some drastic change Nokia was dead against iPhone/Android. Of course his then proceeded to do all the wrong things, starting with the public Osborning of Nokia's entire existing product line. And maybe even if someone had done all the "right" things by 2010 it was probably too late. The burning platform moment came in January of 2007 when the iPhone was announced. Google saw it, and immediately switched from producing a Blackberry clone to an iPhone clone. Nokia, RIM and Microsoft didn't -- the results are there for all to see.

[N9]

@Ted t. "Please explain how Nokia would have done better than RIM --'they stuck to their guns,"

News flash!!! RIM is selling more smartphones than NOKIA, It may very well survive its transition as it did not kiled its existing sales, and consumer fans.
NOKIA is currently DEAD. your hope for "Microsoft may well keep Nokia afloat for a long while" is wishful thinking, Microsoft might buy the IP remains of Nokia, but giving cash is not something I see them doing unless they are going to do the same for all OEM'S in their last breath....