This is the blog of what happens when Two Plus Two is Less Than Two. Not less than four, that was not a typo, I really meant less
than two! Or in other words: why do we know now, that Microsoft's Nokia gambit has failed beyond recovery.
This blog is not about Nokia's record-setting failure in
smartphones. I have written enough about why I evaluate Nokia CEO Stephen Elop
as the worst CEO of all time. If you want the first 19 reasons, they are here.
The 20th reason is here, and the 21st reason is here. I am not alone in calling
Elop incompetent and one of the worst managers alive, or even possibly the
worst CEO of all time. This blog is not about the Nokia point-of-view. This is
now the calculation from Microsoft's angle. How did it turn out for them. The
Nokia partnership was the most certain slam-dunk gambit that could not fail, no
matter how badly it might be botched, this was so pure gravy for Microsoft,
they would always end up roses in the end. The scheme that could not fail. Like
Baldrich would say on The Black Adder, I have a cunning plan...
MERGERMATH
When high-priced management consultants and mergers and acquisitions experts talk about corporate takeovers, partnerships and mergers, they talk of 'synergies'. They hope to achieve that optimal condition, where two companies are so good together, their combined performance is more than their two separate parts were independently. So they hope to find a mathematical formula where 2 plus 2 equals more than 4. The parts, when merged will achieve more than they did independently. That is often the hope, in reality it rarely succeeds, but it can be done (far more often in measurements of financial performance than other metrics, and achieved through cuts of overlapping functions, but nonetheless).
So that is the optimal. The next best thing is to hope that the two entities, when added together, produce more than either individually, so 2 plus 2 equals less than 4 (but more than 2). This is still an improvement from either individual player's position but then such things as management politics come to play, who got to be CEO of this venture etc.
That is still usually seen as a good merger or partnership. The bad situation is if the resulting partnership achieves no gain. So 2 plus 2 equals 2. The combined effort is no better than either one was able independently. Now the effort took a lot of administration and management effort for no actual gain (but at least there was no loss).
And the worst situation is when 2 plus 2 equals less than 2.
This is a catastrophy. The merger or partnership was so poisonous to its
partners, they would have been better off without attempting it. This is
unfortunately often the case. Ok, lets take a look at Microsoft and Nokia, from
Microsoft's point of view.
THE VISION
Let me show you what the CEO of Microsoft, new CEO of Nokia and the Nokia Board were looking at, about the time when this partnership was sealed. This was their ''prize"
These are the market shares of Nokia's ecosystems (Symbian
and Maemo) partners in blue, and Microsoft's ecosystems in red (Windows Mobile
and Windows Phone) when the partnership was announced, ie the last quarter just
reported, Q4 of 2010. Nokia had 29% of the market, and its Symbian partnership,
mostly with Japanese and Korean handset makers had 35% market share. Microsoft's
Windows ecosystem had 4%. Now the math in Steve Ballmer's head looked at that
picture and saw the potential of a juggernaut with 39% market share, after
these two parts were merged and allowed some time to reach their full
potential, right? At the time this would be the 'first ecosystem' by a wide
margin over Android the second.
And yes, there were the Nokia partners, but even if we allow for Nokia's
partners all to run way (to Android) and just take Nokia's own Symbian (and
Maemo) smartphones and all Windows based smartphones, their market share would
be 33% Remember, at the time Nokia was
bigger than its two nearest rivals, combined (today Nokia is one fifth the size
of Samsung and one third the size of Apple's iPhone, when counting Nokia
branded smartphones). In the previous 12 months, the total unit sales of
Windows based smartphones had actually declined, while Symbian had grown
strongly by 42%. You can see why Ballmer was so eager to jump into bed with
Nokia. Even if this migration by Nokia to Windows were to be executed 'poorly'
and we'd say that Nokia lost half of its customer base and they lost all
Symbian partners, the end result would still bring 14% market share gain to
Microsoft. Added to its current 4% that would give a wonderful 18% market
share, a huge jump for Microsoft, and far exceeding Windows peak share it had
ever had globally of 12% a bit before the iPhone had launched. At 18% Windows
would be all-but-guaranteed to be at least the third biggest ecosystem and if
all went perfectly with Blackberry and Apple cannibalizing each other and
Android growing fast, Windows might, just might with 18% be even the second
largest smartphone OS. In any case here is where the myth of the 'Third
Ecosystem' came from. The vision that even if Nokia utterly botched its
transition from 'the obsolete' Symbian to 'the superior' Windows Phone, from
'obsolete style' Symbian phones to new 'iPhon-a-clone' style Windows Phone
touch screen smartphones - even if this was totally messed up, Nokia would have
to get at least half of its current market to this new powerful ecosystem.
That was the belief and expectation. Some then-current Windows partners (HTC,
Samsung, SonyEricsson, LG etc) might initially become upset by Nokia joining,
but the moment they saw how big and powerful Windows Phone OS would become,
they would soon go where the money, ie the market was, and stay with Microsoft.
That was the expectation, the hope.
Gartner, in fact, one of the big 4 analyst houses of the handset industry,
issued its forecast for this partnership and projected that 18% as their
expecation of what the partnership would do in 2012. So this is no bizarre Tomi
reinvention of history or attempt to somehow paint Microsoft and Nokia in a bad
light. This was a fair view to the partnership by the expectations they had in
Redmond.
Then remember, this is not 2 plus 2 equals 4, nowhere near it. This is
definitely 2 plus 2 equals less than 4. And Ballmer and Elop put their spin
machines into overdrive to hype this partenership, and sure enough, plenty of
willing 'experts' came out with forecasts promising the partnership would do
far above 20% market share and the myth of the Thrid Ecosystem was launched
into the minds of the analysts, investors, operators/carriers and very
importantly, application developers.
Now why do I say 'cannot fail'. Remember, Microsoft's actual unit sales of its
smartphones were falling in 2010. No matter how little Nokia would bring to the
table after the transition, because Nokia was so huge, it would be a massive
jump for Microsoft. And lets remember, Nokia was the bestselling smartphone at
the time, on five of the six inhabited continents, where 92% of the planet's
population lives. Where most smartphones were sold. Nokia so much owned the
world's largest smartphone market - China (far bigger than the USA) that Nokia
had 77% market share in smartphones just there. And it wasn't even Nokia's best
market by market share.
So lets take the beyond any reasonable expectation utter catastrophy scenario. If Nokia somehow lost four out of every five customers it had, lost 80% of its market share in this transition - mind you, Microsoft wholeheartedly believed that Symbian was obsolete and without a future, and that Windows Phone would revitalize those Nokia sales - but if Nokia somehow lost 4 out of 5 customers it had in the transition to the better Windows Phone smartphones of modern design, then Nokia would still walk in with 6% market share, and added to Windows 4%, they would command 10% of the market. That would not be 'the Third Ecosystem' but counting Android as biggest, iPhone and Blackberry in the second and third places (at this time RIM was bigger than Apple), if you had 10%, you would be fourth biggest. And Microsoft would take that happily. They had a history of long platform wars, with Windows, with Xbox etc, so if they could jump from 4% (and falling) to 10% with Nokia, that would be aweome for Microsoft, even though in reality, from Nokia's point of view, this would be catastrophic brand failure. And nobody that they talked to suggested this was even plausible (by nobody I mean experts in the US market where 'all the real experts' were as believed by Microsoft ie the PC/web tech industry as opposed to the mobile industry centered in Europe and Asia)
Regular readers of this blog know this part of what happened
next. That many true mobile experts jumped on this partership immediately as a
doomed venture, that it would result in a total market collapse due to the
Osborne Effect and simultaneous Ratner Effect (that I have dubbed since as the
Elop Effect, the costliest management error of all time). So it was not just me
on this blog that yelled that their combined market share would fall to single
digits, so too was for example Horace Dediu at Asymco blog. But Ballmer and
Elop weren't listening to any 'old-fashioned' and 'obsolete' European experts
who knew only of the old push-button era of mobile, they 'knew' that the real
future of smartphones was driven by California. When Nokia top internal
managers were giving Elop their views on this super-risky strategy, he appeared
to listen very carefully and thoughtfully, while in his mind he was putting
those people on his 'must fire next' list. Very soon the top managers learned
that Elop was not willing to listen to facts, he had already made up his mind.
Talking to him was as useful as talking to a wall.
TWO ACES
Ballmer had two aces in his sleeve. First, he had 'his boy' Elop in charge.
This was one partnership that would not be wrecked by an uncommitted or faltering
CEO. This would not miss any true Windows strengths, and would not waste any
effort pursuing any futile Nokia pet projects from MeeGo and N9 to Nokia Money
to Qt to Ovi. That it was ex-Microsoft guy, Stephen Elop driving this thing
from Nokia's side, was a guarantee, it would always go exactly the way Ballmer
had planned and wanted. Every last detail of it. To the point, that Elop
maintains a second home right near the Microsoft HQ where Elop's wife and
children live and Elop commutes by jet for weekends at home as often as he can
(with plenty of convenient face time with Ballmer as needed, far away from
prying eyes of suspicious Nokia collagues).
The other ace was money. Microsoft would throw massive amounts of dollars at
this comeback. Starting with one billion dollars per year in marketing support
payments direct to Nokia (but without paying them, as these were offset by the
royalty payments Nokia was due to Microsoft of essentially the same size; these
would cancel each other out. But in other words, Microsoft decided to forego up
to 1 Billion dollars of Nokia-owed licencing fees per year in the transition
period to Windows. For a company that makes its profit on software licencing,
this is real money.) And with Elop in charge over at Nokia, he could be sure
Nokia would not be pinching pennies either. Nokia was sitting on ten billion
dollars of cash in its vaults (and Nokia was very profitable at the time).
Ballmer knew that money went a long way in buying market share, he had seen it
done with Zune and Xbox in the past, and how those deep pockets had won
Microsoft earlier the Windows wars vs the Macintosh by Apple.
I am 100% certain, that when Ballmer looked at the pie graph when agreeing to the partnership, and he pondered the two
market shares, he calculated that his boy Elop would bring in the share in the
20's not in the 'teens' or single digits. If all went perfectly, they might
even break into the 30s in market share. This was the gamble that Microsoft
could not lose. This was the ultimate 'sure thing' in the tech industry.
Whatever risk there was, only fell on Nokia. Microsoft could not lose.
TWO PLUS TWO
So here is today's picture. We are literally 18 months from the launch of the
partnership. And here is the market share. Same colors, same companies.
The
circle on the left reflects the situation in Q4 of 2010, the circle on the
right, the situation now in Q2 of 2012. What the hell happened here? This was
not supposed to be possible. 2 plus 2 equals less than 2. Quite literally, Microsoft's own market share
- the red part - is now SMALLER than it was before this partnership started.
This after 9 months from the first Nokia phones running Windows. This while
Nokia has already migrated 40% of its total smartphone production to Windows. Out
of the 25% of market share that Nokia has so far attempted to convert to
Windows Phone, Nokia was not able to convert all, nor most, or half; or even the
catastrophic one quarter. No, Nokia has lost 7 out of every 8 customers it
tried to convert from 'obsolete' and 'undesirable' and 'outdated' Symbian
before this partnership to the new and better user-friendly Windows Phone
today. Nokia traded 25 market share points in Symbian in Q4 of 2010 for under
3% market share on Windows Phone today. Yes. This 'partnership' has been able
to convert only one out of every 8 loyal Nokia owners. Seven out of those eight
went to the competition, primarily to Google's Android, Apple's iPhone and Samsung's bada.
So now when we see stats like the consumer survey that 4 out of 10 new Lumia
owners in the market where that handset was designed for - in the USA - hate it
so much that they rate Lumia worth a 1 on a scale of 5 to 1 where 5 is best and
1 is worst - this is a nightmare that was not supposed to be able to happen.
What did happen? Its not like Ballmer has seen radical new phones by Blackberry
with mind-reading or iPhones with teleportation or Samsung Galaxies with time
travel. The Nokia phones did not have a catastrophic production disaster like
exploding batteries or some kind or radiation poisoning. There were no factory floodings or earthquakes or volcanic ash stopping air shipments or pirates stealing ships or wars or strife or any outside disaster at all, affecting this cunning plan.
How could this happen?
Whatever had happened, Ballmer is smart enough to calculate, that if the first
25 customers that Nokia had on Symbian, could only be converted to 3 on
Windows, then the remaining 4 that Nokia now has left, won't yield even one
more percent of market share. Literally only one half of one percent.
Literally, now the writing is on the wall - after Q2 results, the math of 2
plus 2 in Microsoftian Nokia new math nightmare will result.. in 'less than 2'.
This is the end of the Windows Phone Third Ecosystem dream.
Now, this blog does not in any way attempt to explain why the Windows migration was the ultimate flop, but it was not due to Microsoft failing to provide money or marketing effort. The Windows Phone OS was - within reason - a modern and competitive (albeit sadly in many ways incomplete) OS. The apps for it were built with great haste and the app store at least on the surface is fully stocked and competitive, at least to the degree of considering a third ecosystem. No, the failures were all in the Nokia side of the aisle. Problems of execution. Problems of management interference and meddling. Problems stemming directly from Stephen Elop's mismanagement of this transition.
I have written several bound books worth of text here on this blog chronicling where all he went wrong - and of my early advice and criticism already more than half have either been admitted by Elop to have been mistakes or harmful (eg Burning Platforms memo) or he has recanted (eg claiming Nokia behind in tech vs for example Apple) or he has reversed a dumb position he took (naming/numbering fiasco and flipflop). The problem, in a nutshell, was that a PC guy with no understanding of how mobile industry works, came in with a pre-set mindset refusing to learn what it takes here to win. That kind of fool is destined to die trying. This result was inevitable with Elop in charge. The top management insiders knew almost immediately and Nokia has seen an alarming exodus of top management. We outsiders did not know until we saw the first Lumias, but by then, it was also clear to us, this Nokia Microsoft gamble with Windows Phone and Lumia was utterly doomed. (as I wrote on this blog such as this comphrehensive analysis of why the Lumia series was already doomed at its launch)
But this blog today has not relitigated the crimes of Elop. We have now examined the view from Redmond. This was
the 'cannot fail' game by Ballmer. He could not lose. And yet Elop delivered
failure out of this project. He snatched defeat from the jaws of victory. This
could have worked. Now it is doomed. The Nokia gambit to gain Windows a place
in the top 3 (or at worst, top 4) has failed. Now, the only road left is to try
to go Windows Phone 8, and start again from zero. Except today, Sony(Ericsson),
LG, Dell and Motorola are no longer in the partnership. Samsung has its own two
operating systems it will prefer over Windows - bada and Tizen. HTC is deeply
suspicious of Microsoft. Nokia is essentially the walking dead. What is left?
ZTE?
Meanwhile traditional PC makers are deeply suspicious of Microsoft now because
of the tablets it will manufacture. The app developers feel once again burned,
their investments were all for nothing, the promised wonder 3rd ecosystem counts
today for the 6th ecosystem at best by installed base (barely besting its older
cousin, Windows Mobile) and in terms of total installed base, amounts to 1% of
all smartphones in use worldwide. Who in their right mind would bother to
develop for that platform next, when now even this investment is Osborned and
Microsoft again starts from zero. Meanwhile Android sells 6 out of every 10 smartphones, Apple 2 and Blackberry and Samsung's bada power most of the remainder.
In 2006 Microsoft was briefly the second largest smartphone OS at 12% market share. Microsoft was then one
quarter the size of giant, Nokia's Symbian. Today six years later and countless
billions of dollars wasted, most of Microsoft's partners have abadoned it, and
Windows Phone sells 3% of the world's smartphones, while still Nokia's Symbian
outsells it, but now only by a ratio of 4 to 3. And Q2 was the peak sales for Windows Phone, it is now again in free-fall due to the Osborning of the series. Even Nokia loyal carrier partners are bailing on Windows Phone like Germany's biggest carrier/operator T-Mobile who refuses now to even sell the Lumia 900.
The grand scheme, the 'cunning
plan' of 2 plus 2 resulted in the end, less than 2. Microsoft decided Nokia is
not worth the effort and now goes it alone. It will of course take Nokia's next
Windows Phone 8 handsets 'with great joy' as any that may come from Samsung,
HTC and perhaps others, but as Microsoft has already started production of its
own tablets, it will do its own smartphones next. Ballmer won't even bother to
deny it anymore. This Nokia partnership died. Perhaps it died earlier, we don't
know, but for sure, when the internal numbers became clear that Q2 is this bad,
Ballmer decided it was over. And coincidentially - that was when he announced
the Osborning of the Lumia line, and the Microsoft tablet, and suddenly started
to act very cold and distant towards his former BFF, Stephen Elop. The Ballmenator,
he is a cold dude.
But I cannot fault Microsoft for getting into this "can't fail" deal.
I cannot fault Microsoft for not pulling its weight in the partnership, and I
cannot fault Ballmer now for looking at the blatant truth and tossing Nokia
under the bus. That all was totally sensible from Microsoft's point of view.
Lets not just now pretend that there is some rosy future to the Windows Phone 8
in mobile smartphones. It no doubt will sell well on the PC side, but as I
said, it will happen as eary as 2014, that Android will pass Windows as the
planet's most used computer OS, when counting PCs, tablets and smartphones,
combined. Yes, Microsoft's reign comes to an end in less than two years from
now. Windows 8 will no doubt be a big success but Windows Phone 8? Maybe hit a
couple of percentage points if Microsoft is lucky. 1% if things go 'as usual'
for Microsoft in mobile. And 1% is the level where even Palm quit this
industry.. This Nokia gambit was Ballmer's last best hope and it was ruined,
not by Ballmer, his grand plan was ruined by 'his boy' Stephen Elop, the
Microsoft Muppet, the most incompetent CEO of all time.
So, thats the story today. If you happen to need more info about the handset
industry, remember my TomiAhonen Phone Book, an easy ebook formated for your
smartphone so you can carry all the industry stats and facts in your pocket.
And if you are a strategy thinker type of exec, then you'll want to see my
TomiAhonen Mobile Forecast 2012-2015, the best value of forecasts into the near
future of this industry, by the most accurate forecaster in mobile.
So absolutely everything is Stephen Elop's fault now? This is getting less credible post by post.
"I cannot fault Microsoft for not pulling its weight in the partnership"
Surely if Microsoft had held up their end of the bargain by delivering an OS/platform that users actually wanted in significant numbers then Nokia would not be in this mess, even with the terrible strategic and comms errors around the transition.
Now you could argue that Elop backed a horse that was already looking like a loser but Microsoft had the opportunity to show they could in fact iterate quickly, add missing features and re-spin the look and feel a bit for popular taste. They didn't. Since the next version is primarily about replacing the core OS under the hood, they don't look to be doing many of those things for WP8 either... the writing does appear to be on the wall.
Posted by: Mark Wilcox | August 22, 2012 at 04:50 PM
Another warped and one-eyed blog and rant against Elop. A good opportunity for an objective analysis wasted.
Posted by: tommi hates Steve,..got it! | August 22, 2012 at 05:13 PM
I don't read this blog completely anyway.... just a waste and propaganda
Posted by: anti | August 22, 2012 at 05:18 PM
In other news:
Nokia Oyj, burning cash as it struggles to revive its smartphone business, is winning time for the recovery effort by gaining more customers for another product: basic mobile phones it sells for $39.
By adding features such as quicker Web and online games to its Asha handsets popular in faster-growing economies including India and China, Nokia boosted its share of the basic-phone market to 35 percent last quarter -- the highest in two years.
Unlike the smartphone division, the basic-phone business is profitable and unit sales are increasing.
Nokia's cheaper phones outsold its smartphones 7-to-1 last quarter and, at 2.29 billion euros ($2.86 billion), brought in 49 percent more revenue.
http://newyork.newsday.com/business/technology/nokia-39-phone-rebound-wins-time-for-smartphone-struggle-1.3919528
Posted by: foo | August 22, 2012 at 06:22 PM
Good post. I agree that this wp thing Nokia is trying was a flop from the beginning. But putting all the blame on the village idiot is a little unfair. Nokia's board have to shoulder their fair share too. Elop believed wp was a superior OS because he was ex msft. tBalmer thought the same. Both failed to realise wp is disliked not only because it is a second rate OS that can't do the simple things expected of smartphones. Things Nokia users are used to.
The same principle applies to ifans moving to other OS. A friend of mine went from a 4s to a galaxy note and couldn't stop talking bout Bluetooth file transfers...
Fire elop, keep elop.. No one really cares. Just bring back the Nokia we loved.
Posted by: tired | August 22, 2012 at 06:23 PM
The $1 billion in phony payments back and forth between MS and Nokia is IN NO WAY REAL. You wrote, "Microsoft decided to forego up to 1 Billion dollars of Nokia-owed licencing fees per year in the transition period to Windows. For a company that makes its profit on software licencing, this is real money." In no real situation would Nokia be paying $1B per year in licenses for a PHONE OS THAT NOBODY WANTS.
Okay, so MS decided to forego $1B in licensing fees from Nokia.
Well I've got a deal for you! I'll sell you $100B worth of useless licenses for this thing that I have that nobody wants, and all you have to give me is your soul. YES, I have just decided to forego $100B in license fees! How generous!!!
The Nokia/MS deal is exactly as phony and made-up as that.
Posted by: m | August 22, 2012 at 06:30 PM
Tomi, you were doing good for awhile there but now you are ignoring the Microsoft elephant in the room. I would suggest you compared WP with how in the past Microsoft approached Zune, which is explained at
http://www.roughlydrafted.com/RD/Q4.06/D0BC712B-7DBA-46CA-AA44-19376E64FBA6.html
You will also see an emerging "big picture" when you compare WP activities and how Microsoft "consumer products" always struggle (a serious understatement) when exposed to real competition. Explained at:
http://www.roughlydrafted.com/RD/Q4.06/2E6D9BB2-FE1B-4556-8389-67BD581FBCCC.html
Why didn't anyone on Nokia's board see this obvious history of massive consumer failure before they decided to bet the company? WP (or windows) is NOT a superior OS
Posted by: John Waclawsky | August 22, 2012 at 06:33 PM
"Now, the only road left is to try to go Windows Phone 8, and start again from zero."
Not really.
Have you noticed that wp7 app development was heavily encouraged and funded, and then as soon as the magic number "100k apps" existed, no matter how many were trivial or crappy, that all stopped? Then the "no migration path for phones to wp8" was announced. But MS still throws around the 100k apps number as a selling feature for wp8.
MS doesn't care if wp7 phones can't be updated (better that the customers have to buy a new phone anyway).
MS DID have a migration path from wp7 to wp8, but it wasn't for the worthless phones or customers, it was for their precious precious "ecosystem".
Posted by: m | August 22, 2012 at 06:56 PM
"This is the end of the Windows Phone Third Ecosystem dream."
Not so long ago, on June 27, you, Tomi, wrote this:
"And for the 'other' Windows 8 so-called 'partners' - Samsung will be pushing its Tizen out this year plus selling its smartphones primarly on Android and bada, not Windows Phone."
And this:
"Samsung's bada alone will outsell them all as per usual, not to mention Samsung and Intel's new Tizen OS that launches also this Autumn."
And then later, on July 20, you said this:
"And even of the two other major partners, Samsung and HTC both are clearly putting their focus on other platforms, Samsung on three - Android, bada and the about-to-be-launched Tizen."
And now we have this piece of news:
http://www.sammobile.com/2012/08/22/no-more-bada-and-tizen-in-2012/
Not so long ago you, Tomi, said Tizen is the OS that will take the position of the 3rd ecosystem. Would you like to give us an update on that? Still believe this is the case?
Posted by: CN | August 22, 2012 at 06:57 PM
Not so sure W8 will be a big success in the PC market. At work we are encouraging people to buy high-spec Windows 7 machines and wait for sanity to return with Windows 9 (this is the traditional good Windows - bad Windows seesaw).
Posted by: Mark | August 22, 2012 at 07:12 PM
"So absolutely everything is Stephen Elop's fault now?"
Please read the article again. Microsoft did deliver with WP7 exactly what those who know Microsoft expected they would deliver. Its NOT a total disaster product. It is just not competative to the competition. Not even close to.
Tomis point is that Microsoft only could win in that deal. They are not blind. They saw how well competition does and how far they are away to win that races. As Tomi wrote, Microsoft was looking for a helper, for a saver, for a strong partner that can help them.
Elop came along and offered that. He put all eggs in tgat basket. He.killed off all alternates and put the fate of all of Nokia on that single strategy.
That Nokia is dead now is Elops fault and only his fault. He was and is the one who did bind Nokia's survive to WP's success.
That Lumia was not able to keep customers is Elops fault. He is the Nokia Lumia man. Lumia is a Nokia product, not a Microsoft product. If the software, hardware and conditions do not sell the product then you need to change the software, hardware and conditions. Elop did neither of tyem. He is the Lumia man. Lumia failing is his failure.
Posted by: Spawn | August 22, 2012 at 07:25 PM
@Mark Wilcox
> if Microsoft had held up their end of the bargain by delivering an OS/platform that users actually wanted
When Elop jumped on WP7 was already in the market. He saw the product, the software, was able to compare, had lot of high quality people on his side who gave participated at that process. He had all the options for negotiation with Microsoft including access to the code, changing things so Nokia's product would sell. It was his decision how the Symbian->Lumia transition should be applied. He had the option to keep Symbian running while applying a soft transition strategy. He had the option to keep alternate strategies alive so Nokia does not bind itself to only one product line. He is the CEO, the General, the Nokia boss. Not Ballmer. Lumia is a Nokia product, not a Microsoft product.
Elop failed on planing, execution and reaction. Till today he keeps course till the bitter end.
> Nokia would not be in this mess, even with the terrible strategic and comms errors around the transition.
They are in that mess cause of terrible strategic errors.
It works the other way around. Nokia could have made it a success but they failed.
If Microsoft would have delivered a competative WP 7.0 they would not have need Nokia so much to put WP 7.5 on Lumia.
If WP 7.0 would have been competative it would not be below 4% market share and sinking when Nokia joined.
Or do you really expected that Microsoft would make with WP 7.5 a totaly to WP 7.0 different mobile OS that is competative now? Why do you think they would wait till 7.5 rather then doing it with 7.0 already? Why do you think Microsoft would be able to change evrything within 6 months when they failed all the years before it took them to turn Windows Mobile into Windows Phone 7.0?
Seriously, you must drink the same water Elop drinks (or smokes?) if you think that way.
> iterate quickly, add missing features and re-spin the look and feel a bit for popular taste
Thats not what Elop had in mind, why he picked WP7 and he told us so every week since then. "The problem is NOT WP7 but the sales personal, the marketing." that is what he told and still tells us. Heck, he plans to go on to sell WP7 Lumia far after WP8 Lumia hee just told us. He tells us now that WP 7.8 will be "even better" and goes on to apply the next crazy suicide-strategies like not selling there new WP8 Lumia everywhere, like aborting key markets.
Now if you name art-work as reason I must ask you: Why did Nokia not change the art-work if thats the reason?
If you name missing features as reasin I must ask you: Why was HTC adding some of the missing features to there WP7 HTC Titan while Nokia did ship a 1:1 WP7 Lumia with no,additional feature added?
Posted by: Spawn | August 22, 2012 at 08:04 PM
@leebase
> Same for RIM. Both have collapsed. Both. RIM did what Tomi wanted Nokia to do. RIM stuck to it's guns, came out with it's own OS.
Blackberry 10 is still not on the market. So, no. RIM did not came out with its own OS yet but its scheduled for Q1 next year.
> The reason Tomi's analysis did not predict Nokia's fall
Actually he did. In the article there are some words with underline, you can click on them and the will bring you to other articles writen by Tomi before. Crazy that internet isn't it?
> Nokia was going to fail either way
Are you the same who predicted Apple will fail anyways when Steve Jobs came back and hence they should not even try? I think you are.
Posted by: Spawn | August 22, 2012 at 08:17 PM
@tired
> Nokia's board have to shoulder their fair share too.
We, the ELOP (Embassy for Lost Opportunities and Profit) are still uncertain about the state of the Nokia board. Half of our members think they got infected with a zombie-viruss while the other half thinks aliens took them over. We agree that Its save to believe that there brains are "filled with other things" right now.
@m
> The $1 billion in phony payments back and forth between MS and Nokia is IN NO WAY REAL.
At the end it is. There was a large amount of cash invested into marketing, xbox's got bundled for freewith Lumia's, sales got free phones, the lumia where/are sold under cost and so on.
That is real money and it did not came out of nowhere. Its a joint venture of both and, like it happens in such deals, the one side pays thr other and the other way around but the money may still have to change positions cause its planed,cread bind to be used, for special purposes and then over time used for it (not all at once but its also not freebas in cash money any longer cause of contractual bindings).
Short: Bothx Nokia and Microsoft lost lot of money but both also lost way more then that. Microsoft is at its all-time low with an even more worse start-point for the future what may not hurt them today but only tomorrow but then 2x harder while Nokia will not see a tomorrow.
@John Waclawsky
> how Microsoft "consumer products" always struggle (a serious understatement) when exposed to real competition.
There are some examples where they did succeed (as in not failed): MsOffice against Word Perfect, Windows Server against Novell, Visual Studio against Borland, IE against Netscape, xbox against Playstation.
There are some examples where they failed: .Net against Java, IIS against Apache, Bing against Google, ActiveX against Flash, Zune against iPod.
E&D&E, monopoly, good/bad products, weak/strong competition, etc. So many factors there playing together.
Yes, Microsoft is one of the companies perceived to be most evil for good reasons. The are convicted to hqve used illegal tactics and the.continue to do so but it does not help them any longer. They may win some battles but are losing the war. It was never more visible then now.
Posted by: Spawn | August 22, 2012 at 09:09 PM
@Spawn
> We, the ELOP (Embassy for Lost Opportunities and Profit) are still uncertain about the state of the Nokia board. Half of our members think they got infected with a zombie-viruss while the other half thinks aliens took them over. We agree that Its save to believe that there brains are "filled with other things" right now.
Classic !
Posted by: No Plan B | August 22, 2012 at 09:47 PM
@m
> "Now, the only road left is to try to go Windows Phone 8, and start again from zero."
> Not really
Yes, literally. In real they statt from 1-2% market share or so but not from zero.
But literally it was much more at there previous attempt with WP7. Also they have way lesser partners now and the WinPhone brand and customer stand is way more damaged.
The possibility that Microsoft can turn around the boad is close to zero NOW. They see that what is why Surface was born.
> migration path from wp7 to wp8 ... "ecosystem".
First who is interest in 99.999 different clocks? Quality counts not.quantity. Microsoft spread the quantity message cause they cannot.compete on quality of the apps.
Second the world moves on. As I wrote.above and Tomi in this article the.conditions are NOW much more worse for.Microsofts own failed island.ecosystem.
Nobody is going to invest into that after even Nokia failed, no died on trying, to succeed with that ecosystem. While before there was at least some kind.of investment, and I am not talking here about the pinuts Microsoft itself invested, into the ecosystem its down to zero now.
Microsoft knows that what is why they try to spread the Windows Phine 8 compatible with Windows 8 message where we KNOW this is.false. Its not even RT-compatible cause of screen-resolution, sensors and services.
No, no one is.going.to invest into Windows Phone. Even those who did into WP7 will wait. This time they wan't do the same mistake again.
Theird Microsoft knew and they did haf to open.the native code door. Unlike WP7 the WP8 will not be limited to Microsofts own development tools and technologies. That is compromise they had to go else WP8 would have been dead from the beginning. But ecen that is not enough. The investment-burden is to high.
There is one way how they could change that and they will try. An own WP8 phone. This is the ONLY way left to take WP8 out of the irrelevance doom.
@CN
So, Samsung moved there for ebd of this year planed first Tizen devices to beginning of next year according to your link.
That is not totaly unexpected. There seem to be a general trend to delay new platforms (MeeGo, Blackberry 10, Tizen, ...).
I think you read to much from your linked article but it seems.the author made it also not easy to differ between the delay of one platform and.the introduciob of another. Seems the athor likes to indicate that the one has to do with the other what is, well, utter bs.
Samsung will ship WP8 devices lije the did and STILL do shio WP7 devices.
For Bada: So they delay the NEW Bada too. Fine, that gives us some more indication for the relation of Tizen and Bada 3.0 which was always speculated.would be either identical or.move.closer.together.
What that gives us is that the new iOs and.WP8 will launch end.of.this.year. The.new.Bada, Tizen or TizenBada and Blackberry 10 beginning of next year.
Jolla Mobile may wrll able to keep there plan and.ship end.of this year too buy taken into account.its a.new.platform.there is a high possibility for.delay till beginning of.next year too.
Posted by: Spawn | August 22, 2012 at 09:48 PM
Spawn, I respectfully disagree with your superficial analysis. Please look deeper, the Microsoft "consumer" products only win when they are monopoly assisted. It's as simple as that! For example, the xBOX subsists on massive subsidies from the monopoly profits(something Nokia cannot do). And please don't forget KIN phones! The writing was clear and on the wall AND ignored by Nokia.
Posted by: John Waclawsky | August 22, 2012 at 09:52 PM
"RIM did what Tomi wanted Nokia to do. RIM stuck to it's guns, came out with it's own OS. Bothched it as surely Nokia was already doing...and has failed right along with Nokia."
Thats bull. RIM's situation is an entirely different one. Their stubborn refusal to accept the fact that a smartphone is more than a corporate device was their downfall.Nokia, on the other hand, acknowledged that Symbian wasn't going to be enough to sustain them in the long run and they needed a new player in the game. Enter N9. I have yet to see an unhappy N9 owner. This despite the fact that they knew they were buying a DOA product. I bought one and have never been so passionate about any of my previous devices, ever. And I'm not the only one. Compare this to the reaction of Lumia owners that have just learned that their devices are about to become obsolete. Discontinuing and not capitalising on the success of one of the greatest phones ever created, thats Nokia's downfall.
"So absolutely everything is Stephen Elop's fault now? This is getting less credible post by post."
I have been buying Nokia products since the late '90s. I've always loved my devices. I currently have in my possession an N95, a 5800, an N8 and an N9. Most people, like me, buy them because they're reliable. Even my 5800, disaster that it was with its infamous "out of memory" errors is way better than any Lumia product on the market. Note that I choose the 5800 because it is undoubtedly the weakest of all the devices mentioned. But I love it. I can transfer files via Bluetooth. I can change my ringtone. I don't need Zune to transfer files to and from my PC. I can easily backup and restore files, contacts, messages, calendar entries, etc. between all my devices without even the need for a PC. I can do it via Bluetooth. I can connect to Wifi and let my phone run without having to worry about it disconnecting once my screen locked. I can use my phone to download stuff. I have a choice of browsers should the default Symbian browser not be good enough for me. I can set an alarm and switch off my phone knowing full well that my alarm would still ring in the morning. "out of memory..." Pfft... There are task managing applications in abundance to assist in that regard. I have every intention of buying the 808 asap and that will be my last Nokia. Why? Because Nokia no longer makes phones half as good as that disastrous 5800. Whose fault is that? The Nokia that was provided me with regular updates for this 5800 even 2 years after I purchased it so I never felt forgotten. That was one of the reasons Nokia became one of, if not THE most trusted brands on the planet. Not any more. Ask any of those current Lumia owners that now know their phones are'nt upgradeable to WP8 just months after they purchased it. If this isn't Elop's fault then, pray, tell me, whose fault is it?
Posted by: Visitor | August 22, 2012 at 11:44 PM
I still have the strong belief that the board of Nokia was secretly paid by Microsoft to let Elop do what Ballmer expected from him: Make Nokia a Microsoft company.
Call it a conspiracy theory. But you can't prove this to be wrong.
Posted by: Buttface Elop | August 23, 2012 at 01:08 AM
I have a 5800. Switched it on during my n900 days and found an update. That's the Nokia corporate culture I loved. Always looking forward and giving the best to even old obsolete phones as long as the phone hw can handle it. Now we have a Nokia that doesn't give two hoots about the customer, and is paying the price for it.
Posted by: tired | August 23, 2012 at 04:39 AM