When 2 plus 2 equals less than 2. Thats right, not less than 4, I meant less than 2. The Microsoft Point of View to the Nokia dead-end

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.

Comments

[Sander van der Wal]

Samsung not proceeding with Bada and Tizen (delaying patforms in a platform war is very much the same as killing them) and publicly thinking about Windows 8, is very interesting.

It means that Bada and Tizen got no traction and/or Samsung is not able to develop both platforms quickly enough. It is a sign of weakness. I would hate to be a Bada-only software developer right now. (Not that being a Bada-only developer was smart in the first place, and is is why.)

[Spawn]

@John Waclawsky

I am not sure we really disagree. I do not say that your point wasn't one of the factors too. I only say this wasn't the only factor but there are more which played a role.

I agree, and so did various judges, that Microsoft is using its desktop monopoly to push compering products to the market with an advantage.competition cannot offer.
I also agree that there deep pockets are essential.
But I do not agree that this two factors alone make a winner. There is more involved otherwise they would always win (when those two factors apply / are applied) what is just not the case.

@leebase

The playbook is a tablet and not a phone. RIM's core business are mobile phones and.the did not deliver a BB10 phone yet.

Also the playbook is an intermedia state. The reason why there is no BB10 phone yet is that they do not just take whats on the playbook and.put it on a phone. They extend, improve, align that platform to make BB10 a well received and sold device.

That is in contrast to Nokia who has Lumia with there all in one WP7 strategy in the market, available for consumers, since a while now.

> now an even newer OS "real soon now". Sounds a LOT like Nokia.

For Nokia its the second try. The WP7 Lumia was the first try (note that I do not differ between WP 7.5 and 7.8 Lumia here what is important) and it failed horrible. The WP8 Lumia is thr second AND last try. We, those who work in that industry, know how it will end.

RIM so far failed to bring there first try to the market. They may beginning of next year or maybe even later or never.

The result is indeed.the same but the reasons are very different.

> RIM's product is more competitive than Nokias

RIM's product, BB10, is not on the market. That makes.them less competative to just ANY other product that is in the market.

In fact every other.product who sold at least one unit is doing better then RIM cause.till today RIM sold zero BB10 units.

> We tried to show Tomi that marketshare did not mean all he thought it did.

There are two errors I see here. First your intwrpretation of what Tomi wrote is not even close to what he really wrote. Second you try to bring the point on the table that he is wrong buy.fail to name or explain why. Those both errors are at your side and you need to solve.them. There is not much we can do about it.

@Visitor

> RIM. Their stubborn refusal to accept the fact that a smartphone is more than a corporate device was their downfall.

The coperate section is RIM's core business and thats what they focus on. They are not focused on market share (unlike Android) but.focus.on profit (like Apple to a certain degree).

They are aware of the drawbacks what is why you see the.CEO running around.looking for partners that have a focus on the mass consumer market.

Its just that all that is future and not present or past like with Nokia. The one, Nokia, tried and failed. The other,RIM, did not try (yet) and hence failed (so far). That is the difference.

> That was one of the reasons Nokia became one of, if not THE most trusted brands on the planet. Not any more.

I fully agree. There waa once.the slogan "once a Nokia, always a Nokia" what was.cause you could expect from any of the devices they had a certain quality, certain futures and a certain handling. The usability and polished features where always strong selling points. Nokia understood to keep that from device to device and improve in small steps from there.
Then came Lumia. All was thrown away, usability totaly different, important features missing, incompatible. They broke the contract, lost the trust and people switched to alternates.
Now the slogan became: "Once a Nokia, never again a Nokia". Just ask all thr lost customers and those who are stuck with there outdated, unsupported WP7 Lumia now.

@Sander van der Wal

> delaying patforms in a platform war is very much the same as killing them

No, its not. Delaying platforms is very much like delaying them.

> publicly thinking about Windows 8

Do you have a source? As far as we know the author of the sami-article draw that conclusion by himself.

[n900lover]

I think Elop's biggest crime is that he gave Nokia to MS on silver plate without any alternative plan, without way out, without any levers Nokia could use to press MS, i.e. the infamous "no plan B" strategy.

And that wasn't mistake, he did that deliberately.

[Decade]

@CN

That article completely lacks sources. The claim that Samsung is dropping Tizen and Bada would be interesting if true, but I don't see why I should take it seriously.

[Mark Wilcox]

@Spawn You completely missed my point. If you've seen my writing elsewhere on this subject then you'll know that I believe Elop's strategic and comms errors are responsible for accelerating Nokia's decline and that he should be fired (and most of the board along with him).

What I'm arguing against here is that Tomi seems to be implying that Elop is responsible for Microsoft's failure with Windows Phone as well. Nokia have made the improvements to WP7 (e.g. maps and navigation) that were within their power in the timeframe they had - the execution there has been much faster than most of Nokia's other software efforts.

Microsoft is failing with Windows Phone because they have built a product the market doesn't want at the moment - nothing Nokia could have done to change that. Can't possibly be Elop's fault.

The odd conception that Microsoft should retain the market share from Windows Mobile to Windows Phone, or that Nokia should be able to migrate customers from Symbian to Windows Phone when the new platform is so completely different (higher average cost of devices, fewer features & radically different UX) is the only thing that makes there seem to be a story here. The reality is simply Nokia managed to increase Windows Phone market share from where it was by going "all in" but only by a tiny fraction of what was hoped for.

[Decade]

@Visitor

I never had a whole lot of trust for Nokia. The Maemo 1-4 devices (Nokia 700, N800, N810 tablets) didn't get a lot of updates, and none of my Nokia dumbphones got any updates. Maybe it's because I live in the planet's backwaters, where Symbian is uncommon and iPhones are innovative.

But when we bought the Maemo 1-4 devices, we knew that they were not the finished "mass-market" product. I waited so long for that product, so I hate Elop for killing the N9. Since the new Nokia is Elop run rampant, I therefore hate Nokia, too.

[Tomasz R.]

Windows Phone 7 had too many limitations to be successful on a high-end smartphone market. Like support for only one, small screen resolution, or support for only a single core processor. Windows 8 doesn't solve this problem, it just puts the limit bars higher, but not enough to be competitive in the near future.

Android is much better here, as they allow to produce whatever the manufacturer wishes - any screen resolution and size, number of cores etc.

[Nexus S]

@Decade

For an article without sources it got quite some traction:

http://www.unwiredview.com/2012/08/22/samsung-pushes-first-tizen-device-to-2013-forgets-bada-ever-existed/

http://www.mobot.net/bye-bye-bada-samsung-focusing-android-windows-phone-46590

http://www.gsmarena.com/samsung_push_back_tizen_to_2013_bada_almost_certainly_dead-news-4686.php

http://www.ubergizmo.com/2012/08/samsung-not-expected-to-launch-new-bada-or-tizen-devices-for-the-remainder-of-2012/

Well, I am inclined to believe it's true. There are no new Bada devices released since IFA last year and none announced. And looking at how much you can find about Tizen's "open" development on the web, I sincerely doubt it will play any major role in the war of ecosystems even in 2013

[vladkr]

All is not just Elop's fault as he's strongly backed (by the board, by MS, by some other people I don't know).

It's interesting to read this article from 2008, which shows Elop's reputation is not new (and it doesn't even mention Boston Chicken disaster) :

http://www.siliconbeat.com/2008/01/11/microsoft-beware-stephen-elop-is-a-flight-risk/

[jack1059]

Microsoft's problem is their success. And that's not a compliment. They've succeeded by being very cutthroat nasty businessmen. Not by virtue of a good product competing as fairly as possible in the marketplace. In computing they've sued, bought patents, destroyed competition and dictated terms / contracts to the oems. Now they're taking that same approach in the mobile game. And as you've rightly pointed out, carriers can and will tell you to go take a leap if you don't play nice with them. For Microsoft, and the current ms crowd now in control of nokia, they simply brought that mindset with them. And its killing them. They can't and won't ever eat humble pie on this. They believe they're #1 and I'm sure are stunned as to why the masses aren't flocking to them and their fantastic best in class mobile OS. It must be someone elses fault, because they will never believe its theirs.

[eduardo]

"Microsoft has already started production of its own tablets, it will do its own smartphones next."

Interesting prediction. Any idea when it would be coming out?

But in any case, I don't think it could succeed. Microsoft has little experience in designing mobile hardware, and the telecoms hate the company with a passion.

[Spawn]

@Mark Wilcox

> I believe Elop's strategic and comms errors are responsible for accelerating Nokia's decline

But that, his strategy decisions, are not responsible for the Lumia disaster result?
If thats your argumentation then we indeed disagree.

> arguing against ... Elop is responsible for Microsoft's failure with Windows Phone

He was and is responsible for the Nokia Lumia product. He is responsible that Nokia lost so many customers and was able to convert so less of them from Symbian to Lumia.

The RESULT of HIS failure is that WP7 failed too cause Lumia was there last hope.
Its true, and I think neither me or Tomi argue against, that WP7 failed to get significant market share before Nokia jumped in. So, yes, Microsoft failed long before. But the point here is that Nokia was going to change that. There, Elop's, promise was "WP7 is going to be the 3th ecosystem with us". Elop and Ballmer did stand at that stage and promised exactly that to happen CAUSE of the NokiaSoft partnership.

That was what Nokia had to offer, put on the table. The possibility to turn around the WP7 story.
Please remember what Elop and Ballmer say. WP7 qas a failure cause noone else focused on it 100%. Nokia would do and hence.would succeed where others failed. That was the whole point of the burning platform memo, of aborting Symbian and.MeeGo and.putting all eggs into the WP7 Lumia basket.

Sure Microsoft jumped on that offer. WP7 was failed at that time and Nokia's Elop promised to turn around the story, make it a success.
Nokia's Elop destroyed all alternate ways Nokia had and did bind the survival of Nokia on the success (or failure) of that promise to make WP7 a success.
Nokia's Elop was very clear in that either there succeed or Nokia is gone. "There is no plan B".

That Nokia failed to turn around the WP7 story was Elops failure. That is why Nokia is in all those problems now.
Microsoft lost money. There WP7 was a failure and Nokia did not change it. For Microsoft not much was lost cause of Nokia BUT thet could have win something, they don't. Nokia is near dead now cause of that, Elop's, two central failures to 1) bot be able to turn around WP7 and 2) bet everytging the survival and health of Nokia, onto being able to turn around WP7.

> Nokia have made the improvements ... that were within their power in the timeframe they had - the execution there has been much faster

And there you made the point why Elop is responsible for the WP7 Lumia failure yourself.

They got WP7 from Microsoft and where supposed to improve it, make a product customers would love and sell ot to lots of customers.
They, Nokia's Elop, failed on improving it and execution to make it a well selling product. This was Nokia's part of the deal, this was what they promised to Microsoft and.there stack-holders and they (Nokia!) failed.

Your argument for the failure are timespan and execution time? This are both things that whwre decided and applied in Nokia, not in Microsoft. If time and execution was the problem, and yes it certainly was ONE of tge problems, then you delay, optimize execution, improve or do whatever to nake the final Nokia(!) product a success. This was 100% Elop's decision, on his table to plan, decide and execute. Microsoft had NOTHING to do with that part of the story.

> Microsoft is failing with Windows Phone because they have built a product the market doesn't want at the moment - nothing Nokia could have done to change that.

But that is exactly what they (Nokia) was supposed to do, what they promised to do.

Why to do think Bokia even tried AFTER WP7 was in the markwt and proven to have failed already for a while?
Because Elop promised they can make it a success. That was his offer to Microsoft, that was and still is his stand when asked about WP7 Lumia.

Elop did see the software, he and his team tested Lumia prototypes long before they came to the market. It was Nokia's decision that yes, Lumia is ready and customers will buy it. They decided to bring it to the market NOW, not polish future, not address problems, add better art work, improve the.design, etc. No, it qas.ready for prime time. Elop's decision. Now it turns out it wasn't. Now you yourself say that the product was not ready. Who is responsible for Lumia being that bad? Nokia, Elop. Its there product.

[Decade]

@Nexus S

The failure of bada and Tizen would not be a surprise. I don't think Intel has ever led a successful project to make a consumer Linux device. They were so close to pulling it off with Meego, if it weren't for those meddling Microsoft guys.

But, no, the blogosphere's echo chamber does not count as validation. Eldar Murtazin's analysis looks interesting, but it's not proof. http://mobile-review.com/articles/2012/birulki-169.shtml?ystfuv

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I tend not to write many comments, but I browsed a few remarks here Communities Dominate Brands: When 2 plus 2 equals less than 2. Thats right,not less than 4, I meant less than 2. The Microsoft Point of View to the Nokia dead-end. I actually do have a couple of questions for you if you don't mind. Is it just me or does it look as if like some of the comments come across like they are written by brain dead folks? :-P And, if you are writing on additional sites, I would like to follow you. Would you list of the complete urls of your social community sites like your Facebook page, twitter feed, or linkedin profile?