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« Second picture in the Nokia Destruction Saga - Greatest individual Management Mistake Ever Made - Nokia vs Competition in one picture | Main | Quick notes from the smartphones battlefield and announcements from CES »

January 07, 2013

Comments

cycnus

@Wayne

BB touch screen pre-10 is just like the Nokia S40 + touch support. crappy!!!

When I look at how long it take RIM to finally support email and calender on Playbook, I think RIM would not success with their BB10. Because when they finally 'catch up' with 2011 AndroidOS/iOS, the competition already way ahead. When Microsoft introduce THE ALL NEW WP8, Tomi said that the counter have been reset to ZERO again because it's new OS, new ecosystem. I think the same with RIM BB10. The counter have been reset again because the target market is now changing from (NOW) cheap-messaging user into advance real smartphone user in which android and iOS already have a very good ecosystem.


John Phamlore

Today is truly a monumental day. The first non-Microsoft (Bill Gates or Steve Ballmer) opening keynote speaker at CES is ... Qualcomm CEO Dr. Paul Jacobs.

http://www.forbes.com/sites/connieguglielmo/2013/01/07/qualcomm-ceo-paul-jacobs-delivers-opening-keynote-at-ces-live/

http://live.arstechnica.com/ces-2013-liveblog-dr-paul-jacobs-and-the-qualcomm-keynote/

This was the change that happened the last five years. This is the future Nokia missed out on.

"... one billion Android devices in use today... most are being powered by Qualcomm chips ..."

cycnus

@John Phamlore

AGREE!!!

The funny thing is (if you see the live streaming), Steve Balmer trying to steal android thunder, I wonder how much MS pay for Balmer to be able on the stage.... BIG LOL.

Balmer was on stage saying that 2012 christmas WP sold 5x better than last christmas. Unfortunately no one throw egg or pie at Balmer.

John Phamlore

@cycnus

Wasn't it hilarious Ballmer having to serve a secondary role to the CEO of a company no one would have guessed five years ago would take away the opening keynote at CES? This is why I have relentlessly hammered away at Qualcomm's role in things here--they are that important at least in the United States.

It's breathtaking to me the sure scope and scale at which companies working in the mobile space have to be at these days. In their CES address one can see all the things Qualcomm is trying to put their chips into, way beyond handsets, into entertainment, automobiles, etc. And it's the same way for companies such as Samsung and Huawei and Google.

That's why part of what I have been arguing is that to succeed now, a company has to both have a company mission beyond handsets and government help. Samsung the Korean chaebol basically is into making everything and owns its own fabs. Huawei is the Chinese national champion that is laser-focused on providing end to end networking. Google is the big data + artificial intelligence company that apparently has its own very powerful allies in US government.

It's unfair the necessity of government help, but that is an inherent part of being in telecommunications where the government by necessity picks winners and losers allocating spectrum. I'm not sold that Nokia had the same European government support watching its back, and I'm not sold that dependence on handsets was / is the right way to win in the mobile space except for a company such as Apple.

Winter

@ukd
Nokia's market share in smartphones was going down in 2009/2010 because the Smartphone market exploded. The real disaster was that the absolute number of sales was crashing from 1Q2011. That is, after Elop's presentation of his new WP only strategy.

http://communities-dominate.blogs.com/.a/6a00e0097e337c8833017ee44107c1970d-pi

Sander van der Wal

@John Phamlore

CodeWarrior a developer-friendly IDE? Not when you compare it to Microsoft Visual Studio.


About the declines, a couple of issues.

RIM. RIM did not lost the plot because they were introducing a tablet. RIM had a problem in that in the USA people started to BYOD, starting with upper management. That was the segment they were making money in. Tee youth was indeed using Blackberries because they had free messaging. And when in Europe iOS and Android introduced free messaging (WhatsApp), they left.

Palm. The platform started to disintegrate under its own weight, and Blackberry became popular. There were attempts at getting a proper multitasking OS under the bonnet, and those attempts failed.

Nokia. Nokia was king of the hill outside the States. At one time they held 80%+ of the smartphone market. How about presenting the downfall from that highest point attained, instead of 2010?

In general, there is no worldwide single smartphone market. Conditions and players in the USA were different from those in the EU, Asia, or EMEA. So an analysis based on worldwide market share is only going to show the causes that were indeed global.

Now, iPhone was not introduced globally at a single point in time. So the influence of iPhone on a global scale is not clear, the difference between a single blow and a death by a thousand cuts. You have to look at the separate markets to see what was happening.

Obvious example, if iPhone is only introduced in a small number of European countries, its impact on total European sales is less than the impact it made in the separate countries. So, a better picture will emerge is you look at the countries separately.

This very argument was used to say that the MeeGo based N9 was a big success in the countries it was actually introduced in. So it is only appropriate to use that kind of analysis for all devices and countries.

alvi

Tomi, this should get your blood boiling: http://www.investorguide.com/article/11473/nokia-nok-bounces-back-on-strong-windows-phone-8-lumia-sales/#comment-385760

From the article: "Nokia CEO Stephen Elop, a former Microsoft employee, managed to slow Nokia’s rapid descent by simply admitting that the company had to change."

I wouldn't even know where to start arguing with that...

Tester

@ukd:

Sure, Nokia did have problems. And yet, their market share only declined moderately. More importantly, they were working on solutions (Symbian^3, MeeGo.) that would have helped overcome their problems.

Unfortunately it's impossible to tell now if and how much they would have helped - because they were outright sabotaged by Elop's idiotic memo.

So:

Before Q4/2010, Nokia was indeed not competetive on hardware specs. This showed in a moderate decline of marketshare.

In Q4 the N8 was released and Nokia had relatively good numbers to show. But since only 2 months later it all went sour there were no long term effects.

The same goes for MeeGo. Instead of letting it improve Nokia's numbers it was destroyed right out of the box by some idiot CEO.

Elop was a true genius. He managed to destroy the future of Nokia right in the moment when it became available.

foo

@ukd - you are trying to say that Elop wasn't the only culprit in Nokia's demise. Fair enough.

But what you cannot deny is that the Elop Effect caused the sales to collapse.

And how could that not happen? The CEO said that their current platform was on fire, but -- wait! -- Microsoft is going to rescue us... by the end of the year! Elop told the world that Symbian was obsolete before he had anything better to show.

Tester

@ukd:

I'm sorry but in that graph I can't see that the loss of market share in 2010 was as bad as in 2011.

To me it looks like 2009->2010: 5% points loss of market share, 2010->2011: 15% points loss of market share.

And as I said, the effects of Symbian^3 can't be fully measured anymore because the most critical quarter was the one where Elop destroyed everything.

Mind you, the rumors about a Windows deal started surfacing a lot earlier so who can tell how much damage these alone did?

foo

Tomi,

Here are some images based on your first article:

http://oi49.tinypic.com/211qv54.jpg

http://oi50.tinypic.com/157bvro.jpg

http://oi48.tinypic.com/dgu3n.jpg

And here's the result of Elop's madness in a single image:

http://oi48.tinypic.com/34ifvvb.jpg

(black=lost sales; orange=windows phone)

Spawn

The point is Symbian growth in 2012. The whole market did and in absolute numbers of sold units Symbian's grow was faster then any competition. That you cannot hold on 100% when you have strong competition is no mystery but if you grow more then competition then you win.

You always have to set market share in a specific context. For example market share is not what Apple makes strong but the profitability. f you look at profit Apple wins even when Android has more market share.

Another example are platforms like JollaMobile. If they get 2% market share they win whereas when Microsoft gets 2% they lose. You have to put things into a context.

For Symbian: It was number 1 in 2010 by multiple factors to its nearest rivals. ALL forecasters and investors agreed that even when Symbian shrinks in market share it will stay number 1 next years, will be highly profitable for Nokia and sell well. The next billion wasn't a joke. That number may have been a bit high but it wasn't impossible to reach. All they, Nokia, had to do is to sell devices and stand behind it.

Nokia had years of time left till they would even come close to becoming unprofitable. Huge number of cash, talent, customer base, partners. hThy could introduce an Android device and sell a few millions just to try out. They could do WP7, WP8, Android, Symbian, MeeGo, S40, Meltimi, BB10, FirefoxOS all in parallel, come to market and test the water.

They could do all this years long and still be profitable. Tomi wrote it once but it seems to be needed to repeat it: The problem was NOT to offer WP Lumia devices. The problem was to burn there cash cow, to close there income source, to suicide themself.

If you burn your income source you have no income. If that happens while you have to pend money on things like sallerys or a VERY expensive Lumia strategy then you make lose. Day by day, month by mongm quarter by quarter.

Nokia had a huge pot of cash, that got burned last years cause they make huge lose every quarter since then. They run out of cash. This is a problem if you have no way to get new cash somewhere. When no cash is left you are bankrupt. Your company is done. This is what is happening with Nokia.

They burned all there profit-sources, keeped there lose-sources anf run out of money. Done, finished, good bye. And no, Symbian was a f*cking money machine and yes it would stay one for years over years to come. If you kill your money-machine (with no single reason to do so) you are a bad CEO. If you kill onr of h most profitablr oney-machines in our industry and burn billions of cash on a losing strategy and yet not change what you do you are the worst CEO, you are Elop.

But beware that therre are very very less companies like Nokia eith a stand like they had just 2 years ago. You first need to become CEO, you second need to find the most rapid way to crash that company and you third need strong support to be able to do so without anyone jumping in and stopping you. Only then you are a first class Elop.

Spawn

The point is Symbian growth in 2012
=>
in 2010

Stupid typo that would not be one without Elop.

Tester

@ukd:

That's Symbian, not Nokia!

As Tomi has explained when being asked, in 2010 several manufacturers dropped Symbian from their portfolio, so obviously their market share disappeared.

And you still don't seem to understand the difference between natural decline and artificial collapse.

If you look at the numbers you'll see that Nokia lost maybe 10-15% of their market share in 2010, but they lost 60% of their market share in 2011! That's quite a difference.

Spawn

@udk

> http://en.wikipedia.org/wiki/File:World_Wide_Smartphone_Sales_Share.png

An do you suggest that now that Microsoft Windows has lesser market share then they had 20 years ago that they are lesser profitable then 20 years ago and should burn Windows right now?

See, the straith fall down of Symbian starting in Q1/2010? See thr curvr up before? The first is Elop's burning, the one before introduction of Symbian^3. Yes, Symbian had huge competative problems when Android and iPhone arised like WinCE had, like RIM had, like everybody had. Its new competition and its strong one. But Nokia answered. They answered with Symbian^3. They even changed strategy as an answer and moved away from big major releases incompatible with the previous one to incremental improvments. Symbian^3 was on track, the N8 sold very good.

Then Elop came along, burned and the line in the graph crashes to a rounding error.

Sure, Nokia lost before. They where not any longer the ONLY offering. RIM became a problem for Nokia beforehand too (hey, first Android's focused on RIM as comotition, not Nokjia and not Apple).

But unlike RIM Nokia had a new version. One that sold well. Huge profits for Nokia. There money-machine, there cash-cow. They even had an alternate offering to Symbian^3 close to be released, MeeGo. And they applied the same strategy to there. Driving S40 forward (and result is Asha, touch-screen low-end) and worked on Meltimi.

Elop did just one mistake: He not killed S40!
That's thr only failure in his strategy. But at least he decreased investment....

Spawn

@udk

And for market share: What you are missing is that the overall market did grow! Herr look at this which is a graph related to sold units 2007-2010:

http://www.asymco.com/wp-content/uploads/2011/02/Screen-shot-2011-02-20-at-2-20-11.48.41-PM.png

See how Symbian sky-rocked? The difference is that h other much smaller curves, Android and iPhone, also grow. Much slower but still and so in percent of market share they eat some of Symbian's.

Having competition is always more worse then not having any. Thisnis what your graph shows us. But in terms of profit (;remember: context) and sold units Symbian was sky-rocking more and more without any fall till Elop's burning.

From a pure fiscal perspective it does not matter if your competition makes profit too as long as you make profit. And Nokia make huge profits, with Symbian, what they decided to burn, and now Nokia makes huge loses.

Spawn

@udk

And yet another try to explain that: Its like Elop and the Nokia board meet together and look at your graph and then following talk happened:

Elop: OMG! We are losing!
Analyst: But we heavily grow sold units and every year more much more then before and so have every year more profit...
Elop: But that blue curves goes down!
Analyst: Yes, because our competition sold more units too but we stillcgroe faster and its accelerating since years...
Elop: I not like curves that go down!
Analyst: Nobody likes but in overall we do more and more profit with Symbian!
Elop: Symbian is the name of the blue curve? I not like blue! I have a suggestion for a strategy change!
Analyst: But we make every quarter more profit...
Elop: Lets change that Symbian blue to a WP green!
Analyst: ....

Tester

@udk:

Yes, that hypothetical talk sounds quite right, albeit heavily flawed.

If you approach complex problems with such simplistic attitudes you are always going to lose because it obviously ignores secondary effects.

Johannes from Norway

Elop says anything is possible. Even launch of a Nokia with Android this year:

http://economia.elpais.com/economia/2013/01/04/actualidad/1357311412_694701.html

Spawn

@udk

> Nokia was able to sell more units because of the market growth but when that stopped, Nokia's unit sales crashed.

So, in your own world the market not only stopped to grow in 2011 and 2012 but also there where in total lesser units sold? So much lesser that the 3% market share Nokia has today equals in fact the 40% they had before?

Interesting mathematical and physical conditions in your world. It's just not very compatible with the reality...

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