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« Location Is The Speedbump on Mobile Highway - Understanding how futile 'Location' is as a driver of any mobile service concept | Main | Sherlock Holmes and the Hounds of the Basket Case: Clues on the trail of Elop, Ballmer and Nokia's Board »

June 18, 2013

Comments

oli

@Spawn: Wanna bet?

Tester

@Spawn:

>>Define "much". Nokia's brand not helped.

"Much": What Nokia actually sold.

>> plan B (Surface) keep Microsoft in the game with 2% market share or is even that not possible any longer?

If one assumes that they made 2% from people who bought a WP phone because it was from Nokia, any brand name change would mean immediate loss of these customers.

I read somewhere that the vast majority of WP buyers are first time smartphone users, i.e. they probably do not know much about operating systems. They just buy what they had before, and that was a Nokia phone. So, take out the word 'Nokia' and all the WP offerings immediately turn into worthless junk.

Tom Gorr

I seriously doubt the Chinese manufacturers are allowed to buy big mobile tech companies. No trust in the Chinese government, and the western powers are already using these tech avenues for similar activities.

Simon

@Spawn:

I assume that the reason Elop burned everything else was that this was a condition of getting the support (money) from Microsoft.

I also assume that any buyer of Nokia (unless it was through a bankrupcy court) will also have to honor the same agreement to keep selling only WP phones.

Kenny

@Simon
>I assume that the reason Elop burned everything else was that this was a condition of getting the support (money) from Microsoft.

There was no real support money from Microsoft. Whatever Nokia received from MS would have to be paid back in terms of minimum license fees. Elop really did a fool's contract there. Nevertheless the imaginary money may be used as a contractual condition to tie Nokia down to Windows Phone only.

StupidusMaximus

Is it funny that the NET worth of Microsoft money coming from the Nokia & MS co-operation contract was NEGATIVE !! I call that a STUPID deal !

Everyone saw that, but dishonest people, their stupid henchmen (Nokia Board of Directors) and lies can turn even BLACK to WHITE !

Hansu

As I said before in this text(deleted) it why buy Nokia now for double price when it could have been had a year ago for pennies, The only reason MS would be now intrested in buying Nokia is that now Nokia has perfected the hardware to WP the new Lumia 925 and upcoming EOS with the 41MP pureview camera and now they can start selling it for real the previous WP7 phones where lagging in hardware but now the system is becoming ready. Another reason could be stock market speculating but I doubt this because Nokia is the Short sellers favorite and pumping up the stock for short seller is poison. As for NSN I do not understand why people are badmouthing it it is the only thing at Nokia that is making serious money it never made a penny during Ollila and Kallasvuo but to Elop's credit he did turn NSN around to pretty profitable unit. The numbers dont make sense why wait wait to get to pay double for a Big Mac when you could have had it earlier for the same price

Tester

@Hansu:

>> As for NSN I do not understand why people are badmouthing it it is the only thing at Nokia that is making serious money

Yes, it may make money - but that doesn't automatically mean that it's an attractive purchase.

For someone who is only interested in the handset business it's a load of baggage they've got to get rid of.

Just looking at the stock price doesn't make sense. Who knows what other poison pills were involved last year that made Nokia a less attractive takeover target?

przemoli

Do not forget "Skype" in analysis of what Nokia did wrong.

Nokia may learned a bit on how to present and sell Lumias (but they still do it below the profit), but that do not auto-magically mean that carriers would jump on Nokia bandwagon again. (You heard, that Lumias had biggest PR budgets from some carriers EVER?)

"Skype" is still there to disable Nokia chance for healthy growth.

Tester

@Hansu:

As I said, there's various reasons why a company is an unattractive takeover target.

You have to look at the values AND the costs. Only if there is a clear advantage on the value side a takeover makes sense. If, however, you got to buy a lot of expensive baggage along with the value (like, say, several thousands of employees that need to be laid off - or even worse, several thousands of employees that can't be laid off easily and still demand their salary) a low price alone may not be enough.

Even now, Nokia still got that gigantic poison pill - their feature phone unit - that would scare off many investors. Everybody knows that the division is in a terminal condition and there's enormous costs involved in winding it down.

Siri

Goddamnit ELOP IS AN IDIOT and sometimes when Tomi haven't posted for a while I'm starting to think that Elop and Ballmer got him assassinated I mean if Nokia is ever to regain its former glory it better switch to tha Droid right away. Or die like the rest. its the Flops choice, And now every other top 10 manufacturer is having their own OS. Even HTC got some ongoing development of a kickass OS.

Spawn

@Oli

> Wanna bet?

I don't bet on Nokia/Microsoft :-)

@Tester

> take out the word 'Nokia' and all the WP offerings immediately turn into worthless junk.

Granted. But those 'Nokia' word was not enough. Its still only 2% and they are going nowhere from there.

If we assume there is and always was a plan B, since Microsoft keeps options unlike Nokia, the question raises up if plan B could result in a similar 'success' like plan A did. That are 2%. This 'goal' is reachable and would probably even be more promising in that it 'could' also be more. It hardly can be more worse. I mean if its 0.1% or 2%, its both a fail. Past years show that Nokia is not going to help them GROW but only to keep status 'alive somehow'. That's certainly not enough. Microsoft better aborts then to keep that running for next years. But I am sure there is a plan B. They may well give it a try. What do they have to lose?

> Nokia ... immediate loss of these customers.

Well, it may have been a good argument 2 yea prs ago when Nokia had lots customers. Today these customers are not with Nokia any longer. The 2% that, by accident means not knowing better, buy in will learn and may gone in the next iteration. Fact is the Nokia brand is vanishing, is losing its stand. Yes, its still strong but it used to be MUCH stronger 2 years ago. Now think long-term Microsoft strategy. The brand may be worth nothing in 2 years, Nokia will need heavy cash infusion to keep in, its not looking like it can grow beyond 2-3% next 2 years.

Microsoft isn't heading for 2-3%. Its not enough. They need to change strategy. The shift away from Nokia is visible since a while now. It only means accelerating that AND finally not care. That may mean a Surface Phone soon which will doom Nokia once more but who cares?

Microsoft can well apply a transition strategy here. Transition those 2% Lumia users to Surface. Hallelujah!

@Simon

> I assume that the reason Elop burned everything else was that this was a condition of getting the support (money) from Microsoft.

I doubt it. Back then Microsoft was needing Nokia, Nokia wasn't needing Microsoft. It was Nokia who had everything to offer, not Microsoft. More so, Elop's burning was NOT in the best intest for Microsoft either. Microsoft, just like Nokia, was planing for a TRANSITION, not a burning. Yes, Symbian would have been faded out but it would NOT have been burned from one moment to the other driving away all the customers. That was insane.

I think it was Elop's ego that made him write and issue that memo. I think therr was nkbody reviewing that memo before. He and he alone is responsible for the mess. Days, weeks, months and years later the Nokia BOD failed horrible with there job. That's there duty.

Tester

@Spawn:

You are making one big mistake in your analysis. Yes, Nokia's smartphone user base is small - but this is not the people that matter.
Right now Nokia is still the second largest vendor of feature phones - and all these people still need to migrate to smartphones. Right now for them, the brand 'Nokia' still matters and there's still a good chance that, if they transition, they choose a Nokia phone again. Many of them have no smartphone experience so they can be much easier convinced to fall for WP. Take away 'Nokia' and even this small chance evaporates.

And if you think about it, that's currently really the only users Microsoft could capture. Everybody else is already on another platform.

Did I say that this strategy works? No, not really, in fact it doesn't work well - but it's the only thing that keeps WP going at all.

Spawn

@Hansu

> Patents

Nokia still tries to improve the cash they get out of there patent-portfolio. Promised target are $500 million / year. Now, as Tester wrote, you have to compare price to pay with value to get / earn. $500m/year income if you pay $10b means it takes you 20 years to get investment back and finally start making profits. That is assuming $500m/year can be reached what is in doubt (FRAND, law-suits, patent changes, etc). Unactractive like hell.

> the only real competitor to Huawei in the broadband hardware market

And you think Microsoft, a software shop, would join that smal margin hardware business? Dream on.

> it is like buying the golden goose

Cause its a bit profitable now? Yeah, why go for the big money if you can have the small and who needs synergy?

> Symbian was selling like hot cakes and according to Tomi it was the best mobile operating system ever created

You are mixing things up. Whats "the best" is total irrelevant. What sells, has customers, generates profits, is what counts. So what was mobile ecosystem number 1, most customers and market share, when Elop took over? Symbian! That's not only according to Tomi. Look at some numbers if you missed that.

> Nokia was heading for the iceberg

Iceberg == abrupt crash. No, Nokia was losing market share but it wasn't abrupt. By the time everybody knew it and evrybody predicted Nokia has plenty of years left for transition. All that changed with the burning memo iceberg. That's the full power of the Elop effect that hit Nokia. Not an iceberg but a management-mistake bomb that destroyed Nokia market share, value, profits in world record time.

Spawn

@Tester

> all these people still need to migrate to smartphones

And just like last years the are going to migrate mostly to Apple and Samsung. Why should it be different now?

> there's still a good chance that, if they transition, they choose a Nokia phone again.

Would you buy your new car at McDonalds cause McDonalds has such a strong brand?

In more detail: Nokia has a feature-phone brand. In asia and africa Nokia is NOT present at all in the smartphone-segments for over 2 ysars now. I mean not present as not existing, zero, nada, nothing. While europe and US got Lumia ANY smartphone-offering from Nokia vanished, was gone and done with the N8. That was there last offer over two years agoin africa and asia.

The gap was filled. Samsung and Apple took over. You think Samsung is a strong brand in US of europe? Then you didn't saw them in asia or africa yet. There brand is big, there presence is even bigger. Nokia is nothi against that. They are done and gone. Shops closed, presence not existing. When Elop took over he moved AWAY from those markets. Nokia featurephones are still existing and will be for a long time to come (through second hand markets) but smartphones? Nothing. If you go smartphone you go Samsung, Apple, Huawei. Nokia is not an option, they are featurephone. Heck, 99% of people don't even know that Nokia does smartphones too!

See it as what it is: a lost battle. Nokia would need to rebuild its presence in asia and africa. Not from the ground up, granted, but they at least need to be present. They arn't. Remember Elops focus on US? He did so while givig up africa and asia. Samsung, Apple, Huawei took over. Those are they go-to brands for smartphones. Nokia is featurephone, not more.

You are not goi to buy your car at MacDonalds cause of there brand. You are going to a brand which does cars. Its that easy.

punisher

> And that Elop finally gets what he deserves - to be fired.

I strongly disagree.
Considering the value he destroyed, corresponding to several thousands of lives of full time job in Europe,
he deserves to be dismembered alive, and its entire fortune taken away from him and his family, as a miserable compensation for its depthless treason and mischief.

Tester

@Spawn:

I agree with everything you say. It still doesn't change the fact that the only market where WP is having a tiny bit of success is Europe - and that tiny bit is only achieved by using the 'Nokia' brand. So, ultimately, the survival of WP solely depends on Nokia's brand.

Right now, some people can still fool themselves into thinking that the current achievements mean something. However, once Nokia goes, all that'll be left is a giant black hole.

No, the Nokia brand is not string enough to make the platform a success and it'll never be. But it's still the only thing that makes WP hang on.

Hansu

@Spawn yes but that was before Android gained it's market share and if Nokia would have continued on symbian the customers would have realised that Android was the superior OS compared to Symbian and same would have gone for app developers, who hated making apps for symbian even with QT and all, Symbian was 2 years behind Android and it was at the end of its life no multi core, low res screen terrible browser etc the seed was planted during Ollila and OPK for Nokia's demise sure Meego would probably have eased the fall but it would have one major disadvantage almost no apps and app developers only focus 2 platforms same problem that WP has we need apps so that people buy our phones, the app developers would have said come back when you have the maret share I mean Nokia made and still makes great phones in all price ranges 20 usd feature phone 99 dollar touch screen Asha that just launched with Meego design ques and the Lumia range with great cameras and value for money phones. Other thing is cost it's pretty damn expensive to develop and maintain two operating systems many billions in R&D and the other system was coming to the end of it's life. As for WP it shame with skype deal and carriers boycotting it since it is pretty good OS lean and fast and different but if carriers decide to support Apple and android, Apple gives the carriers shitty terms and they dont make an money selling Iphones only pennies and yet they decide to push it, fine it's their money that's going down the drain be my guest. And as for Asia and Africa of course they are a feature phone maker very few people there have the money to buy a 400-700usd smartphone and the infastructure to support such an phone doesn't exist there especially africa altough its coming it's like opening a Mercedes dealership in a low income area

chithanh

@Hansu
If Symbian is inferior to Android, what makes you think that 99 Dollar Asha phones are suddenly competitive? Local-branded Android phones are currently on sale in India for less than 60 Dollars.

Windows Phone is an ok OS, but it was never good. Technology-wise it was always trailing Android and iOS, and even Symbian to some degree. Especially disastrous from consumer PoV is that WP seemingly cannot keep up with the spec war between the Android vendors. We may finally see quad core 1080p Lumias in Q3 or Q4. By then, the competition will have moved on to the next must-have feature that Microsoft will have to catch up to again.

Tomi T Ahonen

to Siri

Today's posting re Sherlock Holmes etc - I had been planning it, but reading your comment (assassinated..) motivated me to write it before I went to bed. Thank you Siri (And all my readers) for the continuing support. I'm here because you are here

Tomi :-)

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