The Only Thing Worse for Nokia to Do, than Launch a Tablet Now - Is to launch a Windows based tablet

A few words on the rumored Nokia tablet.

If its a phablet, a very-large screen but still marginally pocketable touch-screen smartphone, that is ok. To race to the top on the screen size races, thats ok. It could work. If its pocketable-sized.

If its a proper tablet however, that is the second worst thing Nokia could do right now. Why? Because launching a new device type, into a new market where Nokia is not established (portable computers) where Nokia doesn't have any retail and distribution presense - is VERY expensive for any global brand. Worse, it means fighting the two strongest brands in the IT industry right now - Apple and Samsung which just about control the tablet market globally. In smartphones, by contrast, Nokia was there before either Apple or Samsung even launched their first smartphones. Nokia has invented and reinvented the smartphone space and has deep, years long relationships with the sales and distribution channels (even as they have recently been damaged by Elop's actions). And differing from handsets, in handsets the carriers/operators have a disproportionate impact to the actual sales - in the PC market there is no such thing. Nokia's long-standing strength in all markets except the USA, has been its carrier relations (which were only damaged by Elop's Microsoft madness).

Nokia would move from the market where it still commands considerable carrier good will, into a market where no such thing exists. Nokia would be abandoning what advantages it holds, to move into a market it never knew, that is well established, contested by dozens of players and dominated by the two strongest players of the industry. What is wrong with this picture?

What Nokia's CEO needs to do right now, is to STABILIZE his company and its flagship unit, the smartphone unit. His strategy plunged Nokia's profit-generating machine, the smartphone unit that had never reported a loss, into a downward spiral where it has not reported one quarter of a profit since. This while the smartphone industry is exploding globally and powering the profits of Sony, LG, Samsung, Apple etc. The CEO has to put his effort into fixing what is wrong, not pursuing costly new adventures into spaces where winning is incredibly difficult.

Samsung could succeed as could Apple with tablets, because both Samsung and Apple were PC makers and had the right distribution and sales channels to sell portable computers. Nokia has none of that. Look at Motorola, look at Blackberry (ie RIM). Both were pure handset makers who had no history in the computer market - and both failed disasterously in their tablet launches and both companies were fatally damaged in that attempt. A phone maker should not pursue the tablet market - which is tiny compared to the phone market - whereas phone makers should pursue the smartphone market - which is far far FAR larger.

The right thing for Nokia CEO to do, is to put all his resources into fixing the smartphone unit (which would start with announcing a new parallel smartphone OS platform, either MeeGo (or its derivative, Sailfish) or Android or Firefox. He would not have to announce the end of Windows (that is inevitable) but just to announce a new OS for his smartphones, and he could escape the carrier and retail sales 'boycott' that Windows based smartphones have been under for two years now. Not my words - Elop himself said speaking to Nokia shareholders that mobile operators/carriers were refusing to sell Windows based smartphones from anyone. Not my words. Elop said that. So this point is not up to argument on this blog.

So, Elop should put his effort into fixing what is broken (his company, his smartphone unit, incidentially, a unit that was reporting record profits before Elop broke it).

The only thing worse, than for a pure handset maker like Nokia (or Motorola or Blackberry) to launch a tablet, is for anyone to launch a Windows based tablet now, that Microsoft itself has admitted its own tablet has utterly failed the market. That is taking a totally suicidal strategy - handset maker launching a tablet - and compounding it with the most hated platform going - Windows.

The Nokia share price was $9.36 on the day before this mad Microsoftian misadventure was announced. Nokia's share price is now $4.06. Elop's predecessor, Olli-Pekka Kallasvuo saw the Nokia share price fall 55% in three years and was fired. During Elop's tenure, the Nokia share price has fallen 57% in less time. I am not claiming all was good at Nokia before Elop. I was on this blog critical of Kallasvuo and I agreed with the decision that he was fired. But the Nokia share price has fallen more in less time - Elop is certainly a worse CEO, than Kallasvuo was. Why is Elop not fired? Is the Nokia Board in collusion with this idiot? If the Nokia Board doesn't fire Elop, the Nokia Board is also incompetent and must be fired as well.

Back to the tablet. If Nokia now wastes its precious resources to launch and market a tablet against the iPad and various Android tablets, it only means massively more waste at Nokia, more good people then being fired, and ever deeper trouble for the company. If Nokia announces a tablet, nothing good will come from that, just be warned. Look at how tablets killed Blackberry and Motorola and why can't Microsoft's own tablets find any love and traction?

Comments

[Allan Funt]

Agreed that a Micro$oft powered tablet will suck profitability out of the company. Another thing that struck me was that Elops main argument about moving to Micro$oft was that Nokia was no longer going to waste time and resources on OS development - Now the Amber updates show that Nokia has swapped one old dog (Symbian) for a crippled dog (Windows Phone)and is now developing core OS features for Micro$oft.

[asturcon3]

" I was on this blog critical of Elop and I agreed with the decision that he was fired."

Like that :D

[eduardo]

As I have said previously, my guess is that if Nokia were to launch a Windows tablet it would be because it was a condition of its agreement with Microsoft.

I wonder if this means that Microsoft is going to subsidize the tablet.

[Kenny]

@leebase
>Having a tablet that runs real Microsoft windows is going to be compelling for some segment of the tablet market.

Nokia wants to make Windows RT tablets which doesn't run Windows programs but its own Win RT apps. This os has already failed with consumers and other manufacturers have fled Win RT. What makes Nokia think it can do better?

On another note, Windows 8 tablets aren't popular either for the same reason as Window 7 tablets which have also failed in the market - lack of tablet apps. Most classic Windows programs are not touch enabled or designed for tablets. Furthermore who wants a tablet which will be susceptible to virus and malware just like a PC?

[J.O. Aho]

Quite mad to make a microsoft WindowsRT tablet, those has failed badly and been the device with highest return rate ever as customer were so dissatisfied when they couldn't run old x86 based applications.

[AndThisWillBeToo]

"which would start with announcing a new parallel smartphone OS platform, either MeeGo (or its derivative, Sailfish) or ******* or Firefox."

Rriiiight. I'm sure betting on any of the uncensored OSes is a straight way to victory! If betting on unproven WP7 with miniscule app offering was bad, what is betting on those OSes with virtually zero existing devices and apps?
Android... That's a different story.

[Brock]

I can only agree. Every big tablet company like asus has quit the plans for new rt tablets and even ms has been sued in the usa for the fail of the rt tablets (and not telling/warning the stock holdings how bad it is) and now, after all have seen that selling rt tablets are a catastrophy, nokia jumps in the boat and is trying to sell the tablets which noone wants... a tablet that is incompatible to the apps on their phones... thats absolute the wrong way to save this company.

[Brock]

@leebase
"Smartphone don't exist in isolation anymore. They are part of an ecosystem. Tablets are an expected part of the ecosystem."

Thje thing is that WP and WinRT are two different ecosystems and are not compatible. With RT you can only use apps from the Win8-Apps-Store. If you buy an android or ios tablet, you can use all of the apps you like on your phone now on your tablet but win8 rt and wp are two different os, only same thing is the first part of the name, windows, nothign more.

[Tester]

>> The thing is that WP and WinRT are two different ecosystems and are not compatible.

And herein lies RT's biggest failing. It's a system, that's incompatible with everything. It can't run Windows desktop apps, it can't run Windows Phone apps.

So what can it run? Yeah, right: Microsoft Office!

And Nokia expects to make profit off it? How, if Microsoft itself failed dismally?
Tomi is right. Nokia is a phone company. They are known for producing mobile phones, not computers. Sure, they may get some sales in countries where their name still means something but they will need utterly clueless customers to sell these things. Everybody with a shred of knowledge will know Surface RT's failure and steer clear of these things.

But this announcement proves without a doubt that Elop is not working for Nokia, he's still doing Microsoft's business. Because they will be the only ones who could potentially benefit from such a crazy business decision.

The only alternative is that Microsoft is financing this thing to get some tablets into the market without the tarnished Surface brand and Nokia is the only company in bad enough shape (or with a crazy enough CEO) to play along.

@Leebase:

The problems with RT are not in execution, they are technical. This system is just not attractive. As has been said, Android tablets and iPads can run their smartphone counterpart's apps directly which instantly gave them a huge repository of software. Microsoft, as usual under Ballmer, failed to see this very important selling point and made it incompatible with everything that could possibly have given it a boost.

And just in case someone mentions Surface Pro, yes, that disappointed as well but it was a huge mistake to release Surface RT first, let it do all the damage and then come with the Pro version when the reputation was already in the dumpster. The failure of this really was an execution problem.

[foo]

There's another problem with Microsoft's strategy.

They are still trying to pursue Apple's 2007 strategy, where they developed an UI and kept it for 6 years.

Compare this to the multiple skins of Android:

http://arstechnica.com/gadgets/2013/07/the-great-ars-android-interface-shootout/

You may not like all versions of Android UI. But it is quite possible that you'll like one of them.

Meanwhile, with iOS and Windows Phone, you may have any interface as long as it is the default one.

In other words:

Microsoft is pursuing a strategy that is starting to fail.

[ej victor]

Brilliant way to fix execution elop! Forget about being a "first mover", who needs to be in the pack with all the followers! Only after has the product been thoroughly panned by the technocrati, rejected by the consumer, dump on educators at cut rate prices, and written off by Microsoft does it merit Nokia's attention. I know Myth Busters proved that you can polish a turd, but this is ridiculous. Or is it that it takes Nokia 31 months -since January 2011- to get a polycarbonate shell out the door?

[Hansu]

Nokia making a tablet in itself is a good thing hardware has never been a problem for Nokia (N97 excluded). The problem here is that why RT why not make a full WIN 8 PRO with unique Nokia design new Haswell chips and selection of vibrant colours and a nice camera to as a top off. I am pondering Nokia knows full well that WIN 8 RT is not catching on or do they know that Microsoft is pushing an new version out or something else we dont know only time will tell.

[khim]

@Hansu: Nokia making a tablet in itself is a good thing hardware has never been a problem for Nokia (N97 excluded).

Actually that's wrong. Nokia was always able to create good hardware, but it's process was slow as molasses. Long upgrade cycle, slow and careful testing, released after years of development. With traditional phones it was not a problem, but as you've notices when Nokia tried to develop anything in hurry the end result was abysmal. And they've lost whatever engineering talent they had thus process is even slower now.

@Hansu: Why not make a full WIN 8 PRO with unique Nokia design new Haswell chips.

Sure Nokia can do that. But tablet will be available for sale sometime in 2015. This will obviously be a problem: Nokia needs something to sell today, not in 2015.

[Hansu]

@khim The slow process of testing and getting things approved was one of the main reasons why Nokia is in the state it is now that was fine 5 or so years ago but now time to develop and test and doa trial production run is a luxury that only Apple has anymore. As for developing something in a hurry give me an example of a fast development gone wrong. As for the 2015 if Nokia is commited to a tablet relase in 2015 i doubt if they have an WIN 8 RT version allready developed as suggested they probably also have a WIN 8 pro version somewhere

[Allan Funt]

@Hansu...Still turfing for Microsoft!?

@Hansu: why not make a full WIN 8 PRO with unique Nokia design new Haswell chips.

Duh because that isn't the "tablet" market, that is the Slate PC Market, which is in deeper shit then the "other segment" of the tablet space. Execution, Execution, Execution!!! As far as RT is concerned all they had to do is machine a polycarbonate shell - they are more restricted with RT then they are with Windows Phone.

Design without user experience does not sell! Look at what happened when Nokia put windows phone on the award winning N9 design - utter total crap rejected by consumers.

[Hansu]

@allan funt not really but there are allways two sides to a coin I agree making an RT tablet is not the smartest decision in the world by a long shot if you are going to make a Tablet make a decent one on full OS and give it all the features it needs. The Lumia 800 was a rush job but then again it was never really made by Nokia the only Nokia part about it was the casing and the badge the rest was designed in the US. This is my problem with tablets they are bigger than smartphones and have a bit more umph under hood and a bigger screen and are fine for playing around but proper work a PC/Laptop will allways be better for that just like a dedicated Game console for playing games. My point with this why do people have to carry around a smartphone wherever they but then take a tablet alongside for something more serious only to have to go to PC for the serious stuff why not make tablet that does both RT is like ios on the iPad or android yes you can do 90% of the stuff you do on a computer but you have to go to a computer time and again. Making a PRO version would eliminate that last 10% and make it so much more usable day to day for work play whatever.

[Alan Funt]

@Hansu

Nice fairy tale, but we prefer fact over fiction, experience over wishful thinking.... As a daily user of a Samsung Series 7 slate for almost two years with windows 7, windows 8 and now windows 8.1 let me reassure you it is the worst $2,000 USD I ever spent in my life, and a shining example of what is wrong with Microsoft and how out of touch they are with mobile computing.

The Lumia 800 wasn't a rush - all they had to do was put a plastic case around Compal hardware - stop making excuses for a shit product (windows Phone 7.x). This entire exercise of doing a tablet now with any windows product show how utterly broken Nokia's management brain trust has become.

[Tester]

@Leebase:

Ouch!

You really believe that a system that has completely and utterly failed when Microsoft handled it will magically turn into a success story under Nokia's brand name?

As for "Android phone apps on Android tablets are a terrible experience.", the only thing I'll say is that it's at least an experience. Better that than having nothing. At least I can run my banking app on my tablet. Who cares that it's not optimized for the large screen? At least it works.

>> Only the iPad has a tablet app catalog that is fully fleshed out

And why? Yes, because Apple had a jump start that gives them some advantage. You wouldn't think that this is going to change, now that Android tablets are rapidly gaining market share?

>> There is an opportunity for Microsoft here.

Is there? Really? So why didn't it work in the first round? The RT opportunity was last year when Android in the tablet space was still weak. Microsoft tried, they did some heavy advertisement and the result of all this is that they are going to write off almost $1b.
Microsoft may have a long play space - Nokia doesn't, though. They make no profit with smartphones and now they enter another high-risk business on Microsoft's behalf. No matter how you twist it, that's utter insanity - and perfectly fits Elop's character.

So this is yet again the same story as always. Microsoft will be successful because they are Microsoft and are in for the long haul. I heard this for WP7, for WP8, for RT, for Win8 and so far all of these platforms have been dismal failures.

What is it with you Americans that you attest these companies such magical attributes that are nowhere justified?

[dies felices]

This is the one place where I disagree with Tomi. I think a Phone manufacturer can and should enter the Tablet market (though that is not to say that Nokia is in a position to do so right now). The problem with smart phones and tablets right now, is that they don't relate to each other. You can't even use a tablet as an over-sized phone via a hands free kit! (except if you use voip)... The relationship should be symbiotic and user focused. The word 'Integration' should come in to use somewhere about here. I think the fact that Apple and Samsung both strong smart phone and strong tablets is not a coincidence.

Integration is exactly one example of how Microsoft have failed, as again both IOS and Android have app compatibility from phone to table. While Microsoft don't even have compatibility or perhaps equivalence across the Surface RT and the Surface Pro.

Therefore to return to my main point and this is only my twisted view on things but I do expect convergence between the tablet and smart phone markets. This is a great risk for any manufacture big or small. Thinking of Jolla for a moment, they have to start somewhere with their Jolla Phones but if they're to be successful they will need offer that larger productivity orientated tablet and again, the way to go is integration.

This isn't a PC vs Smart Phones thing, it a convergence thing.

[Uwe]

I really hope Nokia will not even try a RT tablet. Rather donate $900m to a charitable cause and call it a day.

I was waiting for Tomi's take on these tablet rumors and his estimate what the success (in volume) of the 520 will do for Nokia's margin... Now still waiting for the latter :-)))