My Photo

Ordering Information

Tomi on Twitter is @tomiahonen

  • Follow Tomi on Twitter as @tomiahonen
    Follow Tomi's Twitterfloods on all matters mobile, tech and media. Tomi has over 8,000 followers and was rated by Forbes as the most influential writer on mobile related topics

Book Tomi T Ahonen to Speak at Your Event

  • Contact Tomi T Ahonen for Speaking and Consulting Events
    Please write email to tomi (at) tomiahonen (dot) com and indicate "Speaking Event" or "Consulting Work" or "Expert Witness" or whatever type of work you would like to offer. Tomi works regularly on all continents

Tomi on Video including his TED Talk

  • Tomi on Video including his TED Talk
    See Tomi on video from several recent keynote presentations and interviews, including his TED Talk in Hong Kong about Augmented Reality as the 8th Mass Media


Blog powered by Typepad

« Humanity are the data wells that make the black gold of the 21st Century | Main | Elop 25 Million Dollar Golden Handshake for Destroying the Company - How Could This Happen at Nokia (analysis and speculation) - Tomi plays detective again »

September 23, 2013


hostgator coupon code

I blog quite often and I seriously appreciate your content. The articlke has truly peaked my interest. I am going to bookmark your blog andd keep checking for new details about once per week. I opted in for your Feed too.


@Sander van der Wal

"Blackberry was executing the strategy that Tomi was recommending for Nokia, keep developing one's own platform. And that strategy has failed miserably, Blackberry had to write down 1 billion in unsold devices, they fired 40% of their staff."

Nokia had two options:

1) Keep developing their OS

2) Adopt a different OS

Elop opted for the first option. Great.

But why the hell did he choose the worst and less popular operating system, from his former employer?

Why did he give exclusivity to Microsoft -- effectively giving control of his company's future to a strong supplier? (Read Porter's five strategic forces -- particularly the force of suppliers -- to understand how bad that decision was)

Why didn't he kill all the alternatives?

Why did he say that he would kill N9 even if it was successful?

Why did he invite competitors to join the "ecosystem"? (Which was owned by Microsoft)

Taking about "ecosystem", why did he acted and talked like a Windows Phone advocate?

There is not a single one, not only two, not three... there are *many* evidences that show that Elop was working for Microsoft's best interests, not Nokia's.

This is the difference between Blackberry and Nokia.


@tomi, others,

why finnish govervnemnt don't say "no" to this acquisition?



> why finnish govervnemnt don't say "no" to this acquisition?

Because Nokia can no longer survive as an independent company.

Elop gave away the strategic control of the company when he made this exclusive "partnership" with Microsoft and killed all the possible escape routes.

The original plan was to sell the company without selling it: Microsoft would have all the benefits of "owning" Nokia, but would still be able to say that it didn't make smartphones, being able to attract other companies (HTC, Samsung, etc).

Elop made his part -- too well, I would say. He promoted Windows Phone, invited competitors to join the "ecosystem", etc.

But the transition was so poorly executed (and the OS was so undesirable) that Nokia collapsed, and had to be rescued.

Selling the company was the only thing to do after the utter destruction made by Elop.


Strange. If Nokia was french (I'm French) the government would have say no to this. Even if there are a lots of lay off...


The news is getting around:

Nokia Admits Giving Misleading Information About Elop's Compensation

So Vatar

This is an excerpt of Forbe's article Winter linked to:

"Elop was facing an instant, massive windfall should the following sequence happen to take place:

(1) Nokia’s share price drops steeply as the company drifts close to cash flow crisis under Elop.
(2) Elop sells the company’s handset unit to Microsoft MSFT under pressure to raise cash
(3) The share price rebounds sharply, though remains far below where it was when Elop joined the company."

I can see only 2 reasons why this was allowed to happen:

1. All the members of the board are incredibly stupid, have no idea about what they signed to Flop, and did not get any reasonable legal advice or did not listen to it. Or

2. It all was planned and set up from the get go and the board colluded in this scheme.

Pick your pick!


I think the REAL idiots behind this drama is the NOKIA Board Members! THEY have failed to control the CEO - THEY have agreed silly plan A without a plan B.
Who are those incompetent managers sitting in the NOKIA Board?

So Vatar

you have some points but you also oversimplify what happened. You have a grasp on one aspect - Apple disrupting the high end of smart phones, but you fail to see that there was a lot that Nokia COULD HAVE DONE to fend off the challenge.

To simplify for you, let's just talk about a few general phases (arbitrarily chosen by me) from Nokia's point of view:

1) Phase On (up to about 2007): Nokia is the undisputed king of the hill. They make the most money in the business, have the most phone variants, best functionality, best eco-system (the competition had nothing to show), etc. However, success starts to make them complacent. Still, they have everything in place to stay ahead (cash, r&d, customer relations, etc).

2) Phase Two: (2008-2010) There are problems: Nokia's new products get more and more delayed to the market, their development is too slow. Symbian shows signs of getting too complex, with lots of functionality that is not intuitive to use. They switch their smart phone strategy gradually to Qt / Linux core phasing Symbian to lower end and gluing everything together using Qt. Good strategy, very bad execution. Instead going full speed they lose a year in trying to merge Mameo with Intel's Moblin (=MeeGo). They still have cash, r&d, customer relations etc. They still have increasing sales, but market shares comes down and they open themselves to be attacked by competitors. They need to fix their execution.

3) Phase 3: (2011 - mid 2013): Nokia hires a new CEO. Observers think he was supposed to fix execution, instead Nokia makes a 180 and drops all their existing smart phone business, contracts with MicroSoft to use MS's failing phone OS exclusively. They dropped most of their customers along the way. Volumes declined, mass lay offs, smart phone business becomes unsustainable. Nokia becomes the laughing stock of the industry.

4) Phase 4: (Mid 2013 - now): The end. Phone business is destroyed, remaining (phone) assets are sold to Microsoft. CEO makes millions, Board is still neither fired nor indicted.

Nokia had it in their hands until phase 2, but instead of fighting back in phase 3 they rolled over and caved in. This is the incredible failure of CEO and Board. They made it easy for the competition (especially Samsung) to pick up the pieces.

So Baron, while you say Apple drove Nokia out of business, I say, Nokia drove Nokia out of business. An unbelievable failure of gigantic dimensions, totally unnecessary and self inflicted.

This is the shame. Not that they got disrupted, but that they let it happen without a fight.



> That is the SAME thing that happened with BB. They got destroyed by Apple in the US, then fled to Europe.
> They got destroyed there, then fled to Indonisia and other emerging markets. Then they ran out of places to ride.

There is one fundamental difference between Nokia and Blackberry:

Blackberry fought to survive; Nokia surrendered to Microsoft.

Choosing a different operating system is not a bad decision per se. Choosing the least popular, and incomplete, that's silly. But going ahead with this strategy without a contingency plan -- and killing all the alternatives -- that's criminal.

There are too many evidences pointing to the same direction: Stephen Elop wasn't working for Nokia's best interest. He gave away strategic control to Microsoft. He talked and acted as a Windows Phone ambassador. He invited competitors to join the "ecosystem".


It's not a matter of "Nokia would fail anyway". The real matter is that, if Elop was really working for Microsoft, he committed a crime.


Blackberry wasn't killed by Apple. They were killed by their own abysmal execution. Instead of rolling out a new product when it was most needed they took THREE(!) years to get the new OS ready. Needless to say, in that time the business had turned away from them. Nobody wanted their clunker phones after Android became attractive.

The only similarity with Nokia is that both companies suffered from bad execution that made them vulnerable and left them defenseless to Apple and Samsung.

The big difference is why they died.
Nokia died because they threw away everything they had - not just the bad stuff but also the good stuff.
Blackberry died because they weren't able to throw away the bad stuff - because they had no good stuff to replace it with - unlike Nokia.

And no, Android wasn't near strong enough when the fatal decisions were made.


The most interesting remaining part of this affair is now really the thinking and actions of the board. Does Jorma Ollila give interviews?

I assume Elop can argue that his employment contract shows that selling the smart phone unit was in his remit and thus in the fiduciary interest of the stockholders. If so, fulminating about prison is probably pointless. However, it would be interesting to see when this clause appeared -- when he was hired, or at a later stage; likewise, how does it compare to his other compensation? Depending on which, it could tentatively explain why the board didn't fire him.

Finally, as I understand it, the deal has not closed. While nobody else has come in with a counterbid yet, that could spice things up.

So Vatar

According to YLE Elop's terms were changed exactly when the sale to MSFT was finalized, early September 2013.

New Nokia twist - Elop's contract revised same day as Microsoft deal.


@Baron95: That is the SAME thing that happened with BB. They got destroyed by Apple in the US, then fled to Europe. They got destroyed there, then fled to Indonisia and other emerging markets. Then they ran out of places to ride.

Nice theory you have there. Let's check it, shell we?

This theory predicts that worst effect will be felt by manufacturer who's popular in advanced markets (US, Europe, etc). Nokia was basically absent from US when this process started and was very strong in China and Africa while BlackBerry was very strong in US and Europe and was not as strong in Latin America and Africa. This means BlackBerry should have collapsed first - by far. FAILURE OF THEORY.

Another part: obviously the one who will switch to a new platform first will survive and the other will fail. Blackberry had nothing to show for till 2013 while Nokia had MeeGo in the middle of 20011 and WP7 at the end of 2011. Which means that BlackBerry should have collapsed first - by far. FAILURE OF THEORY.

How many wrong predictions should theory give before you'll abandon it?

It's possible that effect you are describing is real. Sure. It may even explain collapse of BlackBerry (it failed when "they ran out of places to ride"). But it DOES NOT EXPLAIN the Nokia failure. Not at all. In a world where Nokia and BlackBerry are both small smaller yet Nokia is larger of two this theory will be acceptable. In today's world it's not. SOMETHING ELSE it at play.


Baron doesn't have theories, all he got is pro-Apple propaganda. It can't be more obvious that his mission goal here is to put Apple on a pedestal so that everyone Who Sees The Light can pray to the One God of Mobile.

It's just ridiculous and completely fails to acknowledge the actions of the players involved in this misery.
The end of a long story: Two companies crashed because they failed to bring the products to the market which the market wanted from them. The reasons why they failed to bring those products to the market are completely different and in no way comparable. And it was certainly not Apple who put them out of business but their own lack of momentum.

And dare I predict who will be next: Those Android manufacturers who fail to release OS updates for their hardware. I know lots of people holding grudges against HTC and Sony due to that. And if they go out of business it's for the same reason: They fail to bring products to the market which the market wants. A non-upgradeable Android phone is not a desirable item. Period.

So Vatar


you do have a very narrow US centric view.

There is a world outside the US. Before 2007 when Apple supposedly invented the smart phone for the US there has been a vibrant smart phone market outside the US. Nokia was weak in the US and in the (then) important corporate market (owned by RIM). Still, they had their ducks lined up and everything in place to stay king of the hill.
They did not. Way slow execution (2007-2010), and then disastrous strategy combined with way slow execution (2011 and up) killed them off.

You keep saying there was no way out for Nokia than to go down. That's just no true, there were alternatives. However, Nokia in its eternal wisdom made a series of devastating decisions (changing strategy instead of fixing execution, then selecting the worst possible OS for all their smartphones, then not allowing a plan B, then angering their customers with "my windows phone way or no way", and most (ex-) customers chose Android.
And there were some (Tomi among them) who called their mistakes out. Nokia did not listen.

Go back to 2006 and see for yourself the state of the business. In 2007 it would have been likely for Nokia to fend off Samsung and Apple, in 2010 it was still possible. After Feb 2011 they maneuvered themselves into a corner with now way out than capitulation.

Still the board gives Elop $25Mio. Go figure.


From the beginning, I, for one, considered Elop a Microsoft mole.

His primary Microsoft task was to eliminate an unbeatable competitor to Windows Phone, by turning said competitor into a Windows Phone house. Microsoft would then, in a practical sense, "own" Nokia without having to officially "buy" it.

Obviously, Microsoft would have preferred Nokia Windows Phone to be successful, since that would have put Windows Phone on the map.

That Elop didn't care about Nokia, and that he had a hidden agenda, became instantly clear with the "Burning Platform" memo. I'm sure that Elop's actual employer (i.e., Microsoft) was filled with joy when he released the memo, since it instantly killed the annoying competitor; it was likely even inspired by his masters in some way.

Elop's bosses surely were unhappy about how he failed to create a successful business around Windows Phone - although I'm still puzzled about how Microsoft helped sabotage Nokia phones when it announced Windows Phone 8, given that the Nokia phones at that time were stuck at Windows Phone 7. It seems to me that even Microsoft wasn't all too confident that Nokia Windows Phones would be successful - or that, by then, Microsoft had its own reasons for killing the Nokia business. Perhaps Microsoft was beginning to understand that Elop wouldn't turn Nokia Windows Phone into a success after all, and that there would eventually come a day when they would either have to buy Nokia anyway, or (oh, horror!) see it fall into the hands of a competitor? At that point, driving the buying price down must have looked like a nice idea to them, too (though I have no idea about how they would have any guarantee that none of the competitors would snatch Nokia; perhaps that was when Elop informed his bosses about the $25M bonus he would get when selling the business to Microsoft?).

Clearly, Elop is not an idiot, and he can successfully execute a plan in his own interests - I would be more inclined to call him a genius in that sense (though the 25 million reasons that he was offered must have been a strong motivator).

Was this a fraud? Yes, it was. Should it be investigated? Obviously. Should Elop et al be sued, sentenced, sent to jail? Sure. Will any of this happen? Don't hold your breath!


@ Tomi
Off topic to this specific post, but I'm curious if you signed up for the pre-order for Jolla in Finland?
David Kuopiossa

John Doe

I have watched Nokia from investor's perspective several years, and I can't help but be amazed when people say Elop did a good job, or Elop's era was success. The reality is exactly the opposite.

Just for a quick perspective,

-Nokia shareprice just before February 11th (2011) when WP-only strategy was announced: $13
-Nokia shareprice now (9.24.2013): $6.6.

So looking only at the recent quick jump in shareprice due to the MS acquisition is a bit shallow..

Had Nokia chosen Android, they would have been better off now than what the reality is. It definitely would NOT have been late to choose Android then.


Consider WP (Windows Phone)

In 2011-2012:

-Very minimal consumer demand for WP
-Very small supporting ecosystem
-The OS was unpolished, lacking many basic features
-Slow WP development (huge problem when looking at the state of the OS, see above).
-Hardware restrictions holding back manufacturers, especially Nokia
-WP7.5->WP8 fiasco (no update capability, apps were incompatible), cannibalization of sales

Just now (late 2013!) most of those points are slowly being overcome - that means years were spent for what? They were spent for going from irrelevant to getting a ticket to compete. A ticket, merely a chance! We are still the very distant third globally.

Whereas had Nokia gone Android in 2011:

-Android was the market leader and growing at very fast rate
-Huge ecosystem
-Highly polished OS, though Android has it's drawbacks of course
-Fast development, Google was pushing out updates at short pace (fragmentation not an issue considering the big picture)
-Practically no hardware restrictions to hold back manufacturers (open source nature, established platform)

Even if Nokia couldn't have got past Samsung in sales volumes, they definitely would have sold more than they are now selling WPs. Also, they would have been making profit from their D&S (phone division) because of the established and growing market (=demand) and their expertise in design and hardware (=differentator) at which they are almost unmatched.

Btw, Nokia boasted it took only about six months (IIRC) to push out the first Lumia 800. This was basically very similar to Nokia N9 (MeeGo). Lumia 800 had the same physical design as N9 and WP was actually capable to run the same hardware architecture that was in N9. That's one of the reasons why it happened so fast.

However, keep in mind Nokia was developing MeeGo at that time, which was basically Linux based OS. Had they gone Android, which is also based on Linux, would there have been significantly more synenergies than going with WP, that is totally different platform from developers perspective. I'd even like to wager, that Nokia would be more succesful even with MeeGo, but with Android it wouldn't have been a close call at all.

Slightly off topic: Elop destroyed great amount of shareholder value immediately after his 'burning platform' memo, which was followed by accelerated drop of demand for Symbian phones.

In essence, there is no way anyone could consider his work (and the board, which decisions had led Nokia to this point) even remotely succesful.

Ps. I personally prefer WP over Android, but as a shareholder, Android would have suited Nokia far better from shareholder's perspective.


This is the tip of an iceberg. The number of people involved in this story is overwhelming. It will take several months to unearth the truth, something that only Nokia investors can demand but probably dont have the stomach for. I have mentioned before that there is definate criminal act that has taken place.

Read more here..

The comments to this entry are closed.

Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati