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« Another Death in Smartphone Bloodbath - Windows Phone strategy so failed, now Nokia handset unit sold - to MIcrosoft | Main | Thank You For The Smartphone - Some Abba Lyrics Revisited on a Nokia Theme »

September 03, 2013

Comments

The Recusant

>Additionally, Android is not popular as a smart-phone OS. >Android is popular as an OS for cheap phones...the kind >you get on BOGO promotions and are successful in >3rd-world countries. Android has been a replacement for >Symbian and Java-based phone OSes. People who want actual >smartphones and have money to spend on them are buying >iOS devices.

Wow, that's just dead wrong on so many levels.

another ex-Nokian

same comment as few other above this one, You are blaming Elop for all that went wrong at Nokia, but what about the board? As per your suggestion, if Elop is investigated for this sale, then shouldn't the board members be treated the same way. After all, Elop did not have the power and authority to finalize this sale all by himself. If the existing Nokia board is so incompetent that they let this sale go through, and that also for such a low price, then they should be the first ones to get fired from the board, and should not have anything to do with 'new' Nokia.

Thomas

Thomas

Never used Symbian too long but saw that it was a lot like android. I have a 920 as an experiment and the major flaw I saw was definitely the decision to undermine and then show up with what was obviously not a flagship product. The 920 just came too damn late. If it came out without the anger over 8 by MSFT actually not rushing 7 out the door (they started 2 years too late by some estimates by thinking 6.5 was a good starting point and developing that for a while a full YEAR after the iPhone, THEN saying, oh no, and dumping for the more flexible? wp7. Then, they said, sure, we'll develop 8 to finally compete with ios and hope nobody will get mad. Well. Guess what. Nobody trusts MSFT anymore. Not developers o
r carriers. I think that is what killed Nokia and I'm sad to see it go. I love that Nokia at least tried design.

So Vatar

This is what I find funny:

On the day Nokia's handset sale became known Nokia's market cap gained $4.5 Billion.
However, the purchaser Microsoft lost more than $12 Billion market cap.

Is Microsoft already feeling the Elop effect?

vladkr

Tomi,

To be fair, we can note that Eldar Murtazin predicted Microsoft strategy few months before Elop was hired, and also predicted a resale to Microsoft, facing mocking from Nokia executives. I don't know where he got his information from, but he appears to be well informed. I won't meter who was right first, as the most important thing is that all this was predictable and predicted.

Tomi T Ahonen

Wesley

I had to remove your blog because of my rules on this blog that you probably didn't know of - you sounded like a new visitor - welcome.

I remove any comment that would require me to write in a reply 'if you read the full blog'. Please re-read the FULL blog, and consider your comment, you will see where you made a falseful statement that you no doubt believe, but is clearly stated in my blog to be untrue. That you must acknowledge - 'Tomi you said this, but did you know that source X says the opposite blah-blah-blah' - in that case of course your comment can stay.

I trust when you re-read the full blog, you will see where you made such errors (Several). Please adjust. If you have no evidence to sustain your claim, don't make it. Else include the facts. Then make your other arguments - which were good. But I will not waste the time of my readers with any silly comments - ie ones that would necessitate me to start by saying 'if you read the blog article'..

Tomi Ahonen :-)

ChrisG

This comment is on a point a bit tangential to the main point of your post, Tomi. In connection to the "third ecosystem" and the future prospects of Tizen I think your forecast only has a low probability of proving to be correct.

Tizen is just Linux and there is nothing about it that is the least bit novel. The only thing attractive about Tizen is what it shares with all varieties of Linux - it is open source.

Development of open source software normally follows one of three approaches. Software can be developed by committee but in most cases this doesn't work because there are conflicting visions that arise and that cannot be mediated within a committee without a clear structure of leadership. Mistrust also abounds within committees with many participants taking part more to keep an eye on commercial rivals than to develop anything. The Meego product had qualities of this sort and would have faced serious problems in maintaining its vitality over the long term.

Maemo, which proceeded Meego, had a different approach to development, which has had a much better track record in open source development. With Maemo one company provides leadership and underwrites the costs of development. The singular leadership imparts a definite and consistent character to the product and avoids unnecessary bloat in an attempt to be all things to all people. Usually a greater effort is put into development tools rather than spectacularly absurd features ensuring the interest of the software development community. Still, this development style has its issues. Rivals will generally be very resistant to using the product because of its close association with one company no matter how good the product is and how nonrestrictive the licensing may be. It would have been for reasons of this kind, that the upper echelons of Nokia management, in a fateful and inept call, decided to shelve Maemo. Nokia management apparently completely oblivious to or unhappy with open source development procedures had no intention of playing a long game - the only way to achieve success in open source development.

Tizen is a bit of a half-way house between these development approaches. It appears to have the vices that attach to both. In my view, this makes Tizen a very unlikely wager. This is particularly so in the current environment because the situation has changed since Maemo was being developed - there are now many many alternatives to Tizen.

This brings us to the third development approach being pursued by Ubuntu/Canonical, FirefoxOS/Mozilla etc. In this case we have systems with a definite character and direction under the leadership of one company or organisation. They zealously pursue their own objectives but most products and all of the core system are entirely open and, like Maemo, there are no financial barriers to participation in the ecosystem. Unlike Maemo, participation in the ecosystem does not advantage any single phone supplier because the code base is maintained by an independent software development body that has no direct interest in mobile phone hardware sales. Furthermore, participation in an ecosystem of this sort frees the participant from having to maintain a unique code base that a phone supplier has to maintain (usually reluctantly) owing to the need to differentiate its products sharply from its competitors. With this third development model a phone supplier can work on areas that are relevant to its own software platform without maintaining a whole system. It can also choose to keep its own development work proprietary and in-house or to have it merged into the software suppliers codebase. Independent software companies or organisations of this sort have always been the most successful in open source development and their codebases have always been the quickest to develop and improve.

Tizen is a system some users and phone suppliers think that they want. When push comes to shove it is what users and suppliers need that will rise to the top. Those systems will have more of the shape and flavour of Ubuntu Phone and FirefoxOS than Tizen. Tizen has a future as an entirely in-house Samsung phone OS, but I doubt that it will be found on other suppliers phones. Still, it could be as good as or better than Maemo and consequently very useful without being the foundation of a third ecosystem.

KPOM

Apparently even after the 30 months, the "Nokia" brand can't be used on anything but Series 30 and 40 phone until 2024.
http://www.theverge.com/2013/9/3/4688888/there-will-never-be-another-nokia-smartphone

Ronin8317

In response to ChrisG's post about FirefoxOS : if they stick to the pattern of forcing an 'upgrade' of the OS every 3 months, it will never gain any meaningful market share. The insanity of forcing a version upgrade every 6 weeks caused the dramatic collapse in Firefox market share, and it doesn't look like they've learnt their lesson.

Tomi T Ahonen

ChrisG

Lovely comment and spoken like a true engineer. Thanks! If the best OS was the way you win, Palm WebOS would be the second biggest OS right now. The reality of the smartphone wars is not an open market with open market rules. It is a totally warped competition.

So briefly, why Tizen is strongest of the newcomers - 1, Samsung. Samsung already has the carrier relations to every country and essentially every carrier. Only Sammy has this (Nokia used to, also). Samsung controls 20% of total global handsets. If Sammy decides tomorrow to replace all its Androids with Tizen, it would instantly gain 12% market share of total handsets and if it then migrated the remaining dumbphones to Tizen rather than Android, they'd end with about 20% in a few years. Nobody else of the 'dumbphone' makers has this opportunity (Nokia had it, but destroyed it). Do you think ONE carrier will object, if they can take similar Linux style OS from Samsung, the new one, called Tizen, over the established Android from Google who is now gaining a bit too much control of the market?

That is Samsung alone, before we add other Tizen handset partners like Huawei and Fujitsu etc. Secondly, carrier support. NTT DoCoMo owns half of Japan. They are a Tizen board member. They have said they will prioritize Tizen over Android. Same of SK in South Korea (S Korea's biggest mobile operator) etc.. Tizen has STRONG carrier support.

Its no guarantee. The handsets still have to be good, on a good portfolio. The OS has to be reasonably good at the first iteration, and then keep improving. There have to be 'some' apps at least at the beginning. This is no sure thing. But Tizen is strongest of the newcomers. That is why I say Tizen has best chance.

Incidentially, Sammy won't go 100% Tizen, its not in their nature, they want to know what the competition is doing haha, thats why they go to many baskets..

Tomi Ahonen :-)

I agree BillG does not want Elop in charge of Microsoft. He wants Elop to run Samsung.

So Vatar

@KPOM
I read this differently: Microsoft can use the Nokia brand for featurephones (Asha) for 10 years. They are not allowed to use the Nokia brand for smart phones at all (Lumia).
Nokia (the "rest" company) on the other hand is not allowed to brand any mobile devices as "Nokia" until end of 2015.

Of course I did not see any "original" agreements, only what was reported on miscellaneous websites including the one you linked to. So the actual contractual agreements might be different.

Bottom line: No Nokia branded smartphone until at least 2016. Then Nokia could release Nokia smartphones (or license their Nokia brand to a handset manufacturer).

Interested to know

Tomi, this is one of your most well written entries yet. A very good read.

Elop made this disaster by running Nokia for Microsoft's best interests. Had he made decisions that were in Nokia's best interests, Nokia's shareholders would be much better off. I hope someone in Finland wakes up and prosecutes those responsible.

The dark comedy in all this is that both Microsoft and Nokia are actually claiming that Microsoft is doing Nokia shareholders a favour by buying their loss-making handset business. The nerve of these people.

"Good luck with that, bozos." LOL.

Symbolset

It's going to be OK. I know it doesn't look like it, but it is. Things are wrong now but they will come right.

Tester

About Tizen, I'm not so sure.

If Samsung replaced all Android with Tizen the same thing would happen as with Nokia's transition: The customers would look elsewhere.

Most people buy Samsung because they know they get Android and if Samsung no longer offers what people want, they'll immediately lose market share. I think the biggest problem for any new OS is that the high end market is extremely aware of what it wants and unlikely to change platforms. On the low end things look different. Inexperienced customers are far more likely to get tricked and buy stuff that's not worth much.

So, as long as Samsung releases Tizen in parallel to Android, they may catch some market share in the (unattractive) low end but apart from that it's only the eternally dissatisfied who have to complain about everything that might get turned around. But this is an extremely fickle customer group which would jump off at the first imaginable situation to try the next new thing.

Of course Samsung knows this themselves and I guess that's one reason why there's currently nothing happening on the Tizen front. Samsung may be powerful now but fortunes can shift quickly in this business. Nokia should be the best warning example of what can happen if a manufacturer switches to an unpopular platform. Samsung is not immune from that.

TimoT

I think the smartphone space is going to get really crowded and that will result in fierce pricing wars. The technological entry barrier is very low today, compared to 2006 for example.

After Nokia N93 there was not much more to be added and the N900 was the ultimate hacker phone. So the average price could be soon about 100 dollars even for large screen smart phones. So maybe this turns out to be just the right time to get out.

Microsoft lackeys do not have a clue how to run the crucial dumbphone division, creating even more problems. Too American, too arrogant and too slow. Finnish working culture is also very different than the American one. It will create a lot of conflicts.

zlutor

@Tester: "If Samsung replaced all Android with Tizen the same thing would happen as with Nokia's transition: The customers would look elsewhere." - not necessarily...

If Samsung plays clever - and we can bet on it - they will bring Tizen Android app compatibility - with ACL e.g. - and it's done. I wish Nokia did it with N9... :-(

Of course, Google can play nasty and forbid using some services from Tizen phones but I think they will not do it. They want to partner with Samsung, not fight with it...

Of course, it depends on what Samsung wants to do with Tizen, too. If it goes to premium segment only, Google win not care too much. If Samsung tries to replace whole Android portfolio with Tizen - then thermonuclear war may begin... ;-)

Louis

@ChrisG: Firefox OS has the basic problem of not really working. My office mate has one, and every time it updates, all his contacts get wiped out and something breaks. Also, no WhatApp is fatal in Europe (much like no Kakao and Line is fatal in NE Asia).

Tester

@V900:

>> If you look at forecasts from 2008-2009, they all include companies like Sony-Erricsson, Motorola, HTC and RIM as top 6 vendors in 2013-2014 along with Nokia.

That's the problem with forecasts. They always assume that the environment won't change. But the same mistakes are being made now. People just seem to assume that the current market leaders can continue their business undisturbed.
Most forecasts these days are as clueless as back then. They all go like
'Apple will remain leader in profit. Samsung will sell the most phones. Microsoft has enough money to buy themselves into the market.' But they all ignore that a tiny misstep could cause irreperable harm - and none of these companies has a clean track record:

- Apple missed the large screen market completely. Depending on how they deal with it in the next year this could mean trouble.
- Samsung got criticized harshly for overstuffing the Galaxy S4 with useless garbage apps. This needs to get under control again. The customer doesn't want all that crapware on their phone. It's also unclear if the manufacturers' redesigning of Android is a good or bad thing. If this blocks OS updates it may backfire eventually.
- For Microsoft there's even more unknowns. The biggest question is the prediction that Microsoft can continue Nokia's momentum. But will that really happen? Tomi always talks about Microsoft boycott due to Skype. I have to admit that I'm in no position to confirm or deny that boycott. I also can't tell how Nokia sold most of its phones and whether such a boycott may have affected them and if it did, how much it affected their bottom line. What I do know is that most of the carrier deals didn't go that well. So the thing is, this boycott is a possibility, and if it exists and the carriers are dead set on blocking Microsoft's entry into the market there will be a mess in half a year after the deal is done.

By that alone, any prediction that is being made now about Microsoft's performance, be it positive or negative, is extremely speculative.

>> By the time Elop came into the picture, it was too late, but he chose the best strategy facing the circumstances, and obviously the board and top management at Nokia agreed with his strategy and implementation.

On that one can safely disagree. I think history has amply proven that putting all eggs into one basket - and an unproven one especially - is a very risky, very dangerous strategy that can fail on the tiniest misstep. If Nokia had determined that their current product line and their existing future options won't do it, you don't play high risk gamble, but some saver, broader version. They could have just done some pro-forma Android release in parallel to Windows Phone to guard themselves against market failure. THAT wpuld have been a good strategy.

Winter

"Also, no WhatApp is fatal in Europe"

That is soooo true. I have seen parents buying a smartphone because their children insisted on using WhatsApp.

The comments to this entry are closed.

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