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« My Thoughts On Nokia Handset Unit Sales to Microsoft - In Short: Is Bad WAY to Sell Something and thus gets you bad bargain | Main | Nokia Under Elop - His 3 Years: Performance Review - Worst CEO of All Time - All the Facts - In Pictures »

November 08, 2013

Comments

ashok pai

@Jamie ,
well summarized. absolutely no joke to start afresh, even if they have all the IP, how the hell do they hire all those great talent again ? not possible within a few months for sure!

Jamie

@Asko, I do not see how Elop was fired from CEO position in Nokia. Elop is still a Nokia employee until the sale is concluded. Infact his actual role is a mystery as he continues to launch new phone Models as CEO. He simply made a statement that he is "stepping aside" but in reality he is as much in control to ensure nothing goes wrong. Secondly, Elop is the one wielding all power at Nokia - not Risto or Ihamuotila as they would like the world to believe.

You may be right about the second part regarding exclusivity but why not:
1) Fire the THTRH
2) Continue the exclusivity but prepare to launch new phone models with other OS as has been now open secret with many analysts
3) Reverse some of the losses by rehiring Key Nokians, revamp the Nokia BOD. there is still Nokia top management out there that would help reverse this decline. I do not think CEO should come from outside
4) It definately is a bad to taken a decision at the point of surrender. And that is exactly what has been presented to Nokia investors. That the business is failing and has no future - so, bailout and sell at throw away price. At point of surrender you sign to the conditions of the victor, you have no choice.

These are very worrying times for Nokia investors but a lot of this is own making and having not consulted analysts and firing the THTRH when initial signs were all over. The worst decision they can take at this moment is to sell. My guess is that the shareprice will take a nosedive from there on and will never recover. They will have condemned the business and Nokia to history.

RottenApple

@Jamie:

"Can you imagine that those "dumb" feature phones made a profit this last quater ?"

Of course. But the writing is still on the wall. This is a dying business - and that death is inevitable. If I was the CEO of any company depending on such a unit I'd be very, very worried. This unit will soon become a liability because continued profitability is extremely uncertain, even more so since with the sale of the smartphone unit Nokia wouldn't have any high end or medium range product anymore to position their name in the market.

And it's absolutely clear that Microsoft has no use for that unit. It's not in their interest to buy it. So why did they? The only answer is that they couldn't get the parts they wanted without it.

Name

@RottenApple, the other answer is that every Asha phone sold means one less low-end Android phone sold. I think they still hope to convert those users to their own smartphone platform at some point.

E.Casais

"Can't you just imagine that Nokia themselves know that this is a dying business that will take immense costs to wind down?"

Remarkably, feature phones constitute a profitable business for Nokia -- contrarily to the heavily unprofitable Lumia range. Consider that Samsung also continues with its feature phone business, and that many of the manufacturers that focus on the supposedly future-proof, high-margin smartphones are incapable of turning in a profit with them (current poster case: HTC, but LG, Sony and before that Motorola are also examples).

Progressively winding down the feature phone segment is not trivial, but neither is it so risk prone, costly and difficult that the entire company would founder on it. Besides, Nokia already had that experience -- when it progressively and profitably wound down its entire NMT business in the late 1990s.

The big question is less how to wind down a business (except if you deliberately scuttle it like Elop did with the burning platform memo), it is how to ramp up a new profitable one.

khim

Gosh. And people claim they are mobile analysts. All these talks about "idling factories" and "ready-to-go N9" miss one important fact. It's not exactly new one, how could you miss it?

http://www.zdnet.com/how-tis-move-out-of-smartphones-into-servers-highlights-chip-issues-7000007439/

Nokia Asaha business and all these N9 devices are ZOMBIES. Yes, they can produce and seel them for some [relatively small] time but eventually they will run out of spare parts and expertise. Google already pulled the plug on Galaxy Nexus because it can not really support it without TI and TI is not interested:

http://www.techhive.com/article/2059570/galaxy-nexus-wont-get-android-kitkat.html

All the Nokia non-Lumia featurephone/smartphone expertise is built around OMAP. The fact that Elop have not shifted Asha from OMAP to something else (e.g. MediaTek) in the last couple of years is criminal but by now it's too late: Nokia does not have resources to attempt such transition now.

This is the end. Can we, please, admit it and forget about this story? It's something for history books now, not for actual discussion about smartphone features. Lumia division is [barely] alive, it may even produce something worthwhile in Microsoft, the rest of Nokia is dead (basic phones are not enough to keep Nokia profitable and featurephones/smartphones are dead because of TI), what's to discuss here? No, really?

E.Casais

@khim

In my experience, uttering "XXX is dead!" disqualifies the argument ipso facto.

"basic phones are not enough to keep Nokia profitable"

Straw man argument. Nobody states that feature phones _alone_ are enough to sustain Nokia, as everybody agrees this is a declining business. But as a business unit, they indeed are profitable -- and if well-managed, for a few years more.

"featurephones/smartphones are dead because of TI"

My understanding is that TI exits from the smartphone and tablet oriented business, but continues to develop OMAP products.

Furthermore, you cannot have it both ways.

If indeed "feature phones are dead!", then there is no reason to make a massive investment into a new hardware platform to replace OMAP. Just continue with OMAP as long as possible and let the business fade away.

If feature phones have a long, slowly declining but profitable future, then the fact that "all the Nokia non-Lumia featurephone/smartphone expertise is built around OMAP" is not a real problem, as it is obsolete anyway. Whoever takes over the feature phone business will have considerably more resources than the current battered Nokia to perform a migration (I personally believe Microsoft will resell the feature phone segment to somebody else -- perhaps in India?) In that case, not migrating earlier to Mediatek or whatever is criminal -- but this is just another charge to add to the long criminal record of Elop.

As far as "smartphones are dead because of TI", I do not see the point: aren't Lumia smartphones based on Qualcomm Snapdragon instead of TI OMAP? If you are thinking about the N9, it is not an issue. Production has stopped, the software team has been disbanded, the model is already 2 years old, nobody is interested.

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R

@ashok: I can see reasons for Finland not to protest the collapse of Nokia. Nokia was absorbing a disproportionate amount of tech talent, and getting poor results from them due to the insane bureaucracy. Now Finland's tech talent can go to various startups, headlined by Rovio. This is certainly more democratic than leaving a large chunk of the country's GDP in the control of an inept Board of Directors.

@Baron95: You're a troll. Under the terms of the sale, Nokia is not free to reenter the handset business for 2 years, so Jolla would have to sink or swim on their own for that time.

B a r o n 9 5

@R You are totally uninformed. Get some facts before you start insulting knowledgeable people.

Under the agreement, NOTHING - NOTHING AT ALL, prevents Nokia from launching Smartphones at ANY TIME. Nokia simply can't do it under the Nokia brand until Dec 31, 2015.

Nokia could buy Jolla today and launch a line of smartphones under the Jolla brand or Maemo brand or Here brand or any other brand they want.

After Dec 31, 2015 they can simply rebrand as Nokia.

Nokia can get Microsoft's $7B and buy RIM the following day and launch smartphones under that brand.

They can go buy HTC and launch Android phones under that brand.

Try to be informed - your posts are already emotional and non-sensical - like a 12 year old girl. Fix that, before you try to insult people that are simply posting accurate facts.

Winter

@Boron95
"Try to be informed - your posts are already emotional and non-sensical - like a 12 year old girl. Fix that, before you try to insult people that are simply posting accurate facts."

Spoken (written) like a true troll.

MadExNokian

This latest revelation in Helsingin Sanomat just confirms what I have thought all along: that Elop is a completely mercenary character, who has no room in his heart or mind for anyone other than himself. Everything he has done with Nokia was done with one goal in mind: to get to the top of Microsoft, which he now has a good chance of doing; and he doesn't care who or what he destroys along the way. He doesn't care how much damage he does to other peoples' lives or jobs, or how much damage he inflicts on the economies of whole countries, as long as he gets what he wants.

Any company which proposes to employ this sorry excuse for a human being had better watch out.

Winter

@MadExNokian
"Any company which proposes to employ this sorry excuse for a human being [Elop] had better watch out."

GO Microsoft, GO!

guest

"Elop is a completely mercenary character, who has no room in his heart or mind for anyone other than himself."

Like practically every CEO of a large corporation.

Balmer, Zuckerberg, Schmidt, Bezos, Cook or any other bigwig is not different in this perspective -- but I admit they are way more competent as CEOs.

Noella

3) Go outdoors for as long as it takes get perspective. No wonder people in historic times treated amber as sacred and magical. amber light bars also come with an outer housing that is made of clear polycarbonate domes that prevent the dust and dirt from settling in.

RottenApple

Baron 95 posting utter bullshit again. As usual.

We can sum this up very simply: Elop's strategy ruined Nokia. End of story, no matter how much 'success' you want to interpret into it.

As for Microsoft, who cares? People buy Windows Phone because they buy Nokia. We'll see what happens if they have to buy Microsoft instead, once they stop using the Nokia brand.

Name

Of course the memo had an impact on relationships with operators. I remember one of Elop's flying visits where the salespeople were quite outspoken about the damage it had done. This was in a "first world" country.

B a r o n 9 5

@Name - What first world country had Nokia smartphone sales increasing at the time of the Memo - which would only impact orders for handsets to be sold in Q2/2011 and later?

Either way, the memo was probably the only way to get the multiple Nokia fiefdoms to pull in the same direction.

Microsoft will likely in Q4/2013 have a market share twice as large as the next biggest ecosystem besides Google and Apple.

Give that neither Apple nor Google were options for Microsoft, then have been at least twice as successful as anyone else trying to challenge Google and Apple on smartphones.

That is the true measure. Microsoft was always competing for #3. Never for #1 or #2. #3 and twice the nearest competitor in 2 and 1/2 years is not bad. No matter which way you look at it.

Just like the Mac was never competing for #1 on the desktop/laptop market. It was always competing for #2 vs Linux and Google and OS/2 and all the other attempts. It is a solid #2 dwarfing the #3.

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Winter

@Baron95
"That means that in this decade, Microsoft may sell more smartphones than Symbian ever did, even at 5-10% share."

But MS will sell them all at a loss.

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