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« A Nuance on the Burning Platforms Memo - Nokia Board and Nokia Chairman Reprimanded Elop For That Mistake | Main | Bloodbath Year Four, Smartphones Galore - Q3 Results, all market shares »

November 13, 2013


Anoop SK

Tomi, why are you making us sad again and again :-(

Paul Ionescu

Nokia was starting to show signs of going downhill when Elop came BUT probably it would have taken Nokia ~10 years to reach the bottom by having incompetent CEOs (BUT without Elop's help). Elop took Nokia to the bottom in ~3 years! Basically, Elop used Nokia (i.e. took Nokia for a joyride) for one single purpose and that was to support and serve Microsoft Windows Phones! The sad part of this is that Elop could not have achieved all these without continuous help from inside Nokia (i.e. board members, JO, etc.). It is still amazing that Elop didn't get fired immediately after the burning platform memo! One does not have to be a genius to realize that this kind of stunt can sink even a big company!


Wow, it must have taken you quite a bit of work to compile the information into this report.

A few remarks:

1) It would be more relevant to compare the performance of Kallasvuo from the time he took the helm (mid 2006), not just from 2009 onwards. After all, he was in charge before Android and iPhone appeared, and it is his long-term performance in the face of those disruptions that really count compared to the performance of a CEO who had to deal with the full blows of a competition now on a winning path.

2) For the same reason, I think the comparison with the crises at Coca-Cola, Exxon, etc, are interesting, but probably not that relevant. Elop (recklessly) engaged the future of the entire product portfolio of Nokia mobile devices; it was not just mucking up by launching one miserable model, or having one large accident in the production processes.

3) I really get a sour feeling when looking at the figures for Nokia Networks. You argue that benign neglect might have done it good, but the situation was really bad for a long time before that, and is just acceptable now (but far from safe). What really helped NSN out of the hole?

4) On the other hand, I am impressed by the performance of the feature phones business. Nokia knows what it is doing in that domain, and its strength in production and logistics shows. Keeping a decreasing business profitable when everybody is shouting "Feature phones are dead!" is quite an achievement.

Hopefully this is your last word on the matter for a while. I look forward to reading more on those interesting things happening in Asia or Africa, and less about how Nokia was run aground by a series of incompetent managers.


"I look forward to reading more on those interesting things happening in Asia or Africa, and less about how Nokia was run aground by a series of incompetent managers."

I agree, Asia and Africa are changing faster than the eye can follow. South America is changing too.

Your commitment to Nokia is understandable, but the people that made Nokia great are still around. They will push Finland into the future. Helping them understand this future in mobile will do more for Finland than trying to punish Elop. Let him go destroy MS. They deserve each other.

Sander van der Wal

@E. Casais

Try looking at this post: It argues that Nokia did not convert its portfolio of feature phones early enough to cash in on the surge in smartphone interest.

The "money quotes" are at the bottom:

"Samsung was able to convert its portfolio to smartphones while Nokia failed to do so. This is the sort of transition that can only come about from an explicit strategic intention on the part of management. Market demand can steer you in any number of directions, but a vision of a future should provide the compass for making the big bets.

The bet Nokia made many years ago was that there would be a continuing, substantial business in the “low end”. And low end meant feature phones. This strategy was still in evidence last year under the moniker “the next billion” users."


@Sander van der Wal
You see that the turning point for Samsung was halfway 2010? That was when Elop started.

Had Elop betted on Android late in 2010, he could have caught a lot of sales in the summer of 2011. Android phones were quite easy to produce by then. Now, all those Nokia feature phone users switched to Samsung.

But we know Elop decided to go for WP. For the first three quarters of 2011, Nokia had no credible Smartphone on the market. After that, they had a good one they did not want to sell, and a bad one no-one wanted to buy.



Great article as always!

There is one argument that some people still use to defend Elop:

"Look at Blackberry -- it shows that Nokia's doom was inevitable"

The answer, in my opinion, is simple: both companies had problems, and had to make difficult decisions; but Elop made a series of dumb decisions:

- the burning platform memo
- pre-announcing the death of Symbian before he had anything better to show
- adopting the unpopular, not ready and feature-missing Windows Phone
- giving strategic control of the company future to Microsoft
- killing alternatives -- for instance, saying that N9 would die "no matter how succesful" it was

And so on.

Blackberry made one similar mistake: their OS was also not ready. But, unlike Windows Phone, their OS was popular and was fully controlled by the company.


When we look at all of Elop's decisions together, we get a clear picture: he always acted to promote Microsoft's best interest.

He acted and talked like a Windows Phone advocate. He invited competitors (including Samsung!!!) to join the "ecosystem"!

That fact, by the way, puts down the argument that Elop somehow knew that Samsung would dominate Android, and thus opted for Windows Phone.

If he knew Samsung would become so powerful, why the heck would he invite the company to the Windows Phone bandwagon?

And let's not forget that Nokia was bigger, had better carrier relations and brand recognition than Samsung at the time. Even today, people say they would love to buy a Nokia Lumia... if it only had Android.

Didn't Elop made a market research before adopting Windows Phone? Wasn't it clear that Nokia would have to lift Windows Phone, and not the other way around?

Other silly arguments:

"Android wouldn't allow differentiation".

Bullsh*t. Just look at all the Windows Phones and see what is lack of differentiation: the same form factor, the same interface. Microsoft gave minimum space for customization because it wanted manufacturers to build generic products which depended on their OS (just like in the PC market)

"Microsoft would pay $1B / year to Nokia"

If the plan went as expected, and Nokia managed to sell 200 million devices per year, it would probably be paying more than $2B / year in royalties to Microsoft. So -- Microsoft would pay a grand total of $5B (for 5 years) and recoup the investment in less than 3 years.

As everything in this "partnership", great for Microsoft -- and terrible for Nokia.


So, that's the point that must be stressed out: Elop wasn't only incompetent -- he was working for the best interest of another company.

And failed miserably in both ends.


E. Casais

> On the other hand, I am impressed by the performance of the feature phones business.
> Nokia knows what it is doing in that domain, and its strength in production and logistics
> shows. Keeping a decreasing business profitable when everybody is shouting "Feature
> phones are dead!" is quite an achievement.

Do you know how profitable the feature phone business is?

I wouldn't be surprised if Elop wanted to kill the feature phone business, going 100% Windows Phone.

The man was crazy, and destroyed everything non-Microsoft that he could find.

(Of course, Windows Phone was such a flop that he had to keep the feature phone business alive.)


@foo: "but Elop made a series of dumb decisions" - well, well - whatever the reason was behind that "dumb decisions", Elop got a nice compensation package at the end...

I'm now just really waiting what the end of this story will be. It will be part of history - one way or an other...


"This is the sort of transition that can only come about from an explicit strategic intention on the part of management. "

And while Nokia did initiate the transition to smartphones, it was racked by so much infighting that this strategic intent failed to stabilize. Hell, you are the head of the feature phone business, selling hundreds of millions of devices at rock-bottom prices -- and you are clearly profitable; why would you disengage and let your fiefdom go to please those Symbian guys in difficulties, or those Meego nobodies, or those WP or Android sell-outs?

As I repeatedly said: there was a series of incompetent managers at Nokia, and one sign was their total inability to end internal feuds and make the whole organization work towards common goals. The belated and incomplete transition to smartphones is a result of this.

"The bet Nokia made many years ago was that there would be a continuing, substantial business in the “low end”."

And there were right. The best-seller amongst Nokia WP devices is the Lumia 520 -- a low-priced device. The new Motorola G is already shocking the market with its low price. And the next billion users is not a gimmick -- remember that there are billions of people for whom the price of an iPhone represents one month to one year of income; for them, only low-priced devices will do -- and that inevitably means "low-end" devices.

Notice that Samsung, which focused so much on the high-end and left its low-end Bada line in the limbo has announced that it will devote more attention to the low- and middle-range in the near future. Transition to smartphones does not necessarily mean transition to high-end only...



> Notice that Samsung, which focused so much on the high-end and left its low-end Bada line in
> the limbo has announced that it will devote more attention to the low- and middle-range in the
> near future. Transition to smartphones does not necessarily mean transition to high-end only...

Samsung strategists were intelligent enough to diversify their bets.

They made experiments with different OSs: Android, Windows Phone, Bada.

They manufactured high-end, middle- and low-end phones.

Android proved to be the bestseller, but they didn't kill the alternatives.

In all accounts, Samsung was the anti-Nokia -- and succeeded.

Elop followed the textbook on how NOT to run your company.



You make the typical mistake of judging everything by share price. This attitude has hurt global economy more than everything else combined. I have no idea how many jobs were lost just to 'maximize share value'. Bottom line: Every company run with such an objective is doomed. And if that's what you attribute Elop's actions to, you just prove my point.

And let's not forget to achive 'just' that 17% drop the company was utterly decimated and annihilated. That may be nice for Wall Street locusts like you but not for the people actually working in such a company. The damage being done will eventually paid by others who had no say in what was happening.

I'd say people with your mindset better stay out of economics. You'd leave a barren wasteland behind in your relentless crusade to squeeze out as much money as you can.

Timo M

To say that Elop did good job running Nokia would be equally dumb to saying Jobs failed miserably leading Apple.

It took me a long time, years in fact, until I understood that people who knew nothing about the total Nokia dominance in mobile, Elop can be seen as having done decent job. Like looking from the USA, where Mr Kallasvuo failed to gain market share, Elop did gain few percentage points with WP and for almost 100 % of the population this was the first time they ever saw Nokia smartphones. Having never seen or known anything about Nokia's powerhouse mobile products and market dominance, being blinded by the brilliance of Google & Apple, this is understandable.

But the whole point of this blog is to correct that misconception.

When Elop announced the death of Symbian while saying we have no replacement either, not for a long time, I walked around like a zombie for days, not believing in such stupidity to be possible. His reasons are no longer secret, though.


@Baron95: "Why is Tomi so emotional trying to convince the losers that Elop is the worst CEO, while the rest of the world is talking about him being in contention for CEO of Microsoft, or, at the very least lead what will be Microsoft's biggest division?" - can that be one possible reason because Elop executed a plan brilliantly - that apparently ruined a company what Tomi (as many of us) respected a lot?

For an outsider - yes, it is an achievement. Even such a big achievement that makes him good candidate for being CEO of M$.

But for the ones being Nokia fan - it is really painful...

So, yes. Elop is the worst CEO of Nokia - by default since during his tenure the crown jewel of the company, the part what Nokia is known of, the one made the brand a world recognised BRAND is going to be sold out for peanuts.

C'mon, let's be realistic: what a market verdict it is about a strategy that announcing its end - even together with selling the most known part of the affected company, the part what is behind its brand - rockets stock price back to the 'sky'?!

Such a brilliant strategy it was...

Timo M


I was actually worried in the 90s and early 2000s that USA would be left behind in mobile and, despite Nokia¨s success, we would in the future be running Japanese OS in Taiwanese hardware and speaking in Chinese network. Or something similar. Ironically the thing I was worried about was having those ears on all our western communication, companies, banks etc. and them thus being able to greatly influence western freedom. The idea might be a bit far from the average phone user, but I am a bit paranoid :-) Oh well, NSA did it all even worse.

Still I welcome the success of Google and Apple. What I hate is what Elop did at Nokia. He destroyed everything. Nokia could have gone with Meego (Intel-Nokia venture) or Android (the most common prediction). Symbian was on terminal stage when Elop took over. Still making money, though, but to be replaced.

WP was non-existent. Zero market share. Nokia changed dominant position to zero. They eventually migrated probably less than 1/10 of their customers to WP. Every WP phone still makes a loss. All his other mistakes are catalogues here in the blog. That kind of incompetence cannot be justified. It is criminal and Elop should be in jail now.

Nokia should be Samsung and that is what pisses me off. You have no idea how much I hate Elop. Probably half as much as Tomi, which is more than I can handle.

I don¨t believe everything what Tomi says, by the way. Like when he said Microsoft will never buy Nokia, I drew different conclusions and bought Nokia stock. I was sure that with Balmer Elop would be gone as well and that would skyrocket the stock. Got lucky. That 100 % increase in stock value eases the pain that Elop is still a free man.

There are some weird characters (¨Ω) in this message, because I am writing this on my belowed Nokia foldable keyboard, which is not fully compatible with my iPad.


I'd like to note a few things about this post.

The graphs are many, but the quality of them leaves things to desire. The 12 month average is very slow to react to changes. It shows the reality with a huge delay. A good quarter almost year earlier will cancel out a bad latest quarter and it is very hard to see sudden changes. Another problem with some of the graphs is that they do not show enough history.

I am sure Tomi knows how phone manufacturing works, but he chooses to ignore it as it does not fit his story. The Symbian device projects were around 18-24 months long, even when they were not horribly delayed like many were during OPK era. This means that when a CEO is changed, the effect of his actions will take a long time to be seen. A big ship turns slowly. Elop inherited a product pipeline (both hardware and OS) that was not good, actually it was a disaster. Mere months after Elop had become CEO of Nokia, Q4 2010, Android took the market share leadership away from Symbian. [1] There is no CEO in the world (not Jobs, not Ollila, not OPK) that could have prevented that in the one month Elop worked at Nokia before Q4 2010.

Unfortunately the worst part was not the unit sales, it was the user experience and price. I remember playing around with ZTE Blade in Q4 2010, in Finland it was sold for a bit over 100 euros. It felt more responsive than N8 with S^3, unfortunately N8 was around 3–4 times the price. Before that I had been worried about Nokia and Symbian, because their UX was from 2006 without much progress, iPhone was on a totally different level. But after seeing ZTE Blade I was certain Nokia were toast. Nokia was fighting war at two fronts. Apple had already taken the premium category and nice margins from Nokia, now Andoid devices started to undercut Symbian device prices, with better software library and UX.

The post tries hard to argue that Elop was some kind of superman who did all the decisions and that his actions happen instantly in some kind of a bubble that is unaffected by the surrounding market. That is simply untrue. Rise of Android would have happened in any case. The user experience of Symbian vs. iOS and Android would have been the same. Elop had little to do with the delays and problems of Symbian, Maemo/Meego and Nokia's hardware pipeline.

Elop worked closely with other executives to realise a strategy that was set *by the board*. The board decided the WP strategy, which was assumed to be the best option for Nokia by the board and by the executive team. If CEO does something against the will of the board, it has full power of changing the CEO. This did not happen.

Both Ollila and Kallasvuo have stated lately in Finnish media, that big mistakes made were made in their tenure. Nokia faced a huge disruption (or two) and Nokia just was not prepared for it. Their software and OS expertise was not at good enough level.

Tomi is totally correct, Elop was at helm when Titanic hit the ice berg, but the course and speed was set by the CEOs before him, and obviously the ice berg (or two) were not under his control.



@Baron95: You still don't get it, do you? People don't buy Lumias because of WP. Those who buy them, buy them because of Nokia DESPITE WindowsPhone. A company can't be any kind of player if nobody wants to buy their products. Without customers there are no profits. And the idiotic mistake Americans always do is to think that they are in the business of making money. The only way a company can survive in the long term is being in the business of making money by producing something with a competitive advantage like Europeans are doing. That's why USA has a big track record of reverting to heavy protectionism and still failing while Europe has still e.g. a functioning steel industry.

USA has no "God-given right" to being a leader in the technology. You never did. Get off your annoying high horse and try to understand that there is a very real possibility that you Americans have more to learn from the rest of the world than the rest of the world has to learn from you. Fuck, you couldn't even fight the Russians and scare the living daylights out of them nor build a really deep diving subs like the Mirs. We Finns had to show you how it's done!



Nokia executive team assessed the Meego possibility and it just was not there. It was not ready. Nokia would have been alone putting thousands of man years into developement of an OS that very likely would not fly, with WP and Android were way cheaper for Nokia. The board could have chosen Meego strategy, they did not.

Android was a possibility, but not without problems. To differentiate enough from the others, how to manage Naviteq asset and how to make money in the cut throat competition are some of the clear problems, and there may be more that I am not aware of. In a hindsight it would have been interesting to see how Nokia would have done with Android, but no one knows. Of the big ones, only Samsung seems to make any real money out of Android, HTC is in deep deep trouble, Motorola has been losing money for years too. The board could have chosen Android strategy, they did not.

"WP was non-existent. Zero market share"

As was Meego, but still you think that could have been an option. And WP7 actually had shipped, Meego not so much, the Intel-Nokia Meego nor it's successors *still* have not shipped. Jolla will ship in a few weeks. But that will be the first. N9 was not really Meego, but a Maemo+.

"That kind of incompetence cannot be justified. It is criminal and Elop should be in jail now."

Which of his actions were "criminal"? He did what he could with the cards he was dealt with. And remember, the board, led by Ollila, chose the CEO and strategy. Elop just was executing it.

"Nokia should be Samsung and that is what pisses me off"

Nokia should make everything from fridges, TVs to ships and semiconductors. Fine, if they did they would had a chance.

"You have no idea how much I hate Elop"

I guess it helps to vent emotions into scapegoats, but just try to be rational.

"Having never seen or known anything about Nokia's powerhouse mobile products and market dominance, being blinded by the brilliance of Google & Apple, this is understandable"

I don't really know what you are trying to say. Yes, Nokia dominated "smartphone market" outside USA, when the competition was mainly RIM and Windows Phone. In 2007, started the age of "app-phones" or "internet-phones". RIM and Symbian were not seen that smart any more. iOS and Android devices were superior to Symbian and RIM. After 2007 Apple took the high end (and profits) and Android took the low end (the masses). Obviously this did not happen over night, as people upgrade their phones only every few years, and it took some time for Android to reach Symbian price points. Apple was (and is) just concerned about the high end and has not even been properly available in every major market, every operator until very recently.

"Dominating the market" by unit share, is not much dominating when your UX and price are low, and you are mostly dominating the emerging markets. Smartphones of Nokia were just featurephones with lipstick, comparing app phones and smart phones in the same market by unit share will lead to strange conclusions, as shown by this blog.

B a r o n 9 5

Hi Minna - I don't make the news. I just comment on the news. I told Tomi and all on this blogs and AllAboutSimbian EXACTLY that this would happen. That the European/Nokia/ST-Ericsson and DoCoMo bubble would burst ant it would be Google+AndroidOEMs (#1 by volume), Apple (#1 by profits) and Microsoft (distant #3) in control.

And that is exactly what has happened. You can scream as much as you want about "idiot Americans" and how the USA is doomed.

It still doesn't change the fact that Europe is out of it, and it is all US West Coast ecosystems and Asian manufacturing.

No amount of tantrum or emotional rants will change the *facts*.

Get used to it. Denial is not healthy. Particularly writing 10,000 words over and over and over again to try to deny obvious facts.

Tomi: Elop is the worst CEO in History

Microsoft: We want Elop to run Devices division post acquisition and are considering to be CEO of the whole company.

Tomi: Microsoft acquisition Deal is bad - vote against it

Nokia Owners (shareholders): Will approve the deal overwhelmingly

Tomi: Japan and the DoCoMo forked Symbian is the most advanced handset market and phone platform in the world and the iPhone has no chance in Japan

DoCoMo CEO: We were losing subscribers without the iPhone, but now iPhone is over 50% or mobile phone sales - #1 through #5 best selling phone models are iPhones.

You can chose emotional rants that are divorced from reality or you can choose to accept that what I told over 3 months ago was going to happen has happened.

Your choice.

Baron95 <-------- having so much fun watching the Tomi disciples coming unhinged. Thank you. I'm making another bag of popcorn to watch

B a r o n 9 5

Ooops. Obviously I meant to say what I told this blog over 3 YEARS ago (not months) has come to pass.

So much fun!!!

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