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« Where Next for Microsoft? - As the mercy killing of Lumia and Windows Phone will happen in next year or two, what impacts to Microsoft world domination plans? | Main | Smartphone Wars: Apple results, Microsoft results, Huawei numbers »

July 11, 2015



@WayneBorean : whats the catch for nokia to sell jolla (labeled) phones?
Definitely if Nokia wants to re enter as a winner, it needs to differentiate. It has deep pockets (thanks to - and God forgive me - Elop), so they would have a chance.



No, sorry. Nobody will have any chance with another incompatible operating system. That's just naive dreams of clueless people. 4 years ago it would have had a chance - but now it's too late.



"No, sorry. Nobody will have any chance with another incompatible operating system. That's just naive dreams of clueless people. 4 years ago it would have had a chance - but now it's too late."

According to PWE new platforms do not need apps in the first 12 months of sales. If this is true, Nokia could actually use Sailfish OS.


@RottenApple: compatible as in android?
Iirc, jolla has support for android.


@Wayne, for once I agree with RottenApple. At this stage, it doesn't matter whether an operating system is "better" than iOS or Android (whatever that means today). Those two are entrenched. Nokia could return as an Android OEM but they aren't going to be launching a different OS.

Tomi T Ahonen

Hi Everybody

Wow nice discussion here for a weekend blog posting... haha I thought it might provoke a bit of debate. Lets do responses

Per - haha yeah, but Yahoo could maybe want it (and have nothing to lose as it doesn't rely on carrier relationships)

Wayne - very good point that I hadn't even thought of (MS doesn't sell to competitors) but that is historical Microsoft and this is a new era. It might happen now under Nadella.

winter - good point and in the IoT race they have no need for a legacy dying loss-making smartphone (and far less dumbphone) business.

Louis - on Jolla, Nokia really wouldn't need the software compentence as Nokia wouldn't want to try now to create any OS platform so they'd really only need the HW side of Jolla. On licencing, yes, that is the least risky way but that also gives least upside potential and greatest danger that the last strengths of Nokia brand are ruined by more companies not in Nokia's control. Its not like Apple's iPhone where they do everything except the manufacturing, there Apple retains the consumer-facing brand image, but if Nokia has to go with the current deal with Microsoft ie Nokia isn't allowed to market and sell smartphones on its own brand next year, and has to licence all of that, then it does threaten the Nokia brand (in consumer space) even more, but also, there would be almost no risk to Nokia corporation to have any big losses if that venture doesn't succeed.

E - you know fully well there were no numbers released into the public domain. You also know fully well that those numbers are with Nokia HQ and if they were bad, Nokia would have let the official denial - there won't be any smartphones next year - stand. Instead, Nokia CEO rushed out immediately after Elop was fired to admit, yes Nokia is coming back next year. The only reason Nokia would pre-announce such a big move is that the CEO is confident this is going to be done and it will succeed - inspite of the disasterous history of Nokia brand in smartphones of the past 5 years. Remember Rajeev Suri is not a handset guy pining for that past, he is a networks guy and after the total break, Nokia dumping all its phone business in Microsoft's lap, this is a very deliberate and thoroughly-planned return.

As to Leo Apotheker, yes there have been many bad CEOs but this kind of situation, a major corporate deal between two companies where both side CEOs are moved from their posts almost immediately after the deal was concluded, that I think - and I have not researched it so please do correct me if I'm wrong - I think this is a first in Fortune 500 size corporate mergers and acquisitions.

Another - fair points but if Nokia was clearly done with the consumer electronics side, then why bother with an Android tablet and now add to the portfolio as fast as possible with next year's licenced smartphones? And why would the CEO rush to tell the world this early they are going to do that, a year before the smartphones are sold? It seems like a big hunger to return (to me). As to this scenario, yes, its Hollywood and its likely not going to happen but when I have had speculation about mergers and acquisitions on this blog (rarely) mostly the entities discussed have later confirmed that there had been talks. Like of the Nokia sale before the Microsoft deal, and that Motorola would not stay at Google, or the speculation around a Blackberry sale, or of Sony sale/non-sale, and of Palm's sale(s) further after HP didn't want to do anything with it. I don't have any inside knowledge from either side about THIS deal but again, my gut says, this would make sense, and because this would make sense on BOTH sides, and both CEOs seem to both want that direction I write, and both CEOs have ALREADY made deals in their brief tenure, I don't see this as implausible. Possible yes, likely? Probably not, but don't be surprised if something like this happens in the next 6-12 months.

Juan - good points and that would have been seen as heresy under Ballmer haha

Symbolset - haha very funny. But seriously, a Ballmer (or Gates) or Elop (or even OPK) in charge, I don't see it happening. With these new CEOs wanting to set a new direction, why not. They might act rationally haha...

Spawn - haha good answer and on Bush-style madness and nuke wars, there is a current article at Vice, entitled literally 'Now would be a good time to launch a nuclear attack on Russia' - I am not kidding. Its by Ezra Kaplan, a very smart military analysis of why a 'Pearl Harbor' style attack might work in the coming months because Russian early warning systems are being upgraded and their satellite-based element is down for several months relying only on ground-based radar that has far less warning time. The article is here

... and while I don't read Vice regularly, I read Real Clear Defense almost daily so its one of the periodicals that RCD monitors. And if anyone at paranoid Russian military and Putin regime want to show 'proof' that the USA is the aggressor and global military threat, haha, an article saying 'now is the right time to nuke the Russkies' by a 'mainstream' publication is something they can milk for propaganda hype for months to come. (But its an interesting article nonetheless, and of course it says the US cannot and will not attack unilaterally with nukes against anyone). But haha, funny coincidence with that title - I don't remember ever reading an article with such a provocative title before and I've monitored the superpower balance of power for literally over 40 years.

Ok will post these and more replies coming

Tomi Ahonen :-)

Tomi T Ahonen

Continuing responses

E - very good point, I can't remember this ever being done, but there HAVE been instances where later management admitted to missing the opportunity that was in their hands. Like for example HP's purchase of Palm and then abandoning that project. Or Microsoft's purchase of Danger, launching the new phones under the Kin brand, then killing Kin and later buying Nokia instead (ie coming back to business it abandoned). Coca Cola - New Coke - Coca Cola Classic arguably was a similar reversal but far faster. So its not like that is unprecedented in general but not ever at this level, I totally agree.

But that being said. We on this blog KNOW why the Nokia smartphone business suddenly collapsed. It was not because the phones were suddenly outclassed or suddenly undesirable or suddenly exploding in pockets or radioactive or suddenly nobody used phones. All of Nokia's visions in 2010 proved 100% correct and the business late into 2010 was growing and profitable and dominated the smartphone industry more than HP or IBM or Apple had ever dominated the PC business. Its collapse was not because of normal business forces, it was madness in management. It was self-inflicted wounds.

We also know having monitored it here closely as I warned my readers including of course you E, who have been here to watch closely as that catastrophy unfolded, why all Windows Phone based smartphones failed and furthermore why Nokia's own Lumia business failed. We know why, its not because nobody wants Nokia anymore, or because Nokia didn't have phablet-sized screens, good cameras, lasting batteries etc. It was the carrier boycott. So from Nokia management point-of-view, they see this as a (possible) instant recovery. Imagine how heroic that would be seen, Nokia returns to smartphones and succeeds where Microsoft failed. A true 'Steve Jobs' moment of returning this business to healthy profits and growth and doubling the market share in 18 months. The story would be of legends.

If Nokia would say repeatedly 'we are done with consumer electronics' and they only focused on networks and instantly quashed any rumors of a smartphone return, I wouldn't entertain this Hollywood ending here, but there is clearly a desire for Nokia to show, it wasn't them. It was not Nokia who failed, it was Microsoft and Windows and Elop who failed. Nokia can win. And once they DO come back, they want to become top dog again.

I think its one or the other. Either they walk away completely like automobile tyres and toilet paper and TV set-top boxes and Mikro-Mikko PCs etc. Or they come back and then they want to WIN. If they have to wait, and go the slow route, licencing out the Nokia brand to third parties, I would bet those licencing deals have an end date on the exact month when Nokia is then allowed to sell and market its own smartphones. There are no guarantees in business, but a Nokia Android smartphone sold in China, India, Brazil, Russia, Italy, Spain, France, Germany, South Africa, Indonesia, Nigeria, Egypt, Pakistan, Philippines, Vietnam, Ukraine, Mexico, Argentina etc - would be one of the bestselling Android smartphones in those markets in a matter of months. The Nokia brand is intensely loyal there and the markets are mostly Android and Nokia holds a huge premium brand image. In India last year, only last year, Nokia's brand image fell from number 1 position to number 2. Not as a PHONE brand. As the TOTAL brand across any industries ahead of Mercedes Benz and Nike and IBM and Coca Cola. Its still number 1 overall brand in Nigeria. Etc etc etc. And the carriers have told Nokia, if you give us an Android smartphone, we will buy it.

The main question is, will Nokia come back the slow way through its current deal, or renegotiate that deal, perhaps in ways I discuss here, and help Microsoft exit the phone making business, and expedite Nokia's return to smartphones. Its return to smartphones is obviously already announced so that is unstoppable.

Tk - good analysis but Sailfish OS makes no sense at all for Nokia now. It cannot risk failing again. So it has to go with the safest option in OS and that is Android. And then why would Nokia need the SW competence from Jolla? Now.. a REALLY Machiavellian world-domination plan (assuming the Microsoft deal first goes through in one of the ways I outlined) would be to invest in Sailfish now to keep it alive for 3 more years, and if Nokia can get to 7% by 2017 and still grow, and start to target a 10% market share window for 2018 and beyond, THEN it starts to make sense to fork out of Android, especially if Sailfish can support native Android apps - and bring back a vision of MeeGo/Jolla/Sailfish as a premium iPhone-killer 'super Android' that also runs Linux but is a Nokia vision of the future of smartphones but through an Android fork. That to me is the only way that Sailfish would make any sense for Nokia and is subject to a whole series of things going perfectly for Nokia before that (and for Sailfish to survive - and evolved - during the same period). This is highly unlikely. But as this blog is a Hollywood ending then yes, of course we'd love for that Jolla effort to end up around year 2020 to be proven to have been worthwhile, after all the troubles and tribulations. But no, not likely at all. Hardware side of Jolla team, definitely could help Nokia.

But yes, an angle I hadn't thought of, Jolla to licence the Nokia brand and be a Nokia design manufacturer on Android? It would be VERY credible as a 'real Nokia' house and they have been doing the visits trying to sell the Jolla phone to carriers and distributors. That might be an interesting twist to how Nokia does the licencing part which could include all sorts of contract clauses allowing Nokia then to purchase the Jolla (hardware) business once the limitations from the Microsoft deal end. But Jolla of course doesn't have its own factories so its only the marketing organization, the Jolla phones are made in China anyway.

Per - totally agree, HW makes sense not SW but then, only if the Microsoft exclusivity clause is removed through a newer superceding contract between the two giants.

TK - no factories only HW design team.

Wayne - Nokia can't sell Jolla smartphones branded as Nokia. If Nokia sold Jolla as Jolla, it is only Jolla. The power is the Nokia brand. Nokia should not dilute that brand at all anymore, more than is strictly necessary (because Nokia is coming back, that is the strongest asset it definitely has, assuming it can't get back part or all of the sales organization from Microsoft). So selling Jolla as Nokia is not allowed, Nokia selling Jolla doesn't make sense. But hiring Jolla HW design team to design the 'next N-Series flagship' for a 2018 Barcelona launch - that would be a Jedi move.

zlutor - Good points and no, this would not be without costs but Nokia does have money in the bank. It does depend a lot on what Rajeev Suri heard from his clients. Obviously if the market has died and nobody other than Apple can make profits in the new era of smartphones, it would be stupid for Nokia to return and as any Nokia handset return would be massive tech news, he can't hide from it either. It will be monitored and if he goes that route, he has to be 100% certain it will succeed. So why not wait until he has the phones designed, the partners signed up, the release date is a few months out, and its a big trade show like Barcelona? Why not wait until then? If there is uncertainty and doubt, that is the smart move. On the other hand, if the carriers have been begging this and Rajeev Suri has said he'll be doing it the moment it is allowed by the contract - in that case he HAS to keep his customers satisfied that this is coming. Else they may commit to all sorts of deep long-term deals with say Samsung or LG or Huawei.. But saying in public that yes, Nokia is coming back - that is a signal most of all to the CEOs who have been burned by Nokia promises during the Elop times, and need now clear reassurances that the old Nokia is back.

It may also be related to some very quiet ongoing negotiations between Nokia and Microsoft. Remember the leaked story that Nokia is coming back with Android next year. then the USA Nokia office issued an official denial (and I mentioned it here, that isn't it odd that the official denial did not come from Finland). And then Elop is fired, then Nokia CEO says he will return to smartphones next year, and now Microsoft writes off 90% of the book value of the handset business. It COULD be necessary steps in a deal that was already agreed by handshake level around April haha... Certainly Nokia's future reputation with the carrier community needed Elop completely gone and humiliated (as well as Ballmer who also meddled in those sensitive carrier handset purchase negotiations). Nokia can now safely say, we are going back to how we were, the OS will be Android as you wanted, and no Windows and Elop the man of all the broken promises is run out of the whole industry. Lets talk how we can rebuild...

Maybe I am reading too much into it, but coincidences always smack to me of something smelling..

Rotten - nearly agree with you. I agree that Nokia cannot come with a new OS now. I agree to the degree that anyone 'too small' today cannot launch a new OS. But the one exception is Samsung who has more than a fifth of the market. They are large enough that they can try the new OS path, as they are with Tizen (and you may have not meant Samsung because Tizen is already created and launched). But other than Sammy today, I agree, nobody else has a chance with introducing a new OS today. Too little too late. Most of the last remaining OS platforms will also die, not survive, meaning Blackberry, Windows, Firefox, Ubuntu, Sailfish etc. Blackberry might survive as a niche OS only for enterprise (but unlikely). Firefox is a very dark horse because they abandoned the low end and have rally no place now to go. Windows is dead. And apart for those, Tizen is not in any way guaranteed to survive either, it takes TONS of effort from Samsung which they still haven't shown they are in any way seriously pursuing.

Lullz - the argument about apps in the first 12 months is ever less true going forward. It was 100% true in 2007 when the iPhone didn't even allow apps to be installed, but that argument is becoming ever less true as we go forward. And it depends a lot on the market segment. A premium phone (like Nokia returning to smartphones) absolutely needs apps, a low-cost entry-level sub 100 dollar smartphone brand doesn't necessarily need them, at least not a huge range of apps - but it helps. And then over time, that app portfolio has to grow if the platform is seen to have life. Hence say Firefox, Ubuntu, Sailfish - are so troubled because of the chicken-and-egg situation, nobody makes apps because there are no users, and nobody buys the phones because they noticed there are no apps.

(I'll leave Baron's standard comment to be, no need to reply to it, thats his long-held view)

ok keep the discussion going

Tomi Ahonen :-)

Per "wertigon" Ekström

@Tomi (about 12 months of Apps):

Yes, today it's nearly impossible for any small fry to introduce a new ecosystem. It could be done, but it would require either:

a) A top-five manufacturer putting significant support behind the platform/ecosystem (and remember Nokia is not even top 10 anymore). Today only contender is Samsung/Tizen, and Samsung is only giving it lip service which doesn't bode well.
b) A shitton of money, competent people and nothing to posison the well (e.g. Skype). And yes, Windows would've had far better chances if Microsoft didn't buy Skype.

However, back at 2011, Nokia was still the largest smartphone manufacturer. For them to throw all their weight on a new, non-poisoned OS, the apps would've come to them, most definitely. There was also a window for new ecosystems, closing fast but still available, even for small fries. If Ubuntu had released the phones it now has, in 2011, it would've seen a fighting chance. Today it's too little, too late.

And yes, Nokia did throw all their weight on Windows, which was a risky but viable strategy - and then Ballmer bought Skype and poisoned the well, and the rest is history.


> 'Now would be a good time to launch a nuclear attack on Russia'

In the long run we probably need something similar to the Darwin award to reward this kind of "all-in war of ecosystems" ideas.

My proposal would be an Elop, "First you must believe in yourself" (if nobody else does), call me the Sun Tzu General, award.

> Or Microsoft's purchase of Danger, launching the new phones under the Kin brand, then killing Kin and later buying Nokia in

Talking about Danger & Kin; So, Andy Rubin did two companies:
First Danger, who had a rather popular device in the market back then, bought by Microsoft, resulting in Kin. Killed two weeks after product lunch cause of total market fail. The team behind that moving on to develop that "successful" Kin-design future (now known as Metro) when working on WP7, WP8, Windows 8. As we see such a "line of success" that the dev-head responsible back then for aborting CE, years of WP7 development that gave Android the opener to take over, got *rewarded* for this by leading now, under Satya, Windows+Devices. Wuth?
Then Andy Rubin did his second company, Android. They never had a product, bought by Google, went dark for years, resulting years later in tge Android smash-hit.

Draw your conclusions :-)


"Draw your conclusions :-)"

MS have always been the anti-Midas: Whatever they touch rots to dust. Being bought by MS was an almost certain death sentence for technology.

After they established their Windows/Office monopoly, nothing else MS did delivered a positive ROI. Actually, only the Xbox was able to deliver at least a positive operational result at the cost of billions of lost investments.

All "partners" of MS were severely damaged or destroyed one way or another. Which already started with the infamous MSX home computer in 1983.



> Whatever they touch rots to dust

Very true. Whats interesting about the Andy Rubin Kin/Android case is also that within Danger/Microsoft he didn't took the product lead, and that while he proved(!) that they had a successful device(!!) whats why Microsoft bought them(!!!). Then within Android/Google he was the lead and delivered. Then we have candidates like Ballmer, Elop, Myers, Belfiore, etc. that somehow made it within Microsoft to the top beside there track-record.

Some scary insider-view:


@ PWS:

"And yes, Nokia did throw all their weight on Windows, which was a risky but viable strategy - and then Ballmer bought Skype and poisoned the well, and the rest is history."

It wouldn't have helped anyway. Remember: WP had already comprehensively failed to capture any market share before Nokia got in. So, Skype or not - they had to fight against a non-buying public. Skype may have contributed to WP's ultimate failure but its main undoing was a UI that people universally seem to hate.

This was a product nobody wanted to own so it was easy for the carriers to sabotage its prospects. Had WP been popular like the iPhone all their manipulation wouldn't have helped. People would have voted with their wallet and shopped elsewhere.


@Tomi: "Maybe I am reading too much into it, but coincidences always smack to me of something smelling.." - I wish any of your option come true. I like Nokia as company, its values and its approach to bring global solutions for all not just for the richest 5-10%...

And I'm really getting fed up with this Silicon Valley bullshit and superiority thingies so it would be really good to have something clearly setting those things down. Due credit where credit is to be due - regardless its in the US or anywhere else...
Sorry B95! :D

What I was concerned about whether Nokia will have those cash reserves after merging with ALu? That will cost a lot I guess...


Somewhere on the otherside of the Internet....

"“Apple Inc. recorded 92% of the total operating income from the world’s eight top smartphone makers in the first quarter, up from 65% a year earlier, estimates Canaccord Genuity managing director Mike Walkley,” Shira Ovide and Daisuke Wakabayashi report for The Wall Street Journal. “Samsung Electronics Co. took 15%, Canaccord says. Apple and Samsung account for more than 100% of industry profits because other makers broke even or lost money, in Canaccord’s calculations.”
“Events last week highlighted the lopsided financial picture,” Ovide and Wakabayashi report. “Apple is asking suppliers to make a record number of new iPhone models. Meanwhile, Samsung forecast disappointing profits, HTC Corp. reported a quarterly loss, and Microsoft Corp. wrote down 80% of the value of the smartphone business it acquired from Nokia Corp. last year… The results demonstrate the rapidly shifting fortunes in the smartphone business, which Apple transformed with the iPhone in 2007.”"



> more than 100% of industry profits [...] in Canaccord’s calculations

Thats creative to base percentage on something else then 100%. Probably even more creative then them leaving somehow certain participants out like all chinese, Google, etc.

So, why didn't they just calculate that "Apple makes more then 100% of the industry profits"? It wouldn't even be wrong if industry refers to the Apple appstore industry and 100% to more then 100%!


i.e., "Let's get the old band back together again"


@Wayne Brady:

I think your post is a textbook example for the rule not to discuss Apple's profits. Nothing good can come out of it.

Regarding Apple's market share: Assuming that all players act sanely, yes they did peak. Of course, if someone acts insanely and as a result has a bad year (Samsung, I hear you!), of course there can be some mild fluctuations.

But as things stand, the iPhone growth will end - be it this year or next year doesn't matter. And when it happens it will cause shockwaves among the gullible fools who seem to believe that Apple's growth potential will be endless. The really interesting thing is how this will affect Apple's reputation. With the hypergrowth of the last few years it's nearly inevityble that some stupid investors will take the current trajectory for granted and panic if it ends.


"@Interesting - from my understanding, this blog sets the score on marketshare only, as long as there is some profit involved."

Yes. I am talking about the market share. Market share of money. ;)


Apple have been raking in obcene profits for years now. And they let the money rot somewhere. Sounds a lot like a leech on mobile. People work hard so Apple can let theor money rot.

Just an alternative view on the economy.


One of Microsoft's big problems -- and I believe it's probably the biggest non-carrier reason for the failure of Windows Phone -- is that they don't understand their own brand. Microsoft have desperately been trying for years to convince people that they're a consumer brand: they're not. Consumers know Windows as that annoying, badly-written, buggy, confusing thing they have to use at work, and want nothing more to do with it, thankyou very much. It's very telling that adverts for the Xbox (which was an internal code name for something Ballmer allegedly wanted to call the 'Windows Gaming System') featured a very prominent 'XBox' logo and slogan, with a much smaller 'Microsoft' logo buried in one of the corners in a light grey font.

Notice also that there are good numbers around showing what laptops people buy when they're given a choice by their employers. IIRC, about 80% of the time it's Apple kit.

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