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Just How Unprofessional IS the Trump Campaign - When Hillary In Trouble, Trump Hogs Limelight?

So we get to see some remarkable insights into the two campaigns. (obviously this is again a blog article about the US election, not about digital/mobile/tech). Hillary had her worst days this year, from the middle of last week when the Inspector General of the State Department found she had broken rules about emails and was at fault. For a pro campaign and very seasoned veteran politician, Hillary's campaign had a disastrous moment (every campaign has some of those) and it was clearly her worst moment of the year so far (don't fall for any of the Bernie 'moments' her victory was never in doubt so they were never that bad for her). And like a pro in a pro campaign, she went immediately onto the talk shows, put out as much of the fires as possible, then went to lay down low, riding out the rest of the news cycle. Her best hope is for other news stories to overtake this bad news email story, and that it won't grow to be any bigger than it now is.

TRUMP EPIC FAIL CAMPAIGN

The rival to her campaign should play this like a pro. If the opponent is in trouble, get out of the way. Get out of the news cycle. Don't give the news any possible story now, to compete with the big splash that your rival is in trouble. The smart play by Trump was to stay away from everything. Don't even allow interviews of YOU, let your surrogates handle the needling of Hillary about her emails. Stay away from the press, don't give them any chance to talk about anything relating to you. No, that is too much to ask of Trump. He had to jump in, with NEW silly stupid idiotic damaging stunts to a) draw attention away from Hillary's emails; b) bring up problems you've had in the past; c) bring up new problems for you; d) prepare the press to keep your problems in the spotlight into the near future as well.

Trump is massively behind Hillary. Before Trump clinched his nomination (the last time polls were reporting fairly the race) he was behind by close to 10 points. RCP had Trump behind by about 7 points. Then when Trump clinched (or more accurately, his rivals both conceded defeat) then every time that nominee gets a polling bump. It does not signal that the race has become suddely tight. Hillary will get the same bounce after June 7, when she has clinched. The real race is about a 7 point race which is more than what Obama beat Romney in 2012 and nearly what Obama beat McCain in 2008. Thats the reality right now, except some idiots are falling for the one-sided polling anomaly which happens EVERY election when one side clinches before the other. And it always returns to approximately the same it was, when the other side also clinches. So the reality is, that Trump is losing badly right now. It is FAR worse than the national poll, because in the in-state polling, Trump is behind in every state that Obama won in 2012 plus he is behind also in North Carolina (which Obama lost in 2012 but won in 2008) and he is behind in Arizona (which Obama lost both in 2008 and 2012). Trump is not ahead in the in-state polls of ANY state that voted for Obama in 2008. So Hillary is currently AHEAD of where Obama was in 2012 and by a VERY healthy lead indeed. What Trump needs to do, is to work hard - and CAPITALIZE on the rare occasions where Hillary's campaign is in trouble or making mistakes.

What was Trump doing last week? He wasn't done fighting with Republicans!!! He posted a silly video attacking his past rivals John Kasich and Ted Cruz. Why. What possible good does that serve Trump? It angers supporters of Cruz and Kasich - Republicans - who must be convinced to come vote for Trump. He HAS to stop attacking other Republicans. There is absolutely no way Trump can possibly convert 1-to-1 lost Republicans out of his tirades, to new Independent (or Democrat) voters, or somehow that 'silent majority' who isn't voting. He may attract SOME with this silly strategy but he is alienating many more. Its stupid. Plain and simple. Its stupid. But he wasn't done. Then he went and attacked New Mexico's sitting popular Republican Governor, Susana Martinez. Trump felt slighted that she would not come and join him at his rally. So now Trump not only starts a new feud with a sitting Governor of a battleground state, he is also upsetting all those demographics she represents - she is young, she is a woman, she is a Latina. This is sheer madness, why on earth would Trump go do this? He has to work now EVEN harder, to try to convince youth, women and Hispanic voters that no, he doesn't hate them all. By the way, the smart play - even if Trump was not actually considering her for his VP slot, would be to suggest she is the type of person he wants. But instead, Trump is fighting with her. A new fight, started by Trump, that was now on the air about the same time as the Hillary email news broke.

TRUMP STARTS NEW FIRES

So while the newsmedia SHOULD be devoting all their time on Hillary's troubles because they can't find Trump, he has gone into hiding, instead, Trump feeds them one story the more bizarre after the other. He goes to California (why on earth is he doing an event in California? California will never vote for a Republican, its a safely blue state. This is totally wasted effort). In California he holds a big rally - with farmers !! Why farmers? Farmers are about the most reliable 'employment' class for Republicans this side of wall street bankers. Farmers VERY steadily vote Republican and the only time you bother with courting the farming vote is the PRIMARIES when you need to win say a state like Iowa. Trump is behaving still as if it was the primaries. When there still was a race, and Cruz was fighting to try to win California, then it made still sense for Trump to schedule events there. Not now. Now he should be in Ohio, Virginia, Colorado or Florida. A battleground state, not in California. This is time he will never get back.

What did he do in Califronia. Well, he managed to create more problems for himself, both now and into the future. First, at this event, he made that stupid claim that there is no drought in California. Great way to get yourself in the media - for all the wrong reasons - again the press can have a field day quoting all the drought specialists who say yes, actually 75% of California is in a drought. The Drought has been going on for years. It is severe in more than half of the state. So next, Trump of course suggests that he can fix it, there is some little fish which is now the 'fault' of the water shortage (another debunked myth and conspiracy theory). And what of the farmers? If Trump suggests he as President can get the water to the farmers - that means taking water from neighboring states - Nevada, Utah, Oregon and Arizona. So 'pandering' to California farmers at their event will NEVER win Trump the state of California - BUT the Democrats in neighboring states can now use Trump as the danger, that if he is President, he will come and steal YOUR water, to give to his pals the California farmers. Is Arizona in play? Yes. Is Nevada a battleground state, of course it is. And polling from safely-red very consevative Utah - which NEVER votes for Democrats - says Hillary is tied in Utah. (Oregon is safely blue for Democrats anyway). So one stupid comment on a LOCAL issue where the US President has no say anyway - now does not help Trump in any way but it will be run in neighboring states against him and be used to force local Republican politicians to side against Trump (because nobody is going to suggest giving THEIR water to go to California's farmers, these would be local farmers in Nevada, Arizona, Utah etc who would then have to give up THEIR water). And this means, Hillary's nasty email story - a story which is well-worn and tired - is now competing with a Trump story about the weirdness - doesn't Trump KNOW what everybody else has known for YEARS that there is a massive drought in California, so bad Governor Jerry Brown had to take extreme means of water rationing statewide in response... This is an undisciplined campaign.

But while Trump was in California laying more mines into the minefield he has to later walk through - he also decided to pick a fight with a judge who is presiding over his Trump University case. Trump feels he can try to bully a judge by going public about his case. Good luck with that, schmuck. His attorneys had requested that various statements and documents about Trump University would be sealed, where some press had requested to see them. Now the judge (of course) ruled to unseal those documents. Maybe the judge would have decided so anyway. But first, by Trump making a public ruckus about it (and essentially threatening the judge) he of course made it very easy for the judge to rule against Trump. But secondly - far more damagingly - now the MEDIA are FAR MORE HUNGRY to study those documents. Trump not only drew attention to his Trump University lawsuit - while Hillary has her worst moment of this year - Trump ALSO guaranteed the Trump University 'sealed documents' will receive EXTRA scrutiny in the coming days. Trump knows this is all bad news, he has been trying to get the court case dismissed or postponed. Incidentally, Trump says regularly that the judge should recuse himself but Trump's attorneys have not made that motion in Court. So his LAWYERS know its not a valid case - but the more Trump pushes this point in the media, the more he angers the judge. Thats totally the wrong move. But Trump is not guided by a professional campaign manager (in charge) and whatever Manafort manages to do, is peripheral at best (and apparently there is a big internal war going on between Manafort and Lewandowski). So maybe California was an isolated case?

Sunday. Trump is in Washington DC (oh, yes, that famous 'battleground state' which votes 90% Democratic. THE single MOST DEMOCRATIC voting region in the nation. For Mr Outsider the dumbest thing to do, is to hold a campaign rally in DC. But hey, who am I to advise the Trumpster. So what was this about? He held a huge event at the State Department with a bunch of email specialists perhaps? No. Its a biker event (Harley Davidson type bikers) for veterans. Now. Bikers. White MEN very very racist, often Nazis, who will vote for Trump no matter what happens. These are in terms of activity/hobby probably the single most dedicated Trump supporters, even more so than the gun lobby. Why on earth is Trump at a biker rally? Oh, its probably that same clown political advisor he took in, who used to work on Wisconsin Governor Scott Walker's campaign. Walker had an unhealthy obsession with Harley Davidson motorbikes. Ok, we get the connection. Except this is the GENERAL election now. You have WON the Harley rider vote, MONTHS ago. That is the LAST place you should be wasting you time campaigning, at a Biker rally, in Washington DC. But its biker-veterans. So first, this of COURSE brings up the bad press about Trump and veterans in this election cycle. So now there is PLENTY of reason to revisit what stupid stuff Trump said about John McCain. Then there is MORE reason to dig into the missing million dollars that Trump promised he'd pay out of his own pocket to veterans. And the gossip about how much he overpromised and underdelivered with his publicity stunt veterans event earlier this year. All this eats time away from the bad news coverage of Hillary's email problems. Meanwhile, did Trump now put this issue to rest. No. He said that on TUESDAY he will release the list of what veterans groups received the millions he has raised. On Tuesday? So the story will linger on for three days now, and run into four at the least, before this story is extinguished from the news cycle. Trump has jumped upon the worst news story his rival has had, and piled one Trump negative story after another, all the while setting up even MORE negative coverage - not of Hlilary - but more bad stuff about Trump in the coming days. How mad is this.

Oh, and on veterans? His supporter Bob Dole now has said, Dole agrees with McCain, Trump should apologize to the veterans. And Lewandowski is on record now saying, Trump won't apologize. Will the media love now digging into this, what will Dole say about that, what will McCain say, and how will Trump react himself. This is an incredibly undisciplined and unfocused campaign, abandoning blatantly obvious opportunities as they (rarely) come.

On Tuesday of next week, Hillary will clinch her nomination (she's only 94 delegates shy of the nomination and June 7 awards nearly 700. She only needs to win about 15% of the delegates to clinch. She is ahead in most polling in most of the states that vote that day). This week is literally the last week when Hillary is this vulnerable - when Bernie is still in the race and thus Trump's attacks would have maximum effect. Yet in the 12 days left between the day the e-mail story broke, Trump has wasted - no, not wasted, destroyed - the news cycle for 4 days and has set the newsmedia ready to put plenty more of Trump BAD news into the remaining days. This is totally bizarre in terms of campaigning. Any professional campaign manager would have advised Trump to behave to the best interest of WINNING in November. But Trump doesn't listen to experts, because Trump likes to talk to himself instead, as he said. And once again, we see he not only hurt himself with these steps, he also did not do what he NEEDS to do (fight in battleground states where he is BEHIND) and he also gave Hillary much-needed cover so the email story won't get much attention.

At some point between now and November, Trump will accept a profesional campaign manager's 'full control' of his message and campaign appearance schedule. That is not yet what Manafort has now. Clearly. It is madness to waste one day of Trump in California, and another day in DC, those states will NEVER vote for him. Its madness to speak at events for farmers and bikers - they will always vote for him. Its utter madness to pick a fight with the judge who can decide to make the Trump University scandal court papers public; and its madness to draw attention to his troubles with veterans. Hillary's team must be thanking the stars for Trump. How much Trump has taken the pain off their worst day of the year and demolished that story from the news cycle.

When Trump starts to behave rationally, he can do a lot better than he is doing now, but so much damage is done already, he can never recover to even footing with Hillary, not even close. But now, he is only making the November loss worse for himself. There are only 161 days left to Election Day. Trump has actually wasted 2 of those days not doing what he HAS to do, campaign in the battleground states (did I mention, Trump is BEHIND in all of the states that Obama won in 2016, Trump cannot win unless he flips half a dozen of those states in 2016). 2 days wasted means one percent of his remaining time was thrown away. That will never come back. No professional campaign manager lets a candidate do this level of damage to himself.

Meanwhile on the other side of the fence. If you're in trouble, who can you call? Ghostbusters? Wouldn't it be nice, if you are in trouble, that you could just call your buddy, the current President of the USA, who happens to be on an international trip - and ask HIM to jump into the story and help deflect the bad news away from you, by attacking your opponent. Yeah. I betcha that was coordinated, the Obama attack from Japan that hit Trump saying that international leaders are 'Rattled' by Trump. Did you see the timing? US sitting Presidents almost never talk domestic politics while abroad. Obama however, can't WAIT to get to campaigning with Hillary against Trump. And he has of course waited, patiently, letting the Hillary campaign decide how to utilize the largest bully pulpit on the planet. Now when Hillary asked (or perhaps Obama sensed it and offered) this was perfect timing to bring Obama into the story, to take some of the heat away from Hillary. Smart play by team Democrats, whoever actually initiated that idea.

Obama will be a formidable surrogate for Hillary, likely more powerful than husband Bill. And he will love doing it, spending most of his energy attacking Trump and the sitting Republicans of Congress. Trump's response? Why didn't Obama accuse his Japanese hosts about the attack on Pearl Harbor. Yeah, thats REALLY smart diplomacy again, Mr 'I talk to myself'. Japan killed 2,400 Americans on the attack on Pearl Harbor (mostly military but also plenty civilians). The USA killed 140,000 in the atomic bomb attack on Hiroshima (all civilians). I think this is quite the wrong time for the US President to mention Pearl Harbor but obviously Mr 'I know great words' would do a fabulous job in international diplomacy haha. Its exactly moronic statements like that, which has those foreign leaders 'rattled' by Trump.

BAD CANDIDATE

So yeah. Trump is a remarkably flawed human being. Fine. We have however, learned again new stuff about him. Clearly, Trump is not listening to Manafort at least fully. But Politico now reported that the in-fighting in the Trump campaign has revealed that Trump is the kind of boss whose mind goes by whoever talked to him last. Like a child. So that bodes well for his run haha. Any advice he gets, is forgotten the moment he meets the next advisor or campaign staffer or friend or colleague or just random supporter at a farmer event or biker rally. This is why Lewandowski has gotten back into favor. Manafort was trying to run a campaign - that means a TON of management work which does not involve - and should not involve - the candidate. But Lewandowski was relegated to be the 'front man' on events - meaning he is sitting in the limo and at the hotel and on the jet with Trump every day. And Lewandowski thus gets in that vital last word. Which would be good news for Trump if Lewandowski was even marginally proficient as a national campaign manager for the general election except clearly he is not. So we have issues like Trump firing the first person that Manafort hired (a pro). Where Trump's team is MASSIVELY understaffed AND with vacancies galore - the last thing they need is to REHIRE more of people that are now being fired !! Plus it makes it EVEN harder for Manafort to get ANY competent professionals to sign up - Trump may well embarrass those too, and fire them two weeks after Manafort has hired them.. Oh, and press relations. The Trump campaign still doesn't have anyone as Press Secretary. Nobody is managing his press or media. That buffoon Hope Hicks is clowning around on various TV shows as his 'spokesperson' while the vital job of press secretary is still not even filled.

A 'normal' Presidential campaign will have something in very rough terms of one quarter of a million man-days of campaign work that will be done in the approximately one year that the campaign exists. Its a LOT of work. Trump's team has done perhaps one tenth of what should have been done up to now, and needs to be at full staffing to do MOST of what needs to be done in the remaining time. Trump will most definitely fall short of what is considered a normal major campaign run, by something like 20% at least, maybe even more. Meanwhile Hillary's campaign has already worked more man-days than ANY campaign in history (and not because Bernie gave her any real resistance, most of her campaign effort has been aimed at November). But conservatively estimating, the Hillary 2016 campaign will probably complete half a million man-days of campaign work. Her campaign will outwork Trump's by a factor of about 3. Who wins? If the race were truly tied, and one side puts in 3 times more work - then that side most definitely wins. Except the race is NOT tied, not even close. Hillary is far ahead, and yet, her team is putting in MASSIVE amounts of more work than Trump's side is. And we are seeing the effects. She is ahead in EVERY single state that Obama won in 2012 plus two that Obama lost (and very close to tied in half a dozen more states - including very very VERY reliably Republican states like Utah and Mississippi). 

So then we learn about Trump's delusion. He wants to run in New York. Now, its fully understandable, that for a man with Trump's ego, he wants to win his home state. He put a lot of effort to win the primary for New York (even though he was safely ahead in all polling). But New York is a safe Democratic state. It voted for Obama by 28 points in 2012, by 26 points in 2008 and even in 2004 where John Kerry lost to sitting President W Bush, New York voted for the Democrat by 18 points. There is NO hope for a Republican to win in New York state. It is the fourth most blue state in the union. There is no chance, zero, zip, zilch, none for ANY generic Republican to win New York. Being a New Yorker does not help Trump because so too is Hillary Clinton except she was their Senator winning twice, while Trump is disliked even in his home state. The Republican voter base is in rural New York state, ie 'upstate' where Hillary was their Senator, and they dislike Manattan-dwellers and big city folk (like Trump). New York state is one of the most diverse states in the union, only 71% was white voters last time (this is bad for Trump) with both a high black and high Hispanic minority. He can't win that state. The Real Clear Polling average for New York state head-to-head has Hillary up by 22 points. This is an utterly hopeless mission. But Trump wants to hire staff to fight for New York. Yes, go ahead Mr 'I am so smart, I went to Wharton'. He is behind in EVERY actual battleground state, and his campaign is massively understaffed with open vacancies not filled. But Trump knows better, he wants to waste hiring and staffing and funding and campaigning - to try to win in New York. Lovely. I can't wait to see how long that lasts and how much of his total effort went into that bottomless pit. New York state is one of the most expensive states to run in, haha, go ahead. Will be a delight to see all that effort wasted.

A billionaire tends to hear what he wants to hear (he fires those who say things he doesn't want to hear). So if Trump says - I want to fight for New York, he probably will get that, no matter how much his whole campaign staff will be aghast. So if its a dozen states, and some of them are not that expensive to run in - New Hamspshire, Iowa, Wisconsin - if the Trump campaign puts a real effort into New York state, it would deplete at least 10% of their total resources (on a total waste on a race he cannot literally cannot win). Lets see if someone can talk sense into the man who is so smart or will he talk to himself instead. But again consider the rest of the party - they see a total utter comprehensive train-wreck of a campaign and a candidate who is utterly out of control. The sensible thing is to run away as fast as you can - and like Susana Martinez - refuse to be seen with this doofus. Now what about all those politicians who are in TROUBLE in those battleground states - but who HAVE endorsed Trump? If Trump spends 10% of his time and money and polling etc in New York, thats AGAIN less of what in any case was a weak campaign in terms of support - to the vulnerable down-ticket candidates feeling the pull of the anchor that is Trump, weighing them down and drowning them.

Bur I want to come back to that idea of deciding based on what the last person was who talked to you. That is a HORRIBLY bad manager indeed. I had one boss like that and it will drive you nuts. There will be many who will be resigning because Trump is so utterly disastrous as the Candidate, where he promises you in YOUR meeting to do it your way and then he talks to the limo driver or the usher at the event next, and decides to go opposite of what he just promised you. So it means the top guys HAVE to hang around Trump all the time - it means THEIR work is FAR less effective - this from a team that did none of its homework in the Primary season - and is behind - and has not hired all the staff it needs - and is short-staffed and underfunded for the general campaign - with almost no usable surrogates to take much of that load EITHER. Meanwhile on the opposite side is the most prepared candidate in history, who over-prepared in the primary season, has the largest staff ever assembled, plus a super-powerful Big Data system to optimize and maximize their effort - run by some of the best staff ever in political campaigns - while being the richest campaign ever to run with funds to spare - and with the strongest surrogate team in the history of Presidential politics.

The morale at the Trump campaign is bad. It will keep getting worse. They can't hire the best staff who won't join the losing effort. Some who are there will bicker and complain. Trump will be firing many more, often for trivial reasons - or in cases where all in the Campaign see the fired person was right and Trump was wrong - this further saps morale. That is all before the REAL polling disaster becomes evident, after the Conventions, into August. Hillary will be safely in a 10 point lead by then, and that means the rats start to escape the sinking ship.

Then a few words about campaign budget and financing. So yeah, now the myth of Trump self-funding is long gone. He spent months telling that candidates who take money are then beholden to those who contributed, but now Trump will take in something nearing a Billion dollars in money - with all the strings that come attached to those donations. So far, so bad. But it gets worse. He has not much time left, why is the SuperPAC still a mess? His various surrogates are promoting two rival SuperPACs and Trump hasn't clarified which it is that his supporters should donate to. This was all done very fast and not with much sensible planning. (Once they exist, the campaign is not allowed to 'coordinate' with its SuperPAC but thats a very nebulous rule). But on Trump's main campaign funding. He's decided he won't build a ground operation of his own - he will rely on the Republican party to do that for him. Sounds nice. Why didn't every previous candidate do that? Because it means Trump will not be in control. And that Republican party machine has to support ALL the candidates in that state, from Governor to dog-catcher. They CERTAINLY do not have the budget to do a proper job of it for the Presidential candidate and his/her needs - that is why EVERY past campaign, the Presidential candidate set up his/her own organization (in the battleground states obviously).

But now comes the added mess of Trump. Many local politicians do not WANT to be seen anywhere near Trump. While Hillary will be loved by all Democrats, who will HAPPILY re-organize their calendars to be NEAR her when she is in town, with Trump, the GOP party organization in that state has to be mindful of every individual candidate who doesn't want to be seen with Trump, and try that extra layer of hassle in organizing events and press etc. What about local fliers, advertising, lawn signs, robocalls, etc. The local party is now saddled with MORE work (because Trump won't be bothered) which takes away from their own guys that they KNOW - who often will hate that Trump can't be bothered to pay his own way and hire his own staff - and where will those loyalties go - to try to save the own guy rather than fight for Trump - which will only get worse, the more Trump will be under water in the head-to-head polling against Hillary. This is a very very VERY bad way to go about the campaign, and I am expecting Manafort to eventually convince Trump that they have to set up their own staffing in at least the most important battleground states like Florida, Ohio, Virginia and Colorado. They will NOT get 100% out of a shared resource with the party. Thats just dumb. Usually its the OTHER way, where the locals hope for more help from the 'rich' Presidential campaign, to pick up some of the extra effort for THEIR local guys, not this way.

LIBERTARIAN MESS

So then we get the last unexpected bonus and silver lining on the thundercloud for Hillary's team, the Libertarian surprise. Its not that much a silver lining as gold-pressed latinum. This may turn out a mirage, but this might be the year of the Libertarians hitting major percentages, into high single digits or even double digits in the general election in November. THAT is more than gold. That is more than platinum for Hillary. In her worst week this year, she may have received the best present at its end. This week which otherwise was so bad for her. Gary Johnson, the ex Governor of New Mexico, was just selected as the candidate of the Libertarian party. He is a Republican. His Vice Presidential running mate is another Republican former Governor, William Weld who ran the very Democratic state of Massachussetts. And these two have already been very vocal critics of Trump. In some polling of a three-way race, Johnson polls at around 10% already - while nobody knows him in any way. Now they will be in the news at least for a short while, and many who are very conservative and or very Republican voters, but who really don't like Trump for whatever reasons, and can't stomach the idea of voting for a Clinton, will have two solid but moderate Republicans - both ex Governors - to vote for. The Libertarian party is the only other ticket which has access to all states, so every voter will get a choice of Hillary Clinton, Donald Trump or Gary Johnson (while each state will have usually a dozen or so also lesser 'third party' candidates, but none that are on the ballot in every state). If Johnson can get his polling to 15% - a distinct possibility - he'd also get to join the TV debates.

Most years a third-party candidate has no chance, and this year too, Johnson won't be winning the election. But recently Ross Perot in 1992 did get 19% of the vote, and at one point in the race he was ahead of both rivals. Bill Clinton eventually won in 1992, with 43%, over incumbent sitting President Daddy Bush who got 37% of the vote. Many Republicans feel that Perot 'spoiled' their race and Daddy Bush would have won if Perot was not in it. The exit polls however very clearly show that Perot took votes from both sides and Bill Clinton would have won in any case. Then in year 2000, Ralph Nader ran on the Green Party ticket, and while he only got 3% of the vote, it did damage Al Gore enough, that (after a recount and Supreme Court intervention) W Bush was declared the winner. Even a few points of the total election might swing it one way or the other.

Libertarians can find some appeal with both Republican and Democratic voters but they generally are far more aligned with Republicans. There is a rather well defined Libertarian wing to the Republican party (which used to vote for Texas Congressman Ron Paul and now supported, but perhaps only in a lukewarm way, his son Rand Paul). I would think, in very rough terms, about 75% of Gary Johnson's votes would be drained from Trump and 25% from Hillary. Give those +/- 5% either way and its always a net damage to Trump now that Johnson definitely will be on the ballot in November. But now the game becomes, how much of the 'stop Trump' movement and 'never Trump' movement which may be left, inside the Republicans, will shift to supporting Johnson and Weld. I'd guess Mitt Romney will be there rather quickly and so probably will be the Bushes.

Because they are both Republicans, Johnson and Weld provide the 'cover' for conservatives to fairly vote 'against' Trump but not actually vote for Hillary to win. In reality, any vote by a Republican to the Libertarian ticket will be effectively a vote helping Hillary defeat Trump (and similarly any Bernie supporters who will end up voting for the Libertarian - or any other ticket like Green party - will be voting to support Trump against Hillary). The Libertarian ticket has zero chance of winning this year, Johnson is about as exciting as a candidate as George Pataki, but he can well get into the double digits in his support. And because they know their core voters will be disgruntled Republicans, the pair, Johnson and Weld, are very well motivated to attack Trump at every chance they get. Meanwhile, for all those Trump-haters who really want Trump to fail comprehensively (the Wall Street Journal just ran an editorial where they argued Trump NEEDS to fail in epic manner so the party learns not to nominate candidates that are this bad - the point I've made for months) they are likely to announce their support of the Johnson-Weld ticket in 'timely' manner, not necessarily coordinated, but to give a general impression of a growing wave, so some will deliberately wait for an opportune moment WHEN to announce, to keep up that feeling of momentum.

Trump is behind. What he absolutely cannot sustain, is for erosion more from his side than Hillary's side. A perfect third party candidate in this year, for Trump, would have been Bernie. The worst possible candidate to run, this year, for Trump, is another Republican. We have to see how this plays out, but this Libertarian ticket may well be the worst news to hit the Trump campaign this whole season up to now. But we don't yet know. Lets see a few weeks of does this story pick up steam, does this story have 'legs' or will it fizzle out in the next few weeks and be dead by the Conventions. I do think, that with all the feuding and trouble that Trump has gotten himself into, for all those who actually do not WANT to be on Trump's VP list, all those politicians will likely want to now go with the 'sane' Republican alternative - ie the Libertarian ticket (as long as that ticket fits their political views - Libertarians are totally against the bedroom police and bathroom police aspects of the Religious Right, so I don't expect Ted Cruz to really like this option but John Kasich should find this ticket far more palatable than supporting Trump).

Then there is the money. The Bush clan has tons of financial clout. If they come in support of the Libertarian ticket, that could give them some significant money. Then there is the Koch brothers network. One of the Koch brothers once ran for VP on the Libertarian ticket, and they have been very warm to Libertarian views in the past. They hate Trump, here they have two moderate Republicans, why not go support them. Its plausible that this ticket really takes off, and gets Johnson to something around 20% or even 25% of the final election in November, and as they'll be a professionally run campaign without the sillyness of Trump, if they run roughly neck-to-neck in total national vote percent, say both get 22% (with Hillary winning in epic landslide at 56%) then its VERY likely that Johnson wins more STATES than Trump while they'd have as many votes. Trump's base is very loyal but widely spread. The Johnson-Weld ticket could focus and pick up a bunch of red states where they could slightly outperform the 'generic' Trump effort - while Trump would have to fight (and badly lose) in the battleground states (where Johnson would not attempt to win).

If the Libertarian ticket is strong enough to qualify for TV debates ie Johnson polls at above 15% by September, then Trump will be fighting a two-front war where he is the underdog, utterly outgunned on both fronts. And where normally the in-party fighting ends at the Convention - this would be that weird year, where the Republican and Conservative 'Stop Trump' movement could actually run until November, uttely totally completely destroying any chances he might have otherwise had. Even if in November Johnson only takes 10% of the national vote (halfway between Ralph Nader of year 2000 and Ross Perot of 1992) then Trump is down another 5 points against Hillary. If Johnson could get to Ross Perot levels - and assuming they continue to mainly attack Trump from the right, appealing to conservatives and in mostly the red states - then at Johnson on a national 20% vote level (with Trump say 25%) its possible Trump wins NO STATES and Johnson wins a handful (Kansas, Oklahoma, Idaho) and Hillary wins over 40 states flipping such 'red' states as Texas, Mississippi, Utah..

We don't know yet. But this is a development that could be utterly devastating to Trump 2016. If they play this right, the Johnson-Weld ticket could be the 'real conservative, real Republican' ticket and the 'adult' and 'rational' choice against Hillary. They could even plausibly win more votes than Trump. But if they get as much as 10% of the vote, then Trump is LUCKY if he escapes with a 20 point loss to Hillary. If these guys climb above 10% in November, it pushes Hillary's victory into truly 'catastrophic' drubbing of more than 20 point loss to Trump. 
 
This is yet another aspect I did not see coming in this truly amazing year, and once again, the stars are aligning even more perfectly for Hillary. A strong third-party run also means higher turnout - that is always to the Democrats' advantage and the disadvantage of Republicans. This means even more trouble for down-ticket candidates. And those will then be making their various choices of who is going to campaign with Trump or who will go join the rebel alliance of Johnson-Weld. Meanwhile the Democrats will be united like never before, safely ignoring the Libertarians and focusing like a laser on Trump. Its fear of Trump which will drive up Democratic voter turnout. And remember, its not enough for Hillary to win, she has to flip both the Senate and the House to have any chance to enact her political agenda. She needs to have huge coat-tails, to bring in that huge change in Congress.

The Nokia Saga Predictions on This Blog: Full Listing with Links

Now that the tech gods had been merciful - or as I wrote in 2013 when we heard Nokia was selling its total handset business, I posted this plea: "if the gods of technology have any sense of justice, they will let our Nokia return one day into our pockets." We have that mobile blessing for our digital sins. And now its time to look at the sins of forecasting by 'the world's most accurate forecaster in mobile'. How did I do with the Nokia saga?

So this blog is ONLY a retrospective, looking back at 6 years of Elop-bashing on this blog. The full Nokia collapse as chronicled here, but looking at my PREDICTIONS when I said it, and what happened. If you want to be part of the 'integrity' of a forecaster, this is for you. I think all forecasters should do this with all their forecasts, but hey, some are pretty ashamed of their silly Nokia and Windows forecasts haha. So yes, very long blog, 26,000 words (like 2 and half full chapters in one of my bestselling hardcover tech books) - you'll need at least 2 cups of coffee to finish it. But lets start, and note, I did NOT hate Nokia, and I did NOT think Nokia was in trouble or about to die. So we start from before there were even any GOSSIP about Nokia replacing its then-CEO Olli-Pekka Kallasvuo. When other pundits were falling in love with the iPhone and thought HTC would be the other big winner, with Blackberry and Palm also about to capture the smartphone world, and a Nokia was to their minds 'losing the game' this is how I wrote about the pending 'Smartphone Bloodbath' years, I saw starting in 2010:

JANUARY 10, 2010: I SAID NOKIA WILL REMAIN BIGGER THAN NUMBER 2 & 3 COMBINED

Apple launched its iPhone in 2007. That is not the start of the smartphone industry. Blackberry made smartphones for years before that, and Nokia literally invented the smartphone ten years prior to that point in time. Nokia was BY FAR the largest smartphone maker of 2009, when I made my forecast for 2010. The top 5 smartphone makers of 2009 were: Nokia, Blackberry (then known as RIM Research In Motion this Canadian company rebranded later to match its popular handset as Blackberry), Apple, HTC and Fujitsu. The tiny players of the Top 10 included Blackberry, Palm, SonyEricsson, Samsung and LG. Samsung was ranked number 6 globally in year 2009.

First, note that I predicted a 'smartphone bloodbath' to start in year 2010. Nobody - NOBODY said that of the sleepy smartphone sector of mobile phones of 2010. Nobody said 'bloodbath' where Top 10 brands would literally DIE (like Palm, Motorola) or quit the smartphone business (Ericsson). The Top 10 of smartphones was remarkably stable for the previous decade. In 2000 you will find Nokia, Motorola, Sony, Ericsson, Fujitsu and Samsung among the Top 10. So for 10 years VERY stable sleepy industry. Suddenly from 2010 the industry was shattered and in 5 years, A Bloodbath for 2010: the Smartphone market preview. (I had never written anything like that before, I did not regularly claim in 2007 and 2008 and 2009 that we were about to have a 'bloodbath' in smartphones).

It is yet another INCREDIBLY valuable, forward-looking and insightful blog - that nobody else, on any site or publication, whatever you paid, would say. I saw it coming. I said, the smartphone wars are about to go ballistic - and they did. The smartphone market for the next five years became THE most competitive global industry in human economic history. So THE most competitive stage of ANY industry ever in history. More competitive than personal computers or televisions or the VCR wars or cars or airplanes or the cola wars (Coke vs Pepsi) etc. The most competitive industry EVER. Nobody else said that, I did. (You're welcome).

In that incredibly insightful blog, I said the following about the Top 3. I said Nokia would grow but would bleed some market share. I said Blackberry and Apple would grow, Blackberry would end the year second and Apple third. I said Apple would need another new hot model iPhone - and Apple did deliver, it gave us the hottest-selling iPhone in history, the brand new design, first -redesign, iPhone 4. BUT even WITH this caveat - I said Apple needed a hit product that year, and Apple delivered - I said Blackberry will end up second biggest. (obviously, the Top 3 of 2010 were: Nokia, Blackberry, Apple. Yeah. BEST FORECASTER IN MOBILE. You're welcome).

I want to take a few exact quotes that I said. This is the Nokia Saga review. How did I write about Nokia smartphones BEFORE Stephen Elop joined Nokia. In fact before Elop ever came to a secret first interview for his new job. I wrote on January 8, 2010 about Nokia smartphone business for year 2010: 

Who makes the "most desirable" phones when we take price into the equation? Not necessarily the single best phone for internet surfing, but rather a series of phones to suit mass market tastes? Thats Nokia, hands down. As big as number 2 and number 3 combined. Even with all that, expect Nokia not to grow market share this year in smartphones, and very likely to lose some in 2010. The competition is coming from every angle and the big leaders will likely feel the heat. Nokia has been aggressively moving downstream in price and gets some solace that its price points are difficult for smaller brands to match, but its going to be a very rough year.

 

Yes. You're welcome. I said Blackberry and Apple will see good years (as long as Apple has another great new phone in mid-year when it launches). But while some were thinking Nokia was somehow threatened by Apple or about to die or struggling or falling. I KNEW the numbers, I REPORTED the numbers. I said clearly that Nokia was the OVERWHELMING number 1 in the world - Nokia was bigger than number 2 and number 3 COMBINED. Nokia was TWICE as big as its NEAREST rival !!!! Never in the PC industry or the airline industry or the TV industry has one rival been TWICE as big as the nearest rival. IBM was never in personal computers twice as big as then-number-two whoever that was, HP or Dell or Compaq or Apple. Nokia in smartphones was twice as big as its NEAREST rival and Nokia was reporting consistent profits in its handset division, every single quarter of every year. The PROBLEMS at Nokia which led to the CEO being replaced - why Nokia reported only one quarter of a corporate loss - was in the NETWORKING business, which was put on the selling block when Stephen Elop was hired. Elop was not supposed to mess with the goose that lays the golden eggs (handsets) but rather, to try to find a buyer for the NETWORKING business. There was NO talk of a shift to Windows when Elop was hired. That was his own moronic idea, which he pursued secretly and without the Board's blessing until he had started discussions with Google and Microsoft (And attempted also at Blackberry) and Elop then sold that ludicrous idea to the Nokia Board.

So lets understand the context of when Elop came in. Nokia in 2009 sold 67.8 million smartphones globally (with 39% market share). This was a world record obivously and Nokia set record profits in its smartphone unit. In 2010 Nokia then grew 35.8 million new smartphone sales (growth rate of 53% !!!!). Nokia from 2009 to 2010 grew MORE than Apple even thought Apple released its most popular new iPhone model ever, the iPhone 4. Apple grew 22.4 million units but Nokia grew more, Nokia grew 35.8 million new smartphones. Very literally mathematically irrevocably true - Nokia was WINNING against Apple iPhone in 2010. Nokia GREW MORE than Apple with its MOST iconic new smartphone. The GAP between Nokia and Apple was NOT CLOSING, it was GROWING. Nokia was PULLING AWAY from Apple in 2010. Look at the numbers side-by-side:

Nokia Smartphones vs Apple iPhones Unit Sales 2009-2010
Brand . . . .  2009  . . . . .2010 . . . . . . Growth
Nokia . . . . . 67.8 M . . . .103. 6 M . . . 35.8 M
Apple . . . . . 25.1 M . . . . . 47.5 M . . . 22.4 M
Note period is January-to-December 'calendar year' not 'fiscal year' which differs for the two brands
Sources: Company Quarterly Results (corrected results for Nokia)
TomiAhonen Consulting 24 May 2016
This table may be freely shared

This is no secret. We KNOW its true, Nokia was winning in 2010. Nokia grew more than Apple. Duh. Nokia also grew more than Blackberry. Nokia started the year 2010 - year of the bloodbath - with a huge lead over its nearest rivals - and it GREW that lead during the year !!! Nokia was the second-most profitable 'smartphone' maker if pure smartphone makers like Apple and Blackberry are included in the comparison (an unfair comparison, where 80% of new phones sold in 2010 were dumbphones) and Nokia was BY FAR the most profitable 'full portfolio' handset maker. Far far FAR more profitable than Motorola or LG or Samsung or SonyEricsson or Fujitsu or Huawei or ZTE etc.

Nokia's market share was not falling because its traditional rivals were gobbling it up. The INDUSTRY was EXPANDING. When you go from a sleepy 7 global competitors to 23 global competitors in 18 months - that is where your markets SHARE is gone. And consider the context. The global smartphone market went from 40 manufacturers in 2005 to 500 manufacturers by 2011. THAT is why Nokia's market share did decline. How badly? From 39% to 35%. While Nokia grew 53% in JUST ONE YEAR and set a new Nokia record for smartphone business units sold, revenues earned and profits - and utterly dominated its rivals - growing more than its nearest rivals, this is NOT a company in trouble.

So Sammy? In that blog posting from January 2010, if you read it, you may have spotted a TRULY WILD prediction. NOBODY was talking of the Koreans back then. Nobody was. The two 'also rans' who were both smaller than the largest Japanese smartphone maker-giant Fujitsu. If pundits got past Apple's shiny iPhone, the brands they thought would be big in smartphones were the other shiny plays - HTC, Palm, Blackberry. Go to January 2010 and find ANYONE else who wrote this: "If executed perfectly Samsung would seem to appear out of nowhere" and reach the top 3  I said I expect Samsung to break into the Top 3 in 18 months. So by Summer 2011, the tiny number 6, would need to leapfrog almost everybody and become a Top 3 smartphone maker. By Q1 of 2011 Samsung was on path, it had become number 4 .Then yes, in exactly 18 months from my prediction, Samsung crashed into the Top 3 except it did even better - it became number 2. That was not thanks to Samsung's brilliant strategy (which did get them to Top 3) the Top 2 position was because of the sudden unanticlpated, stupid, self-induced total collapse of Nokia. Nobody could have anticipated that Nokia hire a madman to run its handset business literally to ruin. Without the Nokia collapse I was 100% correct on Samsung, it did hit the Top 3 even if Nokia had never collapsed. The Nokia fall gave Samsung a windfall bonus, giving it the second ranking by June 2011, instead of number 3. But do go back to January 2010. Nobody anywhere ever, on any tech site or in any handset analyst report said, number 6 'also ran' Samsung will suddenly experience a 'leapfrog' year, and in 18 months will crash into the Top 3. (You're welcome).

I understand this industry, I tell you how I see it, and I give insights on this blog. Others were loving HTC or Blackberry and everybody swooned over the iPhone. I went by the math, I was consistently reminding people - wait, Nokia in smartphones (ignoring its dumbphones giant business) is more than TWICE as big as Apple, and the gap between the two is GROWING. Nokia is breaking its own profit records in the smartphone unit. There is no definition of 'failure' that applies to Nokia in the way the smartphone bloodbath wars were happening in 2010. Yes Nokia was UNDERPERFORMING and I was often critical of their various problems like delays in new flagship launches and buggy software etc. But in a global market, Nokia was winning more than Coca Cola has ever been beating Pepsi. More than McDonalds has ever beaten Burger King. Nokia was beating Apple more than Airbus had ever beaten Boeing. More than Toyota had ever beaten General Motors. Pick your global industry, Nokia was nearly unprecedented. The last time Ford was twice as big as General Motors in cars was 80 YEARS prior. So yes, I told you more than half a YEAR before anyone learned the name of Stephen Elop as the coming CEO to Nokia, I told you Nokia was SAFELY guaranteed to remain the largest smartphone maker for the year. It would end the year twice as big as its nearest rivals. And I warned that Samsung was on a rise, the new competition was not HTC or SonyEricsson or Blackberry or Palm. So please do understand the context. This blog was not a 'Nokia hater' blog. This is a 'math lover' blog. I go by the numbers. The cold hard numbers. Numbers are my buddies.

SEPTEMBER 17, 2010 I WELCOMED ELOP: PROMISED GROWTH IN NOKIA SMARTPHONES

So lets get to the Nokia saga. For the first five months he ran Nokia, then-new CEO Stephen Elop (the worst CEO of all time in any industry) executed the previous strategy by the fired CEO, Olli-Pekka Kallasvuo. Note, this was what Nokia's legendary previous CEO and then-Chairman, Jorma Ollila had promised. He said Elop would not change the Nokia strategy, he would rather EXECUTE the current strategy but more efficiently. Because Nokia had taken in a lot of troubling bureaucratic tendencies especially with delays. Great award-winning phones that sold incredibly well - were delayed and delayed and delayed again. So Ollila wanted the new CEO to fix those 'execution' problems when Elop was hired in. And as a 'software guy' from Microsoft, Elop was expected to be good at this. He was NEVER expected to tinker with the JUGGERNAUT that was BEATING Apple iPhone like a rented mule, after all. I warmly welcomed Stephen Elop on this blog when he was announced and I wrote about the Nokia smartphone business:

The reality is that recently the iPhone market share has been declining (four quarters in a row) where Nokia's market share held steady or actually grew. The reality is that in the past 12 months, Nokia smartphones have been winning against the iPhone, not losing to it. The numbers are irrefutable, but the myth prevails that Nokia is somehow 'losing' and specifically 'losing to the iPhone'. This is a perception problem! This is a communication problem. Not a strategy problem and not an execution problem. All the new CEO needs to do, is to communicate Nokia's true performance more clearly than previous Nokia managers have done in the past. The numbers are very clear. How awesome is that for Mr Elop, he gets the media attention for being the new guy, and he has a wonderful story to tell, where he does not need to 'fix Nokia' but rather just elaborate clearly what Nokia is doing. Awesome?

Nokia profits have been declining - as one might expect in a global economic downturn where many 'gold standard' corporations of impeccable credit ratings went bankrupt. Yes, Nokia should be able to do better than it is doing, but every other big 5 handset maker has seen either quarterly losses, or severely declining profits in the past few years, including Nokia's nearest true rival - Samsung. As this is a 'partly true' issue, the new CEO needs to tackle it on two sides - address the actual profitability rigorously, but also communicate it far more clearly - that Nokia as a mass market consumer phone maker - should be compared to Samsung, LG, SonyEricsson and Motorola (and ZTE) - and compared to any of those, Nokia profits are very good. And then just make sure as CEO, that those profits will now turn into growth again, as the economy improves - and probably with some strategic decisions about focus areas.

There is the new N8. It seems by early opinions to be a long-overdue hit flagship for Nokia. Remember that Nokia's last succesful flagship - the N95 - handily outsold the iPhone globally. Nokia has the carrier relationships to turn a good phone into a big hit and the N8 seems to be very well poised to do well. It comes to a crowded market with the Samsung Galaxy now the big dog of the yard, with the iPhone 4 a very strong contender, and various other superphone wannabes, from Motorola Droids to Blackberry Torches to Lenovo LePhones out there. But Nokia has the world's best carrier partner network - if the carriers like the N8, it will become the planet's best-selling superphone, almost by default. This is all someting Stephen Elop was not in any way involved with, yet he stands to reep the rewards of the work that was done before him.

While so many idiot-pundits were proclaiming Nokia doomed ('losing to the iPhone') I was here with the math every quarter fighting against the silly myth. And very importantly, as Elop joined, I said that Nokia was poised to have several years of great growth - and increasing profits. Here is how I ended my welcoming blog

Nokia is pretty well poised to outperform its other big 5 handset maker rivals into the foreseeable future. Nokia will never generate as huge profit margins as Apple, but if Nokia's profits turn now from decline into growth - then Stephen Elop will be seen as the savior, the miracle-maker, the man who defeated the Apple iPhone challenge and saved Nokia. While that may not technically be true, it will be a far better story for the Nokia PR people to spin, than the past year of explaining why the N8 was again delayed...

The N8 ended up being a huge hit smarpthone (until Elop killed the whole Symbian and Nokia smartphone business with his silly memo, next February). Nokia did return to VERY healthy profits, its second-best performance in its total handset business, and by far the best performance in its smartphone unit. The year ended STRONG for Nokia powered by that N8 that I wrote about. (Yes, you're welcome)

During his first months Elop fired some staff. I supported those decisions on this blog. He made some product delay decisions (something Nokia had been doing) and I felt this was good, in case the product was not ready. Better to release a ready product like the N8 rather than experience a bad product launch like happened with the previous flagship, the N97. But the secret conspiracy to shift Nokia to Windows had started, and we heard later that Elop was secretive of his schemes, didn't seek the consent of the Nokia Board, was obstinate and even did openly ridiculous things for which he was reprimanded - most famously the idiotic Burning Platforms memo, the most costly management memo ever authored, which collapsed Nokia handset sales not just on smartphones but even on the dumbphones side.

JANUARY 31, 2011 - WARNED NOT TO GO TO WINDOWS PHONE

We now know that Nokia announced its suicidal new strategy on that fateful day Day 11, Month 2, of year 2011, so Feb 11, 2011. That is the day of infamy for Finnish tech industry. The date when Nokia announced its own suicide. But for years and months prior to that date, I was on this blog, posting occasional updates to the Nokia strategy view, and on January 31, twelve days before that fatal moment, I was AGAIN on the blog, writing that Nokia did not need a 'new strategy' and god forbid, it did not need a new operating system, and it would be truly idiotic to suddenly switch and go with Windows OS for smartphones (which at the time was called Windows Phone 7). Windows had ONLY produced misery and losses to anyone who had tried it before. It was BY FAR the worst option. But this is what I wrote: 

Many are begging Nokia to abandon Symbian and join Android or Windows Phone 7. No! Nokia has the best strategy of any major handset maker. They are not executing it perfectly but they have the best strategy. Remember, Nokia's primary rival is not Apple or RIM or HTC, it is Samsung.

Apple, RIM and HTC are tiny in handset makers who only make smartphones compared to these two giants. Apple sold 47 million phones last year. Nokia sells 47 million phones every 6 weeks.. Nokia and Samsung are the equivalents of Toyota and Ford in cars, Apple, RIM and HTC are the equivalents of Porsche and BMW in cars. Toyota and Ford make family cars, city cars, taxis, off-road vehicles, pick-up trucks, vans AND sports cars and luxury cars. Porsche makes essentially only sports and sporty cars (iPhone), BMW makes mostly sporty and luxury cars (RIM, HTC). So we cannot compare the vehicle strategy of Toyota to Porsche, we need to compare it to that of Ford (and GM and Renault-Nissan, and Volkswagen Group). And in phones, among big phone makers, Nokia's smartphone strategy is the best in the business.

(the bolding was in the original). So yes, mere twelve days before Nokia announced its death, I was still defending the WINNING strategy here. Nokia had just posted its best quarterly result ever. The N8 was setting sales records. Nokia's latest edition of its own Symbian OS was now considered 'good enough' in touch screens (the first time that happened, right for Christmas 2010, the Symbian S^3 edition) and Nokia was about to launch the brand new MeeGo OS, a Linux based, open-source OS developed with Intel, to power touch-screen premium smartphones. An OS that had a dozen manufacturers lined up to support it. An OS which was a cousin of Android (and could run some Android apps natively). And most of all, an OS which had a MIGRATION path so current Symbian app developers could migrate their apps into MeeGo and eventually run on Nokia's new superphones. The first MeeGo device came out in 2011 and won all kinds of awards and is to this date the only flagship consistently ranked better than its contemporary iPhone, while MeeGo is the only OS ever launched in smartphones to be ranked as good as - or in some reviews even better than - Apple's iPhone iOS operating system. THAT was Nokia's strategy in January 2011. Only a delusional idiot would change this. The champion crushing its tiny rivals, who has just launched its best-selling phone ever, and is about to launch the best OS this side of an iPhone by ANY OS maker. Only a total monkey from Canada could decide at this point - to throw all that away, and go with Windows. Windows Phone 7 was not the biggest OS back then. It wasn't the second best-selling. Not third, not fourth, not even fifth-bestselling OS platform. Windows Phone 7 was literally only the 7th bestselling OS. Once MIcrosoft was ranked number 2 in smartphone OS platforms with 12% market share. When this partnership was announced with Nokia, Windows (on all its platforms, combined) had only 5% of smartphones. Nokia alone had 35% the year just ended and Symbian had 40% because Symbian also was sold on several other handset makers. Who is the idiot who changes a GROWING business where you have the world's largest platform at 40% and swap it for a number 7 ranked OS who has 5%. Only an idiot would do that. Only an Elop would do that.

FEBRUARY 9, 2011 - IF NOKIA CEO ACTUALLY WROTE THAT BURNING PLATFORMS MEMO: HE IS DELUSIONAL PSYCOPATH

Yes, the Burning Platforms memo. Most destructive management memo ever written. Caused instant collapse of Nokia business. Only a madman would write such a memo. It was not even honest in its 'brutal assessment' of Nokia. It was full of blatant lies even a schoolboy can check. So many lies and falsehoods, its author himself, Stephen Elop walked back a dozen of the most brazen lies in that memo over the next four months. We found out that Elop was actually reprimanded by the Board for that disastrous document. I did my full analysis of the memo and how utterly destructive it would be, if it turns out it was authored by the CEO. All we need here, is my short summary of the idiotic document from my blog on that day:

Worst case, it is proven to be real, he really believes all that, and Nokia is led by a delusional psycopath who willingly suspends reality. Imagine if Microsoft had thrown in the towel when it had the world's biggest PC operating system! Imagine if Blueray had stopped fighting for the market when it was leading. This is silly.

Nokia's new CEO turned out to be a serial arsonist who set fires to all of Nokia's profitable businesses and killed off all areas where Nokia had built a lead on Apple and Google. He was truly a delusional psycopath. When I wrote that on February 9, 2011, I did not believe it to be true. I just warned, that if that memo would turn out to be ACTUALLY written by Elop (and in the next days we found out he DID write it) then he would have to be a delusional psycopath. Delusional in its dictionary and medical defintion: mental illness where the patient substitutes a fake reality instead of the observed actual real world. Delusion. And psycopath, to run his company like a madman, consistently and constantly overrulilng all who are actual experts.


The first five months of Stephen Elop's time had seen strong growth in smartphone sales, high growth in revenues, a reversal in the downward direction of the Average Sales Price, yes Nokia was able to charge higher prices (so the demand had to be very strong). Nokia set its record for profits in the smartphone unit. Nokia profits towered over its full-portfolio rivals and were even more than all other smartphone-only makers than Apple. And being bigger than Apple, growing more than Apple, and reporting growing profits second only to Apple. That is what 'victory' smells like. That is what only a delusional madman would kill off. After Elop changed the strategy, Nokia's total handset business collapsed. Nokia's smartphone business collapsed. Nokia average prices fell. Nokia revenues collapsed. Nokia profits instantly vanished, and the smartphone unit - which had NEVER reported a loss up to that time, went into permanent losses and has never reported even one quarter of a profit since. Nokia lost literally 9 out of ever 10 customers it had just had. Its market share collapsed in literally world-record speed. Even after that, a third of all Lumia smartphones shipped from Nokia under the new Windows operating system had never been activated.

On February 9 I also wrote a second blog where I explained why Nokia was in a different race than Apple and must be measured by a different metric. Nokia's rivals were Samsung, Motorola, SonyEricsson, LG, Huawei etc, not the tiny smartphone-specialists like HTC, Blackberry and Apple. What Nokia HAD to achieve was a TRANSITION from its MASSIVE dumbphone business to the new smartphone business. Nokia was not behind. Nokia invented the smartphone. Nokia also did consumer-oriented smartphone before Apple, Nokia did an app store before Apple, Nokia did 3G before Apple, Nokia did large screens before Apple, Nokia did NFC and mobile payments before Apple. In every way Nokia was AHEAD of Apple and Nokia was growing more in smartphones than Apple and while nobody is as profitable as Apple (in ANY industry) Nokia was second-most-profitable handset maker. The race was not against Apple. The race was against SAMSUNG. Both Sammy and Nokia had a HUGE dumbphone client base (like Motorola, LG etc) who needed to be MIGRATED to smartphones. THAT was the race. Who could do that - successfully - and - profitably. HERE is where the REAL test of Nokia management was felt. I wrote clearly to explain what was at stake:

The true measure of "is Nokia succeeding or not", is only one measure. Can Nokia achieve a better market share in smartphones than in dumbphones. If so, that means Nokia is successfully migrating customers from dumbphones to smartphones. When you are the huge dominant player in your industry, this is the only thing that matters (assuming, obviously, that you do this profitably). The only way Nokia will be remembered at the end of this decade, is either Nokia was able to hold onto its market leadership in the transition to smartphones or else, that Nokia lost its lead in that transition. Like Motorola lost its lead (to Nokia) in the previous transition in phones, from analog 1G phones to digital 2G phones.

If it occurs, that Nokia's market share in smartphones is worse than in dumbphones, that means, that Nokia is actively losing customers when it migrates from dumbphones to smartphones. If that happens, then it is a true sign that Nokia is in trouble. What is this metric reporting? It is reporting again for Q4, like every single quarter of every single year since the first smarphone, that once again, Nokia's market share in smartphones is better than in dumbphones (and every single quarter, Nokia's handset unit has been profitable while managing this transition).

This is the ultimate metric, and as long as Nokia manages this ultimate trick, it is succeeding. It is irrelevant what you or I may think of Nokia's latest phone, or its user interface, or its app store selection or its operating system or its loyalty or customer satisfaction or whatever you want. If Nokia is able to gain market share, as it migrates from lower-cost dumbphones to higher cost smartphones - then that is the ultimate proof, that Nokia is executing a successful smartphone strategy, and it would be madness to change it.

I do not mean that Nokia is perfect. I do not mean that Nokia hasn't made big errors. I do not mean that Symbian is perfect or Ovi. I do not mean that Nokia's phones are perfect. Nokia has made many errors. But those are not in its Symbian strategy, and its migration to MeeGo via Qt, and they are not in the strategy with Ovi. Nokia's problems are elsewhere. To change the operating system now, would mess with a successful formula, would cause crisis inside Nokia and far more with Nokia partners and developers, and would serve to kill the best strategy of any legacy dumbphone maker migrating to smartphones. Yes, Nokia can do better and yes, Nokia has to do better, but changing to Android or Windows Phone 7 now, would be a catastrophic failure in strategy.

So yes. I wrote just before Elop announced his shift in his strategy to Windows, that 'to change the operating system now, would cause a crisis inside Nokia, and would kill the best strategy. Changing to Windows would be a catastrophic failure in strategy'. Obviously it also turned out to be so (you're welcome). And haha, sell your shares in Telstra. The idiot new CEO of Telstra has just hired this same moron Stephen Elop as his new strategy guy!! (its true).


Up to January 2011, we saw a fake Stephen Elop pretending to be a normal sensible rational CEO. He was just biding his time and preparing for Doomsday. Then he released his memo and then, came the fateful day of Nokia's suicide announcement:



FEBRUARY 11, 2011 - WINDOWS STRATEGY ANNOUNCED - NOKIA COMMITS SUICIDE

While the Burning Platforms memo was the worst management memo ever (it caused what is known in MBA schools as a 'Ratner Effect' so idiotic management communciation, that it will destroy the total company), it was not Elop's worst strategy mistake. That was the Windows choice. It came days later. This mimicks the most famous tech industry corporate suicide (called the 'Osborne Effect' by the way Osborne computer company died, and another management blunder never tried since until our Elop). So what did I think of Windows and Microsoft partnership announced by Elop on 11 February 2011? I wrote "I am certain this move by Nokia will be seen as one of the classic biggest blunders in technology history."  (You're welcome).

Many idiots applauded this partnership. Many tech companies promised the partnership would build into a wonderful flower, getting 25% market share, to be bigger than Apple's iPhone. I said no. Its the end of Nokia. I wrote literally on that day "this is the beginning of the end" for Nokia. That day. Beginning of the end. It was when the suicide started. The patient had drunk the poison and it was now only a matter of time before Nokia would be sold. Who else said that on February 11, 2011? Nobody (you're welcome).

In that blog, on Feb 11, 2011, when Samsung was ranked 4th largest smartphone maker in the world and everybody was so excited about Apple's iPhone and were talking of Blackberry and HTC and SonyEricsson and Palm and Blackberry - I said - on that day - Samsung now becomes the biggest handset maker. I said on the day Nokia announced its Windows partnership, that Samsung will now take the global crown from Nokia. NOBODY ELSE said this in February 2011. I said it on February 11, 2011. It occurred in the fourth quarter of the year and not once since then has Samsung been overtaken. I told you on this blog, before anyone else, who will become the new biggest handset maker. When Nokia falls, who will take its place. And that it was not number 2 (Blackberry) or number 3 (Apple iPhone). It was tiny Samsung only one QUARTER the size of Nokia in smartphones, that now would rapidly grow to become biggest by year-end. (You're welcome).

This blog has never said it possible for Motorola to pass Nokia (some said it would) or HTC or Apple or Blackberry. I had never BEFORE said that Sammy was going to get past Nokia. Not even in my bloodbath preview blog when I predicted Samsung would get into the Top 3. I have never SINCE said anyone threatens Samsung while others have thrown utterly silly ideas that Apple iPhone or hahahahaha Xiaomi might dethrone Samsung. But WHEN that only one change-over of the top happened, I told you who it is, when it will happen (and who it is not). I was totally correct and in February 2011, nobody else said this anywhere. Samsung-who?

In that same blog I predicted that Windows smartphone OS will end up between 3% and 5% at the end of the year. The just-ended year had Microsoft with 5% market share (down from its peak of 12%). EVERY other analyst predicted growth for Microsoft Windows. I said decline or at best, flat market share. Where did Windows end in 2011? At 3% (you’re welcome).

I also predicted that Windows OS will not be able to support early innovations in 2011 or 2012 like Augmented Reality (true); that Windows OS will not support low-cost smartphones where the growth was and where most Nokia customers were (true). The damage to Nokia sales will be worse than for example similar problems in the PC market because the handset replacement cycle is so fast (true) and that the retail channel will not want to sell obsolete Nokia phones (true). I said many app developers will not come to the Windows OS because its too small (true).

In 2010 Nokia’s Ovi app store had become the world’s second-most used app store behind only Apple’s iOS (a status currently held by Android). It has the most developers in 2010, yes more than Apple (but Symbian was a slow difficult complex OS to develop for, so it took much more effort to create apps for Symbian than iOS). Nokia had developer tools called Qt. Qt could be used to develop apps not just for Nokia’s Symbian but also Nokia’s MeeGo and older Maemo; Nokia’s Qt could be used to develop apps for Blackberry and Android and soon also iOS. The only OS for which Qt could not be used - was this new tiny Windows platform. How stupid is that for Nokia to select?

The Ovi store and Symbian apps were built with the carrier community, offered dozens of languages and alphabet support; Ovi store had carrier billing (you don’t need a credit card, just click to buy and it will be deducted from your phone bill). Most customers in the Emerging World do not have credit cards. Windows Phone 7 did not even support the Chinese language when Lumia launched. And Nokia had a migration path, to take consumers and apps from Symbian to MeeGo. That migration path did not exist into Windows. In fact, Microsoft were being such dicks about migration, they refused to let current users of the older Microsoft Windows Mobile apps migrate to the newer Microsoft Windows Phone 7 ecosystem. That is how anti-apps and anti-consumers and anti-developers the new system was. As I wrote on this blog:

 

The ecosystem goes from a potential 'Win-win-win' situation to the ultimate 'lose-lose-lose-lose-lose' and let me add 'lose-lose-lose' system. Less handsets, with increasingly less high-end capabilities, used on ever less-capable networks and lower speed connections, by ever less-affluent (and even illiterate) users, accessing ever more old and obsolete apps, of ever less updated and modern apps, generating ever less revenues, offering ever less advertising and virtul property alternate revenue streams.. This is the most toxic 'ecosystem' conceivable. Its like a dead sea, where the salt content just keeps growing until nothing can live in it. Not an eco-system, a toxi-system.

 

I further forecasted that the BUSINESS for Nokia as a company will be damaged so badly, that by Q4 of 2011, Nokia will have lost one quarter of its total size (ie revenues). I said this in February. What was the reality? Nokia revenues Q4 2010 vs Q4 2011 were not quite that bad (the networking business was growing) and actually down only 21%. The handset division (including smart and dumbphones) was down far more than what I forecasted - they crashed 30% in 12 months. (you're welcome)

I forecasted the smartphone unit would be plunged into loss-making (true, it never recoveted) and that the overall Nokia corporation would start to report losses (also happened). This after Nokia had weathered the global economic crisis with flying colors, not one quarter of a loss in its handset business, and at the end of 2010, had seen strong growing healthy and increasingly-profitable business. Nobody else said in February 2011, that Nokia is about to go to deep losses. I did. (You’re welcome).

Now of the upcoming Nokia branded Windows OS smartphones (eventually branded Lumia) - I said on that same day 15 February, that Nokia’s first proper, self-designed and self-manufactured flagship on the new Windows OS won’t come until alter in 2012 (true). I said the first two phones that may come out right at the end of the year won’t be proper Nokias they would be clones made in China at some sweatshop who have nothing to do with Nokia, just having the Nokia brand slapped onto some generic Windows slab smartphone (as it happened). And these phones would suffer greatly from all sorts of production problems (exactly as it happened). I warned that the early Windows smartphones sold by Nokia will bring so much disappointment, that Nokia will run losses in its smartphone unit through the SUMMER of 2012 !!!! (I said this in Feb 2011). I gave all the reasons why (and it all became true). At that point I then saw some light at the end of the tunnel, and I wrote that from the summer of 2012, “Then Nokisoft and Microkia will be back into the game, and seriously can start to fight for the ecosystem battle - using the awesome execution and speed of the tortoise that is Nokia, combined with the astonishing execution and speed of the snail that is Microsoft.”

I finished my prognostication for Nokia on 15 February, 2011, four days after the Microsoft Windows strategy was announced, with this view to the next 22 months. Aiming for end of 2012, I wrote “by the end of 2012, hopefully Nokia is back to profitability. If that company still exists at that time.” How prophetic and sad. Only 9 months more and Nokia would sell its handset business to Microsoft. ‘If that company still exists at that time.’ I did not believe it when I was typing those words but I knew I had to say it. I saw it was a distinct possibility Nokia the handset maker might not survive this massive crisis caused by its delusional psycopath CEO.

FEBRUARY 16, 2015 - THE WINDFALL WILL GO TO SAMSUNG

So five days from when then-CEO Stephen Elop forced Nokia to drink his poison that would kill the company’s phone business, and as most of the world was still singing happy songs about Microsoft and Nokia the giants about to win over the tech world, I wrote my competitor analysis part of the story. The winner would not be Apple’s iPhone. I said very clearly that Apple would pick up random little bits but the winner was going to be Nokia’s truest nearest rival, Samsung. Look at the market shares of the three brands just before this disaster and up to year 2013 when Nokia was down to 3%. This is how it went:

SMARTPHONE MARKET SHARES NOKIA, APPLE, SAMSUNG FROM 2010 TO 2013

Brand . . . . . Share 2010 . . . Share 2013
Nokia . . . . . 35% . . . . . . . . . 3%
Apple . . . . . 16% . . . . . . . . 16%
Samsung . . .  8% . . . . . . . . 32%
Sources: Company data, industry data, TomiAhonen Consulting 26 May 2016
This table may be freely shared

So with HINDSIGHT now in 2016 it is easy to see, no, Apple was not touched by Nokia’s collapse. There was almost no overlap between Apple’s mostly North American iPhone smartphone user base, and Nokia’s mostly rest-of-world full-portfolio smartphone user base. But Samsung was offering an almost identical smartphone portofolio in all of Nokia’s markets and was able to catch most of what Nokia abandoned when it shifted to Windows. Apple was totally flat, from 16% to 16% while the world’s largest smartphone manufacturer collapsed. In three years, Apple was unable to pick up even one point of market share. But Samsung? They were ‘Korean’ about it. They were fast and nimble, moved really rapidly to pick up as much as possible. While they didn’t get it all, they took about 8 of the 10 Nokia customers that were abandoned and catapulted from fourth ranking smartphone maker of 2010 to top ranked by the end of 2011 and went from 8% market share in 2010 to 32% market share by 2013. An amazing and indeed record-setting rise. Did anyone tell you this? Five days after Nokia announced its mad Microsoftian misadventure, I was on this blog, on 16 February 2011, giving my forecast of how the Nokia customer give-away would go. I said

This is THE year of Samsung. You get far more than your fair share of the above Nokia windfall, and you know you can do it. What you need now is sales staff and sales support. Hire every body you can find to sell sell sell. Make Samsung the brand everybody sees everywhere, in the Nokia footprint. Steal that candy, it is yours. Move faster than the rivals, 'balli-balli' and push your factories.

You are best poised to eat the low-cost slice of Nokia's windfall. But do it the right way - keep pushing the Galaxy series, make Samsung the new aspirational phone, so all those who can't afford a Galaxy this year, will buy the bada Wave phones hoping to upgrade to a cool Galaxy next time.

I said also that Blackberry, Apple and HTC would get good wins out of Nokia’s fall. Apple did see a temporary rise in its share but then it subsided as Samsung got fully into gear. Blackberry took its eyes off the ball of smartphones and had its own management brain-fart just months after Nokia’s collapse with their obsession of going for the tablet wars (idiots) which ruined their chances. But before anyone had MEASURED any Nokia fall yet (that was two months away) from the next quarterly results that had the first huge warning bells, at this point NOBODY said Samsung would be the big winner out of the Nokia fall. Nobody.

 

Samsung is definitely the new gorilla of smartphones, and while its still a baby gorilla this year, just watch them play with this market and take it with ease. No matter what the others do, this will be Samsung's year. They were already the fastest-growing maker, with by far the biggest footprint on the dumbpohnes side to add to that, and now, are the maker most perfectly poised to capitalize on the Nokia windfall. So Samsung should be able to capture the biggest slice of Nokia's 50 million smartphone customer give-away. And bearing in mind, that Samsung had already targeted this year for enormous growth - they had their sales and manufacturing all set up for massive growth - they are also best positioned to take more than their fair share.

I said Samsung was safe to take 17% of the market for the year and could do better. Samsung ended the year with 20%. NOBODY else said in March of 2011, that Samsung would become the largest smartphone maker and nobody said they’d be in that kind of level of smartphone sales. (You’re welcome).

Of Nokia, I wrote year 2011 was the year Nokia had to ‘wait for the cavalry to arrive’ as it now was selling doomed Symbian smartphones and had to await the first Windows Phone based smartphones. I wrote that Motorola the former giant was not going to be able to capitalize on Nokia’s fall because recently Moto had retreated from a global footprint and now was mostly selling in markets where Nokia had nothing to give, especially North America (Motorola went from 5% to 4% in that year 2011). I said HTC will have a good year and capture market share. HTC went from 8% to 9%. The one brand I got wrong was Blackberry but that was its management’s own fault for not capitalizing on the moment their largest rival globally in smartphones decided to collapse, instead of focusing on stealing Nokia’s market, Blackberry inexplicably delayed its new phones and went for the tablet market instead. So Blackberry stumbled right after Nokia in the same year. But SonyEricsson, I said they’d have a pick-up also as Nokia fell, and that happened too. SonyEricsson went from 3% in 2010 to 5% in 2011.

There is no better analysis of how Nokia customers will be distrbuted than my blog from March 2011, even as that blog warned of Samsung’s rapid rise, it still didn’t get the full scale of exactly how strongly Sammy would do. Yes, I was wrong, didn’t get Samsung’s scale, and missed the call on Blackberry - but both of those were further monitored on the blog in coming months; and nobody - litereally nobody else - made a forecast on even those two brands, half as good as mine. And the relevant point. I said Nokia annual market share 2011 would be 13% to 16% (when it was 35% the year before) and Nokia ended at 15.9%. Nobody else said Nokia would fall this badly this year. It would keep getting worse as the year progressed and as I previously already forecasted, by Q4 Nokia would be down to 12% market share (was 12.4%). I concluded my Nokia part of the Electric Boogaloo preview writing: “All of 2011 will be a bloodletting for Nokia and the full-year numbers will be artificially inflated counting long-lost customers from early in the year. The thing to watch for Nokia is when the first Microsoft phones will ship.” And we would soon see, those first Lumia smartphones turned out to be even worse than we could imagine, only making Nokia’s fall even more doomed.

APRIL 25, 2011 - NOKIA COLLAPSE IS IN WORLD RECORD TERRITORY

We got the first quarterly results of Nokia after the suicide announcement in February. The April 25 financial report was ringing all sorts of alarm bells. The networking business had taken a hit and was now unprofitable. The dumbphones business was seeing sales erosion. And the smartphone business was going over a cliff, into free-fall. Nokia was already falling faster than Motorola in its worst times of collapse. This is how I wrote about Nokia smartphone business and how bad it was already now in April of 2011:

Even when Motorola did its massive market share harakiri suicide from the peak of the Razr hysteria, Moto only lost 6% to 8% of its customer base per quarter. That was our world record for destroying your own customer base in mobile phone handsets, Motorola devastated 3 out of every 4 existing customers in a four year period between 2006 and 2010. Nokia is not doing twice as bad as Motorola in its worst quarters, Nokia is right now doing about 4 times as badly, as Motorola in its darkest hours.

 

So I warned you when only HALF of one quarter of Nokia results were out, following the suicide announcement of February 2011, that this was now a world record in tech collapses. That Nokia rate of fall was four times as bad as Motorola at its worst. I warned in the blog that Nokia was going to be inevitably reporting a loss in the smartphone unit in the next quarter and the whole company was going to be unprofitable also this year (both came true). (You’re welcome)

MAY 13, 2015 - THE SUBLIME AND RIDICULOUS PYRAMID FANTASIES

Many analyst houses made incredibly rosy forecasts and predictions for Windows Phone OS with Nokia partnership. I did not take them on, because they seemed to be made in good faith, based at least on solid base numbers in reality up to the current moment (ie solid numbers for year 2010 for example) and then with REASONABLE assumptions into the future. One analyst house is the silliest and most immature unprofessional idiots who should never sell another report again. Their idiot forecaster/analyst Stella Bokum wrote a report for Pyramid Research which promised in 2011, that Windows would get 11% market share in smartphones in 2011 (reality was 3%) and that would rocket up to 35% by 2015 (reality in 2015 was 2%). What made idiot Stella Bokum and criminal liers Pyramid Research total con artists was that they BASED their forecast on FALSE numbers out of 2010. So I told you so on this blog, on May 13, 2011, when I titled my blog that day as “Pyramid Research are Unprofessional and Incompetent - do not buy any of their work in mobile! - this after mindless Microsoft Phone 7 forecast to 2015”

I was correct. Pyramid were idiots to publish that report. Many have speculated - including in the comments to my blog - that this so-called report was actually purchased by the dirty tricks squad of Microsoft (or Elop’s new similar professional liars club at Nokia) and it was just paid propaganda. Pyramid should go out of business for such shady work and still to this day we await their ‘mea culpa’ on that ridiculous forecast. They should have rescinded it already in January 2012, when their IDIOTIC projection FOR THAT YEAR 2011 was so much wrong, they said 11% when reality was 3% for Windows Phone OS. They are idiots and should go bankrupt, stop feeding lies to this industry.

JUNE 6, 2011 - LUMIA WILL BE DOOMED BECAUSE OF FAULTY DESIGN; ELOP MUST BE FIRED

Nokia was losing every battle but waiting for the cavalry to arrive at the last moment for Christmas, to rescue what would be left of Nokia. Everything Nokia was and had, was now literally hanging on one thread, that the first Lumia smartphones would be a big hit and would rescue Nokia from death. Then on 6 June I wrote that the first Lumia smartphones on Windows Phone would not be a market success, even though we had not yet seen any prototypes or any specs. I wrote it based on what Stephen Elop told us in a TV interview. Based on his replies, I wrote on the blog, in not just bold, but in red letters:

 

Please stop and think. EVERY improvement to the iconic original iPhone. EVERY improvement that is so significant, that ‘minimalist’ perfectionist Apple’s Steve Jobs has approved to be changed on the iPhone since, every single change, was already discovered, tested, deployed – and commercially launched in successful Nokia phone products – before the first iPhone of 2007.

This is not trial-and error design. This is not hit-and-miss experimentation. Come on, it’s an unbeaten winning streak! Nokia’s designers have correctly anticipated EVERY one of the very selective improvements that Apple has accepted to its iPhone. And LAUNCHED THEM BEFORE APPLE! Come on? What am I missing here? Nobody can accuse the iPhone of being a ‘Swiss Army Knife’ of feature overload. But when it comes to the must-have most important features that Apple approves to its hardware – or software – Nokia and Symbian have had EVERY one of them prior to the 2007 model (except for the original touch screen multi-touch, which obviously was not Apple’s invention and Nokia has since done).

From that evidence, for Elop to say, Apple has leapfrogged Nokia by two years, is true delusion. He has been presented with all the evidence and he refuses to accept it. He instead substitutes a fantasy he has concocted.

And please, don’t say that is ancient history. Today, Nokia has not stopped innovating. It is continuing to launch tons and tons of features, abilities and services that Apple does not yet offer. Like HD TV output, like full USB connectivity including thumb drivers and USB sticks plugged directly to the E7, etc.

 

Based on what Elop just said to CNBC on live TV, I concluded that Elop had benched the best smartphone design team in history - the team with an unbeaten win streak, which had produced smartphones so popular, Nokia was still, even after its worst-ever quarter, the world’s largest smartphone maker. And instead, Elop went to some American designers attempting to create an iPhon-a-clone. I wrote:

So now, we go to the CNBC interview. Read what Elop said in the end of the paragraph: “Our very first Windows Phone products are being designed and put together here, in California, with the US market very much in mind.” This is the way Elop creates the single most important phone for Nokia’s survival. Remember, the US market is only 7% of all mobile phone subscribers. If Nokia wins in America but loses the rest of the world, Nokia goes bankrupt. The USA is too small. Nokia cannot design a USA phone and hope to win the world. Nokia’s main flagship first Microsoft based smartphone has to be a hit in Australia, in Singapore, in Britain, in Spain, in Brazil, in China, in Russia, in Italy, in Mexico, in India, in Egypt, in Poland, in Indonesia, etc. And now, they do need a hit, a world-winner phone. Where is that to be designed? Not where Nokia has over a dozen years of design excellence and market leadership in premium phone design – Finland – no, in California, where there is mainly a legacy of some of the worlds’ most rapidly failed phone designs. Hmmm…. This does not sound good.

 

And what did I say in that blog. June 2011. I said we now have seen signs that Elop will be fired as CEO. Two years later he was fired. I was literally the first in the world to say it, that he was not fit to run Nokia. He had not been in office even for 12 months at that time and Nokia had not yet reported one quarterly loss. I said he has to go. Here is how I forecasted the fate of the new (not-yet-named) Lumia smartphones and warned of Elop’s fate:

 

But for the CEO of Nokia to say, Nokia has fallen behind the USA, it is patently false. For Nokia’s CEO to say Nokia is two years behind Apple. That is patently false. The opposite is true. If Nokia CEO says the world leadership is in Japan and Nokia should adopt more Japanese ideas, that would be in line with the truth. But to suggest, that the world’s most successful smartphone maker should abandon its rich heritage and knowhow, built from Finland and Asia, and go to laggard-market USA, and learn from the inventors of the Kin and Nexus One and Palm and Motorola – that is a recipe for failure. I am afraid an Apple envy project would be a perpetual drain on resources and result in Nokia’s version of Microsoft’ Zune, at best. Rival the Microsoft Kin disaster at worst.

Microsoft’s Zune lasted a few years before it was shut down. Microsoft’s Kin lasted 6 weeks before it was shut down. I predicted these (not-yet-named) Lumia smartphones were headed to the same fate. The Lumia unit lasted barely more than two years under Microsoft control. Quite a radical forecasts from 2011, eh? Three years before Microsoft would even take over the handset business from Nokia. I looked at Elop’s statements and said, this meant the same end as Zune and Kin. This project could not emerge successful out of the Windows Phone adventure. I said so in June 2011. And then yes, I said Elop will not survive.

 

We know now, that Stephen Elop has expressed the ‘USA leadership’ myth for many months and continues to live by it. That is unfortunate. We now learned that Nokia’s CEO has taken his delusion, and started to make strategic decisions based on that fantasy. That is a dangerous sign. I think now we have started to count the days that Stephen Elop can remain in his job as Nokia’s CEO. When the CEO of one of the world’s largest corporations deliberately suspends reality and makes decisions on his own version of wishful thinking, that is the sign of the end is coming.

And Elop was fired two years after I wrote that blog. He was delusional and a madman who went against his instructions from the Board, who kept secrets from the Board who was a rogue arsonist setting profitable Nokia businesses on fire and embarking on silly adventures that destroyed healthy parts of Nokia. He would become in the next two years, literally the worst CEO in corporate history of any company of any industry of all time. The worst CEO ever. Nobody else said in June 2011, that this guy is so bad, Nokia should fire him. I did.

JUNE 6, 2011 - APPLE HAS PASSED NOKIA TO TAKE OVER BRIEFLY AS BIGGEST SMARTPHONE MAKER

Then on June 6, 2011, I did my usual ‘deep analysis’ of the Nokia numbers including some deep math on the regional sales splits and totals for average sales prices and Nokia handset portfolio (back then that was kind of fun, nobody today reports their total handset business as thoroughly as Nokia used to; and it gave incredible insights into regional markets too because across all phones, Nokia sold about 4 in 10 handsets worldwide). I discovered the actual significance of the China sales level for Nokia Q1 results that had just been reported a bit over a month ago. The reality of Nokia smartphone collapse was worse than thought, and it meant that as of ‘now’ when I was reporting it, Q2 of 2011, Apple was just then - in JUNE - passing Nokia to take over as the largest smartphone maker in the world (temporarily, Samsung would do that for the full year of course). Nokia’s collapse was happening EVEN FASTER than I had predicted, and I was the most pessimistic of any analyst in tech. Q2 results for the industry were not even due for another month, in July. I was literally the first to report that hey, lets celebrate, Apple’s iPhone has captured the largest smartphone manufacturer crown from Nokia. I reported that before either Apple or Nokia would give their results - based on the deep analysis of where the Nokia collapse WAS seen in Q1 and how much of it was hidden by China. I told you here, on this blog, literally first in the world - that Apple was now the largest smartphone maker in the world, for Q2 of 2011, when Q2 itself was not even yet completed. It was eventually confirmed on July 29, when Nokia, Apple and Samsung Q2 data were all out, that Apple iPhone had indeed become the bestselling smartphone in Q2 around the world. But you heard it first here on this blog nearly two months before that bombshell hit the world news. (You’re welcome).

JUNE 6, 2011 - CALLED APPLE BIGGEST SMARTPHONE MAKER

I didn’t just ‘hide’ that discovery inside a long blog article. I made it a whole separate blog entry. I was literally the first to call it, Apple had overtaken Nokia in the smartphone wars and (temporarily) became the largest smartphone maker. I called it on 6 June 2011. The numbers didn’t come out until July to confirm that fact. (You’re welcome).

JUNE 7, 2011 - WINDOWS SMARTPHONE OS ITSELF IS NOW DEAD - DUE TO SKYPE

On June 7, 2011, half a YEAR before the first Lumia smartphones would start to ship, I pronounced the Windows OS for smartphones to be dead. It had just died but nobody else saw it yet. Eventually all major analysts who specialize in mobile (not generalist tech or PC or internet pundits or wall street wankers) have come to agree. It was the Skype purchase which caused the retail boycott that hit Microsoft Windows smartphone as an OS and killed it. When I first wrote about it, many were laughing at it and saying consumers love Skype. Yeah, consumers indeed do love Skype, but consumers are not the retail channel. Nokia was totally dependent on its retail channel - its precious carrier relationships - to win in the handset wars. When the retail boycott started, Nokia started to die. And when the carriers noticed, what, Microsoft has just bought Skype - the one entity that the carriers hate the most - the only one entity in the world, that existed year 2011, that was an EXISTENTIAL threat to the carrier community - Skype - that meant an instant - parallel - boycott against all Windows based smartphones. Note - Nokia had not even LAUNCHED its first Windows based smartphones yet (to be called Lumia). Nokia did not even INSTALL Skype onto its first Lumia smartphones when they came. And Nokia’s then-current Symbian smartphones did not come with Skype pre-installed at this time. There was the first sales boycott against Nokia brand already - due to the Burning Platforms memo and the Osborning and Ratnering of Nokia’s handsets by CEO Stephen Elop. But now, for the upcoming replacement OS platform that Nokia had not yet launched - Windows - that was ‘dead on arrival’. In June the carrier community globally set Microsoft Windows smartphones on a global sales boycott that lasts to this day.

All other major handset brands ALL OF THEM got the message immediately. SonyEricsson, Motorola, Dell, LG and with a little delay, also HTC and Samsung - all quit making Windows smartphones - because of the sales boycott by the carriers. Not because their BRAND had lost sales. They shifted to Android. All of them quit Windows almost immediately after this sales boycott against Windows started in June 2011. By Spring of 2012, Nokia CEO Stephen Elop ADMITTED there was a global sales boycott against all Windows smartphones, when he was asked about it at the Nokia Shareholder meeting.

Up to May of 2011 there was a theoretical chance that Microsoft and Windows might succeed in smartphones. Once the carriers put Windows into a sales boycott, that ended. No smartphone maker from July 2011 onwards has been able to sell one Windows smartphone at a profit. Not one. The sales collapsed and Nokia at its PEAK was able to push 3.5% of the world’s smartphones to run on Windows. Of those - one in three which did ship out of a Nokia factory, was never actually activated. So the real maximum success Windows had after massive Nokia and massive Microsoft pushed it in every way, was an effective sales success of 2%. That was because there is such strong love of Nokia brand. Once Nokia left the deal and Microsoft bought the business and extinguished the Nokia brand, well, now the share is 0.7% of smartphones and Microsoft is ending the Lumia business. I was the man who first reported this business had DIED. It died in the summer of 2011. I wrote that Windows smartphones were dead, on 7 June (You’re welcome). I told you the REASON why, which was argued for nearly a year onward until Nokia’s CEO himself admitted, yes there is a sales boycott because of Skype (You’re welcome). As I wrote, the carriers will not drink that poison. This is how I wrote on 7 June, 2011:

 

And if there is something carriers hate more than Apple’s iPhone App Store or virtual SIM cards or dual SIM cards, or ‘American’ designs for phones, the thing carriers/operators hate the most, is Skype. They hate Skype with a vengeance. Why? Because the carriers witnessed how easily Skype destroyed their fixed-landline telecoms cousins, and where Skype might not take all traffic, it devastated the revenues and profits of that robust industry. All existing Nokia senior managers know, that to offer Skype for carriers is tantamount to offering them a drink labeled as poison. And what is our clever little darling Stephen Elop now promising the world? That Microsoft’s new WP7 smartphones will include Skype. His Muppet Master, Steve Ballmer is proudly crowing about how Microsoft will use Skype to build its eco-system.

Again, please don't misunderstand me. You and I may want to have Skype on our phones. It may come some day. But trust me, the carriers will not be letting the biggest phone maker flood their market with Skype phones replacing the carriers' cash cow - voice calls. Won't happen. The players who will eventually bring Skype in, will be the smallest of the disruptors, not unlike how Blackberry sneaked beneath the radar to bring Blackberry instant messenger to challenge SMS today. The carrier will not allow Nokia and Microsoft to do this. Not with the brand they hate the most, Skype. Its like building an eco-system for plants, and bringing it out to space, and setting it out of the spaceship. Into the vacuum where there is no life. Steve Ballmer has killed Microsoft WP7’s chances as a smartphone OS, with this Skype malarkey.

If you want the ultimate proof that your phone will not ever be supported by carriers, put on unrestricted Skype on it. The Grand Genius Stephen Elop is jumping from one CEO failure to yet another, and compounding the problem every time. So first he shoots himself in the foot. Did that hurt? Yes? Sorry. Let me get a bigger gun and shoot again. Pain? Sure. Thats good. Now let me get a bazooka to really shoot myself in the foot.

 

The MARKET for Nokia was now dead. This is June of 2011. The market for Nokia is dead. Not dead from outside sourcs. The market was killed by Nokia’s CEO. This is how I wrote:

 

Stephen Elop has caused the cardiac arrest which now grips Nokia. The distributors have put Nokia smartphones on a boycott. Stephen Elop has not learned from that. He has not reacted with haste, attempting to save Nokia. He is now thinking like a Microsoft Muppet, what is best for Microsoft. In that process, Stephen Elop has seen a patient whose heart has stopped, and rather than try to revive it, he has now started to strangle that dying patient. Stephen Elop is killing Nokia. He is angering his distributor chain with every move he makes.

He is incompetent to run a company in a period of change, if he is unable to change to changing conditions. He is unfit to run Nokia whose business depends totally on carrier support. His strategy has seen wholesale rejection by the channel, they now have Nokia in boycott. Not just Nokia smartphones, Nokia dumbphones are struggling. What little Nokia can sell, is sold with massive discounts. I know a dead parrot when I see one, and I am looking at one right now. That parrot is definitely deceased. It has passed on. This parrot is no more. He has ceased to be. Its gone to meet its maker. He's a stiff! Bereft of life, it rests in peace. .. this is an ex-parrot. (substitute 'career as CEO' for Parrot if you consider Elop's chances now).

 

JUNE 9, 2011 - NOKIA WILL BE SPLIT AND SOLD

Then still, before we had the first disaster-quarterly result of Nokia corporate losses under Elop, we are more than a month before that date - I proclaimed that Nokia will not survive intact. It will be split and parts will be sold. I told you this on 9 June 2011. The decision was announced two years later when two thirds of Nokia’s business was sold to Microsoft. (You’re welcome).

JUNE 13, 2011 - NOKIA WILL NOT MATCH SYMBIAN LEVEL WITH WINDOWS

Then on June 13, I did an overall Smartphone Bloodbath Year 2: Electric Boogaloo review and update, and in it I wrote for the first time that Nokia’s Windows smartphones will not even find even sales level of Symbian (a promise made by Elop to Nokia investors when he introduced the Windows strategy - all industry analyst numbers were roughly based on that promise, that in time a 1-to-1 transition would happen from Symbian to Windows. Some analysts felt Nokia and Microsoft might do a bit better or a bit worse but that was the assumption - and as the market was strongly growing, even if Nokia matched 1-to-1 transition - that would mean a big loss in market share). Suddenly we had so much of the new picture known, that in June I could foretell that no, there will be no 1-to-1 transition. Nokia will not match with Windows (aka Lumia) what it had just been able to do with ‘obsolete’ Symbian. This is how I wrote:

 

This is your Arabic Spring, Stephen Elop, the channel has spoken and like Europe and Nato came to support the Libyan revolution, the Shareholders of Nokia have now joined the chorus by slashing the Nokia share price. Like the 60 Libyan army generals who fled to Italy, your best and brightest are already deserting your ship. You do have to go, Elop, like Libya's Muammar Ghaddafi. And what is worst of all, after Elop torpedoed Nokia's Symbian, and assassinated the evolution path to MeeGo, now Nokia is set on a path to Microsoft Windows Phone 7, where another reseller boycott has been started.. The Microsoft WP7 option is actually even worse for Nokia than sticking with Symbian!

 

JULY 5, 2011 - ELOP KILLS MEEGO AND N9

Then a bit before Nokia’s quarterly results were due, Nokia released its long-delayed new OS and awesome latest flagship, not running Windows, but running on Nokia’s proprietary, brand new OS, developed together with Intel, called MeeGo. It was Linux based, open-source OS with several dozen manufacturers committed to the platform - and several devices already shipping mostly tablets and netbooks; the first MeeGo device released to the market was a Fujitsu netbook sold in Singapore already in February. MeeGo was in some ways a cousin to Android and many Android apps could run natively on MeeGo. The most exciting thing about MeeGo was that its early reviews suggested it was as good as - or even better - than Apple’s iOS powering the iPhone. No other OS was rated that good, not any release of Palm or Windows or Android or bada or Blackberry OS. And Elop had cancelled the first Nokia MeeGo handset already (because he is an idiot) so this was the second one Nokia had designed, but finally shown to the world. The world fell in love with the N9, it was the most praised and highest-rated Nokia handset in Nokia history. Its most amazing killer phone, ever. A truly potential iPhone-killer. A phone that would go onto win all sorts of awards including the Oscars of tech design the D&AD award in London, beating the brand new Apple iPad 2. Who beats Apple at design? That is what was at stake with the N9 and MeeGo. Nokia was sitting on its biggest hit ever. This is what I wrote about how Elop handled his success:

So, Nokia had its biggest buzz and positive press reaction to the MeeGo powered N9 smartphone that Nokia had seen for years. It was a massive positive story for Nokia. Even the stock market loved the story and Nokia's share price got a jump. MeeGo was slick and sexy, the N9 was a hot phone with excellent specs. Any CEO who loves his company would celebrate and cherish the moment and do his best to promote and prolong that success. But not Stephen Elop. No. What did he do. He immediately moved to quash any possible good will that the N9 and MeeGo were generating. He first 'revealed' the first look of a Microsoft Windows Phone 7 based phone - which looked to most analysts identical to the N9 except for one mysterious button. And he did it in a most clumsy way telling a packed audience "don't show these pictures" while at least two news outlets were videotaping his presentation. The stock market rewarded Stephen Elop's new Microsoft Phone 7 based Nokia phone preview with a share market decline. He stole all the thunder and bizarrely for a CEO, he actually stiffled a stock market rally. What is wrong with this guy Elop? Who does he work for? He certainly doesn't seem to be working for Nokia. 

If thats not enough to help kill Nokia N9 and MeeGo, Elop went in public to say that "even if the N9 and MeeGo were a success, there will be no more MeeGo devices". What? Even if this totally new Nokia product is a market success, the CEO will kill it. Thats a very special kind of love, isn't that. Its not euthanasia, which one might argue, Stephen Elop was doing for Symbian. (Euthanasia is a mercy killing of someone who is already dying). No, its pure murder what Elop is now committing to MeeGo.

And to be absolutely sure, that MeeGo has zero chance of even a 'fair fight' - Nokia has since kindly announced to us which markets will get MeeGo. The N9 will not be launched in.. the UK, Germany, France, Italy, Spain and the Netherlands (and several other major Nokia markets). Thats the 'big six' Western European markers where most of European smartphones are sold! Not a one of them gets to play with MeeGo, none of them get to buy the N9 ! This is Nokia's way of killing Me softly with Microsoft, killing Me softly, with Microsoft, killing Me softly, thats Elop! And by weird coincidence, have a guess what are the six European countries that will be the launch markets for the new Microsoft WP7 phones? Yes, the UK, Germany, France, ITaly, Spain and the Netherlands! Is Elop really this afraid of MeeGo? He has to sterilize Western Europe against MeeGo, keep it pure, so its not 'polluted' by the better OS that Nokia's own designers created, so that Europe would be willing to buy Microsoft's OS. Who is Elop working for? This is not in Nokia's interest, this is a CEO who is working for the best interests of a rival corporation! Elop is not looking after Nokia's best interests, he is looking after Microsoft's best interests.

 

I of course again called for Elop to be fired. But if you want to see how thoroughly Elop destroyed Nokia. If your company launched a new gadget seen as good as - or gosh better - than Apple, would you not be celebrating it everywhere and promising to sell it in every market and to give future editions of that device? What is wrong with Elop? He said even if the N9 was a huge hit, there will be no more MeeGo devices to follow after it. He was RATNERING the N9 and MeeGo. He was on a mission to destroy every single chance Nokia had of its handset business possibly surviving.

JULY 21, 2011 - ELOP MOST INCOMPETENT CEO EVER; WORLD RECORD COLLAPSE; MICROSOFT WILL BUY NOKIA

So the quarterly results came in on July 21 of 2011, and Nokia did report losses in its smartphone biz as I promised, and a massive fall in total sales. But since the first quarter results, Elop had been on a series of more self-destructive actions which guaranteed that the smartphone business would go DEEPER into the red and would remain unprofitable to the end of the year at least. Those added mistakes, voluntary errors committed by Elop, like the bad-mouthing of N9 and MeeGo, and the voluntary embracing of Skype to further anger the carrier community - those are the reason why I wrote, Elop is the most incompetent CEO ever. When Elop was removed from the post of CEO of Nokia in 2013, many management experts agreed, Elop is the worst CEO of all time. I told you so in July 21, 2011 (you’re welcome). And of how big was the disaster:

Lets understand how significant this is. This is not like the carnage that caused the death of Motorola (and the company to be split) or the destruction of Palm (that caused it to be sold to HP) or similar disasters in mobile telecoms. This is truly the world record for market share capitulation not just in mobile or tech; it is brand destruction world record - in any industry, ever. Toyota's damage with the brakes in its cars, BP's oil spill, British Airways worst quarters fighting with labor disputes; etc have not slashed market share by half in only five months. Nokia and CEO Stephen Elop will go down in history as the notorious and misguided names that destroyed the best-known brand on the planet. This is management stupidity in the scale of Coca Cola's 1985 launch of New Coke.

 

 

That was the ‘situation report’ of July 2011. What of the prognosis going forward. I said then that the future was so dire, Nokia with Microsoft could not ever get to double-digits. The Nokia Windows partnership would never recover to even half of what Nokia had when the Microsoft partnership was announced only five MONTHS prior. I said in summer of 2011, before the first Lumia phones were sold, that there was NO LIFE coming on Windows for Nokia. I wrote:

This Microsoft alliance sounded great to some analysts looking at it in February. By now that we know much more of it, and all facts say this is suicidal move by Nokia and is not sustainable and will be abandoned just like HTC did with Microsoft, and LG did, and Motorola did. And add on top of that misery, now we learn in late May/early June, that the carriers have revolted against Microsoft in a reseller boycott after Microsoft bought Skype - carriers hate Skype - and then add the point that Microsoft's other handset makers are now deserting the platform and shifting their production to ever more Android. The Microsoft strategy is utter folly by Nokia.

 

And yes, July of 2011, I was the first analyst to say, it will be Microsoft who will be buying Nokia’s handset business, simply because the other handset makers are abandoning Windows and Microsoft cannot have Nokia also going to Android, which it inevitably has to do. This is how I put it in July of 2011:

It is clear that the Microsoft option is certain death to Nokia. There is no chance for that to now rescue Nokia. Thus every penny spent on any Microsoft evolution is totally wasted. And because Nokia has to transition away from Microsoft as soon as possible, this is going to be enormously painful. Nokia desperately needs to distance itself from Microsoft now. But Microsoft needs Nokia desperately to remain relevant in mobile. While Elop has said there were no talks of Microsoft buying Nokia, if Nokia moved away from the WP7 operating system, Microsoft could panic and rush in to buy Nokia, especially now that Nokia's parts are worth much more than the share price. Now consider Stephen Elop and his loyalties? What a challenging conflict of interest is it, to abandon Microsoft or to drive Nokia into the ownership of Microsoft? Elop has to be fired right now, because he will not look at Nokia's best interests.

 

Yes, you’re welcome. The Nokia handset business sale to Microsoft was announced just after two years from this blog posting. Elop was a figurehead by the time the negotiations started in secret and Elop was not allowed to attend those discussions.

JULY 25, 2011 - NOKIA TO FALL TO 6% IN NEXT 15 MONTHS

In Q2 of 2011, when I was writing that blog, Nokia stood at 16% market share but was awaiting new Lumia Windows smartphones to launch for Christmas. Most analyst houses were promising Nokia with Windows to get to over 20% market share by around 2013 or 2014. I had said 2011 will fall to 12% but initially I thought the Lumia Windows smartphones would then see a recovery. Now I knew better. As we’d seen the first signs of the design principles of the first Lumia smartphones (designed to please US customers, not global customers) and the carrier boycott against Skype and all Windows smartphones, I had downgraded my outlook for Nokia. I said in late July that Nokia would actually see a FALL of smartphone sales in 2012, when the new Windows smartphones were coming to the market. That the ‘new’ Windows Lumia smartphones would sell WORSE than the ‘obsolete’ Symbian Nokia smartphones they were to replace. That turned out to be true, obviously but again, NOBODY else suggested this in July of 2011. I said that Nokia smartphone sales would hit a bottom level of 6% by Q3 of 2012, after which a ‘slow painful recovery’ could start. From 6% and from Q3 of 2012. That the corporate misery would continue for at least the next 15 months.

Nobody else forecasted single digits for Nokia in 2012. NOBODY else forecasted single digits when Nokia sold Windows smartphones. I said it will get so bad, Nokia will be down to 6% by Q3 of 2012. I was wrong. It was worse than that. Nokia was down to 6.9% by Q2 of 2012 and down to 3.6% by Q3 of 2012. I was hopeful of a recovery to start, slowly and painfully from Q4 of 2012. Slow and painful it was but not a recovery. Nokia continued down the drain even past my point of worst despair as Nokia plunged down to 3.0% markets share by Q4 of 2012. So yes, I was the most pessimistic forecaster for Nokia, and even I could not see how bad it would get. But nobody else saw it even that bad, to be in single digits. This blog was again, by far, the most accurate of Nokia forecasts, by a country mile (you’re welcome). It should make you concerned, however, if the truth was so obvious already in July of 2011, why were some ‘experts’ and ‘analysts’ selling you promises that Nokia and Microsoft would climb to 20% or more in market share. That would seem like gross incompetence in light of all the evidence we had by then. This blog? Never wavered and always was the most accurate, only even I could not imagine how determined Elop would be in destroying the company he was hired to run. Still, every single round, this blog was the most accurate forecaster about Nokia and Microsoft, including yes in July 2011 saying Microsoft Windows OS will never get double digit market share. Never. Nokia would never recover to even double digit market share when the collapse would be over sometime around end of 2012 - while at this time when I wrote that, Nokia still had 16% market share of smartphones.

JULY 28 2011 - FIVE YEARS FROM NOW NOKIA AT 3%

Then we had more and more of details of Nokia blunders and I made my first look five years into the future. From 2011 that is now, 2016. I said Nokia and Microsoft cannot get to more than 3% in 2016. Nokia fell to 3% by 2013 and the business sold to Microsoft was down to 2% last year and will be well below 1% this year. Nobody else said under 5% for long term for Nokia and Microsoft Windows, back in the summer of 2011. I did. (You’re welcome)

In that blog on July 28, 2011, only weeks after Nokia gave its first profit warning, I said that based on all the latest info, we were not headed to a zero-profit Q3 as I originally thought. The news was so much worse, that Nokia was going to actually produce a loss also in its third quarter, which obviously then did happen as I predicted (you’re welcome).

AUGUST 2, 2011 - NOKIA NUMBERING BRANDING FIASCO; CHINA RISING: HUAWEI AND ZTE

Then on August 2, in a Smartphone Bloodbath Year 2 Electric Boogaloo update, I mentioned that Huawei and ZTE were about to crash into the Top 10 and unseat two other Asian brands, Japanese veteran smartphone makers Sharp and Fujitsu (as it shortly also happened). Huawei kept growing and today is the third largest smartphone maker globally. Who talked about Huawei or ZTE back in the summer of 2011 when everybody loved HTC and Palm and Blackberry as the promising future behind the iPhone. (yeah, you’re welcome).

But on Nokia’s side, another self-induced total marketing fiasco arranged by delusional psycopath Stephen Elop. He went against all marketing logic - and against the marketing wizzard Keith Pardy (ex Coca Cola) who was brought in to help with Nokia branding. One of Pardy’s first decisions was to expand the NAMING with Nokia phones, so we had things like Xpress Music line of musicphones, not just semi-cryptic N95 or E7 style number and letter combinations. But what did microbrain Elop do in August? He felt his marketing people were not busy enough trying to explain Windows migration and death of MeeGo and refusal to sell award-winning N9 and various deaths of Nokia’s key projects like Nokia Money in India; Elop wanted them now to communicate a totally useless and counter-productive change in naming, to pure numbers. I was immediately against this madness, reminding that this is exactly opposite of what Keith Pardy had just preached only months prior:

And yes. We on this blog celebrated when Nokia's new Chief Marketing Officer, Keith Pardy, came from Coca Cola, a genuine consumer marketing brand, and one of his first decisions was to change the cryptic Nokia naming scheme and introduce real names for Nokia phones. Unfortunately, Keith is no longer with the company. And now the engineers have taken over the asylum. If a 'name' has too many of them complex alphabeticalisms, then yes, a pure numbers-oriented naming scheme fits nicely with them engineering brains. Smart move Sherlock, going EXACTLY the opposite way of what the top consumer brand marketing guy told you to do. And is it just me, Stephen Elop is destroying everything he can find of Nokia heritage of any kind. So the N8 and N9 were flagship phones. No more. Next expect a 903 or an 872 or whatever number they come up with. I'm sure it makes sense in the first dozen phones but three years later, are you really going to remember and fondly recall your Nokia 781, or wait, was it the 872, or the 767 or the 794. And all this while Rome burns, eh? I am reminded of the phrase rearranging deck chairs while the Titanic sinks.

Well, its one way to be sure the Nokia PR people cannot even accidentially be promoting Nokia's hottest phone, the N9 (or its highly desirable cousin, the N950) but rather to further underline how obsolete they are, they even have the old-fashioned Nokia names. Stephen Elop is certainly an evil genius, he'd make a Bond villain proud for his psycopathical obsession with destroying Nokia.

It did not take long for Elop to then reverse totally on that, and he would allow names to return such as Asha featurephones, Pureview cameraphones etc. But for a while yes, idiot Elop actually insisted even letters be banished, that it was just going to be pure numbers. That didn’t last six months as everybody in marketing ridiculed Elop for this lunacy. By November Nokia was back into names. But I pointed it out first, right as he made that moronic decision in August, that it was indeed moronic.

AUGUST 11, 2011 - COINED TERM ELOP EFFECT

So we had the market share update of the smartphone wars on 11 August, 2011, and in that blog posting I gave my most brutal assessment of Nokia’s performance the past quarter, of any smartphone brand ever, with a grade of F- (F Minus) and wrote that they deserved an even worse grade but no worse grade exists. Then I explained what is the Elop Effect:

 

Nokia is a disgrace to the industry, while the industry is in hypegrowth stage. This is far worse mismanagement than Siemens or Motorola or Palm (or Microsoft Kin). Nokia's free-fall means that by the end of Q3 they will have fallen behind HTC and RIM, and by Q4 will be passed by LG and SonyEricsson (maybe even Motorola and Huawei). Going from undisputed number 1 with 29% of the market to number 8 with 7% of the market, in a matter of 12 months, that is self-inflicted corporate suicide. When other manufacturers complain of shortages, Nokia factories are idling and Nokia suppliers cry of lack of demand from their biggest client. (And to add insult to injury, Nokia is not even using its idle smarpthone factories to manufacture their new Microsoft-based smartphones - because of the components etc, the factories are not capable of making the Microsoft-based phones, so the first Nokia branded smartphones are actually made by Compal of Taiwan, can you imagine! That you own the biggest, most efficient mobile phone factories in the world, then you force them to be idle, and you pay third parties to make your phones in sweatshops to far lower levels of quality than expected of Nokia branded phones. What madness is this?). I am not the only tech writer who has now suggested Nokia may disappear as an independent company over the next months to come. That is how badly Nokia is now being mismanaged. Oh, and if you thought a CEO doing an Osborne Effect was a sign of incompetence, have you heard of the Ratner Effect? Thats when you call your own products crap (and then are surprised that consumers stop buying, if the CEO says it of own products, that is instantly believed). Now we have a new standard, called Elop Effect, which is combining the damage of the Osborne Effect with the carnage of the Ratner Effect, and we get the Elop Effect. 

But the numbers don't lie. If you go from big profits to big losses, if you go from growing unit sales to decline, if you go from being as big as your two biggest rivals combined, to smaller than either of them, if lose half your world-leading market share in a matter of six months - that is the worst performance of any company in the tech space ever. Ever. The worst performance EVER. I am sorry I can only award Nokia a grade of F-. They deserve much worse.

 

AUGUST 15, 2011 - VALUED NOKIA SALE AT 6-8 BILLION DOLLARS

So as some other analysts were joining me in saying Nokia will probably be sold or split into parts and parts sold, I did an evaluation of Nokia’s handset business. I said I was no evaluation expert in mergers and acquisitions but we could use the recent Motorola purchase as a basis, and just on the patents portfolio part, I valued the final Nokia handset business sale to be worth something in the ballpark of between 6 and 8 Billion dollars (Microsoft paid 7.2 Billion dollars in the end for the handset business when the deal was announced in 2013 and completed in 2014). Again, not a bad call. Nobody else published a valuation of Nokia. I also on that blog talked about all possible buyers of Nokia and what they’d want to keep. It included Hon Hai/Foxconn in addition to of course Microsoft and even the hypothetical ‘management buyout’ option which would be similar to what became of HMD. If you look at what Microsoft took and didn’t take in 2014, and what now was sold either by Microsoft or by Nokia to FIH and to HMD, they are very consistent with that blog, with only Symbian/MeeGo of course now substituted for Android. But yeah. Who else explained that Hon Hai/Foxconn would want Nokia’s factories AND its retail, but not take its R&D or engineering... That blog was five YEARS ago. (Yeah, you’re welcome)

AUGUST 17 2011 - ELOP WILL RUN MICROSOFT’S NOKIA DIVISION AFTER TAKE-OVER AND ELOP IN RUNNING TO BE NEXT MICROSOFT CEO

So as other analysts were starting to ponder about Nokia’s survival and some openly now saying the Windows path was poisoned beyond repair, I was again ahead of the curve. On August 17 I did a deep analysis of why Microsoft needed Nokia and would not let it be sold to anyone else. In it I explained also how Elop was positioning himself to not only remain in control of the Nokia handset business, once it was sold to Microsoft, but that Elop was now angling to become the successor to Steve Ballmer as Microsoft’s new CEO whenever Ballmer would eventually step down. I wrote:

So Elop knows, if Microsoft buys Nokia, Elop gets to keep his toy (Nokia), he will end up owning the future of Microsoft and unless he messes up - and in Microsoft's eyes so far he has not done anything wrong - he is the front-runner to replace Steve Ballmer as Microsoft's next CEO.

And Elop also knows, any other buyer to Nokia now, and Elop is fired instantly, withouth mercy. While no doubt he'll have his old job back at Microsoft, he is now so heavily tainted goods, the rest of his life he will be known for the Elop Effect that destroyed Nokia. No matter what heroics he might achieve in his later career, he will be hounded by that reputation as the man who made the biggest management blunder of any career. His name will be synonymous with total executive disaster. So even if he were to have a comfy job, his life of expecting to be the next Bill Gates or Steve Jobs in the media spotlight will be extinguished. And as Microsoft would lose its mobile path, Elop would also be stuck in a company whose best days were behind it, and he'd have no chance of succeeding Ballmer as CEO.

So what does this mean? Elop is very biased. If any potential suitor were to approach Nokia trying to acquire it quietly, Elop will instantly inform Ballmer and make sure that Microsoft jumps in immediately, and then we'll have an open bidding war.

Microsoft doesn't want the bloated Nokia as it exists now. They preferred that Elop sell off NokiaSiemens Networks (one half of Nokia's employees and a third of its revenue). And ideally, also to sell off the dumbphones handset unit. And fire off tons of unnecessary Symbian etc programmers (as Elop has been doing). Meanwhile Ballmer is a businessman. He doesn't want to pay more for Nokia than necessary. So the continuous dive of Nokia share price this spring has been good news for Ballmer, thinking he can soon buy Nokia at a big discount.

 

SEPTEMBER 28, 2011 - OPEN WAR WITH CARRIER COMMUNITY

Then in the mission to burn down Nokia, Stephen Elop went to the ‘next level’. As the launch of Lumia smartphones was coming near and many carriers were not eager to help Nokia sell the smartphone OS by the same company that owned Skype - Windows - Microsoft - there was strong push-back by the carrier community. Telefonica said it would not be stocking the early Lumia smartphones (Telefonica is one of the 5 largest carrier groups in the world, based out of Spain they have a vast empire in Europe and Latin America). What did microbrain Elop do? Started to feud with his sales channel and tried to bully them into taking Lumia. That did not go well. But who told you in September of 2011 that Nokia was losing its carrier support? I did. I wrote:

The carriers can see that Nokia, when led by Elop, and allied with Microsoft is by far the most belligerent, arrogant, bullying, unreliable, lawsuit-prone, untrustworthy of ANY handset maker out there. So will they want to support Nokia and Microsoft. Of course not. When they see Elop trying to bully them - and one of the most cooperation-friendly veteran carrier/operator groups, O2 - they will gang up against Nokia. Just like they did against Apple about the virtual SIM card issue. But how will this revenge be served? Like the Klingons say (or like the Sicilians say) revenge is a dish best served cold. The carriers will now line up to promise to sell and promote the new Nokia Windows Phone smarpthones. They will take the marketing dollars from Microsoft and from Nokia. Then when the time comes, ooops, they have a campaign already in progress. The iPhone 5 was selling too well, the Galaxy S2 whatever was in super-demand. The HTC is simply selling better, etc. The Nokia phones will soon find themselves in the back shelves or out of stock.

And if I know my carriers friends, haha, some - maybe many - will 'suddenly' decide, this is too much, and say forget it, to Nokia and Microsoft dollars, and simply decide not to promote those phones at all. And if so, like the revenge served cold, they'll do it very close to the launch date, at the very last moment, to mess up Nokia and Microsoft as badly as possible.

Bullying NEVER works with the carriers. This is sheer lunacy by Elop. But I think this is a bigger story now, I need to write a separate blog about it, and the carrier/operator ethos and what is acceptable and what is not. Elop simply went to the wrong schools. He studied the Rumsfeldian school of collaboration, with the advanced studies of Cheney'an style of backstabbing and conniving (and utter denial in face of facts)

NOVEMBER 2, 2011 - LUMIA FIRST PHONES ARE DISASTER, MARKET SHARE TO FALL FURTHER

I said originally that the ‘cavalry’ was to arrive at the end of the year, 2011, and the recovery can start essentially from Q1 2012 to slow Nokia’s decline around Q3 of 2012 to bring a climb-back from Q4 of 2012. That meant the FIRST Lumia smartphones had to be ‘typically’ good Nokia flagships. Not the dog that was the first Lumia, the Lumia 800. Before it started to sell, when it was launched, and we had the specs and prices, I wrote that this was a clear failure, it will not match what ‘should have been’ and it will cause further fall in Nokia market share - below what I had expected before. That is indeed what happened. Nokia market share from Q4 of 2011 (12.4%) fell to 8.1% in Q1 of 2012 and to 6.7% by Q2 of 2012 - essentially the main period where the Lumia 800 had its role as the flagship of the series. I said very clearly that this was a disappointment and that Nokia’s perforamance in early 2012 would be even worse than I had predicted - as it turned out (you’re welcome). Many others thought the Lumia 800 (and its sister phone 710) were great smartphones and would sell well. I knew they were not. Here is how I wrote in November 2011:

The first Lumia phone could have been a world-contender. In fact, it SHOULD have been. If Elop was in any way competent, it truly WOULD have been. You and I know, if Anssi Vanjoki was in charge and this was the make-or-break phone for Nokia, we would be celebrating the coolest phone ever made (think how excited we were with the N9 all while Elop tried to kill the enthusiasm). At the very least, Elop should have made it a true clone of the N9 with NFC and 3.9 inch screen and forward-facing camera etc. But no. This is a lame phone. The next Lumia is far too far in the future. Nokia will suffer more market share loss in Q4 and into Q1. The losses generated by the smartphone unit will continue.

 

DECEMBER 15, 2011 - ELOP FEUDING WITH OWN SALES FORCE

Then even more Eloppian madness. He was scapegoating his sales staff, firing some and letting others leave, replacing the best sales force of phones on the planet, with bullies from Microsoft. A long blog about retail relationships and carrier relations, where I ended on these words about Nokia’s own sales and their lunatic CEO:

The decision to switch away from Symbian and MeeGo to Microsoft was a choice by Elop, and he could select the timing of when to do it. He knew what he was doing. He planned it. Any graduate of business school knows, if you decide to inflict such severe damage to your company - that in your official Nokia results you warn that the transition-related problems will last for two years - then you minimize all other changes. You act as the epitome of stability for those two years, you do not rock the boat. You do not cause additional pain and stress to the company, its employees, its suppliers and partners, its sales channel and customers, and its end-users. You don't make any other changes unless absolutely necessary!

And for whatever problems, real or imagined, Nokia may have had in its handset hardware, its operating systems and software, and its ecosystem - Nokia's sales were true heroes. They achieved growth with inferior products and services when Elop took over. These were the best asset that Nokia had. If Elop caused the self-inflicted wound with his Elop Effect, then the worst possible thing he can do, is to compound that error - by firing some of his best sales people (or letting them leave) and related sales organizations.

I wrote before that the Elop Effect is like finding your friend has a heart attack, you start to strangle him, and then to be sure, you take your shotgun and also shoot the friend in the face (like Vice President Dick Cheney). What Elop is now doing with his sales force, is seeing a doctor rushing in to try to help your friend, and you then pour gasoline over the doctor and set him on fire...

Please pay attention to Stephen Elop and the Nokia saga. We are witnessing the world record in incompetence in managing a Global Fortune 500 sized company. He is single-handedly destroying the company and we have a front-row seat. This story will be reported in future MBA textbooks as the ultimate folly in running a tech company and I promise you, future students of business will be so incredulous about all the silliness, many will initially not believe the case study is true, some of the madness is so ludicrous that some students will think there are typos in the textbook.

 

DECEMBER 21, 2011 - ELOP DEMOLISHING REVENUES SIZE OF ORACLE, PROFITS SIZE OF GOOGLE

As the numbers kept coming in, I was calculating the Elop Effect and how damaging it was. By December 2011, in just 9 months, Elop had wiped out market share the size of Blackberry (remember, a year prior Blackberry was the second largest smartphone maker); revenues the size of Oracle or McDonalds; and profits of the size of Google. That was our 27 Billion dollar man. Elop was destroying 75 million dollars of revenues EVERY DAY he remained as CEO. A trained monkey could not destroy Nokia as fast as Elop was doing. And of course I was leading the call to have Elop fired.

DECEMBER 23, 2011 - FIRST LUMIA SALES SO WEAK, NOKIA WILL NOT RELEASE THEIR NUMBER

And yeah, then came the cavalry, or what little of it appeared. Lumia did indeed start to sell, in a couple of markets in modest numbers. The preliminary market data was brutal. So I predicted on 23 December that Nokia’s Lumia sales were so bad, Elop will not reveal the number in the Q4 results of Nokia out in late January (and he didn’t). (you’re welcome).

REVIEW OF MAIN FORECASTS I GAVE ABOUT NOKIA-MICROSOFT DURING 2011

I said Nokia’s smartphone business would collapse
And that the dumbphone business would suffer
And that Nokia corporation as a while would be damaged
I said Nokia smartphone market share would hit 12% in 2011, fall further down to 6% by late 2012 and drop even below that in 2013
I warned Nokia smartphone business would become unprofitable
And then total Nokia corporation would also report losses
I said Windows smartphone OS market share would not ever climb to double digits
I later said it won’t return even to the 5% level it had in 2010
I warned of the stupidity of messing with Nokia naming/numbering/branding
I pointed the exact date and reason when Windows smartphone OS died in the market (Skype)
I said Windows partners would desert the platform
I warned Lumia smartphones could not sustain a 1-to-1 transition from Symbian smartphones
And I said Lumia first sales would be so bad, Nokia would not even release their number
I said Elop would be fired from post of CEO of Nokia
I later said Nokia would eventually have to abandon Windows to go to Android
I said Nokia will not survive as a handset maker after this strategy change
I said Nokia would be split into its parts
And that Microsoft would have to buy the smartphone business from Nokia
I calculated the value of the Nokia sale to be between 6 and 8 Billion US dollars
I forecasted Elop would be given the Nokia business to run when he was back at Microsoft
And that Elop would be in consideration to replace Steve Ballmer as CEO
I said that it was possible Hon Hai/Foxconn might (eventually) buy the dumbphone business
And that the smartphone side of Nokia could be (eventually) sold to a Nokia management buyout team
I said this move by Nokia would be seen as an epic strategic failure
And I said Elop would be associated with unprecedented corporate suicide
Finally, I predicted this would be the biggest failure by any global Fortune 500 sized company leading its own industry

All of this came true. In almost every case, I was literally the world’s first person to make those forecasts and predictions. In most of those cases, there were contemporary ‘expert’ forecasts and commentary suggesting the opposite result, ie that whatever was the latest step, that it would be good for Nokia/Microsoft. I never made opposite forecasts on these issues suggesting it would be good, before I said it was bad. And I did not make similar pessimistic views of other rivals; indeed I accurately forecasted Samsung’s surprisingly fast rise to the top which nobody else saw; as well as Huawei’s emergence as a big new smartphone rival globally again which went under the radar of all other ‘experts’.

TOMI IN 2012

Then lets take specific refinements and details that I added to the above, in the next years. I will not go to every detail and specific. But lets start right at the start of the year.

JANUARY 2, 2012 - FOUR OPTIONS FOR NOKIA FUTURE

I said the year for Nokia would be an ‘Elop watch’ awaiting when the new CEO would be fired. I thought Nokia Board was smart enough to fire him during 2012. They waited until 2013. But this is how I summarized the future options for Nokia:

 

One of four things will happen - Elop will be fired, or Nokia's smartphones unit will be sold, or all of Nokia will be sold and likely be split up into parts (which might leave the Nokia brand alive as a small entity but not run by Elop) or Nokia will be bought up by Microsoft (and Elop would run Nokia as a handset division of Microsoft).

 

Not a bad call. Timing was off, this didn’t happen until 2013 (and that is mostly the fault of the Nokia Board who should have moved FAR faster as the evidence was overwhelming) but yes. Did option 3 happen? Nokia after the sale of the handset business was far smaller (mainly Networks) and Elop no longer its boss. Also obviously the handset business was sold specifically to Microsoft and Elop went to run its handset division for a year before he was fired there.

In that blog I also predicted the first Lumia smartphones will face exceptionally large return rates, with disappointed buyers (as it then also happened). As to the Nokia sale, I said in January 2012, that if and when Nokia’s smartphone business was sold, then the Nokia brand would also disappear from the smartphone market (as also happened after Microsoft took over the business). And then I warned this about whether Microsoft is better served by a loss-making independent Nokia, or Microsoft buying the Nokia unit and taking over the handset business. I wrote this on January 2, 2012:

 

Incidentially, if Microsoft buys Nokia, that will be a repeat of when Microsoft bought Danger and launched Kin. It will not turn out well, the carriers will punish Microsoft and that version of Lumia will die even faster, than if Lumia is produced by an 'independent' Nokia run by Elop.

 

That is what happened from 2014 to 2016 when Microsoft took over the handset business. It is EXACTLY what eventually happened. From 2012 to 2014 under Nokia, the Lumia and Windows OS brand stood a steady 3% market share. After Microsoft took over it went from 3% in 2014 to 2% last year to under 1% now.

MARCH 8, 2012 - MORE ELOP MADNESS: TABLETS, LOCATION SERVICES

So then as Nokia was collapsing, Elop came with more CEO madness just over a year after his idiotic memo (oh, by this time in 2012, Elop had admitted that yes, his memo did damage Nokia handset sales; we found out later he also was reprimanded by the Board for that memo, which is why Elop retracted a dozen of its more blatant lies). But when you thought a handset maker struggling to manage a transition to a new platform would not need more distractions, Elop gave us two. He promised Nokia would launch tablets. Tablets? Yes, tablets. He clearly was infected by that Microsoft disease of iEnvy. Anything that Apple does, Microsoft has to also do, no matter how much it hurts them, like Kin phones, Zune musicplayers and haha, Nokia-Lumia smartphones. So in 2012 Elop said: tablets! We now know tablets were a boneheaded idea by 2012 - see Blackberry. And many pundits LOVED this idea. Not me. I wrote:

 

For any handset maker, to launch tablets is utter madness. Witness Motorola and RIM. Tablets are a tiny market niche compared to all portable PCs which are a part of all PCs which are a smaller market than smartphones. Smartphones are bought, used, sold, marketed in similar ways to other smartphones, but tablet PCs are bought, used, sold, marketed in totally different ways to smartphones - in similar ways to PCs. So with tablets, we don't buy them at handset stores (even though a few are typically offered). We tend to buy our tablets at PC stores. The king of the hill in tablets is Apple with about 75% market share with the iPad. The rivals who have tried to compete from the smartphone side like Blackberry, have failed miserably. The only rivals who have had some success have been like Samsung who were PC makers already and had that sales channel already.

Any Nokia branded tablet would fall into the aim of the iPad. Can it be as good, of course not. Nokia has tried for five years now to match the iPhone and while the N9 with MeeGo came close, no Nokia smartphone, not even the Lumia 900 has matched the iPhone. Why would Nokia's tablet be better than the iPad. Of course it would not be. And where are the Nokia stores to sell them? Nokia abandoned its retail flagship stores. Nokia does not have any relationship with the PC sales channel. Why on earth would it invest any R&D to try to sell a new electronic gadget where the market is tiny and utterly dominated by Apple? This is madness.

The right strategy, is to take the N9 and N950, running MeeGo, the most desirable most highly praised Nokia smartphones ever, on Nokia's best OS platform ever, that already are in production, and immediately expand their availability to every Nokia market. Remember the German magazine who loved the N9 and MeeGo so much, it instructed its readers to drive to Switzerland or Austria to get their hands on an N9 (rather than buy the disappointing Lumia handsets sold in Germany at the time). Or see how the Guardian reported on how disgusted it was with the Lumia 800, that it was returning the handset. Nokia problems are not that it cannot make a desirable product. Nokia problems are that the CEO pushes an undesirable product on its customers and refuses to give the desirable product. That is why Nokia is making a loss in its smartphone unit. As we calculated here, even with no Nokia marketing support and selling only in far-away bizarro markets, the N9 on MeeGo was outselling all Nokia Lumia smartphones in Q4 - the launch quarter for both platforms - and how much was MeeGo outselling Lumia? By 3 to 1. What idiot CEO talks about launching a costly tablet PC while he has a hit smartphone in his pocket and refuses to sell that?

 

Yeah. Luckily the Nokia Board blocked Elop from that idiotic idea. Eventually a phablet did come on Lumia series and even after that, after Nokia sold its handsets biz to Microsoft, it released a modest-run tablet-only non-smartphone Nokia on Android. Were they massive hits that gave Nokia the tablet world? No. A moron’s idea. Yet Mr Moron did not relent on the two highly beloved MeeGo devices, N9 and N950 and allow them to be sold in major markets. He teased us with tablets but refused to let the most desirable Nokia smartphones ever made, to be sold in most major markets. That is how rotten he was as a CEO. (You’re welcome). But wait, there was more.

Then Location-based services. So Nokia - which had JUST ended its run as a software company, to focus on HARDWARE only - partnering with Microsoft. Nokia had already ended its mobile money project, sold its mobile advertising arm, and cancelled most of its media etc projects. Then idiot ELOP, when Nokia was bleeding, bleeding badly, reporting losses in all units - suddely suggests more waste, of the LEAST successful aspect of mobile that we’ve ever measured. The. Worst. Sector. Of. Mobile. Location-based services. Where nobody had ever made any money. Where Nokia itself lost a fortune in its mapping acquistion. Elop promised location-based service focus (idiot). This is how I put it

Mark my words, Nokia will fail miserably with this. Nokia's successes will come from other areas, not from location-based services. And Elop will have to eat those words too, like he did with so many from last year. This is sheer madness. Only a complete ignoramus would commit the company on this futile journey, wasting millions in that pursuit. Elop is once again acting like the ostrich. The facts are staring him in the face, he simply hides his head in the sand and refuses to see the truth. He is substituting his own imaginary world, in place of the truth. This is textbook delusion. It would not be so bad, if Nokia was a filthy-rich hugely profitable company, that it could indulge its CEO in some silliness, but Nokia cannot afford this. Nokia has to focus on areas where the industry is strongest (cameras, music, gaming, social networking, advertising, mobile money), not where it is weakest (location-based). Note - Nokia HAD strong initiatives in cameras, music, gaming, social networking, advertising and mobile money. If Elop had bothered to do what he was hired to do - help Nokia execute better - he'd have big successes out of those.

And what happened? Nokia sold its ‘Here’ mapping services finally in August of 2015 to Audi, BMW and Daimler, for 3 Billion dollars. Nokia had originally bought the Navteq unit for 8 Billion. Was it a wise thing to waste Nokia resources on this utterly futile and ultimately massively loss-making venture - where ALL available data said it is hopeless?  Yeah (you’re welcome).

On March 8, 2012, Elop also announced another death-nail to any possibility of a Nokia revival. After several rounds of layoffs and shutting of factories, Nokia now was cutting its product line. That is a NICHE player strategy (Apple) which Apple ITSELF was moving away from already at that time (today Apple has already 3 separate products it releases per year) and Samsung pursued aggressively an EXPANDING product line at this time, as it had become the world’s largest handset maker and largest smartphone maker. But Elop? Cutting the portfolio. And worse - then standardizing on Lumia clone form factors. Some people do like that, but not everybody. Elop was shutting doors that used to be open for Nokia. Its not that those doors were shut in his face, he was VOLUNTARILY closing them. And I ridiculed him on the blog about it, saying this will further hurt Nokia sales (as it did). (You’re welcome).

MARCH 20, 2012 - DOWNGRADED NOKIA 2012 Q4 FORECAST TO 6%

So then on March 20, 2012, we had enough early feedback about how badly the early Lumia smartphones were failing in the market. I said my original ‘Nokia will bottom out at 6% and start to climb after Q3 of 2012’ forecast was based on the assumption that Nokia would be ‘sensible’ with its first Lumia smartphones. The whole future of the company depended on those first Windows OS smartphones being hit phones, doing at least as well as past Nokia launches. But I warned several times from December to February, that Nokia was not even able to sustain a 1-to-1 transition from Symbian to Lumia. Now, in March 20, 2012, while still many expert analysts were promising 20% market share eventually for Windows and Nokia Lumia a few years down the line, I was on record with the worst forecast published (8% for end of 2012 and 5% for 2013). And now, on March 20, I made my first heartbreaking downgrade of that. I said no, there will not be a recovery moment in 2012. The disaster will continue and Nokia will be down to 6% by Q4 of 2012. I said this before Q1 numbers were even seen and literally no public numbers were out on Lumia (because Elop was afraid to reveal the Q4 numbers from 2011). How bad was it? Nokia by Q4 of that year did not do 6% of the smartphone market - my forecast literally the most pessimistic published by anyone by March of 2012. Remember Nokia was at 12.4% in the just-ended Q4. No, Nokia did not manage 6%. It ended the year 2012 at 3%. BUT WHO TOLD YOU it is worse than anyone projected, already looking at the first Lumia product line and early strategies? Yeah. I missed that forecast by 50% - yet I was BY FAR the most accurate forecaster, when the next most accurate forecaster missed it by 70%... (yes, you’re welcome).

MARCH 28, 2012 - DOWNGRADED WINDOWS OS 2012 Q4 MARKET SHARE TO 6%

And then in my Smartphone Bloodbath Year 3, Digital Jamboree blog, I added the Widows Phone OS impact to the downgraded Nokia and Lumia forecast. I did an estimate of the mix of OS platforms sold by Nokia and projected Windows would be down to 6% for Q4, again the lowest forecast by any published expert in mobile at that time in March of 2014 - and again, I was off by 50% because Windows ended the year with 3% but again, I was by far the most accurate forecaster - and most importantly, I warned the industry that the Windows vision was not coming true. (You’re welcome).

APRIL 11, 2012 - DOWNGRADED NOKIA LUMIA TO 4% MARKET SHARE Q4

Then Nokia gave its next profit warning and I sounded the end-of-the-world alarm bells. I said Nokia will fall to 4% by year-end. We had not even had Nokia’s Q1 numbers yet. the last numbers we had for the Q4 quarter said Nokia held 12.4% market share. Most pundits promised Nokia and Windows to have 12% market share by end of 2012 or better. I had already been the most pessimistic saying 8% and then lowering that to 6%. Now I said no, it is that bad, Nokia will fall to 4% (and so will Windows Phone). Reality was.. 3%. (Yes, you’re welcome).

MAY 1, 2012 - NOKIA MARKET SHARE AGAIN DOWNGRADED NOW TO 3% FOR Q4 OF 2012

And then we saw finally the Nokia numbers for Q1. We had even more info about how much the retail channel was boycotting Windows smartphones and how much Lumia was hated and had huge return rates and how many carriers were not taking even the modest Lumia portfolio (but clearly were taking Symbian smartphones such as the brand-new 808 Pureview with its magnificent 41mp camera and HD video recording, with HDMI output). I gave my final and once-again downgraded forecast for Nokia smartphones to Q4 of 2012. I now said it was going to be 3%. I had seen one quarter of sales of Nokia for the January-March quarter which included finally the first reported Lumia numbers. And I said wait. Even 4% is too high. This corpse will not do more than 3% by the fourth quarter (remember, Nokia’s market share that Q1 of 2012 was still 8.1% and Nokia was rapidly rolling out a whole portfolio of Lumia devices from the new flagships to the lower-end Lumias). And yes. Obviously, 3% is exactly where Nokia ended the year, in Q4 its market share was not just 3%, it was.. 3.0%. That is again, perfection. And NOBODY else said in May that Nokia was gonna go down to 3% by Christmas when just a year ago, Nokia had a third of the total smartphone market. That would be literally losing 9 out of 10 customers you had. But incredible as it sounded, I predicted that on May 1, 2012, and that is exactly what Nokia ended the year with. Exactly 3.0% (You’re welcome).

MAY 18, 2012 - MICROSOFT HAS LOST THE MOBILE AGE IN COMPUTERS

So then on May 18, I did an occasional look into the far-smaller computer side of tech (mobile is 3 times larger as an industry). I took a review of Microsoft’s long dominance that started with its DOS operating system for the IBM Personal Computer which Microsoft then sold to ‘clone’ makers and then evolved to Windows and took the vast majority of the PC industry profits once it held a near-monopoly on the desktop and the newer laptop style computers. Microsoft had been on track to also do well in smartphones (Windows smartphone OS peaked at 12% and momentarily second place) but by May 18, I was ready to call it, Microsoft had now officially failed in smartphones where Google Android had won, and where even number two OS, Apple’s iOS utterly towered over Microsoft’s failing Windows OS. Back in 2012 many tech writers still sold promises of an ‘ecosystem’ around Windows. I said it was dead. I said so on May 18, 2012. Android had won and Microsoft Windows had lost the PC wars as they entered the smartphone age. Note - this was written as the tech idiots were still falling for the standard Microsoft lie - the next version will fix it. Back then it was the silly promise of a Windows 8 miracle version to fix all the things that were wrong with Windows on smartphones (hahaha). So yea, today all tech analysts agree, Microsoft fucked it up in smartphones and lost that war to Android, which means Google will control computing of the next decades, and Microsoft was played out of the game. Who said it first? (You’re welcome).

MAY 23, 2012 - LUMIA WAS NOT OUTSELLING iPHONE IN CHINA

Then there were all the lies by the Microsoft and Nokia propaganda machine. Like the sudden wild story that Lumia and Windows Phone were outselling Apple’s iPhone in China (no they weren’t). And I told you so (you’re welcome).

JUNE 7, 2012 - NO WINDOWS WILL NOT PASS iOS BY 2016

Haha more utterly silly forecasts. I don’t deal with those that are plausible, but IDC’s June 2012 forecast was bizarre - after all the utter despair that came out of Nokia and Microsoft. They still dared project that by 2016 Windows Phone OS would pass iOS. Good luck with that forecast IDC. You still have seven months left of this year to pray for that miracle but as Windows Phone was at 0.7% market share in Q1 of 2016 and Apple was at 15.3%, and as Microsoft now has sold its handset business and is firing 1,800 remaining Lumia staff, I think its a safe bet to say, 2016 ends with IDC having yet another silly forecast in its past. Yes as recently as June 7, 2012, after four quarters of collapsing Nokia smartphone sales, three quarters of losses in the smartphone unit and two quarters of disastrous Lumia Windows smartphone sales - IDC promised Windows would pass the iPhone to become second-bestselling smartphone OS by this year 2016. Ain’t happenin, dudes. And who told you right on that date, June 7, and why? (Yeah. You’re welcome)

JUNE 8, 2012 - VIEW OF NOKIA SALE TO MICROSOFT

By 2012 there were plenty of rumors that Nokia might be sold and several buyers were mentioned in the financial press starting with Samsung and ending with of course Microsoft. I did a speculative blog discussing various possible buyers. On Microsoft, I wrote that Microsoft could not afford for the Lumia business to end, so even if Nokia was bought by someone else, Microsoft could probably pick the Lumia Windows smartphone part - very unprofitable business - for a song, whoever bought the other parts of Nokia. But of course I also discussed the idea of Microsoft buying Nokia outright. I ended that part of the analysis with this:

If Microsoft buys Nokia, they would of course sell the NSN unit and the low cost handsets. They would escallate the end of Symbian and MeeGo projects. The Lumia unit would become a division of Microsoft with Elop in charge. The Nokia brand would be sold, being totally unnecessary in the Microsoft world. The carrier hostility towards Microsoft would only grow over time, the Lumia sales would linger in very tiny market shares (think Palm, not Blackberry) kept artificially alive by Microsoft for a couple of years, after which the unit would go the way of the Kin and Zune.

 

So note, that obviously suggested a total buyout of Nokia corporation, as it ended, Nokia only sold the handset business (about two thirds of its total business before the Eloppian destruction started) so the networking business and mapping stayed at Nokia. But haha, did Microsoft want to get rid of the dumbphones business and Nokia brand itself (sold it now to Hon Hai/Foxconn). Did Microsoft put Elop in charge of the handsets business when it was a division at Microsoft. Did the resulting Lumia sales collapse further under Microsoft ownership to be in line with 2012 level Palm (under 2%) rather than 2012 level Blackberry (5%) level yeah. Essentially a perfect picture of how the Nokia deal worked out. (You’re welcome).

JUNE 14, 2012 - CALCULATED FINAL COST OF BURNING PLATFORMS MEMO

So yeah, did the math for you. Did anyone else bother to calculate how costly the Burning Platforms memo actually was? It caused an instant collapse of Nokia handset business, not just smartphones but also dumbphones. It ended up wiping out 13 Billion dollars of annual revenues (permanently, unrecoverable) and demolishing 4 Billion dollars of annual profits (permanently, unrecoverable). I did the full math for you, and then summarized the carnage like this:

So how big is the damage? Sit down before you read this. The last 12 months, the first four full quarters after the Burning Platforms memo, Elop admits he caused damage to Nokia smartphone sales. How bad? The actual total loss of what Nokia should have done, and now has managed is.. 3.17 Billion Euros (4.0 Billion US dollars). He destroyed 4 BILLION dollars of PROFITS in the first year after his Burning Platforms memo. It shouldn't be called Burning Platforms, it was the Burning Profits memo. Four BILLION dollars!!! Profits!!!

4 Billion dollars of profits in year 2011 would have ranked you 130th biggest company in the Global Fortune 500 by profits!!! Four Billion. Four Billion-with-a-B??? Lets put this in context a bit. In the past 12 months, Elop's mismanagement burned profits that were more than the total profits earned by say.. Nissan Motors globally, or Home Depot, or China Life Insurance, or Boeing, or Deutsche Bank, or UPS or Walt Disney..

JUNE 27, 2012 - FORECAST FOR 2013 NOKIA SMARTPHONES: 3%

And then my revised forecast for year 2013. My then-current - and world’s most pessimistic forecast for Nokia smartphones for year 2013 said Nokia would be down to 5% for 2013. That was from before Lumia smartphones were sold. Now that we had half a year of early Lumia sales, I could see far more clearly how bad it would be. Year 2012 was a disaster. Microsoft muppet army was selling the lies of ‘Windows 8 will fix it all’ (together with other lies like the British youth are tired of the iPhone and in China Lumia and Windows Phone are outselling the iPhone). I ignored the silly lies and hype, I went with the math, and I downgraded my 2013 forecast. I said in June of 2012 that 2013 will end with 3% for Nokia smartphones. Full year. Actual? Nokia did 3.1% for 2013. (yes, you’re welcome). NOBODY else said it would be this bad. I told you EXACTLY how bad it would be - EVEN WITH that brand new Windows 8 miracle operating system.

AUGUST 21, 2012 - LOCALYTICS ISSUE BOGUS WINDOWS STATISTIC

Then we had more of the mobile industry charlatans. Now it was Localytics. When all other analysts had Windows Phone OS selling under 5 million total units as the current Q2 level of sales, Localytics made huge headlines how their math found 8 million. Of course they were wrong, probably were paid to say that my the Microsoft Mafia. Who told you that story was ludicrous and their math was bizarre to say the least? (You’re welcome).

AUGUST 22, 2012 - WINDOWS OS TO DECLINE TO 1% IN COMING YEARS

Then we had the feuding now as Steve Ballmer of Microsoft and Stephen Elop of Nokia were breaking up their ‘bromance’. Microsoft was threatening to launch its own smartphones (Surface) and Nokia was threatening to do tablets and cheap Linux smartphones and even might run Android alongside Windows. And then Ballmer said there was going to be no migration path from the Windows 7.5 OS that early Nokia Lumia smartphones were using - to the new Windows 8 OS (what an asshole!). So of course Nokia sales fell even further and Nokia’s smartphone unit went into a stage where it reported a 49% loss on every Lumia phone it managed to sell. And as Nokia was now the only Top 10 smartphone maker left doing Windows (yes all others had bailed by now and were doing Android) it meant Windows OS was CERTAIN to die as well, on the smartphones. I saw a near future level of 1% if things went normal for Microsoft’s way of doing business. Here is how I wrote it:

Lets not just now pretend that there is some rosy future to the Windows Phone 8 in mobile smartphones. It no doubt will sell well on the PC side, but as I said, it will happen as eary as 2014, that Android will pass Windows as the planet's most used computer OS, when counting PCs, tablets and smartphones, combined. Yes, Microsoft's reign comes to an end in less than two years from now. Windows 8 will no doubt be a big success but Windows Phone 8? Maybe hit a couple of percentage points if Microsoft is lucky. 1% if things go 'as usual' for Microsoft in mobile. And 1% is the level where even Palm quit this industry.. This Nokia gambit was Ballmer's last best hope and it was ruined, not by Ballmer, his grand plan was ruined by 'his boy' Stephen Elop, the Microsoft Muppet, the most incompetent CEO of all time

And yes, Windows OS hit 1.1% in Q4 of 2015. Its now below 1% and falling fast. That was yes, the level where Palm quit and it was the level (dropping below 1%) when even Microsoft admitted, this is a dead duck, and it sold the remains as we discovered two weeks ago. But who told you in 2012 that Windows OS - with its wonderful new Windows 8 coming - would drop to 1% market share and that then the Nokia Lumia windows unit would be shut down? Yeah. (You’re welcome)

TOMI IN YEAR 2013

MARCH 19, 2013 - NOKIA SALE IS INEVITABLE

When I did my fourth annual edition of the bloodbath previews: Smartphone Bloodbath Year Four: Smartphones Galore - I spent most of the Nokia part just speculating on how and what parts of Nokia would be sold. It was then inevitable, I was not the only one speculating it and rumors were about of several buyers. We found out later that already in February Nokia had been meeting with Microsoft seriously about the sale (with Elop no more in real power and not attending those meetings). The sale was announced half a year later.

On the smartphone chances, I said Nokia’s upside was 3%, the business downside was 1%. From that point on, Nokia annual share never was above 3.1% and the quarterly market share never went above 3.5%. It was down to 1.1% by Q4 of 2015 (and 0.7% now on the latest numbers). I don’t think there is any other analyst who said definititively in January 2013 that Nokia Lumia Windows smartphones could never climb above 3%. There were still many who were promising 15% market share miracles. But yeah. Nokia to be sold ‘inevitable’ (You’re welcome). Nokia and Windows never to exceed 3% (you’re welcome).

AUGUST 27, 2013 - ELOP WILL NOT BE NEXT CEO OF MICROSOFT

Then Steve Ballmer was forced to quit from CEO post at Microsoft. Elop was immediately in the speculation as his replacement. I said Microsoft are way too smart to hire an idiot like Elop. He obviously was not picked. But many seriously suggested this, the worst CEO ever, would be a good pick. I was not alone saying thats sheer madness. Obviously Bill Gates is a smart guy and saw through the nonsense and didn’t ever consider Elop seriously.

SEPTEMBER 3, 2013 - NOKIA SOLD TO MICROSOFT: WILL FAIL

On September 3, 2013 I received the news that Nokia was selling the handset business to Microsoft, while I was in transit on an airport and just briefly had a moment online. I wrote a short summary and gave my one-line judgement: “With Elop in chrage of that unit at Microsoft, expect the damage to continue and this unit to be a failure at Microsoft in the long run.” Yes. It didn’t even take that much of the ‘long run’. Less than two years and 8 months from this point, after several rounds of layoffs, continous mounting losses, firing of Elop; the Microsoft Nokia project was formally ended with the sale of the last parts and layoffs of the 1,800 last remaining Lumia staff. So yeah ‘expect the damage to continue and this unit to be a failure’ was pretty much 100% on the money haha as a quick opinion (You’re welcome).

SEPTEMBER 3, 2013 - MICROSOFT WILL FAIL WITH NOKIA

And then I wrote my deep, thorough analysis of this purchase and ex-partnership and said it will fail. I explained all the myths, I showed all the facts and then I said, comparing Microsoft’s purchase of handset maker Nokia, to its previously failed purchase of handset maker Kin:

We've seen this movie. We saw the highlights version in Kin. Now we see the TV full-season drama version of the same disaster, but in greater size. This purchase by Microsoft will never turn successful. But it will further anger Microsoft's PC and tablet partners. And obviously scare away what remained of smartphone makers. It will perennially draw profits into the futile attempt to make a success of the dead Nokia remains.

SEPTEMBER 4, 2013 - MAYBE NOKIA MAY RETURN

And then I wrote my thank you love-letter to Nokia, my former employer, a long-time consulting client of mine, a proud Finnish tech institution and my favorite tech brand of all time. I ended that sentimental journey two years and 8 months ago with these words:

Our lives were comprehensively changed from those of our parents' generation due to mobile phones. For most of us, that first phone was a Nokia phone. For many of us, our most favored phones over the years have all been Nokia branded. More than any other tech brand, Nokia has brought digital connectivity and bridged the digital divide on the planet. Connecting People. One Nokia phone at a time. And we loved you for it. We will miss you Nokia as a consumer brand. Please fare well as the networks provider and if the gods of technology have any sense of justice, they will let our Nokia return one day to again live with us, in our pockets ...and in our hearts.

That day is now coming. I wrote that in sad melancholic and hopelessly romantic mood back in 2013, not seriously believing in such a fairy-tale ending. Now we do have the return of the real Nokia. On Android, on Nokia-designed, phones with Nokia patented tech, by Nokia engineers, built in Nokia factories. The companies who now will run that business are FIH and HMD. They acquire a large part of what remained of ‘original Nokia’ handsets including that staff (most who were fired by Microsoft were specifically Lumia people around Windows Phone). And the ‘real’ Nokia, old Nokia is still involved as a patents parent and minority stake owner, with licencing income from this new deal. This is ‘real’ Nokia, on Android, as so many of us wished for back when we saw the Lumia and disastrous Windows Phone with its infamous 101 faults. So even when I write something as pure sentimental drivel, I seem to be hitting the prediction haha, thats how much I can’t miss with Nokia. Who else said the day after the day Microsoft bought Nokia, that not just will Microsoft fail, but inspite of that, Nokia will still return..

TOMI IN 2014

JANUARY 4, 2014 - NOW MATTER OF TIME FOR MICROSOFT TO SHUT IT DOWN

Then in 2014 we get some ever-more-ominous items about Microsoft’s pending end to the Nokia saga. I started the year with my fifth annual preview of the Smartphone Bloodbath Year Five: Who is Left Alive. I wrote that Microsoft will end the Nokia Lumia Windows Phone smartphone nonsense and will fire Elop but it was a question of time. It depended on how long they were willing to throw good money after bad. I wrote

But during 2014 no matter what miracles Microsoft were able to achieve with its new Lumia (Nokia) unit, much of 2014 will be just adjustments and corrections and this is not a year of Microsoft/Nokia comeback. Microsoft-Nokia will be fighting just to remain relevant and in the Top 10 throughout this year. If you want to see the glass as half-full, then maybe in year 2015 we can hope for a comeback. If you want to see the glass as half-empty, we are now counting time till Microsoft shuts the lights out from the futile purchase of the Nokia handset assets. Although with Microsoft’s deep pockets. that will take years still.

 As I’d already previously said this unit will never get past 3% market share, my prediction stood and turned out true. As to Elop, he was fired just a year after he came back to Microsoft.

FEBRUARY 4, 2014 - NEW MICROSOFT CEO WILL GIVE SECOND GUY A YEAR OR TWO

So on February 4 we learned the name of the new CEO of Microsoft and I wrote a blog about him and Microsoft’s future and in it of course a long bit about the pending doom of the freshly-acquired Nokia handset business. I said Satya Nadella will let Elop play around with Nokia for a year. Then fire/remove Elop; then give SOMEONE ELSE a second chance to make the Nokia thing work out. And after that is dead, it will be shut down. The second guy to have 1-2 years. This is how I put it:

The new CEO will probably give Elop a chance at the helm of the Nokia he brings to Microsoft. It will continue to be a disaster and the new CEO very likely sees the history and will fire Elop - no do the Microsoftian amputation by giving Elop a non-job with no staff like say SVP of Mobile Strategy - and then post Elop into some far-away office like Ouagadougou or Antananarivo. But the CEO will give the Nokia unit another boss no doubt a very capable one who will spend another year or two in hell trying to turn the doomed operation around. How much beyond 2016 can Microsoft linger in useless state as a nobody of mobile will primarily depend on how long the profits from desktop Windows and Office Suite sustain the luxuries of loss-making divisions.

 

Yeah. Elop fired summer of 2015 (one year and some weeks). New guy had just under a year to prove, there is totally no salvage possible. When he reported to Nadella - this truly is a dead duck, Nadella did the smart thing: Sell what we can, shut the rest. Less than 12 months was all the new guy had the unit before it was over. (You’re welcome.) So little did I care about any chances at Microsoft, to this day I haven’t bothered to learn the name of whichever VP was running that dead unit there that did the Lumia smartphones etc.

FEBRUARY 6, 2014 - NOW ITS CANALYS WITH BOGUS WINDOWS SMARTPHONE STATS

And then wearing my ‘stats police’ hat, I took on the next idiots bought by the Microsoft Mafia: Canalys. They came out with a wild claim that Windows Phone was growing faster than Android haha. I pointed out that Windows Phone OS was actually COLLAPSING sales and Android had taken over the world, and put Canalys idiots to shame. But again, how many pundits and experts and analysts fell for that bullshit (You’re welcome).

FEBRUARY 25, 2014 - NOKIA ANDROID BASED X SERIES SMARTPHONES

Then Nokia did rush its rumored Android based smartphones to the market, just to tease Microsoft (I bet that was because of some last-minute haggling by Microsoft, trying to change the deal they had). And while 3 X Series Android OS smartphones were launched, only one was sold in any meaningful numbers before Microsoft took over the business. What did I think of this move by Nokia. I wrote: “The overall mess that this Nokia X creates to Microsoft is a nightmare that will be seen with the lens of history as a colossal mistake that Microsoft should have seen to kill immediately or actually, should have prevented from happening in the first place.” Yes, it was killed immediately after Microsoft took over the Nokia handset business. I think it was 5 weeks and dead.

JULY 18, 2014 - MICROSOFT MASSIVE LAYOFFS AT NOKIA UNIT

Then the bleeding just continued. I had warned before that this business would never return to profits. When the bad news broke on July 18, that 12,500 of the staff that came over in the Nokia sale, were now being fired, only three months later, I did warn, that even this was not the end. More layoffs were coming and the unit itself would eventually be shut. (sadly yes, told you so).

JULY 31, 2014 - THE RIGHT MOVE BY MICROSOFT WOULD HAVE BEEN

PS - what might come from ‘Retro Nokia’ next year. I don’t expect first 3 smartphones to fit this pattern but perhaps end-of-year 2017 might see this, or else Spring 2018. But I wrote the blog in 2014 to Microsoft, that if they really wanted the Lumia unit to show some profit, even WITH Windows as the OS, then do the one thing all senior management at Nokia had pleaded Elop to do, but he overruled them. It was actually something similar to what Microsoft itself was doing with Surface. This is the blog if you want to see what I hope we will see from ‘Retro Nokia’ in the next say 18-24 months. The ‘dream’ Nokia flagship: If Microsoft Could Do Just One Thing Right With Lumia / Nokia / Windows Smartphones. I won’t give you a spoiler but considering how darned right I’ve been all along, that MIGHT show one surprising Nokia phone we’ll see soon.

DECEMBER 5, 2014 - NOKIA ANDROID TABLET SIGNALS NOKIA RETURN

Then on the Nokia side of the sale. On December 5, 2014, we had first clear sign that Nokia is eager to return. They announced their tablet. The deal with Microsoft gave MS an exclusivity period where Nokia could not sell phones, but it could sell other gadgets. A tablet was close enough to a phone to help keep some hungry Nokia fans reminded that the real Nokia has not vanished. Very tellingly, while Microsoft itself sold Surface tablets running Windows and Nokia had been working on a Lumia tablet and phablet, the first post-Microsoft-deal Nokia device didn’t run on Windows. It ran on its most hated rival, Android. Yes, Nokia was determined to tell us, they will be back and it will be on Android. Here is how I put it:

Will the N1 Tablet sell in enough numbers to show any relevance to Nokia's business? No, of course not. It will be the squeak of a mouse in the noise of a thunderstorm, but it is Nokia's first salvo. It does signal first of all, that Nokia wants to return. Secondly, it signals the total break from Windows. If any device by Finland's 'real' Nokia made sense to do on Windows, more than a smartphone, that would be a tablet. That Nokia now clearly spits in the eye of its 'partner' Microsoft, and does the tablet on Android is clear signal, Nokia is finished with Windows. For good. Forever.

 

Haha yeah. Never sold any relevant numbers but it did help keep Nokia in the minds of analysts and developers, and signalled clearly that Windows is over, it will be Android when Nokia returns. Good move Nokia (and yeah, you’re welcome).

DECEMBER 29, 2014 - ONE THIRD OF LUMIA WAS NEVER ACTIVATED

Then just a reminder, a bizarre number that came out of Microsoft’s own admissions. One third of all Lumia Windows Phone smartphones that was shipped out of the factories, had never even been activated. The REAL market share of Lumia and Windows was actually 2% not 3%. WOW. If you ever wanted a death-nail to a project, that was it. I wrote:

So now we know. Nokia shipped its 50 millionth Lumia smartphone to its retail channel in the first week of March 2014. Since then Nokia/Microsoft has shipped another 26 million more Lumia smartphones running Windows Phone. But they didn't achieve 50 million activations of Lumia until after the third week of November 2014. Thats pathetic. Lumia is the most disasterous smartphone series of all time. It is a dead phone shipping. Even those who receive it as a gift or as a freebie are apparently not bothered to activate it. Yes, even if we allow for large inventory buildup, an unprecedented 26 million smartphones running that hated Windows OS, yes a massive 30% of the Lumia branded devices have never been activated. What happened to them? Most probably were just thrown away by the retail channel as unsellable junk.

 
TOMI IN 2015

JANUARY 2, 2015 - COUNTDOWN TO END AND SPECULATION ON NOKIA RETURN

Then again my annual preview of the smartphone bloodbath. I wrote in my Microsoft (ex-Nokia) section about the exact time frame of how to count the end date for the Lumia unit at Microsoft. I said it is from one to two years from when Elop is fired. Here is how I wrote it:

 

What kind of time-frame? Expect Elop to be removed roughly 1 year from when he started as the returning Microsoft employee ie around April-ish. And then the new guy has to get at least a year from when Elop is removed. But not more than 2 years from that point. If Elop is removed in January 2015, expect earliest Microsoft to shut down the Lumia unit to be around January 2017 meaning it could even happen December 2016. But this unit is not viable and I would not expect it to survive under Microsoft ownership longer than say December 2017. And before that, even this year, Microsoft might sell its handset business to someone else, just to get rid of the mess. The new owner will immediately remove Elop from running the unit haha.

 

That is almost exact by the day. Elop was fired slightly after one year from returning to Microsoft. The new guy had just under 1 year before the business was ended. And yes, most of the mess was sold onwards to the two parties FIH and HMD. And then in that preview blog in January of 2015, I wrote the first analysis of Nokia returning. I finished that part with

 

If Nokia does this carefully but deliberately. So not like say the mess Samsung did with Tizen. But methodically and with dedication, we could see real Nokia returning to market shares that would be just inside the Top 10 so around 3% market share as a target say four quarters from the launch quarter of the smartphone return. And probably half of that business would come cannibalizing Microsoft’s Lumia return sales so it would depress Windows Phone OS market share into perhaps 2% range (and push even more losses to Microsoft’s handset business).We know Nokia is returning to smartphones, this year will be one more of rumors than phones but they are coming back. And it will be on Android. But there is one possibility even more wild. You want a true wild card scenario?

 

And YES. I did then write my Hollywood script version ending to the Nokia-Microsoft-Elop-Windows-Saga. How ‘should’ it end. I actually wrote it as the last entry with the header ‘Hollywood Ending’. I said Microsoft knows it can’t make this work, they want to get rid of it, it will be costly to shut it down. Why not sell it. The unit is horribly wrecked, massive loss-making turkey, nobody in their right mind would want to buy it. But if Nokia already wants to return to mobile, buy this way back in. Take the remaining staff, get all the rights and shift to Android. I even priced it for January 2015 to be worth 1 Billion dollars (when they still had 2.5% market share. The deal actually was for a quarter of a Billion dollars now, when the share was down to 0.7% so almost exactly one quarter of what I suggested). This is part of how I justified it from a BUSINESS point of view, not the emotional angle or ‘fairness’ side:

Here’s the thing. Nokia is a rare company that is a MASTER at turning around loss-making tech companies of any cultural background and making them profitable again. Yes. Nokia knows how to revive the dead. Look at Siemens telecoms. Look at Motorola’s networking business. These were corpses that Nokia revived to profits. What it would do with the Nokia handset remains from Microsoft would not be, however, an alien business culture. They would be fallen angles returned to the heaven they once knew. The old Nokia would be back. All of the Eloppian Windows cancer would be gone. Only the old guard would return. To the mothership. To the loving arms of the Nokia networking side, ready to nurture them back to health. To many old colleagues. And most of all, to the old ‘Nokia way’ of doing things again. When decisions were made on the merits and facts and sensibly, not by a delusional madman who will fire you for speaking the truth. If Nokia was able to fix the dead Siemens and the dead Motorola networking businesses, yes they can even more easily revive the temporarily paralyzed ex-Nokia handset business. All they need to do, is let it breathe again and it will recover to health. The Nokia handset unit just before Elop instituted his Burning Platforms madness, had just generated a Nokia record profit quarter! They do know how to excell, if the CEO doesn’t overrule his staff.

 

(yeah. January 2015 I wrote that scenario. I not only priced perfectly the initial sale price of Nokia to Microsoft, I also priced - with the timing element - the correct return price. You’re welcome indeed). I did point out it was highly unlikely to happen but it was plausible. I finished my Hollywood Ending scenario with:

I said it was the Hollywood ending scenario and it is unlikely to happen. I am not forecasting Microsoft would sell its Nokia handset business back to Nokia but stranger things have happened. This is a plausible scenario and clearly Microsoft doesn’t want to keep all it bought from Nokia and Nokia does want to return to handsets. The new Microsoft CEO can see the handset business is beyond recovery. Ballmer would never have sold what he bought. The new Nokia CEO wants to be back in handsets and he would of course not want anything to do with Elop and Windows and Lumia. This situation could happen

FEBRUARY 9, 2015 - MORE LAYOFFS AT MICROSOFT

The layoffs continued and again I warned to expect more, that the end was near.

APRIL 24, 2015 - WINDOWS 10 WILL NOT SAVE LUMIA EITHER

Then we had the next misery reported by Microsoft’s new Lumia unit, market share down to 2.3% and more losses reported. And now the promise was that Windows 10 will fix it. Of course it won’t. But some fell for that old lie from the Microbrains. And I wrote:

 

Windows 10 will not rescue Lumia. The Nokia N1 tablet on Android is already damaging Lumia - in particular in China - and the moment Nokia announces its first Android smartphone, that is the final nail into the coffin of the smartphone dream at Microsoft. Nadella should shut down this loss-making disaster (or sell it to anyone for whatever price he can get). Oh, and fire that moron Elop.

APRIL 24, 2015 - ONE SOURCE SAID NOKIA WILL RETURN; OTHER DENIED

And then we had duelling Nokia stories. From China we heard yes, Nokia will return to Android, while a US based Microsoft/ex-Nokia office said no, thats not true. I said the China story was the truth (as it turned out to be, you’re welcome) and then this is how I forecasted Nokia’s return first 36 months. Check this out:

 

And yeah. Am willing to call it right now before we know ANYTHING official about what or how, Nokia will give us more than one smartphone model, it will grow fast. in the first year Nokia passes Blackberry. In the second year it passes Lumia (if that still exists). By the third year Nokia RETURNS TO THE TOP 10. And every quarter of those first 12 quarters, 36 months, Nokia smartphone business will report a healthy profit.4% markets share is where LG and ZTE are today, or where Lenovo would be without its Motorola acquisition and obviously that is well bigger than Sony Xpera today. This is the minimum level I promise you Nokia will do 'with its hands tied behind its back' and blindfolded haha.

So WELCOME BACK NOKIA. We have missed you and we will cherish you and support you. Now please make sure we fall in love with your first re-entry smartphones in ways like we loved the N93 and N95 and E90 Communicator and N8 and E7 and N9 and 808 Pureview etc.

 

Four percent market share in three years for a Nokia on Android, while Microsoft still continues fighting with Lumia. So that could be taken as the ‘lower end’ of the scale for today, haha, as Microsoft ends its pretense and Nokia can return with full sole presence of the brand and retail distribution.

JUNE 17, 2015 - ELOP FIRED, I GAVE LUMIA UNIT 12-24 MONTHS TILL END

So yeah. New guy, less than 24 months. Here is how I wrote it after my celebrations that Elop was fired:

 

This is a VERY clear sign of the writing on the wall. And sadly for any ex-Nokia employees, expect more layoffs to come in the aftermath of this announcement and the 'consolidation' within that new business unit. I think the ex-Nokia handset unit has no more than 24 months ahead of this point, and may be shut down far faster than that. Clearly Nadella knows how to read mathematics and the math about Elop's business was brutal.

It was 11 months from that date that the Lumia unit end was formally announced, partly as a sale of last ex-Nokia parts, some of Lumia was absorbed into Surface, and 1,800 Lumia Windows Phone staff still fired. But yeah. I said it. 24 months or less. It was less.

JULY 9, 2015 - MORE LAYOFFS AT MICROSOFT AND WRITE-OFF OF THE TOTAL HANDSET BUSINESS|

Then Nadella was preparing the ex-Nokia handset unit for its sale. First part, on the books it was listed as worth 8 Billion dollars. You can’t sell that for under 1 Billion without creating a huge accounting loss, unless you first ‘write off’ the investment. Say it has no value. Then you can sell it for any price. The writing was on the wall. Plus more layoffs, another 7,800 ex-Nokians were again fired and I warned, more layoffs were still coming. And that the whole unit was going to be shut down soon. (you’re welcome).

Incidentally, that forecast from the summer last year, had a tidbit looking into the Windows roadmap (Windows 11), I speculated that: “And Windows Phone side of Windows 10, I would not count on much R&D ivolvement on this dead path. The next Windows version (I would suggest it might be called Windows 11) will no longer bother to support handsets, only tablets and PCs..” Its obviously a forecast that has not yet been proven to be true or not, but obviously its insane to try to produce a smartphone OS that also runs on the desktop. If Apple doesn’t think this can work and keeps a separate OS for the Mac and the iPhone, then sooner or later the microbrains at MS will notice that is indeed so.

JULY 11, 2015 - WHAT IF MICROSOFT SOLD NOKIA BACK TO NOKIA

My big blog about the resale of Nokia back to Nokia was a summer boredom blog, but we had occasionally speculated about that now with many of my colleagues over a random beer, whisky or coffee, and I wanted to put my thoughts on paper, the big picture, properly. Turned out darned good and yeah, by now I valued the Nokia deal at half a Billion dollars (ended up one quarter of a billion ie half of that, but 9 months later when Microsoft had lost yet half of its remaining market share). Again, not many were peddling this idea but I was on it now quite seriously. To me this deal always made sense from a business executive point of view. Nadella didn’t want handsets, Nokia wanted to return. And why not. The price was now totally reasonable for either, after the investment had been written off by Microsoft. (you’re welcome)

JANUARY 15, 2016 - WINDOWS 10 IS ALSO FAILING ON SMARTPHONES

Then the evidence the pattern for Windows 10 was no different from Windows 8 no different from Windows 7 now different from... yeah. Dead. (you’re welcome).

Ok, thats about all of the forecasts and projections I made about Nokia smartphones and its Windows disaster. EVERY step was chronicled contemporaneously on this blog. Not one step was missed. I always said what I thought of the latest move - I never changed my mind, if something was seen as stupid, I said so, or if (rarely) something was wise, I said so too. I also called the moves on the rivals. Nobody was HALF as good as me, relating to Nokia and NOBODY called the fall anywhere near what I did on this blog. On many of the foreasts I was dead-on, while the NEXT MOST ACCURATE ‘expert’ was off by 100% or even 300% or more. So yeah. It was a rough painful ride, now its over. And here is the full record of what I said and what actually happened. And remember, on this blog - no advertising, ever. No sign-ups, no paywalls, no registrations or fees. Yes, I am an arrogant son-of-a-bitch with an obnoxious way of writing my blog, but I have been TOTALLY correct with NO mistakes about this saga - where NOBODY else was even ‘mostly correct’ contemporaneously when they wrote about this debacle. You’re welcome.

Now, for those who want to see the future, by the eyes of the most accurate forecaster in the mobile industry, consider TomiAhonen Mobile Forecast to 2018, came out last year.

Time for a new Acronym for Mobile, Digital, Media & Tech: Our New Tech Industry Sectors Are: SCIAM - Social Media, Cloud Computing, Internet of Things, Analytics, and Mobile

There are plenty of great acronyms in our industry. For example a recent one is SMAC (Social, Mobilty, Analytics and Cloud) which is a nice way to remember what all are the real hot tech 'industries' already viable in tech (compared to emerging promising tech which is not yet established as a viable global (and profitable) industry such as 3D printing, drones, augmented reality, virtual reality, nanotechnology etc. Most of those will probably also grow to be big but they are TRIVIAL in size, compared to say Social Media - haha Facebook alone is bigger than global 3D printing industry plus drones plus AR plus VR plus nanotechnology combined). Recently I have been thinking about this and calculating and doing some deep analysis, and have now started to discuss my thoughts in my private customer seminars. Eventually this will become a public conference item and a chapter in an upcoming book. But right now, I want to just introduce a new acronym for our industry. The problem with SMAC is that it is clearly missing a major component... where is IoT? Where is one of the biggest tech opportunities - definitely already a giant global industry - the Internet of Things? All the stuff about Smart Cities and Connected Cars - thats all part of the IoT slice of the tech future - and that CERTAINLY is of the scale to be included within 'SMAC' for example. I have the solution. Easy:

SCIAM

SCIAM is our newest acronym, effective today. If you want to remember easily the 5 largest dimensions of the near future of growing high tech sectors, on a time window from now to 10 years - that is it. It covers all the legitimate big ones without any of the stagnant old industries like PCs, Television, the legacy Internet etc - but including all the big growing tech industry sectors with yes, the Internet of Things. So SCIAM stands for Social, Cloud, IoT, Analytics and Mobile. Within IoT we have all its subsectors especially Smart Cities and Connected Cars but also all other IoT concepts from the connected fridge to the connected baby diapers. Mobile obviously includes the main elements of the classic industries which are shifting to mobile so PCs (smartphones are now accepted to be part of the definition of computers), videogaming (this year 50% of total videogaming revenue will be mobile), the internet (most internet users have been mobile for many years already) etc.

SCIAM ALSO INDICATES SCALE

The beauty of the acronym of SCIAM is not just that it adds IoT to SCAM, it also re-arranges the industries - BY SIZE. SCIAM lists the 5 major growing global tech industry sectors - by their relative size. Social Media is big, but its the smallest of these five. Cloud Computing is bigger than total Social Media. Internet of Things may be somewhat vague still today because of the incredibly wide range of definitions but when in full deployment, IoT will be significantly bigger than both Social Media and Cloud. Just consider Connected Cars, alone, will be a larger industry than the global Social Media industry of Facebook, Twitter, Instagram etc. Then what of Big Data? So the A in SCIAM, Analytics (is a close synonym to 'Big Data'). Analytics is significantly larger than the Internet of Things, why? Because while IoT will have dozens of Billions of gadgets connected, most of those will not post huge profitable traffic to the network. Your new connected fridge will not take selfies next to the new sexy microwave oven, and post them to FridgeBook.com for other kitchen gadgets to come and see. But Analytics - the Big Data industry - will arguably replace or supplant or double the size of the ADVERTISING industry. A massive half-Trillion-dollar industry all by itself. Advertising is running to Big Data and gobbling up many of the independent players along the way. Analytics will be the biggest of these first four. But as Mobile is the last in the acronym SCIAM it also tells us, Mobile is the largest of the 5. Is today. Is still growing fast. Will easily be the largest of the 5 in five years. Mobile will still easily be the largest of the 5 in ten years from now.

THE JOKES

So to finish with something less heavy, lets remember these industries and what they mean. Why is mobile inevitable part of all aspects of SCIAM? Let me tell you:

Social Media without Mobile would soon become Lonely Media.

Cloud Computing without Mobile is just Plain Old Computing.

Internet of Things without Mobile is just Things.

The Connected Car without Mobile is a Disconnected Car.

The Smart City without Mobile is what we have today: a Dumb City.

Big Data without Mobile is just Big. A Big Waste? Maybe not, maybe more like a colossal, gargantuan waste.

Mobile has been the fastest-growing giant industry in human history. Automobiles was the previous champion, which went from zero dollars to one Trillion dollars of annual revenues (1,000 Billion dollars) in 100 years. Mobile shattered that record, we broke the 1 Trillion dollar barrier in 29 years from launch. Television, Cinema, Music, Print, Landline telephones, Advertising, Radio, Computers, Airplanes, the Internet etc have never reached that level, none of them have ever been bigger than half a Trillon dollars in annual sales. After mobile set the world record for fastest-growing giant industry ever, it didn't stop growing. Mobile is still - by far - the fastest-growing giant industry. Today Mobile is worth 1.7 Trillion dollars and will pass 2.0 Trillion in value by 2020 becoming one of the planets 5 largest industries. By 2035 Mobile will be the largest industry in the world. So yeah, lets welcome SCIAM as the new acronym to remind us about all the 5 aspects of huge tech industry sectors with rapid growth today. From smallest to largest, these are all soon to be 100 Billion dollar industries or larger: Social, Cloud, IoT, Analytics, and Mobile.

I will have more to share about this as I get to it, but I wanted to share this top-line thinking so you can come onboard and think it through. What do you think. SCIAM? It does cover all the real industries while keeping the hype industries off the map like VR and drones

So the Nokia brand returns.. with a Vengeance

Ah, that was fabulous news to discover when returning online after two days out of coverage. All readers of this blog already knew what I just discovered.. And let me say that essentially all you ever wanted to know about how will this new Nokia deal work, and the sensible analysis about it, is already on this blog, but written by my readers in the comments section (thank you!). I don’t really need to write my own analysis, I could just quote my regular readers.

What is the deal. Microsoft quits its disastrous play into handsets via the purchase of the Nokia handset business. After firing most of the people they brought in, now part of the remains are sold, kind of, back to Nokia. The hopeless venture into ‘Lumia’ brand and Windows based smartphones will be terminated and some of the resources Microsoft had acquired will transition to the Surface tablet (and phablet) business. The end of this to Microsoft branded consumer handsets is going almost as totally a catastrophy as Microsoft’s previous attempt when they bought Danger who had been making the highly popular youth phones branded ‘Sidekick’. Yes, obviously, its also exactly as I predicted when the Nokia-Microsoft sale was announced in 2013, and what I reaffirmed when the deal was completed in 2014 and reminded that Microsoft handset venture continues to be dead, last year in 2015 when Microsoft fired Stephen Elop and gave this project one last chance.

There was that rumor a few days ago that Hon Hai aka Foxconn (makers of iPhones) was buying the remaining Nokia business from Microsoft. I wrote my initial analysis of that rumor. I also argued that it would make sense for Microsoft to sell the remaining ex-Nokia handset business back to Nokia (instead of Hon Hai/Foxconn). I pointed out that Nokia was already coming back to smartphones and Nokia could/should be able to make this loss-making unit turn back into a profitable and growing business (part of Nokia’s core competence is to turn loss-making telecoms businesses back into profits, see Siemens and Motorola networking businesses, plus now the project with Alcatel-Lucent). I speculated that if there now was a deal in the works with Hon Hai/Foxconn then there must have been at least serious talks between Microsoft and Nokia. As the new CEO of Microsoft, Satya Nadella was not involved in the Nokia purchase (that was done by ex-CEO Steve Ballmer) there was no personal reputation or political investment in that decision. Similarly, Microsoft had already written off the total purchase in its accounting books last year, so the sale of the handset business could be done without a penalty in an accounting/finance sense.

Obviously as it turns out, there had been talks with Nokia and the deal is a complicated three-way (four-way) deal where part of the ex-Nokia business is sold to a new Finnish entity, HMD, which now acquires Nokia handset branding rights from Microsoft and handset design aspects. Meanwhile Hon Hai/Foxconn has set up a company called FIH, which will acquire the ex-Nokia featurephone factories, and handset sales and marketing from Microsoft. Because Nokia already had by the original sales contract from 2013 the rights to return to sell smartphones now, this new partnership of HMD and FIH will become a Nokia brand full portfolio company, designing, manufacturing, marketing, selling and distributing smartphones, dumbphones and tablets under the Nokia brand (exclusively) and using what remains of the original Nokia design, manufacturing, marketing, sales and distribution of ‘original’ Nokia. The part left out is Windows smartphone OS and it will be replaced (we all rejoice) with Android. Nokia retains a licencing agreement with this partnership ie the Nokia brand and some share of its market success, without taking much of a risk in two very volatile businesses.

WHY THE DUMBPHONES?

The traditional handset business (dumbphones aka ‘featurephones’) was a 1 Billion handset business sold annually a few years ago but last year sold only 500 million and this year will sell 400 million and the business will be down to near zero handsets sold by year 2020. A dying business, where Nokia’s brand even under Microsoft ownership was still holding a large market share and fierce loyalty among loyal customers in mostly Emerging World countries from India to Nigeria. Nokia brand offering in ‘featurephones’ extended to near-smartphone class with the Asha series of dumbphones that had good cameras, touch-screens, 3G and WiFi connectivity and of course the full internet; they even could take apps that were written in Java such as Angry Birds, Facebook etc. Before then-CEO Stephen Elop (worst CEO in any time among any Fortune 500 sized company in any industry) decided to destroy the Nokia handset business the Nokia handset business was vibrant, highly profitable, growing faster than Apple’s famed iPhone business (yes, its true) with high customer loyalty and a powerful sales and distribution asset.

Stephen Elop (did I say, worst CEO in history, of any industry) did yes destroy the goose that layed the golden eggs. He did that to collect a bizarre bounty on his CEO contract which ended up being an incentive for demolishing the most profitable part of Nokia’s business). A key point to note, was that Nokia was the best among ‘legacy handset manufacturers’ (handset manufacturers who sold both dumbphones and smartphones, as distinct from newer handset makers who only sold smartphones like HTC, Blackberry and Apple) to MIGRATE its dumbphone customers to smartphones. While Motorola, Samsung, LG, SonyEricsson, Huawei, ZTE and others had to accomplish this tough transition, moving customers from relatively modest-cost and modest-capability phones to full smartphones, the others struggled so badly in that transition that every one of Nokia’s rivals had quarters where they produced losses in their handset unit, and their resulting market share in smartphones was WORSE than the share in smartphones. Nokia (up to when Elop - worst CEO of any industry ever - decided to destroy the business) was the only one of the legacy handset makers to report every single quarter of that transition a profit - and the only one whose resulting market share in smartphones was higher than its share in dumbphones. Yes, Motorola, SonyEricsson, LG, Samsung etc all saw a loss in market share when they tried to move their customers to smartphones but not Nokia. Nokia was able to GAIN market share while executing this tough and expensive transition. And only Nokia was doing that profitably.

So on the dumbphone business, its not a totally dead duck that this new Nokia-HMD-FIH partnership is reacquiring. It is an interesting asset which is actually profitable and still sells in the range of 80 million dumbphones per year, and which is the type of business, that Nokia once was the best in the business, at transitioning to smartphones. Its not inconceivable that Nokia is able to transition all of this last 80 million dumbphone customer base to smartphones in the next 36-48 months. These would be extremely low-cost smartphones of course, but still they would be smartphones. 80 million handsets is a 4% market share of total handset market. 80 million smartphones would have been a 5% market share last year in smartphones, and would put this unit in contention for roughly a 4th place finish in the Top 10. That is IGNORING the top-end and current Lumia etc smartphone potential. This is why this new partnership actually WANTS the old dumbphone unit ‘back’ from Microsoft. They are genuine Nokia mobile phones with excellent market share, a strong global sales and distribution organization and a high volume of handset production in very modern factories, with very competent component sourcing, etc. It is a good foundation to start from.

Note that this ‘dying’ part of ex-Nokia dumbphone business holds about a 15% market share in dumbphones currently and its main rival globally is.. Samsung. But the BUSINESS performance of this unit had suffered from 2011 onwards (Stephen Elop worst CEO ever) and still suffered from bad carrier relationships by Microsoft up to today. This unit could see a modest ‘revival’ in its last years. The Nokia basic phones are very well made, fit their intended customers very well, with aspects such as basic cameras, in-built FM radios, great battery life, etc. Once the ‘anti Microsoft’ attitude by the carrier community and distribution is removed, this unit should achieve its full potential while the HMD-FIH partnership prepared for the final migration of remaining Nokia brand customers to low-end Android smartphones.

ANDROID NOKIA SMARTPHONES

The eagerly-awaited part of this partnership is the ‘proper’ transition of Nokia from dead OS platform Windows to Android. When I speculated on what a pure Foxconn/Hon Hai purchase of the ex-Nokia business from Microsoft might become, I said I expected Foxconn/Hon Hai to focus on low-end and at best mid-price smartphones on Android to gain sales volume, and mostly ignoring the top end ‘flagship’ class contest. I also thought that Hon Hai/Foxconn would not want the actual factories nor the sales and distribution staff from Microsoft which once belonged to Nokia. Now in this new HMD-FIH partnership, essentially ‘the full Nokia’ handset business, of what is left, is transferred in parts to these two partners. Rather than just pursue a large volume low-end business, this partnership will be well prepared to actually ‘compete’ fully for a total smartphone portfolio play. Expect Nokia brand to rapidly return to flagship class smartphones and then several models all the way far far below where day Apple’s new iPhone 5 SE is priced. Because HMD has acquired Nokia design and intellectual property aspects, this new partnership can pursue ‘typical’ award-winning top-end smartphones. But differing from the past 5 years the new HMD-FIH partnership will not be stuck trying to push a dead Windows OS, but rather can thrive using the Android OS (which powers about 80% of all smartphones in use and sold in 83% of new smartphones last year).

I mentioned that Nokia designed a series of 3 ‘X Series’ Nokia Android smartphones in early 2014 just before the handset business was handed over to Microsoft. Microsoft then immediately ended those phones. They were low end smartphones but they did achieve a nice start in sales. They were ‘typical’ low-end smartphones of modest specs. But they also were priced to sell. When we consider the upcoming portfolio, expect several models as updates to those models (and possibly even launching a few of them still now, at lower prices). The more interesting part was Nokia’s R&D project for handsets (and tablets) for Android. That - which is kind of the father of FIH - has already DESIGNED Android based ‘new’ Nokia smartphones, which this unit (while still at Nokia) was hoping to then find a partner like Hon Hai/Foxconn to start to manufacture and sell. In that way, the transition from dead Windows to Android is not starting ‘from scratch’ like it did when LG went through this same process - they tried to go purely Windows first, before admitting its not viable and ended Windows and went fully to Android where most of LG’s rivals had already gone. So we could see (hopefully will see) the first new Nokia Android smartphones relatively soon. I think a Christmas launch of new Nokia Android smartphones is optimistic (but might happen in small volume) but a Spring 2017 roll-out should be very feasible as this deal is now announced in May of 2016.

We then need to think of Nokia and its potential. Apple did not invent the smartphone (in fact the first iPhone of 2007 was not even a smartphone, it was only a high-end expensive featurephone). Nokia invented the smartphone. Some foolish pundits and mostly US based ‘experts’ have peddled the myth that Nokia was somehow behind on the trends in smartphones. Nothing could be further from the truth. Lets take Apple. All major developments on Apple’s iPhone, as announced by Apple both on the hardware to the iPhone and the iOS operating system - all of them - had already existed on Nokia flagship class smartphones - sold YEARS before that latest model iPhone was annoucned. This was true all the way to last year, 2015. Yes, when Apple introduced phablets - Nokia did them in 2013 - and when Apple introduced a mobile wallet Nokia had done Nokia money back in 2010. Nokia had NFC on its smartphones long before Apple, and better cameras, plus a long slew of features, several that Apple STILL has not implemented (such as microSD card slot). What Nokia was particularly good at, was adding features that are popular in the Emerging World from the in-built FM radio, to dual SIM, to the in-built flashlight/torch function. And on the pricing, Nokia had pursued lower-end smartphones long before Apple decided to go to lower-end smartphones. Finally the world distribution, Nokia was in India, China, Brazil, Nigeria etc for years and years before Apple started to pursue those markets. It is simply ignorance to peddle the myth that Nokia was ‘behind’ Apple. As I said, the last year before Elop (worst CEO ever) destroyed Nokia’s handset business, in year 2010, Nokia grew MORE in smartphone business than Apple did. Apple was not CATCHING up to Nokia. Nokia was more that twice as big in market share as Apple’s iPhone - and Nokia was PULLING AWAY from Apple, while Nokia reported its most profitable smartphone quarter just before Elop (worst CEO ever) suddenly caused the total collapse of the business.

 
Nokia knows what handset customers want. Nokia knows what is a smartphone, Nokia literally invented the smartphone. While the original iPhone of 2007 was a revolution (and I said so back then) after that revolution, Apple’s total iPhone strategy was to add features that Nokia had in its smartphones - but on typically a four-year lag. Who was following whom? Nokia knows how to design great phones and to add features and abilities that consumers want and fall in love with. Like now, Apple is rumored to add an optical zoom (aka ‘real zoom’) to its next iPhone, the iPhone 7. It is expected to be either a 2x or 3x optical zoom. Nokia again, has done all that, but when did Nokia do the world’s first smartphone with optical zoom? Nokia did that LITERALLY ten years ago, in 2006. It was the N93. And it was a 3x optical zoom, while Apple might do a lesser zoom now. Or take Xenon flash (aka ‘real flash’ versus the LED flash on most smartphones). Apple still doesn’t do Xenon flash on iPhones. Nokia had the first Xenon flash in 2007.

And Nokia’s massive image sensor, the Pureview with 41 megapixels. The image density was literally the best on planet earth. Literally the largest camera sensor of any camera on the planet, from any camera brand from Nikon to Canon with pro cameras costing 10,000 dollars without their lenses; or any other pro camera including the Hasselblads and the like. And why do I say ‘on planet earth’ - because the only camera sensor even more advanced than Nokia’s Pureview 41mp sensor, when it was launched in 2012, was in orbit, used on US spy satellites which had 64mp sensors. There is much more to camera quality than who has more megapixels, but in terms of image resolution - the sharpness of detail - then megapixels matter. Nokia has still today (in Microsoft’s Lumia) the largest sensor ever put into any cameraphone. Now this FIH-HMD partnership also reacquires that tech, and we can expect more super-cameras on future Nokia flagships. Oh did I mention, the camera function this year becomes the most used feature of any phone, ahead of messaging (and far ahead of voice calls or internet or apps or Facebook or anything else). Who leads whom? Nokia KNOWS how to do great smartphones. What it had, was a bad OS and the sales boycott against Microsoft by the carrier community.

RETURN OF THE REAL NOKIA

So the Windows project was a disaster yes. Nokia had never stopped making great hardware - Nokia even with Windows was winning best phone awards. But the sales and distribution channel was strangling all Windows makers - and all other giant brands left the Windows family by the end of 2011 (yes at one point, 7 of the Top 10 largest handset makers offered Windows smartphones but Windows never passed 12% total market share. Nokia had 29% market share the year before Elop - worst CEO ever - wrecked that business).

Now the remains of what once was the world’s dominating handset juggernaut, but including parts of its legendary design, its overpowering sales and marketing, and its superbly efficent factories, can be ‘released’ from the restraints and constraints of Windows. Now the question is primarily, on how quickly and with how broad a portfolio will this new FIH-HMD make its comeback. I’d love to see the first Nokia Android smartphones this year but lets say they come back in any meaningful way in terms of handsets and their sales reach only next year. Lets say by the end of 2017 Nokia should have at least 5 Android models, maybe something like 8; and including one clear flagship with Pureview camera, Xenon flash etc. That Nokia brand should be at about 3% market share for Q4 of next year. That is four times better than what the same unit, selling Lumia brand on Windows is doing now, in Q1 of 2016. It will be a massive slap in the face of Windows and Microsoft, when this happens.

Then Nokia should be expanding, mostly further down in the price range, but also across more niche markets (I half expect and fully hope for a return of ‘The Communicator’ a full touch-screen large screen flaship class superphone with slider/folder physical QWERTY keyboard, in the style of the Nokia E7 and the N950). Nokia has its own ‘skunk works’ and owns a vast array of patents in the handset and wearable and portable gadget space, we could see many new ideas coming in near-future flagship class phones. But expect most of the new Nokia to be roughly iPhone-a-clones, slab touch-screen ‘generic’ smartphone designs like nearly all of any other Samsung Galaxy or LG or HTC or Sony or Huawei or Xiaomi smartphone that runs on Android. But a portfolio of at least 10 and could be as many as 20 smartphone models by Q4 of 2018 also means a market share well past 5% and Nokia brand fighting for the 4th ranking just outside the Top 3 of global smartphone brands by market share. The last time Nokia had a smartphone market share higher than 4% was in Q2 of 2012, when still more than half of Nokia smartphones sold, were powered by Symbian or MeeGo. The story will be the incredible come-back of Nokia and the damage is likely to be most felt by Samsung but also several of the other current Top 10 brands like LG. I strong recovery by Nokia can well have Sony quit its phone business and HTC and Blackberry to finally fold.

A recovery spirit with the rump-Nokia and its ‘last survivors’ now with FIH-HMD - will power the unit to more heroic and brave attempts and a continuing growth where for 2019 I think Nokia will be challenging Huawei for the Top 3 position. Nokia might be at around 7% to 8% market share which in 2019 will mean something around 135 to 150 million smartphones sold globally. Microsoft sold 21 million Lumia/Windows smartphones in the past 12 months. Nokia’s best year was 2010 when it sold 103.6 million smartphones. But as this recovery-Nokia returns to its ‘natural’ market position as a highly beloved, features-packed, premium phone brand but selling in all markets and at all price points, the fight will get tougher. From 2019 the ‘bounce back’ will be completed and I think its very likely that Samsung will still the biggest smartphone maker and Apple number 2, but the race will be on for number 3 and Nokia as FIH-HMD will be perceived as one of the strongest competitors in that market heading into the next decade. It is great news for all fans of mobile phones and smartphones. It is also great news for Finland and for fans of Nokia. This is pretty close to a ‘best case’ scenario of how Nokia could come back, and yes, we will finally get a full portfolio of ‘real’ Nokia smartphones running full Android. Tervetuloa takaisin Nokia!! Welcome back Nokia !!

Just heard the news, hold on am on trip gotta board plane.. ie Nokia return via Foxconn

Just learned the news. Am at airport, briefly connecting (been out in 'wilderness' literally out of coverage). Gotta board a plane. Will absorb initial news on flight & think, will post something from next airport connection in a few hours. Hold on... ie Nokia return etc ...

So What Could Foxconn Do with Nokia Brand if Microsoft Sells Remaining 8 Years of that Licence

I don’t like to speculate on all rumors floating around about tech topics but this one is worth discussing. What might Foxconn gain out of the Nokia brand? A fresh rumor out of China over the weekend says that Microsoft will shut down the ex-Nokia handset business, fire half of the remaining staff, fold the rest to the Surface project and to sell the Nokia brand to Foxconn for the remainder of the 8 years Microsoft still has the licence to the brand.

The Microsoft Windows based Lumia project is dead. We know this, its been obvious for years. I was the first analysts to proclaim the Nokia Microsoft ‘partnership’ would be such a failure it would result in Nokia selling its handset business (and I speculated, that the most likely buyer was Microsoft). I said this on the day the partnership was announced when many US based tech analysts thought Nokia on Windows would become larger than Apple haha, and have more than 20% market share by 2015. Yeah. Try 2%. So I called all the turns of the sad saga, from the collapse of Nokia smartphone sales and obviously its profits; to the point that Windows OS itself also died, very suddenly in the summer of 2011 (it was actually viable prior to that, Microsoft has had as many as 7 of the Top 10 largest smartphone manufacturers supporting its OS. I called the exact timing of when the OS died on smartphones, after which all the remaining partners except Nokia fled the system. That was yes June 2011 and not related to Nokia. It was another of Steve Ballmer’s boneheaded corporate moves.)

So I said it was not Nokia which was the fault in the failure of Lumia. It was Microsoft. Therefore, even selling the handset business to Microsoft would not help - in fact it would hurt. All this happened yes exactly as I said it would. And I said last summer, when idiot Stephen Elop was fired from Microsoft (worst CEO in corporate history for the 3 year duration he had at Nokia, not just worst CEO of the year or of the mobile industry, he was literally worst CEO of any industry in the history of formal global business corporations - and I was the first to call for him to be fired) - the new exec in charge of the rump of the old Nokia handset business now part of Microsoft Mobile, will have from 12 to 24 months to try to revive and turn around the loss-making Lumia unit. And that effort will fail. As we’ve seen in the past year, its just one disaster after the next. This is Windows market share in smartphones for the past ten years:

Microsoft Windows Smartphone OS Market Share over the Past 10 Years
2006: 12%
2007: 12% (iPhone launched)
2008: 11%
2009: 9%
2010: 5%
2011: 3% (Nokia joins Windows ecosystem)
2012: 3%
2013: 3%
2014: 3% (Nokia sells handset business to Microsoft)
2015: 2%
2016: 1% (optimistic estimate, may end up below 0.5%)
Source: TomiAhonen Consulting May 2016
The above may be freely shared

That is a dead dog. So yes, its obvious Microsoft new CEO Satya Nadella, who was not part of the silly plan by Microsoft to buy Nokia’s handset business (that would be their moron-in-chief Steve Ballmer). Microsoft wrote off the whole purchase and even after that write-off more layoffs followed. I warned that this business will never be revived and even more layoffs were coming, and that the whole Lumia ex-Nokia handset business project on Windows by Microsoft will be ended, and the time frame is between summer 2016 and summer 2017. We are just entering that time frame.

RUMOR FROM CHINA

So there is a rumor on the VTech website (its in Chinese but Google Translate will do a reasonable translation) that Microsoft will sell the licence of the Nokia handset brand to Foxconn up to the end of 2024 which is how long Microsoft owns that right. The website doesn’t name sources but it also says the Microsoft Mobile unit will be ended. The dumbphone side that sold Nokia brand featurephones (like the Asha series known to many readers) will be shut down. The smartphone Lumia business will be ended, merged into the Surface business. About half of remaining ex-Nokia employees would be fired.

If this rumor turns out to be true, then it also makes sense that about the only thing Foxconn would want is the Nokia brand. It has no use for the ex-Nokia handset factories - Foxconn is the world’s second largest handset manufacturer today, and it has now excess capacity in its factories as Apple iPhone sales have stopped growing. Foxconn would not want to buy very expensive, senior, very highly paid marketing, R&D and sales staff either. It hires very very VERY low cost Chinese labor and if Foxconn needed to expand any parts of its organization, it would hire freshly graduated Chinese engineers and MBAs at a tiny fraction of the salary of those ex-Nokia current Microsoft employees, stationed in expensive countries with laws making it hard to even fire them...

Personally I think that actually the sales staff of the Nokia featurephone business - who are likely to be all fired - would be a valuable asset for someone like Foxconn for it to fully capitalize on the opportunity of the Nokia brand, but I think they probably won’t want that expense. But lets look at this from Foxconn’s angle. Why? Would they want this? And why the hell not.

Foxconn is operating at a tiny tiny sliver of profit margin on a high-volume low margin contract manufacturing business. It physically manufactures more than 1 in 10 handsets sold in the world, and physically manufactures the highly desirable Apple iPhone, a smartphone that has powered Apple to world-record profits. What Foxconn would love is to have just one tenth of Apple’s share, selling its own Foxconn brand (or licenced Nokia brand) smartphones with just half of Apple’s profits - and make a KILLING as a hugely profitable company. By that alone, Foxconn total profits would more than double. And the company total business profitability would roughly speaking double. Just by having a tiny slice of what Apple does, but at half the profit that Apple gets.

Does this require advanced R&D. No. Foxconn has been co-designing iPhones and supplied lots of design ideas and suggestions to Apple including prototypes of various models to expand the product line (these were created at Foxconn as sales/marketing vehicles, obviously they want Apple to increase its order of total handsets made by Foxconn). We have heard rumors in the past of lower-cost ‘nano’ type iPhone models which eventually resulted in the iPhone 5C and now the 5 SE. There also were other rumors of for example a QWERTY-slider variant for the iPhone. This doesn’t require a design genius to generate ‘typical’ variants to an existing phone line. It mostly requires insights into what is technically possible with current components and manufacturing. What Foxconn could easily do, in its sleep today, is to create a ‘competitive’ flagship in a Samsung Galaxy class to run on Android and to be about as good as anything from HTC. A competitive mid-range smartphone on Android, just by taking an ‘average of specs’ approach, could be close to best-of-breed, easily on par or exceeding what say a Xiaomi or Oppo or Coolpad can sell today. What Foxconn would want, is primarily a highly popular highly-selling model rather than the award-winning best-of-breed. So a competitor far more to the iPhone 5SE and priced say around 300 dollars, rather than doing a new flagship for the Nokia brand. And then go a bit dow-stream from that with a pair of cheaper Android mid-price smartphones in say 200 dollar and 150 dollar range.

A Foxconn smartphone on the Nokia brand very likely won’t come with Carl Zeiss optics or other such tech specs we have grown accustomed with Nokia but it would be competitive as a ‘generic specs’ Android on whatever price point. So the 300 dollar Nokia Android premium Foxconn product could have say a phablet screen and 16mp camera, 4G and dual SIM with microSD slot. It might very well include the removable/replacable battery but likely would not be waterproof. Not quite in a Sony Xperia or Samsung Galaxy S7 or iPhone 6+ class but not far. Be a bit cheaper, so on that 300 dollar smartphone spec class, the Foxconn-Nokia would be very competitive. And from Foxconn manufacturing and sourcing power, they’d be incredibly profitable for Foxconn to manufacture.

Then the issue only becomes the sales and distribution. Nokia brand has not died (even as the USA continues to be bewildered by this fact. Come visit India or Nigeria or the Philippines or Egypt and see the power of Nokia brand). The boycott by the global carriers against Microsoft was against.. Microsoft not Nokia. Anyone using Windows OS on smartphones was boycotted and all others shifted immediately away from Windows to Android. Even Nokia finally admitted this and launched 3 Android smartphones just before the unit was transferred over to Microsoft (who then - idiots as they are - shut down that rapidly-growing Android smartphone part, while insisting to keep the loss-making Lumia alive). Without the distribution channel boycott against all Windows smartphones, a Nokia brand on Android is freed from the artificial barrier to its growth.

How good could Nokia sell without this boycott? We will never know for sure but we have a good indication from Asha. The Asha series was launched and lived almost the same duration of time as the Lumia line while that was under Nokia ownership. The Asha featurephone line was a ‘premium featurephone’ as opposed to the bare-bones dumbphone side of Nokia’s non-smartphone handset business. So an Asha had a touch-screen, nice camera, full HTML browser internet, could install apps like Angry Birds (via Java) and had 3G, WiFi etc. It was to normal consumers totally equivalent to a lower-end smartphone at that time. Like most of the Lumia handsets sold. The Asha was a direct rival to Lumia. So how did they do? The Lumia series had the biggest marketing Nokia had ever had for any smartphones. That was compounded by Microsoft throwing tons and tons of money to help market the Lumia and Windows Phone. There were bundling deals like in the UK, where if you bought a flagship Lumia smartphone, you received a free Xbox 360 gaming console in the bundle. Meanwhile Asha was mostly ignored with minimal marketing support by what was still then, the world’s largest handset maker. How did Asha do? It outsold Lumia over the full period both were sold alongside each other! Yes. Nokia achieved a kind of ‘stealth market share’ of DOUBLE what Lumia did, if you just removed ‘Microsoft’ and ‘Windows’ from the Nokia brand. And Nokia did this without meaningful marketing support for Asha!

When Nokia Lumia on Windows Phone OS managed 3% market share in 2012 and 2013, the ‘effective’ market share by consumers who can’t tell what is the difference between a smartphone and an Asha - there the market share actually was 6% both years! Six percent market share today for Nokia-Lumia-Asha-Microsoft-Foxconn would be fourth largest smartphone manufacturer with sales of 86 million smartphones and even if these were sold at world average handset price, not average smartphone prices (most of Nokia’s remaining market is Emerging World and both Lumia and Asha sold in mid-price not premium price ranges) thats a 17 BILLION dollar business. Just before Elop destroyed the Nokia handset business in February 2011 the smartphone side of Nokia’s business was generating a profit margin of 12%. Even if that would be down to half today and we say its 6%, that means a Billion dollars in profits. By VERY conservative estimates, the base value of the Nokia smartphone business, if you remove Windows OS and Lumia, move Nokia smartphones to Android, would be about 86 million smartphones sold per year, generating 17 Billion dollars of revenues and 1 Billion dollars of profit. And yes, Nokia without Windows would be the fourth largest smartphone maker behind Huawei but ahead of companies like recent tech darling Xiaomi, or larger than LG, Sony, Lenovo, Blackberry, HTC, ZTE, Oppo, Vivo or Coolpad.

Note that in addition to its smartphone business, the now-Microsoft-owned Nokia dumbphone business still sells basic phones globally and that business is profitable but its shrinking fast. It has no synergies with Microsoft’s Windows based visions and those phones have such basic specs that any Windows variant is hopeless to consider. But that business sold about 70 million dumbphones last year and will sell about 50 million this year if Microsoft (or someone else) kept it still going. Microsoft doesn’t care, its profit margin is so slight, it actually ‘hurts’ the bottom line, makes the overall Microsoft business seem less profitable and as its an industry sector that will end by year 2020, Microsoft will be shutting it down in any case soon. It makes sense to make that announcement and ‘decision’ at the same time as the overall decision about the end of Lumia (and any sale of the Nokia brand to Foxconn).

WHAT COULD FOXCONN ACHIEVE?

So we saw briefly Nokia Android smartphones. They were jumping off the shelves at the stores, before Microsoft shut that business down. There were 3 Android models announced but only one was sold in significant numbers. They were designed to the low end of the Android handset wars of 2014 in the 150-200 dollar price range, well below the flagships or even mid-price smartphones. But they were on specs and performance that Windows OS, a notorious resource hog always, couldn’t support at that time. And going back, the Nokia premium proprietary OS platforms, MeeGo and its predecessor Maemo were running on Linux like Android, so they were cousins to the Android family. Android is the standard OS so anyone supplying smartphones is ‘safe’ to go with Android.

Foxconn can, as I said, rapidly create a ‘generic’ mid-range premium smartphone in the iPhone 5 SE price range with slightly better specs, to make something very compelling in any market and manufacture it to high enough quality levels that it will not seem out of line with past Nokias. It won’t have all the design aspects we loved about Nokias but its not also intended as a flagship to loyal Nokia fanboys who bought top Nokia phones. Its meant, instead. to capitalize on the strong brand of Nokia loyalty in the Emerging World markets, where smartphones still today are less than half of all phones sold, but in the next two years, the majority of phones sold will shift to smartphones. Where loyal Nokia owners will come to stores looking to buy a new Nokia and they will ask the store salesguy for something called a ‘smartphone’. And they may even be told by their relatives to not buy Windows or Lumia. So if Foxconn can offer a ‘proper’ branded Nokia running Android with good competitive specs on a 300 dollar device, its an easy sale.

Then Foxconn will release a couple of lower-cost devices on the same principles, take the average of specs expected on a 200 dollar, 150 dollar and 100 dollar Android smartphone - and release those as Foxconn-Nokias and watch the sales run in the door.

That all is a nice idea, except for distribution and sales and marketing. Foxconn doesn’t have any of that. So they would have to build that organization and competence which takes a lot of time and has huge variances globally between countries and across regions. BUT some of the sales would be done online. That is an instant (if modest) revenue stream. Then part of the sales would literally come in the door. Many carriers WANT a Nokia without Windows, and will love to have Nokia brand return. They will be sending delegations to visit Huawei and ZTE and Samsung etc in Asia, anyway, on various business trips. A visit to Foxconn’s Nokia office would become an easy side-step slight detour and extra day or two on the trip. On that trip, an order of new Nokia Android smartphones would be signed, often on exclusive deals where that one carrier becomes the launch customer of Nokia’s return via Android, into that country. Where Foxconn would not have a global sales organization, it would happily sign such exclusive deals early on, to get a foothold into those markets.

What Foxconn would need, for rapid launch, is a set of a couple of smartphones, probably those 300, 200, 150 and 100 dollar price points roughly, with very generic Android slab smartphone specs. Say the 300 dollar device as a phablet, the 200 dollar device as a 4.5 inch screen, the cheapest with small 3.5 inch screens and the cheapest without 3G and only say a 2mp main camera. Foxconn has enough generic Android smartphone specs and knowledge in-house to ship the first one or two of those four before Christmas, if the deal is signed in May. And all four to ship in large volumes by Spring of 2017. Then they’d see what else the market wants, and expand from there. By 2017 Foxconn would probably run 6-8 models of Nokia smartphones on Android, on prices ranging from say 400 dollars to 50 dollars. No real flagships but nice mid-price smartphones yes to satisfy most normal non-geeky users.

The retail distribution would be the hard part, and that would grow slowly but by Q4 of 2017 this Nokia brand by Foxconn should be at a 3% market share and Nokia would return to the Top 10. If Foxconn kept expanding its product line and sales distribution and marketing, it could get to something around 5% by the end of 2018. Thats a Top 5 smartphone manufacturer of the scale of Xiaomi or Lenovo (with Motorola). If we say the average price of these Foxconn Nokias was 120 dollars then for 2019 Foxconn could be sitting on a business selling 95 million smartphones, worth 11 Billion dollars, generating it a profit of 1.1 Billion dollars and as a sideline business beyond the iPhone, Foxconn would sell roughly 1 Nokia branded Foxconn smartphone for every 2.5 iPhones it manufactures for Apple to sell.

So on the Microsoft side, Lumia is DEAD. It cannot be revived. Every single Lumia smartphone ever manufactured, was sold at a LOSS. One third of all Lumia smartphones that actually shipped out of the factories, was never even ACTIVATED. The Windows OS on smartphones is DEAD. But the problem is not ‘Nokia’ brand. It was just that Microsoft is dead in smartphones. So if Nokia were to discard the poisonous Windows and Microsoft and Lumia baggage, and relaunch as say the Nokia A Series on Android, built in the same factories as the iPhone - why not buy these new Nokia Android smartphones. Some of us would beg for the Nokia staples like Pureview cameras haha or Carl Zeiss optics and all the cool top-end tech that Nokia used to be known for. Thats not Foxconn competence. They are a contract manufacturer. If they wanted to do a ‘generic’ mid-range mid-price ‘average specs’ smartphone to run on Android - that would be a safe bet as a good seller. Combine that with the Nokia brand, in the Emerging World markets and you have good business waiting to be taken.

Eventually, as Foxconn only would own the rights to use the Nokia brand until 2024, they would pivot away, introduce the Foxconn brand alongside Nokia (or perhaps another brand) and by 2023 they’d be away from Nokia and a similar transition would be complete as IBM went with its Thinkpad personal computers to the Lenovo brand. Note Hon Hai is the parent of Foxconn so the Nokia brand might be migrated to Hon Hai.. As to what might be the value of the deal? Its not going to be much. Microsoft doesn't own the Nokia brand, Foxconn would not get exclusive rights to it, and only up to 2024. So if the deal is worth 100 million, that would be I think a good deal for Microsoft and something Foxconn could afford to swallow. Its not going to be a Billion dollars. And Microsoft would prefer a steady stream of money, they'd probably do a 1 dollar per phone deal but Foxconn probably would not want to commit to that, there might then be an overall cap. If Foxconn did get to 100 million Nokia smartphones sold say year 2021, why then pay 100 million dollars - per year - to Microsoft. They probably want a lump-sum payment now and for that to be bare-minimum because the Nokia brand is so badly damaged by Microsoft...

WHAT ABOUT NOKIA

So then it begs the question. Why not Nokia? Nokia has been pining about a return to smartphones. Microsoft knows the Lumia business is DEAD and they just want to get rid of it as fast and with any of their dignity left. If Microsoft is looking for a buyer, why not sell it back to Nokia. Yes, obviously, Nokia is not going to pay anything near the 8 Billion dollars Microsoft paid because Microsoft has destroyed 85% of what it bought already firing most of that staff etc. But come on. Microsoft wrote off the whole business in its books, so even if they were paid half a Billion dollars, it would now be an accounting ‘profit’. And firing another 5,000 people is VERY expensive. Every month they hold onto the Lumia unit, they generate more losses. Why not sell it to Nokia.

We have heard from Nokia that they want to come back to smartphones. But because of the terms of the deal from 2013 to sell the handset business to Microsoft, Nokia can’t be a full competitor itself, it can only licence its brand to third party manufacturers (like haha, Foxconn) which Nokia can do starting late this year or early next year. We have heard some rumors of a possible return of Nokia brand on Android via such an arrangement but nothing certain. Nokia has confirmed they are in such talks.

Nokia has a history of taking loss-making telecoms tech companies and turning them around to profits - look at Siemens telecoms or Motorola’s networking business. Nokia just took its latest recovery project buying Alcatel-Lucent. So this is a ‘core competence’ at Nokia, turning loss-making telecoms companies back into profits. What would be easier, than the ex-Nokia handset business? The dumbphone part IS profitable already. The smartphone part - generated the world’s second largest profits of any smartphone manufacturer this side of Apple’s iPhone the last quarter before then-CEO of Nokia Elop torpedoed his own business. The smartphone business when last run by Nokia properly, did a 12% profit margin. And the popularity and loyalty of Nokia has not ended. Nokia smartphones even under Microsoft ownership continued to offer technical excellence. The carriers love Nokia (they keep buying the networking gear from Nokia) but they will not subsidise Windows smartphones. If Nokia were to buy back the handset business and shift rapidly away from Windows to Android, its a marriage made in heaven.

Note that Microsoft still owns and operates a bunch of handset factories (dumbphones and smartphones) internationally, and a global handset sales force. That is the core of what Nokia WOULD want to recover. It is a skeleton of what it once was, but the core still remains. And Nokia knows everybody who was fired in the unending waves of layoffs caused by Elop’s reign of terror. If Nokia wanted to rehire recently-fired Nokia professionals in R&D, sales, marketing, distribution etc - they all loved their time at Nokia - and some would love to come back. Not anywhere near all, but Nokia wouldn’t need to recruit them all back. But if Nokia now took say 5,000 staff back plus the factories and the sales organization, and paid say half a Billion dollars in cash to Microsoft, Nokia would have the chance to really recover and get back to something like 4% or 5% market share by say end of 2017.

Nokia already had 3 handset designs on Android that were ‘competitive’ low-end price specs for 2014. Those should be able to be rushed back into production in six months, 9 months tops. So the first Nokia return Android smartphones could be sold even for Christmas and definitely by next Spring if Nokia instead of Foxconn was the deal now and that deal was signed in the next few weeks. Then Nokia had a series of flagship-class phones on Linux (MeeGo) which would not be a ‘difficult’ port to Android. They were the award-winning N9 and its QWERTY variant, the N900. Also Nokia had designed for MeeGo at least two more smartphones, the original Lumia 800 and a phablet device which was probably what eventually became the Lumia 1050. Now those MeeGo devices would all be obsolete today, but their FORM factor could be kept, their intenal guts ‘upgraded’ ie by CPU and memory and radio interfaces, to relatively rapidly, create a relatively competitive flagship and high-end spec smartphone set for Android, alongside those cheaper Androids. These could be annoucned at the Mobile World Congress and launched around summer or autumn of 2017. Totally new smartphones meanwhile would be rushed out of various Lumia and Nokia projects so that for 2018 Nokia could have a portfolio of more than a dozen current (new for 2018) smartphones on Android.

If the ‘real’ Nokia designed ‘real’ Nokia Android smartphones, not just as compromise updates of old models or repurposed Lumia models - and those Nokia smartphones were sold by the real Nokia sales force (of what remains now with Microsoft) - that package will get to 6% of smartphones simply because the boycott is removed. Note how evenly the Nokia sales force was able to keep a 3% market share inspite of the boycott against Windows from 2011 to 2014. And then remember the Asha angle. The real market ‘demand’ for Nokia is about 6% which is where Nokia will ‘bounce back’ almost instantly, when an Android line is sold and the boycott against Windows no longer impacts Nokia. Because Nokia has a high loyalty it will also mean at least a modest profit margin, the moment that product line is stable and the sales and marketing channel is recovered from the change-over and erosion of the recent past. Year 2018 say 6% market share for Nokia smartphones selling at an average price of 200 dollars including very exciting new flagships (brand new devices with all the Nokia goodies like Pureview, Carl Zeiss etc) and of course mid-price and entry-level price smartphones. Thats a 115 million smartphone business for 2018, generating 23 Billion dollars of revenues and at least half a Billion dollars of profits, more likely 1.1 Billion. On top of that expect still a slight part of the last dumbphone business on top of that say 20 million more units also sold at a profit. Nokia would be the fourth-largest smartphone maker chasing Huawei for number 3.

What maybe happened. If its true that there are now discussions between Foxconn and Microsoft, then we can be SURE there were at least preliminary talks also between Nokia and Microsoft. Microsoft would try to find ANY buyer and would not want to have to fire half of the staff it has. Microsoft would rather SELL the factories rather than just shut them down. Foxconn doesn’t need those factories or that staff. So there must have been talks between Microsoft and Nokia.

One possible scenario is that those negotiations ARE going on, secretly, and this Foxconn news is a leak to bring pressure on Nokia, trying to get Nokia to increase its offer. Another possibility is that there WERE talks with Nokia that broke down and Nokia has walked away from the talks. And this is Microsoft’s ‘fall-back position’. If there WERE talks already, then the occasional leaks from Nokia make sense - trying to pressure Microsoft - that if you don’t do this deal, we will launch Android phones with a partner. But also, consider the recent news in phones. Apple’s iPhone biz has stopped growing. Samsung signalled a big cut down in its sales. Nokia is no longer in the handset business, it only knew the hyper-growth stage and when the smartphone biz was still growing fast, there was a hunger to return. Now.. many signs say the golden years are gone, so why go back to handsets NOW. It may be that Nokia was interested through say November and then soured on the deal only by say February. And one more thing, Nokia has just bought a company, what was it, Withings for a bit under 200 million dollars. That could be something of the scale of what Nokia might have been offering Microsoft for the rump of what remains of its once mightly handset unit. Or 250 or 300 million, probably not much more than 500 million haha. That timing of that purchase a few weeks ago could have been the ‘end signal' to Microsoft. We decided no, we don’t have the money anymore because we bought this other company. Sorry. Bye-bye. And now Microsoft opens serious discussions with Foxconn..

Remember the WHOLE story about Foxconn came out of a Chinese news website, it has not been confirmed anywhere (yet). It is a rumor. It may turn out to be totally wrong. I personally have NO knowledge of any discussions, this whole blog is just idle speculation. But I did say this is the time when Microsoft will end its Lumia misadventure. It is the time to seek seriously ANY buyer for ANY part of the Lumia mess. For Foxconn the only part they would even WANT is the Nokia brand, nothing else.

And who else would want the old Nokia dumbphone business or the utterly DEAD business of Lumia? HP, Intel and Dell have already tried and ended their experiments smartphones. Sony, LG and Lenovo all are making losses with their smartphone business. Blackberry and HTC are essentially dead. Ericsson already left the handset business. Apple and Samsung don’t need anything from that carcass which is the ruined remains of Nokia now in some forgotten garage owned by Microsoft. The smaller Chinese brands like Xiaomi, ZTE, Oppo, Coolpad and TCL have no use for a Nokia brand and see how little rival Lenovo has been able to do with Motorola. And Motorola’s phone biz was nowhere near as disastrously unprofitable as Lumia is now. Its hard to imagine anyone else ‘wanting’ Nokia other than Foxconn (or Nokia itself). Its a buyer’s market and Foxconn is likely to get that Nokia brand for peanuts. Microsoft will incur huge costs still in shutting down the remains of the Nokia phone business. Which to me suggests, a deal between Nokia and Microsoft should be the ‘obvious’ and easy one to close. It would be in everybody’s best interest.

USA Election Update for mid-May: The Summer Doldrums for Trump and Hillary

The US Presidential election of 2016 has now its finalists cleared. Both have still some final votes to tally to actually clinch their nominations but the race is now set. Its Donald Trump on the Republican side and Hillary Clinton on the Democratic side. I already gave my preview of this race in March and most of what I wrote then still stands. Hillary is cruising for an epic landslide victory in November and since I wrote that in March, increasingly all independent analysts and by far the most of Republicans agree that Trump is far behind Hillary right now. Some Democrats show glee, others warn that they should not take this election for granted. And Trump has surprised his rivals time and again, he could arguably do that again this time against Hillary. Certainly all signs are clear already now, only a week into the ‘general election mode’ for both campaigns after Indiana’s primaries that Trump is indeed intending to ‘pivot’ strongly to run a different campaign in the general election than he ran in the Republican nomination contest this Spring. I said in the Spring of 2015 that this year, 2016 would be a remarkable election we should all watch and follow. I said in October of 2014 that Hillary would win in 2016 by a landslide and would thus become the first female President of the USA. But I’ve also said repeatedly, this will be a historic election worth following. It is even more so, now that we know its Trump who will run against Hillary. So I will do occasional election related blog articles. This is a long article - 14,000 words or about a chapter and half in one of my hardcover books, you better get a cup or two of coffee before you dig in. And this article once again has nothing to do with my usual topics here on this blog about mobile or tech or social media. So any tech topic readers of the blog can safely disregard this article. But for those of the fans of this blog who also are interested in the US political race, follow me after the fold and lets talk politics..

Smartphone Bloodbath Market Share Update Q1: All the Top 10 brands plus OS shares plus installed base

Its that time again. We have quarterly data as best possible. Only 3 of the remaining Top 10 smartphone brands provide us with quarterly sales data (Apple, LG and TCL) and the two remaining big trusted analyst houses only give a top 5; and the other market data we get is from far less reliable sources who can have huge variances in their opinions of the market. But we do the best we can. So here is the latest horse-race in handset brand wars. The Top 10 ending March 31, 2016:


BIGGEST SMARTPHONE MANUFACTURERS BY UNIT SALES IN Q1 2016

Rank . . . Manufacturer . Units . . . Market Share . Was Q4 2015 
1 (1) . . . Samsung . . . .  80.5 M . . 24.0% . . . . . . . ( 20.5% ) 
2 (2) . . . Apple  . . . . . . . 51.2 M . . 15.3% . . . . . . . ( 18.6% ) 
3 (3) . . . Huawei  . . . . . . 27.9 M . . . 8.3% . . . . . . . (   7.6% ) 
4 (7) . . . Oppo . . . . . . . . 17.0 M . . . 5.1% . . . . . . . (   4.0% )
5 (8) . . . LG  . . . . . . . .  . 13.5 M . . . 4.0% . . . . . . . (   3.8% ) 
6 (10) . . Vivo . . . . . . . . . 12.5 M . . . 3.7% . . . . . . . (   2.5% ) 
7 (5) . . . Xiaomi . . . . . . .12.0 M . . . 3.6% . . . . . . .  (   4.6% )
8 (4) . . . Lenovo .  . . . . . 11.5 M . . . 3.4% . . . . . . . (   5.6% )
9 (9) . . . TCL/Alcatel . . . 10.8 M . . . 3.2% . . . . . . . (  3.1% ) 
10 (6) . . ZTE  . . . . . . . . 10.0 M . . . 3.0% . . . . . . . (   4.2% )
Others . . . . . . . . . . . . .   87.9 M
TOTAL . . . . . . . . . . ..   334.8 M

Source: TomiAhonen Consulting Analysis 13 May 2016, based on manufacturer and industry data
This table may be freely shared 


The big mover up is Oppo from 7th to 4th in one quarter, the big drop was by Lenovo from 4th to 8th. Nobody is pushed out of Top 10 and nobody crashed into it but two Chinese brands are on the bubble, Gionee and Meizu. Its a hit phone driven business (see how much Xiaomi has fallen) and anyone around rank 11 or 12 could have a hot period to crash into the Top 10 especially if its a local Chinese brand with a perfectly-targeted modest-price/great features offering. So the chart is 9 Asian brands plus Apple who makes iPhones in China. Seven of the Top 10 bestselling smartphone brands globally are now Chinese. The first non-Chinese brand lower in the charts showing signs it may grow to be big enough to get in, as its home-market grows and it expands into the near-abroad, is India's Micromax. Japan's Sony seems not to be a threat to return to the Top 10.



Smartphone OS wars

Andorid is most, iOS is rest. Tizen has a trivial share and Windows Phone continues to be dead. Android at 84% iOS at 15% and the rest split the one percent.


INSTALLED BASE OF SMARTPHONES BY OPERATING SYSTEM AS OF 31 MARCH 2016

Rank . OS Platform . . . . Units . . . . Market share  Was Q4 2015*
1 . . . . Android . . . . . . . . 2,117 M . . . 79 % . . . . . . ( 79 %)  
2 . . . . iOS  . . . . . . . . . . . . 517 M . . . 19 % . . . . . . ( 19 %) 
5 . . . . Windows Phone . . . 27 M  . . . . 1 % . . . . . . (   1 %) 
4 . . . . Blackberry . . . . . . .  12 M  . . . . 0 % . . . . . . (   1 %) 
Others . . . . . . . . . . . . . . . . 11 M  . . . . 0 %
TOTAL Installed Base . 2,684 M smartphones in use at end of Q1, 2016

Source: TomiAhonen Consulting Analysis 13 May 2016, based on manufacturer and industry data
 * Note these are revised numbers from April 19, 2016, not the previously-reported preliminary numbers
This table may be freely shared 


Thats your market share update for Q1. Nothing major really to report here. Enjoy.

PS for those who need more numbers the brand new edition of my annual statistics volume was released last week. Its 213 pages long, has 109 charts & tables including a long chapter on the handsets including everything from screen sizes to 3G, WiFi, Bluetooth and NFC availability, to camera resolutions etc There's even a separate whole chapter just on smartphone apps. And it only costs the same as always, 10 Euros. Get yours now at TomiAhonen Almanac 2016

Time For 2016 Total Mobile Numbers: The update to my most popular blog article in any year

Its that time again, as the new TomiAhonen Almanac has just been released, I am now doing my annual review or as my fellow mobile statistician, Chetan Sharma calls this, my annual ‘State of The Mobile’ blog like the US President does his State of the Union speech. Its all the top-line numbers for this rapidly-growing industry. Bookmark this page, you’ll come back to it many times in the next 12 months as mobile keeps becoming more vital in your industry as well.

THE BIG NUMBER IS 7.6 BEES

So lets start with the single number we all need and must understand. How many paying customers are there in this mobile industry. These are all RETURNING customers with monthly payments (whether paid by contract monthly after the fact, or pre-paying the mobile use beforehand). For comparison consider other industries with returning monthly customers. There are 1.8 Billion households on the planet but some are not in the coverage of electricity or water. So in round terms, lets say there are 1.5 Billion customers who have a home electricity and a water account. Far less than electricity would be those with gas delivered to the home or central heating from the city or sewage treatment. Into our homes we also get fixed landline phones but that industry has peaked and today only 1.0 Billion total fixed landlines are in use worldwide. How about cable TV? Well, the total number of all paid cable and satellite accounts (which includes some digital ‘freeview’ type counts too but lets keep this simple) is about 1.1 Billion globally. What about cars? There are 1.1 Billion automobiles registered and in use around the world who mostly need to pay for car insurance (not all have to, or do). What of the internet? 900 million have a traditional broadband (or still in some cases narrowband) based wired internet coming to their homes. Its just under half of all households on the planet. If you want recurrring monthly customers, excluding the financial sector (banking, credit cards and insurance) that is just about it. Cars, telephones, cable TV, home electricity and water. And then there is mobile.

When you take the total paying customers of electricity, water, cars, landline phones, cable and satellite TV, and home broadband internet - combined they come to 7.1 Billion accounts by mostly the same set of roughly the same 1 Billion ‘breadwinner’ household heads of those homes, very often the husband in a family. We in mobile have... 7.6 Billion total paying returning customers !!!!!!!!!!!!! More than electricity, water, cable TV, internet and cars - combined. And before you complain, wait, there are multiple accounts among mobile, and Machine-to-Machine (M2M) subscriptions which aren’t the same as unique humans, then I rejoin that argument with - so do the others. Many used to have two or more landline phones coming to their homes (now almost none do that anymore). Some have two cars registered to the same car-owner (while the car may actually be driven by the wife or some older children of driving age). Business accounts are common with cars (similar to M2M accounts in mobile) and many automobiles are registered to corporations with fleets of vehicles, etc.

7.6 Billion mobile accounts, active at the end of 2015. That compares to a global population of 7.3 Billion humans alive of any age. Thats a penetration rate of 104% per capita. Not per household like we measure most other consumer gadgets. Not a measure against adult population. Against the total population we are at 104% penetration rate and just growing and growing. Its as I promised in my forecast about ‘the next 4 Billion’ back in 2009 when the planet had passed 4 Billion mobile users. I said we’d get to 8 Billion and it looks like we’ll pass 8 Billion actual mobile accounts before this decade is done...

Yes mobile has again reached a new record - nothing comes even close to the total number of mobile phone total PAYING customers at 7.6 Billion. None of the industries I mentioned but not others either. There are more people with mobile phones than who wear wristwatches, more people use mobile phones than have bank accounts or credit cards. There are 800 million illiterate people on the planet who have no use for pencil and paper - they can’t read and write - yet they can use a mobile phone. Homeless people have mobile phones! A University of Sydney study in Australia last year found that 95% of the homeless in Australia have mobile phones (this is consistent with previous findings including the USA but there was no actual study of the matter before last year). We hear the stories of the human tragedy of the exodus out of war-torn Syria. What is the most important item all refugees bring along? Their mobile. There has never been a technology as widely-spread, as much used, and as highly valued as the mobile is today. 7.6 Billion total active mobile accounts worldwide. Thats the 'Big Number' to memorize but its literally only the starting point for the TomiAhonen Almanac 2016.

5 BILLION UNIQUE HUMAN MOBILE OWNERS

So in that number of 7.6 Billion we have human and non-human users. What do I mean non-human? Its various Machine-to-Machine M2M uses such as having your home electricity or water read by a remote-control gadget, which is connected via a cellular connection and thus has a ‘SIM card’ ie Subscriber Identity Module like most who use GSM phones around the world. (For non-American readers, yeah, the USA still doesn’t always use SIM cards and Americans tend to be pretty clueless about that side; their phones mostly still come locked to one carrier). There are lots of clever uses of mobile in for example the Internet of Things and in ‘smart cities’ to allow connectivity to various digital devices. One of my favorites is how farms in India use remote-control devices to turn on and off their irrigation - where water is a scarce resource. They can do that via sending SMS messages from the phone to the remote-control devices that turn on and off the irrigation system. So how many are M2M accounts? 400 million. So of the 7.6 Billion total mobile accounts, 7.2 Billion are used by humans and 400 million or 5% are already now used by machines. This M2M side is expected to see dramatic growth in the coming years.

How many of the 7.2 Billion are ‘unique’ humans. Many of us have two phones. Some have a mobile phone and another digital device connected to the 3G/4G network such as a laptop or tablet PC connected via an internal SIM card or via a USB-dongle that connects to the network, to give us high speed internet wirelessly, beyond WiFi coverage. And in all big pre-paid markets (most of the world) a significant part of the population have one phone but two or more accounts, and do the ‘SIM card Switch’ to alternate between carriers/networks to select their preferred network at any given time. It used to be that we could say the total count of mobile subscribers was equivalent to total number of handsets in use and equivalent to total mobile unique users. Not anymore. I was the first analyst to provide numbers on how those numbers have diverged. Now we have the latest numbers out of my Almanac for the total human unique users, which is 5.0 Billion. This number was verified by deep analysis of the recent vast international Pew survey of mobile ownership. Note this number is impossible by national operators/carriers to know from their own networks and even national regulators have no way of knowing exactly which customers on rival networks have multiple accounts across the competitors. So the Pew survey provided a rare and very valuable confirmation of the data and allows us to say very confidently that there are yes, 5.0 Billion unique humans who have and use (and pay for) at least one mobile account and have at least one mobile phone. 5.0 Billion unique human users is 68% of the planet’s total population alive, of any age from fresh-born babies to the frail old great-grandma who is now bedridden.

Note that roughly speaking 1 Billion of the planet’s population are so young they aren’t in school yet. So of people old enough to go to school, ie out of 6.3 Billion, we already reach 79% of the planet! Those remaining 1.3 Billion who are old enough to go to school but don’t have mobile phones tend to be very poor, so I also joke that we have reached ‘every economically viable’ person on the planet already - anyone who can afford ANY discretionary spending like buying a cup of tea or buying a newspaper. If you want to address any commercial product or service at all - mobile reaches literally every viable customer your service could ever hope to sell to. No other technology or media comes close. Not even close. Only mobile does that. There are vast areas of say India or Africa where there even is no FM Radio coverage, far less TV coverage (and are too poor to be served by say newspapers), and yet they have cellular mobile coverage and do get their first media content delivered in their lifetimes to their villages in their valleys.. via mobile. There are many villages without electricity - but the mobile users will send mobiles to neighboring villages to be charged - for example in Africa many areas encourage parents to send phones with kids to school to be charged - so the parents also make sure the kids do come to school - a poor farmer has a strong incentive to use the own children as cheap labor when harvesting time is important, but teachers want the kids in school of course.. 

5.0 Billion unique humans alive on the planet, 79% of all who are of school age and above, and 100% of the ‘economically viable’ part of the planet’s population - have mobiles today. Plus most homeless and most refugees and very often even kids down to prep school (90% of Finnish kids age 7 have mobile phones, most of those are smartphones).

But mobile REACH is even beyond that 5.0 Billion unique humans. In many very poor families, they have one (old, often used) mobile phone, which is SHARED among the family or even shared among some families or neighbors in a poor village. My TomiAhonen Almanac has a whole chapter on the ‘Digital Divide’ showing the differences of mobile (and other tech like TV, internet, landlines etc) between the affluent Industrialized World (often also called ‘The West’) vs what was once called the ‘Third World’ but which prefers to be called the ‘Emerging World’. Thats where 6.2 Billion people live, all of Latin America, all of Africa, and most of Asia including China, India and Indonesia. So in the very poor areas, one mobile phone (and one account) is often shared and has a reach larger than the number of total mobile phones. This is like how we measured the reach of landlines before, when they mattered (or how television or radio are measured for their audience which is larger than the number of ‘receivers’ as in ‘Television sets’ or ‘radios’). In the ‘West’ our teenagers have their own mobiles and all husbands and wives have their own mobiles. There is no need to consider ‘sharing’ a mobile in our worlds unless one happens to be broken or lost somehow, momentarily. But in Africa for example, its not unusual for poor rural areas to have shared phones within familes. My Almanac counts the total shared mobiles to be 230 million, which reach 1.1 Billion people. That adds 870 million more humans to the reach of mobile, so as a media and communication platform, mobile reaches a total of 5.9 Billion humans today (but when counting people old enough to be able to read, that is 5.4 Billion). 81% of the planet’s population is within reach of mobile and out of the age of people old enough to read and write (including those who are illiterate) ie school-aged humans or older, mobile reaches literally 86% of humankind old enough to comprehend any concept of life beyond the home and the immediate family ie to have any possible understanding of a ‘need’ to use electronic communication or media.


MOBILE USERS IN NUMBERS
Total Active Mobile Subscriptions (Accounts) including M2M . . . . . . . 7.6 B
Total Active Human-Use Mobile Subscriptions (Accounts) . . . . . . . . . 7.2 B
Total Mobile Reach, including shared mobiles . . . . . . . . . . .  . . . . . . . 5.9 B
Total Unique Mobile Phone Human Users . . . . . . . . . . . . . . . . . . . . . . 5.0 B
Source: TomiAhonen Almanac 2016
This table may be freely shared


Thats where we are today, by 2016. 7.6 Billion total mobile accounts, active and paid for. 7.2 Billion of those are used by humans. There are 5.0 unique paying mobile account-holders (postpaid or prepaid) who then when poor areas are included with shared phones, give mobile a total aggregate reach of 5.9 Billion humans. These are astounding numbers (and they keep growing).

THE TRILLION NUMBER IS NOW 1.7T

So then the biggest of our huge numbers. The T Number from the T-Dawg. Where other industries dabble with mere millions or billions, we are one of the rare industries that can talk about our T-number. We make REVENUES that are counted now with a Trillion. The print industry is 500 years old. All newspapers, books, magazines combined - never became a Trillion-dollar industry. Recordings are a 130 year old industry (aka the ‘music’ industry) which never was even a 100 Billion dollar business. Radio is bigger than recordings but radio only is about 100 Billion in global revenues. Hollywood ie movies is just over 100 years of age, has peaked and it never was anything near a Trillion in value. Neither is its younger cousin, television which is near half a Trillion (500 Billion) in value. But yes, if you take TV, movies, radio and recordings - plus toss in also videogaming just for the fun of it. Then those would still be less than one Trillion dollars in their annual sales revenues globally. Advertising is not a Trillion dollars (its about half that). The PC industry is not a Trillion (about a half). The internet is nowhere near (its only about a quarter of a Trillion in value). So you understand, the big T is a rare thing. Cars are a Trillion-dollar industry. the military spending on weapons - thats a Trillion dollar industry. Food and housing - those are Trillion-dollar industries as is finance ie banking, credit cards etc.

Mobile was launched only 37 years ago, in 1979 in Japan (not by Motorola and Ameritech in Chicago in 1983. Even in Finland we had a cellular telecoms industry two years before that moment). But mobile breached the 1 Trillion dollar barrier in world-record time of only 29 years and yes, we again grew by 100 BILLION dollars last year, and this industry is now worth 1.7 Tees. One point SEVEN Trillions of dollars. 1,700 Billion dollars. 1.7 million-millions of dollars. Every year. Our industry makes 3 million dollars every single minute of every single hour of every single day of the year, weekends and holidays included.

There are only a few giant industries on the planet, whose size is so big, they alone account for a few percent of global GDP. Mobile is one of those. Any other digital tech industry you may be involved in, computers, internet, radio, TV, gaming, etc - are nowhere near our size. But mobile also set the world-record for fastest growth to breach that one Trillion dollar level. Mobile has literally been the fastest-growing giant industry on the planet. The fastest machine to make money. Read that again. Mobile has been the fastest machine to make money. As I say, Mobile is the Magical Money-Making Machine. Look at Bill Gates, he was the richest man on the planet out of the monopoly that Microsoft created for the PC industry. Pretty nice job if you can have IBM help create a monopoly for you haha. Smart guy. But who took his title? A mobilista! Carlos Slim of Mexico took over Bill Gates’s crown as the richest man on the planet, for several years. How did Bill get to return to the top? By refocusing Microsoft from the PC to mobile, of course (and firing that moron Steve Ballmer from ruining his company).

Don’t like an example about the Evil Empire? (neither do I, I hate Microsoft with a passion). Lets to to the anti-Microsoft. How about Apple? Apple was on the brink of bankruptcy two decades ago, literally. Only weeks from bankruptcy. Steve Jobs returned, saved his company, pivoted it to... mobile. And what happened? Apple set the world record for biggest profits ever by any business in the economic history of humankind. Driven by mobile. Also made Apple the most valuable company on the planet. Thats mobile for you. Google, barely profitable on the internet, decided a decade ago - literally, a decade ago - to pivot to mobile which it said would become the future of the internet. Yes, Google said this a decade ago. Today? They are a massively profitable MOBILE company who also have a side-business on the legacy PC based internet. What about Starbucks? The hugely successful coffee restaurant chain? Their CEO says the most important thing to their future is .. mobile. Starbucks became the planet’s largest mobile wallet provider simply out of their loyalty program built to use mobile payments.

Its not just that mobile is far bigger than the much older industries like computers, television and print - mobile broke the world-record for fastest growth into the Trillion-dollar stratosphere. This is literally the best way to make money on the planet today. It is literally the best way to make money. Any industry, any business, any government entity should use mobile from airlines issuing tickets to mobile to education and healthcare using mobile; to government such as voting - Estonia became the first country to have citizens vote via mobile phones - and taxes - Norway was first to let citizens file tax returns via SMS - to driver’s licences - UAE offered the first mobile phone based national driver’s licences two years ago. And the passport is already coming to a mobile near you. There has been nothing like mobile and we have only started. Wait until this industry really gets going... No technology has ever revolutionized so many other industries so thoroughly and nowhere near as fast, as mobile has now done. Not electricity, not the telegraph, not trains, not airplanes, not computers and not the internet. But mobile has done all that and we've only yet started. But the best volume to see where we are, the true full picture of mobile every year, any year, is the TomiAhonen Almanac now in its 2016 edition.

MAGICAL MONEY-MAKING MACHINE

The fastest-growing industry humankind has ever seen, which has created the most profitable companies and the richest people. Why are YOU not increasing your involvement in mobile? What on earth could be ‘more important’ to you now than mobile? Internet of Things (IoT)? Really? Internet of Things without mobile is just things. Oh, you want Big Data instead? Sure, and Big Data without mobile is just a big useless headache. Its like an airplane without wings. Sure it may be a nice metal tube to go sit in, but it will cost you a ton and it won’t get you anywhere from that airport. So you say ‘Cloud Computing’. Haha yeah, and what is it that gives it that cloudiness? You can’t wire a cloud. It has to be wireless. Cloud Computing without Mobile is nothing more than plain old computing. Smart Cities without Mobile is the very antithesis of Smart. Thats what we already have today: Dumb Cities. Oh, you are into smart watches? Good luck with your next bankruptcy. Mobile will be here when you are done. The Connected Car without mobile is a Disconnected Car. What about AR and VR? Sure, VR is good evolution for the tiny gaming industry if you are in gaming (so are smartphone apps too, if you prefer small numbers). AR however, that is currently driven by.. mobile. I was the first one to call AR the 8th Mass Media (where TV was 5th, internet as 6th and mobile was 7th mass media; print obviously was the first mass media).

Whatever you do in tech, you have to do mobile. And this article should point out to you, that whatever you are doing in mobile today - that is not enough. Your competitors are doing more than you are, and you have to increase your own involvement. Any other media needs mobile. Even classic old mobile-haters - Cinema - is now embracing mobile and starting to allow audiences to send messages and Tweets while the movie is playing. Why not? Its all about involvement and what is more crazy for a ‘mass media’ like cinema, than to prohibit the use of the most used communication tech on the planet. (And don’t write to me to bitch about it. How many times per month do YOU pay to see movies in the cinema? Go see the AGE of the audiences and then shut up. Its a youth media, they go to the movies on their DATES.. so if they want to text while in the movies, and you go once per year to see the next Star Wars, just shut up already. Cinema is not interested in your opinion, they have to appeal to the youth segment which is their primary audience). Soon movies will learn to TALK to audiences WHILE THE MOVIE PLAYS asking for participation.. It is coming soon, trust me. Just like how radio and TV ask us to send in our opinions (and votes) via mobile today.

Oh, while we are on the money topic. This is NOT about apps. Apps, schmapps. Apps are good for videogaming. And thats it. Anything else, its silly to do apps, do the mobile internet instead. Thats how most of your consumers want it anyway. Do a good mobile website instead, far cheaper and reaches far more users (did you know most dumbphones in use today have a full HTML browser.  Yes, the internet has a far larger reach than Android or iOS app stores, even combined). So the big money? Premium SMS. Towers over apps. Even MMS yes Multimedia Messaging - is bigger than the total revenues of all app store apps sold to all smartphones worldwide (And most of that is GAMING). Don’t think apps are a mobile strategy, please. Apps are a side-show, a freak-show powered by idiots out of America who want to push Apple and Google profits. Most apps never ever break even. The Median app developer earns 400 dollars. Not 400 dollars per month. 400 dollars in total. That doesn't even pay for the software licences of his development tools far less his hardware costs. Don’t bother with apps. Learn about how the mobile industry makes its money. Smartphone apps are merely 7% of the ‘mobile data’ part of our industry (and 2% of the total mobile industry). So if you were ‘excited’ about your app project - understand what I am saying - in ‘mobile data’ alone - a vast vast VAST Bonanza exists that is 14 TIMES larger than total apps on all OS platforms including the dead Blackberry and Windows swamplands. Don’t you rather want to know WHERE the money IS, rather than wasting your effort trying to get people to ‘discover’ your app and then to somehow download it, and not immediately delete it and remember to use it a second time... Yes, mobile DATA is worth 549 Billion dollars. 14 times larger than all smartphone app revenues (including the 30% cut that goes to Apple and Google, including all advertising revenues, and including all in-app purchase revenues - combined). Here are the big picture revenue numbers from the TomiAhonen Almanac 2016 also summarized for you:


MOBILE INDUSTRY REVENUES
Service Revenues . . . . . . . . . . . . . . . . $ 1,197 B
  -- Of Which Voice Calls . . . . . . . . . . . $    649 B
  -- Of Which Mobile Messaging  . . . . . $    195 B
  -- Of Which Mobile Advertising . . . . . $       49 B
  -- Of Which Other Mobile Data . . . . . $     305 B
Hardware Revenues . . . . . . . . . . . . . . $    540 B
  -- Of Which Handsets  . . . . . . . . . . . . $    409 B
  -- Of Which other (Networks etc) . . . . $    131 B
TOTAL INDUSTRY REVENUES . . . . . $ 1,737 B (= $ 1.7 T)
Source: TomiAhonen Almanac 2016
This table may be freely shared


This is THE industry to be in. As the global economy sputtered along, we grew by more than 100 Billion dollars again from the year before. The growth rate of mobile is bigger than videogaming total revenues in a year. We grew more than a total videogaming industry, in just one year. Or like three Hollywoods, combined. Or about 5 times the size of the global music industry. Yet those industries have their big annual awards that everybody watches on TV, the Oscars and Grammys etc. Our industry now utterly towers over those but ours is still a young industry not worried as much about giving out awards but rather finding who can be the next Uber or the next Angry Birds.


5.6 BILLION HANDSETS, OF WHICH 2.6 BILLION SMARTPHONES

So we have the consumer numbers and the industry overall. 7.6 Billion mobile accounts. 5.0 Billion unique humans. And the industry makes 1.7 Trillion dollars in revenues annually, and its the fastest-growing giant industry on the planet. What about the phones? Do we know about the phones? How many are smartphones... Yes we do. Again, my consultancy was the first to publish the SEPARATED number where mobile subscription count differed from the handset population. And I was tracking the smartphone installed base the longest as well. We know the numbers. There are 5.6 Billion total handsets in use, mobile phones - by those 5.0 Billion unique mobile users. So 600 million active mobile phones are used by someone who already has one phone, as the second phone. So yes, 12% of us carry two phones, like most of you reading this blog. I started to carry two mobile phones from 1998, one was the phone from work, paid for by my employer; the second was my personal private phone. From year 2000 one of the two was a smartphone, and from year 2001, I’ve had two smartphones always with me. But obviously I’m not ‘normal’ even for a geeky and affluent mobile consumer, I was also working inside the mobile industry. But yeah, most of you reading this blog have not just two active mobile accounts, you have two phones in your pockets at least most weekdays if not 24 hours a day like those of us deeply addicted to mobile.

Many who carry two phones are among ‘the rich’ so they tend to have two smartphones. But some are transitioning from dumbphones to smartphones, so some have still an older ‘featurephone’ which would be a cameraphone with full internet and often also touch screen, and then the new phone is a normal modern smartphone. And some who have two phones (or more) have them for only basic communciations, like say a taxi driver who might have five old well-worn Nokia handsets, one on each network - so the taxi driver’s regular customers can call or text him - on the customers’ favored networks to optimize that customer’s phone bill by allowing the call to the preferred taxi driver to be put onto the lowest-cost network for that given customer. So it takes all kinds. The numbers break down so, that out of 5.6 Billion total handsets in use, 2.6 Billion are smartphones for a 46% migration rate of the installed base of all phones in use. Out of 5.0 Billion total unique mobile phone owners, 2.3 Billion own smartphones today so also the unique owner migration rate to smartphones is at 46%. 300 million of the total installed base of smartphones are ‘second phones’ as well as 300 million of the dumbphones used as second phones.

Of the 2.6 Billion total smartphones in use, now just over 2 Billion are on Android and a bit over half a Billion are iPhones. iPhones have a longer life and are handed down more to others after the first buyer had bought a newer iPhone, so the market share of iPhones out of all smartphones in use is a bit higher than the market share of all new smartphones sold. Still if you want a rough rule of thumb, 4 out of 5 smartphones in use worldwide are Androids with the last 1 in 5 is an iPhone. We can ignore the dying platforms when considering that type of global generalization. If you want the exact percentages, then the TomiAhonen Almanac 2016 of course gives those so its 79% for Android, 19% for iOS and the last half dozen dead or dying OS platforms split the last 2%. Note in new sales iPhones only have 16% so the installed base is larger for iOS than its recent annual sales would indicate.

The Almanac 2016 edition has a whole chapter on the handset business (its the longest chapter in the Almanac and has been so for many years now) including almost any stat you could hope for, the market shares, the installed base, the revenues, the average prices, the price pyramid, the replacement cycles etc. It has several regional splits too. But lets pick a few highlights that are of interest also to those who are not considering manufacturing a phone themselves. I now report on things like GPS capability of the installed base ie 22% of all phones in use worldwide; and for example Dual SIM phones (29%) and so forth. All the older stats that have been part of the Almanac are there of course from camera resolutions to input methods to 3G to WiFi to color screen to internet browser etc. If you do need more, this blog cannot cover all of that, I wrote 200 pages of such data for you into the Almanac with 109 charts and tables. The Handset Chapter alone has 17 charts and tables and the other chapters include another 7 charts and tables about handsets for more detail. But I will add one more freebie for you reading this blog. Of course screen size is an important issue to many so as a new item for 2016, I now include the total count of phablet-screen size handset sales sold per year. For last year 2015 it was 410 million (21% of all new phones sold or 28% of new smartphones). That is almost twice the size of tablet sales worldwide, and obviously all in the PC industry know by now that tablet sales have stopped growing. Its because of... phablets of course (once again, as I predicted on this blog). Lets do a summary of the handset numbers as fresh on the TomiAhonen Almanac 2016 edition:


MOBILE HANDSETS IN NUMBERS
Total Mobile Handsets in Use (Smartphones & Dumbphones)  . . . . . . 5.6 B
  -- Of Which Dumbphones In Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 B
  -- Of Which Smartphones In Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 B
Total Unique Mobile Phone Human Users . . . . . . . . . . . . . . . . . . . . . . 5.0 B
Source: TomiAhonen Almanac 2016
This table may be freely shared


Thats what the handset picture looks like, and this blog has made it a focus area for the past few years as the smartphone wars heated up. I expect in the future the smartphone focus will diminish but other areas of mobile will find prominence.

SERVICES SEE VOICE AND SMS MATURING

Then lets move to the services side. Not everybody reading this blog is eager to launch a mobile phone handset like Pepsi in China or Caterpillar’s rival Dewalt or say the fabulous ‘musician’ smartphone by electric guitar amplifier-manufacturers Marshall. Handsets only account for 24% of the industry revenues. More than twice that - over 70% of the mobile industry revenues are in ‘services’ not the handsets (remaining about 6% are in networking equipment like provided by Ericsson, Nokia-Alcatel and Huawei; and the accessories market for handsetes). Most of service revenues are collected by the ‘carriers’ ie mobile operators out of their voice and messaging business but also increasingly out of their premium data services such as internet access or mobile wallets or telematics or other new mobile data businesses. Voice call usage has dropped so that only 72% of mobile phone owners even ever originate voice calls. I’ve been teaching for years not to call the device a ‘mobile PHONE’ or a ‘cellular PHONE’ or a ‘cellPHONE’ because the voice calls are no longer the primary service we use. The ‘mobile’ as I call it, is used primarily as a messaging device, secondarily as an imaging device (camera, selfies, videos) and thirdly as a time-keeping and alarming device (replacing the wristwatch). Don’t call it a ‘phone’. Call it a ‘mobile’ and you will also free your mind from the mental limits of what that device can be and can do for you and your customers, audiences, users, citizens, patients, students etc.

While voice usage has peaked ages ago and voice revenues recently also peaked, they are still the largest slice of the mobile services sector and indeed still the largest single revenue stream of the total industry. Voice calls generated 648 Billion dollars last year, or about 37% of the total industry’s revenues. Within mobile services voice call revenue now accounts for just over half. What is the other half (not apps, again..). Messaging has just hit its plateau in total revenues, down 1% from last year, to 195 Billion dollars globally. (Yes mobile phone messaging alone is worth more than global music industry, plus global cinema industry, plus global videogaming industry, combined).

Again that is not Whatsapp or any OTT messaging. Its mostly good old trusted SMS and MMS. Both of these are now seeing declines in their annual revenues (while their traffic still grows and user numbers are essentially flat. Whatsapp is not killing SMS or MMS, Whatsapp has stolen their growth. Which is .. again .. as I have predicted for more than a decade of what would happen to SMS and MMS - as I said then, not now, but eventually this would be happening. Its now starting to happen yes. The GROWTH was stolen by Whatsapp. SMS and MMS are nowhere near starting to die yet, total traffic still GREW, users were flat but revenues have now peaked and are starting to come down. It was about time, SMS was the planet’s most profitable big industry ever, so the billing was not sustainable indefinitely at those rates). Messaging has its own chapter with all the users, traffic numbers and revenues, SMS, Premium SMS, MMS, OTT including Whatsapp, etc. But yeah. Top-line numbers. SMS has 5.8 Billion users (vs 1.0 Billion for Whatsapp). MMS is the planet’s second most used data service with still more users than the total internet on any platforms (and far far bigger therefore than say Facebook) with 3.3 Billion active users. MMS is not primarily used for picture-sharing, MMS is primarily used as originally intended, as the letters themselves clearly state - MULTIMEDIA Messaging Service. Its not PMS, Picture Messaging Service. Its a Multimedia service via messaging. To deliver media like news, entertainment and advertising. To deliver QR codes and airline tickets. To deliver web links and TV show preview clips and movie ads. Its a MULTIMEDIA messaging platform showing massive global MEDIA growth. Which is 3 times larger than Whatsapp by reach and twice the size of Facebook. 

The messaging chapter runs 19 pages with 13 charts yes from SMS to MMS to Whatsapp and other OTT messaging on mobile. As so many businesses and government sectors are still only discovering the power of mobile messaging, and the industry is so big (mobile messaging alone is almost as big by revenues as the total global internet, and twice as big by total users). All the big gurus of the mobile industry keep reminding their audiences and readers that ‘Mobile First starts with SMS’ as I’ve been teaching forever, and still the areas where SMS can be used is under-served with enormous growth still ahead, that chapter is warranted both by its scale and being early in the Almanac. So for example last year we learned that the Red Cross in Sweden has started to send out thank-you messages via SMS, when the blood you donated was actually used today (and what type of life-threatening situation it was used in). Imagine the power of that! Or how say Square the mobile payment APP is using SMS to let Square users reach those who don’t have a Square account. Or how Visa is shifting online payment confimation passwords to one-time SMS messages sent from your bank to verify the payment. There are Uber clones that run on SMS. There is a free Wikipedia delivery system in many African nations letting people who don’t have a browser on their phones (very poor people often) access top-line Wikipedia paragraphs for free, and for just modest SMS charges, read more of Wikipedia if they need more information. Contracts in Spain can be signed by SMS and taxes, as I said, in Norway can be filed by SMS. If you lose your email password, the major email providers now prefer to send you a new password to your phone, via SMS. So yes, if you need more data on messaging, a whole chapter awaits you in the Almanac 2016.

MEDIA HIGHLIGHTS

So the media side of mobile is rapidly growing. The news organizations finally figured out a few years ago that the internet was not their future and tablets were a lost cause. The future of the newsmedia is mobile - not words of mine, so said the Associated Press newspaper guild to its members. Similarly advertising media giant WPP (parent of its better known ad agencies like Saatchi & Saatchi, Ogilvy & Mather, Young & Rubicam and closer to us in mobile tech and reseach, WPP also owns Kantar and TNS research companies today). WPP’s Chairman Sir Martin Sorrell (who incidentially is known internally as SMS haha, Sir Martin is a big fan of mobile and messaging) says the fastest-growing slice of global advertising is.. duh.. mobile.

Of the largest media content types on mobile, Social Media is now the biggest worth 42 Billion dollars. TV and video services are second worth 39 Billion and mobile gaming comes third at 34 Billion dollars. In addition to mobile advertising (worth 49 Billion dollars) the top 5 biggest mobile data services apart from messaging, includes mobile search already worth 36 Billion dollars in 2015. Thats your top 5 and for those who have followed our incredibly-fast-growing mobile data industry, yeah, the first hit service of our industry, Mobile Music has dropped out of the Top 5, its even out of the Top 10 by now. Still, I include music as a relevant chapter in the Almanac to see how former giant slices of the industry will manage their declines, to see what may be soon coming to say messaging. But Advertising, Social Media, TV and Gaming of course have their own chapters in the Almanac with several charts and tables each. Mobile Advertising (or mAd as I like to call it) is one of the longest chapters running 11 pages with 8 charts and tables. To grab a few details from those chapters. Gaming has 1.9 Billion mobile users today (of downloaded or online mobile games, not counting games pre-loaded on the phones). Social Media’s largest market is now Emerging Asia, no longer the rich part of Asia. And lets take one detail from the mAd chapter - so in the split of mAd types, banner ads now deliver 56% of all mobile ad revenues. There, you can’t complain that I am not sharing plenty of data from the Almanac haha...

Now yes, there is a chapter on smartphone apps too. Its there mainly because so many begged to see it but seriously, I can’t afford to put more than 7 pages into apps in a 209 page book, where apps only generate 2% of the revenues of the industry. But yeah, five charts and tables for you if you really need to know about apps - and this is in addition to the smartphone OS charts that are in the handset chapter. But note, for example, I have in the handset chapter the regional splits of OS platforms by region. So you can see which OS platform has the installed base in any region, and which OS platform sells the most in that region to see where it may be shifting in the future. Thats stuff not in the apps chapter, its in the smartphone OS part of the handset chapter. And some apps-related info is in the gaming and social media chapters too.

But in total, a general mobile internet chapter; then a general ‘all media’ chapter. Then five specific media category chapters like gaming plus an ‘other media’ chapter. Then still an advertising chapter and an apps chapter. If you’re in media and content and think Tomi only talks about SMS and smartphones, the Almanac has 86 pages with 48 charts and tables for you (79 pages, 43 charts beyond the one apps chapter). If its not in the Almanac, you won’t find it in any other ‘generic’ mobile industry document, then you have to go buy a specialist report on your industry from one of the analyst houses which typically costs 1,000 dollars or more, and will give you a hundred pages or more on your specific needs. That is not what my Almanac is for. My Almanac is the generalist volume covering the whole mobile industry, every year, with all data updated. And the 100 most important issues explained in their own charts and tables, over 200 pages.

MEDIA UNIQUE AUDIENCE

There is again a ‘world first’ chart in the Almanac that you cannot literally find anywhere else. You know how the various media have ‘inflated’ numbers. So Facebook says it has 1.6 Billion accounts but that includes duplicates. FB itself admits it expects something like 11% of all FB accounts to be duplicates, so the unique FB reach is only 1.5 Billion, not 1.6 Billion. Same is obviously true of mobile, as we saw earlier, its not 7.6 Billion unique humans but rather 5.0 Billion who actually own a mobile phone. With these technologies the REACH is less than the top-line biggest registered user count. So then the other way around. Newspaper circulation is about 425 million but newspapers are read typically by more than one person, either at home or at the office. So newpaper audience REACH is significantly larger, newspaper REACH is 1.1 Billion humans. Same for TV, its not how many households HAVE a TV, but we need to adjust TV reach by how many people live in that household that has a TV. Nobody has ever published a listing that includes the biggest media and communication tech (including mobile obviously including SMS and MMS) but also internet, and traditional media like TV, radio, newspapers. I have. Now that we have a solid number on the unique mobile users, I have finally been able to publish that number which I had been working on for a couple of years, and have used parts of it in my private consultancy sessions. But nobody on the planet has released a table with those industries - by their UNIQUE human audience REACH, as a comparable table. I have it now, in the Almanac. Here is the highlight:

Mobile total reach is 5.9 Billion unique humans. TV comes second, with a total reach planet-wise of 5.3 Billion humans. Radio comes third reaching 4.3 Billion unique people alive globally. Fourth? Comes UNIQUE users of SMS at 4.1 Billion UNIQUE texting users (many of us use SMS on two or more accounts that is how we get from 4.1 Billion unique SMS users to 5.8 Billion total SMS accounts). Fifth? Is DVD/Blueray video player reach at 3.4 Billion unique humans.


MEDIA AND TECH TOP 5 LARGEST AUDIENCES BY UNIQUE HUMANS
Mobile Telecoms Reach  . . . . . . . . . . . 5.9 B unique humans
Television Audience Reach  . . . . . . .  . 5.3 B unique humans
Radio Audience Reach . . . . . . . . . . . . 4.3 B unique humans
SMS Text Messaging Unique Users . . 4.1 B unique humans
DVD/Blueray Player Audience  . . . . . . 3.4 B unique humans.
Source: TomiAhonen Almanac 2016
This table may be freely shared


So first, I will yes, write a separate blog about this topic, with more of the numbers and full analysis and sources how I got to those numbers. But the Almanac today has not just those 5, but the unique reach/audiences of 20 media and communication tech. If you are in any media, advertising, customer service or other such business, this is alone a reason to buy the Almanac now, because literally nobody else has this data today. It is now only to those of my loyal readers who buy the Almanac religiously every year when it comes out. I put always new stuff in it (it has again more pages and more charts and more info than last year, plus all data updated to be current). But later this year, I will write a blog about the major tech reach of major media and communciation platforms. (The blog won’t cover all 20 but more than these 5, haha.)  Today as we celebrate the new Almanac and take highlight data points from it, those 5 are enough. Yes, there is again a unique TomiAhonen Consulting statistic that everybody will be quoting. Get yours now.

ON THE STAT OF 221 TIMES

Oh, and if you missed it, the Almanac has the old 150 times per day chart for all phones including smart and dumb, but also the new 221 times per day version, that I have not yet done into the public domain. That was new for last year’s Almanac. I’ll get to it eventually too, but if you wanted to know WHAT we humans do, when we use our phones, how can we look at the phone 221 times per day? I have that breakdown in the Almanac. But don’t worry, I have freebie stuff too - if you want to read the 150 times-per-day breakdown that was on this blog a couple of years ago, still valid today. Read it here. So I have now done the parallel analysis breaking down the 221 times statistic in a similar way. And yes, I will at some point come to the blog to do the 221 times version too. Now, for those who doubt those numbers.. we just heard from Apple that an average iPhone is UNLOCKED 80 times per day. That is totally consistent with smartphone users looking at the smartphone 221 times per day, because some of the activity we do requires more than one look - like placing a phone call - we need to look at the phone to start the call (and unlock the iPhone) but at the end of the call, we have to hit the ‘end’ button ie look a second time to end the call. Its possible the call was interrupted, we lost the signal, and had to re-dial, meaning 3 looks just on ONE phone call, assuming no other follow-up or prep work relating to the call on that session. And then consider all the info we can get from the iPhone without unlocking it, like who sent the message or who is calling now. And we also do some activities on it without unlocking it like when we charge the iPhone or take it from the charger. Unlocking an iPhone 80 times per day is VERY consistent with looking at an iPhone about 221 times per day, certainly 150 per day is not enough, and 221 times per day might be a bit low.

Talking about the consumers, the customers, the users of mobile. There is OF COURSE a chapter on the consumers. What we do on mobile and various stats and charts about it. Including what are the most common features we use, etc. So lets share again one item from that chapter. The Top 10 most used features from most to least starts with SMS. Then camera, clock/alarm and voice calls. Then fifth comes advertising (as in how many consumers receive ads, not necessarily requesting them, obviously). The rest of the Top 10 in order: Music, MMS, Mobile Internet, Voice Mail and News. Yes voice mail has dropped to 9th in usage of mobile. MMS is still ahead of the internet. The actual table this year has 21 items instead of 20, because VOIP has joined the bottom tied with what was 20th, and yes, VOIP services like Skype are now a Top 20 usage type on mobile phones. The Consumer chapter of the Almanac is at the beginning of the book, runs 17 pages long and has 8 charts and tables. Just like I would not deliver a lecture or seminar about mobile without talking about our customers, I couldn’t imagine writing a book or report without discussing the latest trends in mobile customers. But 8% of the total Almanac is devoted to this topic directly. Consumers/customers/users/audience as a topic however, is also discussed in most of the other chapters that follow to some degree.

The Almanac is written out of two decades of studying and reporting on mobile data. Its written by me, a fan of mobile data and numbers to you, an audience who craves that detail. I know out of so long working with people studying this industry, what data needs more detail, and what type of graphic illustration helps explain it. Like one of the most popular charts from the Almanac series, the Venn Diagram that shows internet use. Because some of access the internet both on a PC and on mobile, how to measure one ‘or’ the other? You CAN’T. You have to show by Venn Diagram. Some people never use mobile, only use a PC (desktop or laptop, or now more recently, tablet PC). That was 100% of internet users in 1996. Today only 9% of internet users never use a mobile and exclusively acces the internet on a computer of some kind (when tablets are included as PCs). Meanwhile the proportion of internet users who never use a PC, not even from a shared PC at school or from one at an internet cafe, keeps rising fast. Its 43% of all internet users already, who only use a mobile and don’t use a PC. Then the remaining 48% are like you and me, we use both a PC and a smartphone to access the internet.


INTERNET USE BY ACCESS METHOD: 3.2B TOTAL USERS
Access Internet Only by PC Never by Mobile . . . . . . . 9%
Access Internet by Both PC and Mobile . . . . . . . . . . 43%
Access Internet Only by Mobile Never by PC . . . . . . 48% 
Note Tablets are included in PC count not mobile count
Source: TomiAhonen Almanac 2016
This table may be freely shared


That is the kind of info the Almanac is full of. And trust me, I wrote the Almanac for myself. I may seem like a walking computer myself knowing every data point but I dig into the Almanac ever single week to find out some detail I hadn’t memorized, most weeks when I work, I go to the Almanac several times per week. If nobody bought a single copy of it, I would produce a new Almanac every year just for myself, its that valuable - for me, the ‘numbers guy’ of the industry haha. As I’ve frequently said, that is why its formatted for the small screens of smartphones, so you can store the pdf file onto your phone and carry the Almanac with you and have all the industry stats always in your pocket.

WHAT ELSE IS THERE

Now let me see, is there anything else I’d like to share with you today? One of the items I’m most proud of, is the Digital Divide chapter near the end, where I devote a whole chapter just to explore the digital divide. Most data you’ll find about mobile is about the ‘usual suspects’ rich Western countries who have tons of market research data for them. The USA, UK, various European nations, some Australia, Japan, etc. But try to find data for Nigeria or Brazil or Indonesia or Egypt and you’re out of luck. So I divided the world to ‘rich world’ and Emerging World, for the top-line big numbers and into three tables in the chapter. So you can see for example the handsets how the handset statistics differ dramatically between the West and the Rest. In the Industrialized World of 1.1 Billion people living in affluence, we have 1.6 Billion total mobile phones. Our world is so advanced, we have 100% of the handsets now as cameraphones, 95% of the mobiles are on 3G or faster networks and 81% of our phones are smartphones. But contrast to the Emerging World, there 6.1 Billion people only have 4.0 Billion mobile phones. Of those only 88% are cameraphones, only 65% are 3G phones and only 33% are smartphones. Yes 67% of the Emerging World still uses ‘featurephones’ or ‘dumbphones’. That makes a dramatic difference to you to know, if you wanted to expand your business to say Morocco or Argentina or the Philippines. This is again the type of info that my Almanac is designed to help with.

Then on the back of the Almanac are even more tables and charts. One very useful table is the 60 largest countries of the mobile INDUSTRY. So for ‘rich world’ countries, Europe etc, you can expect any nation with a population of 4 million or more to be included. Ireland is in, Luxembourg is not. New Zealand and Singapore are in, Macau is out. And then for the Emerging World, I set the cut-off at about 15 million for LatAm (Ecuador, Peru are in) or about 30 million for the poorer parts such as Africa (Kenya, Morocco are in). And so if its a ‘major’ country anywhere, the 60 biggest nations relevant to mobile are in the Almanac. If your business is going to Ukraine or Taiwan or Colombia, they are in my table at the back. Each nation has one line, so its just the mobile subscriber count (and population and penetration rate) plus a few most important details - is there 3G and have MVNOs launched in that country - both vital insights to you if you consider your mobile project. But once you know the national mobile penetration rate, with the rest of the Almanac especially the Digital Divide chapter, you can make very good educated guesses of other mobile stats for that country, such as how big is its smartphone population or its internet use on mobile, etc.

The Almanac also includes all my proprietary stats published occasionally on this blog and discussed often in my keynote presentations and seminars around the world. So for example I have at the back of the Almanac my “Index of Mobile Market Leadership” that has been published for over 10 years now, which is a numbers-based index of mobile market LEADERSHIP. Where do top countries rank against each other, by their mobile market maturity. No surprise Japan leads and Singapore comes second. The Top 5 for 2015 has South Korea third, Sweden fourth and Taiwan fifth. (For American readers, USA comes in at 13th tied with Norway; for British readers UK is currently ranked 8th). The index uses the four best measures for national leadership in mobile: mobile subscription level; mobile network evolution; how advanced are the mobile handsets; mobile service use level.

And before any US based opinions are given - ALL international experts - experts of MOBILE - agree that Japan is our industry leader and the USA is not in the Top 10. Only ignorant Americans would dare suggest their archaic industry is the leader of mobile. Japan was the first country to not just launch 3G, it was the first country to shut off its 2G networks (they still operate in the USA). Japan was first to launch the mobile internet and first to report more than half of total internet users were from mobile. Japan was first to launch NFC based mobile wallets literally 10 years before Apple finally brough that tech to the USA a little over a year ago. As I said, the index has been published for more than ten years now, and it is NUMBERS-based not based on some silly Silicon Valley Apple writer’s personal delusions. The Almanac includes the 30 most advanced countries of mobile (excluding the tiny ones like Luxembourg, Monaco and Macau) and sitting at 30, is South Africa. Oh, the Index also roughly explains how much TIME a given country is ahead of others, with 10 Index points suggesting one year of a lead, so Sweden is one year ahead of the USA. Did you know in Sweden all bus tickets can be paid by mobile. All bus tickets. Did you know that Stockholm’s first hotels to have NFC-operated mobile keys were operational already in 2010 !!! Four YEARS before Apple bothered to put NFC on the iPhone 6 (and even then Apple in its wisdom did its typical proprietary solution to limit NFC). Yes its a fair judgement to say Sweden is about a year ahead of the USA in mobile (arguably, FOUR years).

So yes, the Index has its latest listing of the 30 most advanced countries too. And all the other TomiAhonen exclusive stats you have grown to love in the Almanac and on this blog. So thats the big numbers blog for us for May 2016. Bookmark this page as you won’t remember all these and will need to come back to this page in coming months. The fastest-growing giant industry in human history. The genuine money-making machine that produces the most Billionaires and Millionaires and does it the fastest. The immensely profitable industry reaching literally the pocket of every economically viable person on the planet. The most widely spread technology in human history that is still growing fast. If you thought you knew mobile was big, its actually even bigger. But as my dear friend Chetan Sharma likes to say, the golden age of mobile is only now beginning. The first four decades were the time of experimentation and exploration. Now the really big impacts of mobile start to be felt. With that, lets do a short preview of the Almanac, I released it just over the weekend. It costs the same as always, only 10 Euros ie 9 UK Pounds ie 14 US Dollars. Nothing really considering how much great up-to-date statistic and information it contains. The Table of Contents for TomiAhonen Almanac 2016 edition:

Contents: TomiAhonen Almanac 2016

(has 213 pages, 109 tables and charts. Cost only 10 Euros, 9 UKP, 14 USD)

Chapter 1 - Intro to this Almanac . . . . . . . . . Page     1

Chapter 2 - Size of Industry . . . . . . . . . . . . . . . . . . .   5

Chapter 3 - Customers . . . . . . . . . . . . . . . . . . . . . . . 24

Chapter 4 - Handsets  . . . . . . . . . . . . . . . . . . . . . . . . 41

Chapter 5 - Mobile Messaging  . . . . . . . . . . . . . . .    63

Chapter 6 - Mobile Internet . . . . . . . . . . . . . . . . . . .  82

Chapter 7 - Seventh Mass Media Channel   . . . . . . 98

Chapter 8 - Music on Mobile  . . . . . . . . . . . . . . . . . 112

Chapter 9 - Mobile TV and Video   . . . . . . . . . . . . . 117

Chapter 10 - Mobile Gaming  . . . . . . . . . . . . . . . . . 127

Chapter 11 - Mobile Social Networking . . . . . . . .  133

Chapter 12 - Other Mobile Content . . . . . . . . . . .   140

Chapter 13 - Smartphone Apps . . . . . . . . . . . . . .   149

Chapter 14 - Mobile Advertising and Marketing .  156

Chapter 15 - Voice Calls  . . . . . . . . . . . . . . . . . . .   167

Chapter 16 - Business/Enterprise Services   . . . . 173

Chapter 17 - Other Mobile Data . . . . . . . . . . . . . . . 176

Chapter 18 - Network Infrastructure   . . . . . . . . . . 179

Chapter 19 - Digital Divide  . . . . . . . . . . . . . . . . . .  182

Chapter 20 - History and Milestones . . . . . . . . . .  193

Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  202

Index of Mobile Leadership for 30 advanced countries

60 Major Countries

25 Countries by Most Mobile Subscribers

25 Countries with Highest Mobile Penetration Rate

25 Countries with Highest 3G Penetration Rate

20 Biggest Mobile Operator Groups

About the Author  . . . . . . . . . . . . . . . . . . . . . . . . . . 214

Other books by Tomi T Ahonen

Thats the TomiAhonen Almanac 2016 edition. Best little book about the biz you could ever hope for. Its again longer, now running 213 pages. It has again more tablets and charts, now 109. It still costs the same tiny 10 Euros (9 UKP, 14 USD) you can buy it now and have it on your smartphone today. The unrestricted pdf file can be saved on multiple devices you own, and have it on your smartphone permanently saved (file size is only 1.3 MB so its tiny) and the screen is formated for reading on a smartphone screen. Get the Almanac now before all your competitors have theirs. And all the data in the Almanac is of course yours free to use, you can just screen-grab the tables directly to use in your powerpoints or company presentations if you want etc. Best data package of the mobile industry by the guy who really knows the numbers. To see more about the Almanac and the page to order it, is here.

TomiAhonen Almanac 2016 Edition is Just Out - Get it while it's hot

For those who crave all the stats you could possibly carry in your pocket... The TomiAhonen Almanac 2016 edition has JUST been released. All data is current to end-of-2015, the Almanac is the best source of 'everything' about mobile - from the consumers ie subscribers to the handsets including dumb & smartphones - to the services and apps - to the messaging including OTT to the networks, enterprise customers, mobile accessories and on and on and on. It has 213 pages, and 109 charts and tables. The best data source about mobile including countless unique stats nobody else provides for ANY price. And best of all, it only cost 10 Euros. Its an unrestricted pdf file formatted for a smartphone screen so you can carry the best and latest mobile stats with you everywhere, right in your pocket. And boy have I been adding cool stuff into it. How many phones have GPS, how many phablet screen smartphones were sold, on and on and on..

 

The website still shows the details about last year's edition, but don't worry, of course I'll ship the 2016 edition now. This is the best 10 Euros (14 dollars, 9 UK Pounds) you'll spend and nobody is going bankrupt with this price. But if you appreciate this blog for the stats I share, this is the book I MYSELF USE literally weekly, some weeks daily, because nobody, not even I, can remember all those numbers. The best little smartphone file to carry in your pocket (and its unrestricted pdf so do save another copy to your laptop and a third to your tablet PC).

 

The organization and table of contents is like before (just adding a couple more charts and pages). So you can see much more of it by looking at the 2015 edition summary here. And this is the ordering page obviously - just scroll to the bottom of hte page and select which currency you want to pay in. I'm emailing now to those who pre-ordered it. Get yours literally.. today.