

The Three Pillars of Nokia's Strategy Have All Failed - wazoox
http://communities-dominate.blogs.com/brands/2012/10/the-there-pillars-of-nokia-strategy-have-all-failed-why-nokia-must-fire-ceo-elop-now.html

======
chipotle_coyote
Ahonen is a smart cookie in a lot of respects, but he can't let go of the idea
that Symbian and MeeGo were the future for Nokia. While I think in retrospect
Elop made a few bad calls, when he got there MeeGo was _not_ in production-
quality shape. Nokia's own assessment was that they would have _one_ MeeGo
unit ready for shipping in 2011, and that particular unit--what eventually
came out quietly as the N9--was an intriguing but crashably unusable demo unit
even in late 2010. This isn't speculation on my part, either: I was at Nokia
in 2010 and used one of them briefly. Or tried to. There was a lot of stuff
that just didn't work. In November 2010. On the only device that was far
enough along to have hardware that could be shown to other groups.

And Symbian? Jesus. To implement a "search as you go" feature for Symbian^3,
something that would narrow down search results both on the phone and off as
you typed (like iOS and Android devices do, so this was just achieving
parity), we had to _write our own keyboard_ because the Symbian keyboard _took
over the whole screen._ You selected a text field and got the keyboard, then
hit the keyboard dismiss button to see the screen again. But look on the
bright side: in addition to the "Universal Search" team in San Francisco
working on that, there were _four other groups_ around Nokia, both employees
and contractors, working on what was, essentially, the exact. Same. Product.

And this was de rigueur for Nokia. _This_ was the problem that Elop had to fix
beyond anything technical: massive duplicated effort on what, at any other
company, were already solved problems, because Nokia had become a bunch of
fiefdoms all fiercely protecting their own turf. I'm pretty sure this is _why_
Symbian stuck around in essentially the same form for so long. I'm sure Tomi
Ahonen loved it as a user, but the number of engineers working on Symbian who
_liked_ working on it that I talked to was, to the best of my recollection,
zero. (Just getting the developer toolchain running on my machine made me feel
like I'd time traveled back to the days of SLS Linux.)

If I ran the zoo, I'd have probably gone with Android rather than Windows
Phone; Elop went the other way not because of his past connections with
Microsoft, but because he wanted to keep using lucrative Nokia services
(rather than Google counterparts, most notably Maps) _and_ be allowed to use
the Android branding, and Google said no. I wouldn't have cared about the
Android branding--instead I'd have cared about porting Qt to Android and not
burning bridges with Nokia's existing development community. They'd just spent
a lot of time, money and effort convincing everyone that Qt was the Way Of The
Future: instead of writing to Symbian _or_ MeeGo APIs, you'd write to Qt APIs,
and then porting would be simple. Losing that was a bad call.

But I'd say the most serious mistake Elop made had nothing to do with
technology. Love Apple or hate them, one of the things they're really good at
is not talking about products before they're ready. The rumor mill may be in
high gear for months, sure, but when Apple makes their official announcement,
it is nearly _always_ in the form of "Here is our new Superlative Magical
Thing. Here is a video of Jony Ive talking earnestly about it. It will be
available for this price (two weeks from now|tomorrow|as soon as the band
stops playing)." If Elop had been running Apple during the PowerPC-Intel CPU
switch, he'd have leaked an internal memo describing the PowerPC in some
colorful apocalypse-invoking metaphor, then three months later _announce_ the
switch, then six months after _that_ introduce one laptop with an Intel chip
that wasn't the most current generation and say they'd have more coming next
year.

The lesson to draw from Nokia under Elop isn't that they should have stuck
with MeeGo; it's that they should have kept their mouth shut, kept shipping
Symbian phones through 2011, and started 2012 with their new devices _ready to
ship_ when they announced them. I wouldn't be surprised if Ahonen gets his
wish within a year and Elop _is_ canned by Nokia's board -- but I'd be very
surprised if doing so improves their situation.

~~~
gareim
I agree with all your points except for the one about Meego. All reviews I've
read of the N9 when it was released half a year after your experience with it
were positive. All praised the innovative design and the fluidity of the
device while it was running on dated hardware.

Would Nokia have been saved by choosing Meego over WP7? We'll never know and I
think that's a shame.

~~~
zxcdw
This is exactly _The Thing_ ; N9 with MeeGo(more strictly Maemo) has been
idolized by everyone, everywhere. Yet, Nokia tried to kill it and in fact
_still tries_ to, because it does not sit well with their earlier
strategy(Symbian) nor with the current one(Windows Phone).

Nokia was brought down by the internal issues between divisions, Symbian
people fought against Maemo/MeeGo people and executives threw plans and
requirements around at such pace that whatever got nearly finished had to be
scrapped and the whole process began again. Add in other strategy decisions,
issues with hardware(LTE not available, no-go for North American market) and
fierce competition and it's not really surprising they've gone down at the
pace they had.

Well, luckily there are people who still believe on what MeeGo and N9 were
built upon...

~~~
guiambros
> N9 with MeeGo(more strictly Maemo) has been idolized by everyone,
> everywhere.

Idolized? Yes. Is it enough to make people purchase the phone? Not at all.

If a fancy UI and eye-candy animations were enough to be successful, webOS
would be the leader of tablets, and I'd be using BeOS to write this.

What Elop realized was that Nokia was, indeed, sitting on a "burning
platform". And MeeGo wasn't the lifeboat they needed.

MeeGo was fancy, but too incipient as a platform to compete against
iOS/Android. No developers, no industry support, no technical expertise within
the company to develop it (plus the political fights with Symbian). It'd be a
long, slow, expensive and bumpy road ahead. It'd cost him 3-4 years of
development time, and the the board and investors would crush him well before
he could deliver on the plan.

Symbian was completely f-ed up, broken to its core, so this was never an
option (and it's laughable to read "Symbian was winning" as put by the OP). A
much better review was also posted on HN today - "Symbian, a post-mortem"
<http://news.ycombinator.com/item?id=4648843>.

So the only real options were between Microsoft or Google. Android offered no
differentiation against Samsung/HTC -- and no insurance against patent
lawsuits. And I guess Microsoft offering a pile of cash probably helped to
sweeten the deal.

Will Elop be fired? Well, it wouldn't surprise me. The odds are against him,
as they were since the day he joined. But I highly doubt it'll make things any
better for Nokia.

~~~
yannski
Well, you seem to forget that Meego and the N9 were built on Qt. And you
cannot say about Qt that " No developers, no industry support, no technical
expertise within the company to develop it".

------
paulbz
I used to work directly for Elop and thought he was/is an amazing leader. So
while I'm biased, it's only because I know and have deep insight on him - I
have nothing to gain.

This feels ironically similar to saying Obama failed because he didn't fix
Bush's mess fast enough. Nokia was heading for a slow decline. Elop's strategy
accelerated that decline short term in hopes they could turn around. It's a
risk he and the board fully knew existed. It hasn't gone the way they want
fast enough, which sucks, but they had the guts to give it a shot.

Android would have been the safe bet. I don't think any can argue that Nokia
would be a much more valuable company today if they took on Samsung for
Android leadership instead of going down an empty road with Windows Phone.

Instead, they swung for the fences with WP7. They missed. But, they have a few
more chances to try to make it happen, and they're now effectively bankrolled
by a company with much deeper pockets and motivation to win then if they stuck
with Meego or Symbian.

I can't say I'm confident, but I am optimistic. I wouldn't count them out yet.

~~~
CamperBob2
_...they're now effectively bankrolled by a company with much deeper pockets
and motivation to win then if they stuck with Meego or Symbian._

I think this is a good point that's completely overlooked by the other
doomsayers in this thread.

Nokia : Microsoft :: General Motors : the US government. Having alienated
every other hardware OEM of note, Ballmer can't afford to let Nokia fail.
Their relationship is strategic, not tactical.

This wouldn't have escaped Elop's attention when he had to decide between
betting the house on Android versus Windows Phone.

~~~
cmccabe
Microsoft can easily let Nokia fail. Microsoft is already considering making
its own phone, just like they've made their own tablets and game consoles:

[http://news.cnet.com/8301-10805_3-57458288-75/microsoft-
weig...](http://news.cnet.com/8301-10805_3-57458288-75/microsoft-weighing-its-
own-windows-phones-analyst-says/)

Every few years Microsoft gives another lesson about why you should never
partner with Microsoft. People have very short memories, apparently.

------
shill
I cringe when I read "the textbook definition of insanity is doing the exact
same thing over and over again expecting different results".

This is obviously not the definition in any legitimate textbook or dictionary.
When will smart people stop using this stupid cliche?

~~~
marshray
Rather than a textbook, I usually see that quote attributed to Albert Einstein
or the ancient Chinese.

------
Metrop0218
This article completely ignores the concept of mindshare. Which equates to how
many people are thinking about a product, and thus how many people are more
likely to buy that product someday. In 2010 Nokia's mindshare was slim to none
and slim was heading out of town. He tries to make it sound like Nokia was
doing well then but it may have been doing well in the moment, but we all know
what the derivative was.

My opinion: Nokia is fine. They have a good business strategy in their new
smartphone pillar that I strongly believe will work. Why? Because it's a two
pronged strategy. They're selling performant inexpensive smartphone like the
Lumia 510 in the developing world that will be retailing for $150 (off
contract!). While they're doing this to increase their marketshare, they're
making high end 'hero' devices like the Lumia 920 that will ship in the
developed world and increase mindshare. Its unrealistic to expect a
'breakthrough' in western markets because many customers are entrenched into
certain ecosystems and are difficult to move. That said, mindshare is easier
to get, and if you can convince people that your stuff is cool, you can start
to slowly nibble away at the western markets. Nokia is fine. Elop is fine. I'm
tired of all of this doomsday predicting crap.

~~~
jpxxx
From an American persoective, yes. Nokia was a titan everywhere but in
American smartphones. They owned the low end, the owned the high end, and they
owned everywhere in between.

Now they have completely lost the script on smartphones and are losing their
grip on the dumb phones that have paid the bills for more than a decade.

There is no upside to be seen anywhere.

~~~
Spearchucker
I'm not as close to Nokia as you, so can you explain where Nokia lost the
script on smart phones?

I ask because I pre-ordered a 920 off-contract on the basis of a number of
features unavailable anywhere else -

\- Offline maps, search and navigation

\- PureView/OSI camera

\- Being able to use the phone wearing gloves

\- Wireless charging

There are a number of other reasons I chose to pre-order the 920 without
knowing what it'll cost. UEFI. Knowing that the phone won't come with some
crazy manufacturer's interpretation of a UI skin. Knowing that no manufacturer
or network operator will include bloatware that can't be uninstalled without
rooting the phone, or being forced to use iTunes.

Would love to know if I made a mistake, and why.

~~~
jpxxx
I've no doubt it's a great phone, and those are all good features.

But it's late, it's not shipping today, it's only on one carrier in the USA
(odd considering capturing the American premium smartphone market was the
whole rationale for 'Burning Platforms'), it's based on an ecosystem that's
still a distant third-to-fifth in many metrics, and it's part of a brand
that's struggling mightily to mean anything in the minds of customers.

Nokia's late 00's Symbian lineup wasn't necessarily competitive with the
premium side of the market, but it was quite competitive in the lower tiers
and was still selling like gangbusters in the lower-grade markets. Publicly
throwing them all out overnight was an extraordinarily bad move that
suffocated Nokia just as they needed cash to compete more than ever before.
Their ASPs dropped like a rock, carriers told them to fuck off now that they
had a legitimate and thriving alternative (Android 2.x), and the idea of Nokia
being a vendor of status phones evaporated overnight. One great phone isn't
going to fix their situation.

~~~
Spearchucker
I don't see a reason to go with anything else than the 920. The exclusivity
thing is a bummer for US users for sure, but that will be short-lived, if my
sources are correct.

I disagree about the lateness. That's dependent on the release of Windows
Phone 8 by Microsoft. You may argue that the announcement a month ago was too
early, but the counter argument to that is that Nokia is growing mindshare.

I think Nokia's big chance is the apps they're providing. No other
manufacturer produces apps as useful as Nokia. We know Maps and Drive will now
be available on all WP8 devices, but there's City Lens, free streaming music,
Nokia Transport, Nokia Xpress...

Android was never an option for Nokia, given Nokia Maps. As we know from many
sources, Symbian was dead in the water, and awesome as it is, the N9 wasn't
competitive with iOS and Android (there being even fewer 3rd-party apps today
than Windows Phone went live with).

As for one great phone not fixing anything for them? Not sure. It worked for
Samsung. Sure, that doesn't mean it'll work for Nokia. But predicting where
this goes is like predicting the weather. I've owned every smart phone of
Nokia's starting with the 9000 Communicator, and ending with the N900. I'm
optimistic.

Elop is playing a long game, and his strategy makes sense to me. The 920 will,
by all accounts, be the most innovative device when it's released later this
month.

~~~
gareim
Just curious, why did Maps make Android not an option? Samsung bundles their
own apps with their skin of Android. Is there something that prevented Nokia
from doing so too?

>there being even fewer 3rd-party apps today than Windows Phone went live with

Well that's just a silly comparison to make given that the Meego was
pronounced dead before the N9 was even released.

------
jpxxx
It's prett easy to hate on this analyst and his strident, obsessive tone, but
he's right on the money. Nokias financials have gone from fine to apocalyptic
in short order and they are now burning cash at a crazy clip with no evidence
of any competitive products in the pipeline.

They have months left, not years, and no amount of 'mindshare' is going to pay
their bills in the new era.

~~~
thirdsun
Regardless of anyone's opinion on Windows Phone, the Lumia 920 should be a
pretty competitive phone. Furthermore I always had the impression that owners
of Lumia 800 & 900 devices were very happy with.

It remains to be seen how successful the 920 will be but saying Nokia hasn't
anything in the pipeline seems far from accurate.

~~~
Kliment
My father bought a Lumia phone. He's been anything but happy with it. The
fonts are too small to read numbers off the screen from the phonebook, and
cannot be zoomed. The menu structure is confusing. We had to get some images
and videos from the phone to a computer and it was an incredible pain. It
would not work as a mass storage device, the only options were to upload stuff
to microsoft's cloud offering, email them or sync them to the computer. We had
to download hundreds of megs of Zune crapware to talk to it from A computer.
It didn't work at all on a mac or on his windows 7 computer - it wouldn't talk
to the phone at all. In the end we could get it to show up in an XP virtual
machine running under Linux. The email and upload options did not work because
the videos were above some unspecified size limit. The sync option did
eventually work, but took 6 hours to transfer several gigs of video, and
showed no progress bar. Nightmare experience. The video and audio quality of
the recordings was wonderful, but everything else about the device sucked.

~~~
joenathan
That is the first time I've heard someone call the Zune software crapware,
it's a godsend compared to the mess that is iTunes.

~~~
tsotha
I've never used Zune, but iTunes has always bothered me. I get that people
took to it because you could buy new music and get it to your phone from the
same application.

But I've always considered the interface to be a cross between the worst web
page on the web and the worst native app. What the hell were they thinking?

~~~
joenathan
It's especially a nightmare on Windows with all the extra services it installs
that start with up with the OS. Does anyone actually use Bonjour? The
automatic updates that decide to install Safari & Quicktime, it runs like
molasses even on the latest and greatest hardware, you also seem to have to
resign-in to your apple account every time the software even thinks about
doing anything. One of the worst offenses is it won't monitor folders for new
music, if you decide to acquire music outside of iTunes you have to manually
tell it to rescan for music each time. iTunes is an offense against humankind
and will probably be what starts WWIII.

~~~
starik36
I believe Bonjour is used for Airport Express speakers and for sharing music
over the network.

------
aristidb
It is really hard to take seriously an article with section titles like
"SYMBIAN WAS WINNING".

~~~
lopatin
Globally in 2010

~~~
glesica
If you take a very naive view of what it means to be "winning", then sure. But
I don't think such a view is ever warranted in business (heck, or even
sports).

A team that is up by a few points heading into the final period, but has been
thoroughly out-played and out-scored in the preceding period is not "winning"
in the same way as a team that has been dominating for the entire game.

For a company (or team) to be truly "winning", they must be on a trajectory
that will lead to long-term sustainability and growth. Nokia (their smartphone
business, anyway) was on a downward trajectory, just like RIM (which, up until
just a few years ago had a commanding lead over iOS and Android).

I could buy the idea that Nokia should have stuck with Meego, or even Maemo
and pushed harder to make one of those platforms a commercial success. But the
idea that Symbian was winning, under a non-naive definition of the term, is
more or less a joke.

------
anjc
This seems to be micro-analysing graphs and completely ignoring the prevailing
public mood, and even the products.

Anybody any idea of how the Lumia 920 is likely to go? It seems like their
marketing division (apart from the fake pictures) and hardware division etc
are all on their game, and i can't imagine the phone being a flop.

~~~
mongol
I agree quite a lot with this but I think the main point is that he analyzes
financial graphs. I am sure the graphs that bothered Elop were ones that said
how many applications were developed for each platform and so on. Nokia had
not been doing well in this department, and a smartphone without apps is not
an interesting proposition.

------
aik
"CAN WINDOWS PHONE 8 SAVE NOKIA? No."

He goes through a lot of interesting analysis of the past, then asks THE KEY
question about the future, and just dismisses it with a negative answer
without any analysis and calls Elop clinically insane. Instead of a personal
attack on Elop, I'd like to see more about why the strategy will fail going
forward. Being that these are now occurring:

1\. WP marketshare is increasing very very steadily.

2\. WP reviews are great and user satisfaction is great.

3\. WP8 and Windows 8 are both about to come out in a few weeks, and although
Microsoft has taken some risks, there is massive potential.

4\. Nokia's new phones look great, have several impressive unique points of
differentiation, and in some ways are clearly superior to any other phone on
the market (e.g. Pureview).

5\. The news about positive WP phone sales in China and India. Taking into
consideration the fact that they have great phones at several price points.

6\. The existing reports of the new feature phone line are promising (Asha).

~~~
azakai
> 1\. WP marketshare is increasing very very steadily

Source? I seem to recall it decreasing in some quarters.

------
hristov
Nokia has to quickly post haste load android on all their smartphones. They
will probably have to kick out Elop first, but that won't hurt at all. So (1)
kick out Elop, (2) load Android.

It is fricking amazing how a board of presumably tech savvy businesspeople
cannot understand the network effect. So let me put it simply -- it is over
there are no more smartphone operating systems in the present smartphone
segment. Google barely got in with android and the door slammed behind them.
Meego was too late and Windows Phone was far too late. It does not matter how
good Windows phone is, their DOA based on the network effect.

There are so many apps made already, there is so much investment in app
production for both iOS and Android, that any new OS in the same space has
unsurmountable obstacles to overcome.

There is actually an opportunity to make a new breakthrough in mobile devices,
but one has to reinvent the market, like Apple did. The opportunity is for
cheaper phones in the third world. Right now everyone wants a smart phone but
most people in the world cannot afford the 600-700 prices (and no they cannot
afford the higher subsidized monthly fees either). If someone comes up with a
lightweight OS, that has similar features to modern smartphones, but perhaps
with worse performance, worse screen, etc., that will be succesful. It will be
succesful mostly because it will appeal to people that are outside of the
network effects of Android and iOS. But that is not Windows.

~~~
wallflower
> Google barely got in with android and the door slammed behind them. Meego
> was too late and Windows Phone was far too late. It does not matter how good
> Windows phone is, their DOA based on the network effect.

This. If you draw a Venn diagram of competent iOS developers, Android
developers, and Windows Phone developers - there is _very_ little intersection
in my experience. An individual developer's bandwidth is limited - they can't
simultaneously easily grasp the intricacies of UITableView and ListView. It's
like the old cliche about multi-tasking - it simply does not work in practice.
I have met a few who claim to do both iOS and Android well but in practice
they are sacrificing depth for breadth.

Windows Phone is DOA for the reasons you stated and the fact that if there is
a small consultancy or product shop that does iOS and Android - it is likely
two different people. If you add Windows Phone, it will likely be a third
person. From what I've heard from reading MSDN-type magazines about Windows
Phone, those third persons are griping about how Microsoft keeps on changing
the technology stack (e.g. WP7 is not compatible with WP8, Silverlight's
evolution, etc.).

Also, I have yet to see a Windows Phone in the wild in the hands of the
coveted 18-39 Female demographic. That is dominated by iOS with some Android
and Blackberry exceptions.

------
patrickaljord
I think Nokia's strategy is to bet everything on windows 8 on both phones and
tablets but also to offer better hardware (such as the camera), if this
strategy fails then I would agree to call Nokia's strategy a failure. It's too
soon to tell for now, the only sure thing is that Nokia's strategy so far in
the smartphone market has been a succession of failure and bad decisions.
Let's see how it turns out this time. There's also the conspiracy theory that
Microsoft may buy them and that they're failing on purpose to lower their
value...

~~~
Zigurd
The market for mobile Windows 8 is embryonic, and will remain so for longer
than is relevant to a Nokia turnaround. Windows 8 is for high-spec phones, and
will take several years to move down-market. It isn't the high-end phones that
drive a million Android activations per day. Windows 8 tablets are even less
able to turn Nokia around. The game therefore has already been won or lost.

This was foreseeable. Windows CE Core was never competitive with Linux.
Killing Meego looks like a career-management move. It could have been a
bridge, at the cost of casting some doubt on Windows as a strategy.

Nokia could still buy Jolla, but that would be a hell of a climbdown.

~~~
zmmmmm
> The market for mobile Windows 8 is embryonic, and will remain so for longer
> than is relevant to a Nokia turnaround

This is the key problem. Even if Windows 8 is a wild success on phones we're
probably talking 15% market share over the next 12 - 24 months. And that will
be split between multiple OEMs. Nokia in its current form is just not
sustainable long term on 5% market share, or even 10%. What they need to
happen is so unlikely (say 30% market share of Windows 8 phones in 12 months)
that it's truly insanity to bank the future of your company on it.

------
melbourne_mat
You've all completely missed the point: anyone who knows technology thinks
that Nokia phones are junk (myself included). But the clear message from the
article is that the developing world still thought Nokia was awesome!

Elop destroyed the brand. It's very clear from the timing of his burning
platform communication to the destruction of sales.

The game is over for Nokia. Pretty soon they'll be worth the collective value
of their patent portfolio, and that's it.

