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Nokia CEO: Nokia is "standing on a burning platform" (engadget.com)
513 points by ldayley on Feb 9, 2011 | hide | past | web | favorite | 196 comments



This is an excellent, really excellent call to arms from a new CEO. I have a few takeaways -- first: the board brought Elop in for a four to seven year turn-around. He's going to make enemies, but that's okay. If he executes the turn-around, they'll put someone more finnish back in to sooth the old guard after they're making money again.

Second -- this guy has the Microsoft internal criticism DNA, through and through. This isn't quite a Gates-level memo, but it's in the ballpark. I'd love to see some leaks of him reviewing his experience using different phones, Gates style.

Third -- he's totally correct. Nokia f-ed this up, all by themselves. I STILL miss my Nokia E-90; it had 7mb up and down, a beautiful keyboard, video chatting, first-class SIP phone account support, and an 840x320 screen in 2007, for God's sake! The UI sucked, the apps weren't there, and there was no touch interface. Apple cleaned Nokia's clock. Then Android did it again.

One reason HN readers should care: Nokia is probably the only carrier in the world with the balls to just go ahead and release unlocked phones with things like VOIP accounts built in. They may be the only company who doesn't have to play nice with US carriers around; innovation from them will be excellent for consumers.


Nokia regularly cripple features, specifically including VoIP, at the demands of carriers. Perhaps not US carriers, but it happened frequently in the UK.

I took the calls of people angry that their 'top end' handset couldn't do VoIP because they bought it from Vodafone.

The carriers were always Nokia's customers, not the consumers, I can't see how that's going to change.


>Nokia regularly cripple features, specifically including VoIP, at the demands of carriers. Perhaps not US carriers,

Oh, definitely in the US—look at the difference between the E71 and the E71x, the AT&T version. The GP was talking about unlocked phones. I have an N86 which I bought on Amazon, and it's got SIP and other features which AT&T would hate me to have.

>The carriers were always Nokia's customers, not the consumers

Yeah, but that's the case with every phone manufacturer.


> Yeah, but that's the case with every phone manufacturer.

That's exactly my point. In this regard Nokia are not in a special position to stand up to the carriers.

Unlocked handsets don't count: almost no one is paying that much for a phone. Even Apple had to accept carrier subsidies for the iPhone to get the end purchase price down.


> Unlocked handsets don't count: almost no one is paying that much for a phone.

Most mobile phones in the world are bought unlocked. Carrier-locked phones holding most of the market is an US/UK quirk, and in many European countries, carrier-locked phones like used in the US would actually be illegal.


Locked Phones are the norm in Germany too. If this holds true for France too, the vast majority of mobile phones in Europe is being sold locked. I don't know the details about the "illegal" claim, but normally those things are governed by EU laws, making it somewhat hard to believe that contracts common in the UK and Germany would be considered illegal in the Netherlands or Portugal.


  Locked Phones are the norm in Germany too.
You forgot to add that this is only the case for subsidized phones. Nobody stops you from going to Media Markt to purchase an unlocked, uncrippled phone for full price.

In addition: SIM locked (i.e. only able to use a designated network) is not quite the same as a crippled phone (like in intentionally crippling the Bluetooth stack to force users to use a crappy service to upload photos for a couple bucks a pop).

I can't speak for Germany, but in Switzerland the only SIM locked phones are the ones that you buy together with a pre-payed deal. And then they have to unlock it for you after a couple years.

Personally I perceive the development of locking down devices as rather disturbing and I really hope that this trend doesn't swap into European mobile phones. That's why, yeah, I feel that Nokia matters a lot.


Except that Nokia have been locking down handsets at the request of carriers for years (cf, earlier comments about VoIP on Vodafone on certain Nokia handsets). They really do have no special power to say 'no' to those guys. None whatsoever.


I dont know about UK/germany, but in Scandinavia the carrier must unlock the phone for free when the contract is up. The max length of a contract in denmark i 6 months, longer in norway/sweden.


In Brazil they must unlock it upon request. The subsidies are tied to the service contract - if you break it, you pay a fine. I believe carriers are no longer bothering to have their phones locked up.


In France, I believe you can get it unlocked after 6 months, even if your contract is for 24.


> but normally those things are governed by EU laws

There are EU laws, but each member is free to add its own rules.

In Belgium, tied sales are illegal (or were mostly illegal until very recently), and subsidized phones linked to contracts are considered tied. Which makes them illegal in Belgium.

And nobody is going to buy a locked phone for the same price as an unlocked one.


> In Belgium, tied sales are illegal (or were mostly illegal until very recently), and subsidized phones linked to contracts are considered tied. Which makes them illegal in Belgium.

Tied sales ('koppelverkoop') have been declared legal by minister Q since about end of 2009 (1), due to Belgian law conflicting with European law. I'm not sure if the revised Belgian law has gone through parliament already, but Euro law takes precedence anyway.

(1) http://www.quickonomie.be/nl/persberichten/29oktober2009-kop...


Locked phones are the norm in Ireland.


Locked as in "locked to one network"?

Except for prepaid 20EUR-phones and perhaps the iPhone, which phones in Germany come locked?


Phones are usually "bought" for 1€ with a 24 month contract attached. At the end of the contract, the lock is lifted and you can use your phone on all networks.


I'm aware of the 1EUR contracts (I live in Germany). I was just surprised that most phones in such contracts were supposed to be netlocked.

I've bought most of my mobile phones of the past on eBay to use with my prepaid card. I've seen Vodafone, O2 and T-Mobile brandings on them, but I never had to contact the seller because of a netlock problem. I've also found footnotes like "this telephone can only be used on XXX network, wait 24mo or pay us 99EUR" on brochures and paper ads, but only for prepaid contracts.

If there is a common practice of netlocking most German 24-month-contract phones, when did it start?


Those phones will have been unlocked, either officially by the network or unofficially using unlocking tools.

eBay isn't a reliable place to get a sense of the realities of the retail mobile phone market.


Judging from their websites,

I. Vodafone's unlocking page explicitly mentions their CallYa prepaid offers and an outdated brand of "VPA" mobile phones and an "MCC" starter pack[1]. There is no sign of a page for the millions of people with a 24-month contract.

II. The T-Mobile page for old phones [2] lists several models of cellphones; those I recognize look like typical cheap prepaid phones (e.g. the Siemens C35 is there, but not the more expensive S35 of the same era). Their FAQ[3] says that SIM-locks have to be unlocked, but not which phones are locked. It does explicitly say that the iPhone is SIM-locked, which slightly contradicts the premise that all 24-month contract phones are SIM-locked.

III. BASE's FAQ[4] on SIM-locks says that SIM-locks are particularly common with prepaid phones.

While it may still well be the case that most contract phones come locked, it surprises me to read so little of it anywhere.

1. https://www.vodafone.de/privat/hilfe-support/hardware-entspe...

2. http://www.t-mobile.de/sim-lock-entsperren/0,20638,23789-_,0...

3. http://www.t-mobile.de/faq/1,1951,18-_,00.html?vgn_form_enco...

4. http://www.base.de/Fuer-Kunden/Faq/SIM_Karte/


Yeah locked to one network which also means you can only get firmware updates when the network specific version is ready, which is often months later, or never.

Any subsidized phone purchased with a new contract is locked, as far as I know. But I don't know of many that are hard to unlock.


A well-written email is more powerful than many people comprehend. We used to call them letters, and they were powerful then too.

You can change a person's or a group's mind about something, even after a decision appears to have been made. You can clinch a job, win a contract, stop a lawsuit, regain a friend, woo a lover, and change history itself with just a few words.

I'm not sure if people realize quite how powerful an email can be, directed at the right audience, at the right time, with the right message. And the flip-side is true too. A badly written, poorly directed, or mis-timed email can have terrible consequences. You can make or break a company with a single email.

Regarding this memo, it's a truly inspiring, and well-timed. I think this will be a Gettysburg moment for the CEO, and may mark a turning point for Nokia.


Very well said. It's a great memo, but its main effect is to lay the groundwork for a strategy change.

This means we're going to have to decide how we either build, catalyse or join an ecosystem [...] When we share the new strategy on February 11, it will be a huge effort to transform our company [...] The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future.

This may be a turning point for Nokia, but in the end it will come down to just what this new strategy is and how effective it proves to be.


No matter how good the strategy looks on paper, it's useless unless everyone buys in. Its effectiveness will depend to a great extent on how well the new strategy, and more importantly the need for it, can be sold internally.


Well said. If writing is like talking on paper, then a good email is like looking someone in the eyes on paper. As someone who isn't always the most articulate in real life, I feel like some of my greatest accomplishments have been largely attributable to a handful of ridiculously well-written emails.


We used to call them letters

The path from the age of the letter to the age of the one-paragraph, stream-of-consciousness email may be a fairly easy-to-follow one, given the obvious way that technology first enabled, then gradually enforced a vastly lower expected interval between missives, but I'm still curious to see a critical investigation of this process in a McLuhan-esque sort of context. Anyone have any recommended reading?


> woo a lover

And suddenly I remember Valentine's Day is almost here.


> The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse or join an ecosystem.

Please, please, Nokia, adopt Android and put your efforts into making great hardware to go with it, without ruining the interface like so many other manufacturers do.


This is the way forward, a company that wants to develop native apps for mobile must already work with so many different systems. A new startup is going to focus on an iphone app, if they are successful or well capitalized from the start then they will look at android. The third choice in the market is shaping to be windows 7 phone.

Expecting companies to develop for then yet another platform, one which seems to be redefined often, is asking a lot and will result in getting only the really big players and lower rate developers trying to cash in on the under exploited platform.

In a way it's similar to Yahoo outsourcing their search to Bing, advertisers focused most of their attention on adwords and then also rolled some Bing campaigns, but only so much attention can then be given to the third player in the market for even less ROI for time spent due to the lower search volume.


Not really, Nokia's Ovi Store is now third in downloaded apps per day. However, in many countries such as in China, Ovi Store is the most popular app store.

http://www.forum.nokia.com/Distribute/Ovi_Store_statistics.x...


Pretty much the only people making money on Ovi are game companies. Nothing wrong with that, except that gaming is different to other types of software.

Also, note these points:

  * There are 30,000 apps available
  * 400,000 new Forum Nokia developers were added in the last 12 months.

That really illustrates what a horrible platform Nokia has. 400K new developers were interested in it over the last 12 months, and yet there are only 30K apps in the whole store. Compare that to the adoption that the iOS and Android app stores have had.


The prior development tools for native Symbian have been horrid, combined with difficult signing process etc. However, the transition to Qt and Qt Quick -based apps makes it all very easy and convenient thus enabling the potential better. It's true that it isn't the most exciting platform right now, but it's certainly on the right path.


Yeah, but that's like saying that Lotus 123 was on the right path when they finally ported it to Windows.

With Qt/Qt Quick you get an environment that is sort of competitive with where iOS and Android were over a year ago. Meanwhile, iOS and Android have moved on and are accelerating development of their SDKs, and Nokia is falling further & further behind.

Anyway, say you build your app, thinking how great it will be with the huge reach of the Symbian platform. You ship, and discover that (a) people who have a Symbian phone and can afford to buy your apps are just waiting to upgrade to iOS or Android, and so won't invest any time in new apps on their Nokia phones and (b) Symbian is only growing in use in the developing world, where people are very unlikely to buy your app because the cost is a lot more significant.

So you give up, and go back to iOS and Android where the toolsets are nicer and there is more money to be made.


Hmm, in my opinion Qt/Qt Quick is certainly superior to Android in many respects today. And I do use both.


This says nothing of what the sales are like in China which is notorious for not paying for software. In China currently these phones have a much larger share of the market because they are cheaper than iphones and android phones.

Eventually when the prices of the better smartphones fall you would expect a big shift away from nokia unless they can improve on their current offerings. I think we will have to wait some time to for windows 7 phone to pick up some market share before app store figures show whether it is a better bet than nokia in the American market.


WP7 isn't shaping up to be anything. Nokia sold more N8's than all the WP7 manufacturers combined.

Secondly, there is room in the market for other players as indicated by Bada's success.


> This is the way forward, a company that wants to develop native apps for mobile must already work with so many different systems. A new startup is going to focus on an iphone app, if they are successful or well capitalized from the start then they will look at android. The third choice in the market is shaping to be windows 7 phone.

I agree with what you said here. But to take it a step further I'd say that the number one rule I've learned from doing mobile native apps the last few years is that ideally one should NOT be making mobile native apps. Make a web app, that just happens to look and interact decently on a mobile device. Saves developers a lot of pain and a lot of time otherwise invested in a more narrow platform set of skills.


> But to take it a step further I'd say that the number one rule I've learned from doing mobile native apps the last few years is that ideally one should NOT be making mobile native apps. Make a web app, that just happens to look and interact decently on a mobile device.

Yeah, make a web page so I would need to start the browser first, then wait for the page to load. The GUI and the experience will be completely different than anything what I already have on the phone, not to mention that the GUI will be suboptimal. Transition between screens in the app will be dependent on network coverage - if I'm in the bus and it stops on some blind spot just when I clicked the button, I'll have to watch white screen (or an error message) until the bus moves. And for what? To "save developers a lot of pain". Sounds reasonable, I'm sure I'll give you my money.


If your goal is to provide for a nice developer experience, sure. Thing is that developers are paid to do non-pleasant things in order to maximize the end user experience. Most web apps are crap on the desktop already, but not enough to be worse than desktop apps (because of other advantages); but on a mobile, they're 10x worse and in almost no cases equally good let alone better than the native app.

What web apps do you know that work great on a phone? Maybe my experience is skewed, but the slickest web-based phone app is the mobile version of Reddit, and that thing still sucks when you actually use it.

Color me unconvinced - native dev isn't going anywhere just yet.


For this to be truly a reality you would need mobile developers to expose more functionality to the web app. The web app could also become a common interface with lower level functionality, so say a camera on an android phone and an iphone could both expose a common js interface.


This is what Palm was trying to achieve with WebOS.


I'd rather Nokia actually be the only truly open mobile platform out there. No, Android isn't sufficiently open.

It's my phone, at a minimum I should be able to pull all my own data off it in any form I choose.


The problem is that openness at the cost of user experience isn't good enough to keep a company alive. Ideally you'd get both, of course; but so far Nokia has been unable to deliver on user experience compared to iPhone and even Android.


Google is not delivering a truly open handset because it's in their corporate interest, not because it would detract from the user experience.

I'd rather wait for one company to try to and get their UX together than wait for Google to do an 180 on their data collection policies or for Apple to tear down the walls of their garden.


IMO a GNU/free fork of Android would still be a better platform than MeeGo or Symbian, and would be cheaper to develop.


There is no such thing as a free Android, except if you tear the whole Java user space away.

And I'm REALLY curious about why you and 14 other people think that Android is such a good mobile OS. The VM is both a legal and speed liability, the Android UI is not GPU-accelerated and the entire OS is still immature (see the embarrassing bugs with the SMS or the browser security holes).


> There is no such thing as a free Android, except if you tear the whole Java user space away.

Isn't that part BSD-licensed?

> the Android UI is not GPU-accelerated

It's a bit hard when you have to support more than one device, but I believe it's a matter of time. As more and more hardware gains hardware acceleration, I assume it will come (if not already in the latest 2.x and 3.x series)

> the entire OS is still immature(see the embarrassing bugs with the SMS or the browser security holes)

Don't confuse the OS with the programs that run on it. You don't blame Windows when SharePoint eats up all your intranet, do you?


The license doesn't matter that much, it's the principles - one of them being that you don't get sued by such and such corporation if you use the code. Or Google doesn't change the terms if they lose on trial. No one has patents on C or C++ AFAIK...

SMS and web browser are core mobile OS services, they're not simple programs since connectivity is very important for a mobile phone.


> No one has patents on C or C++ AFAIK...

Oracle is not complaining Google is implementing Java in Dalvik. Oracle is complaining they are implementing things too similar to stuff Oracle has acquired patents about.

http://carlodaffara.conecta.it/oraclegoogle-the-patents-and-...


From a technical point of view the OS is actually the best out there, imo. It's developed from the beginning with handsets in mind and as such has quite some really nice features.


Which technical point of view? From an enterprise standpoint, where it's on par with the iPhone and behind Blackberry, or an API standpoint, where CocoaTouch has about 30 years of development lead-time?


How the point of being far older makes it technically superior is far beyond me. You wouldn't say Symbian is the best mobile OS out there because it's one of the oldest, would you? Also, afaik CocoaTouch has been developed for iphone/ipod and thus can't be 30 years old.

Anyway, features i find pretty neat are:

  - The concept of Activities
  - The concept of Intents and their connection to activities
  - real multitasking 
  - XML based layout with builtin internationalization
  - the use of Java as widely known language
  - Dalvik after getting JIT compilation = nice piece of technology, a fast and capable VM for such "slow" and limited hardware
  - oh and it's open source (except for the google apps, just like any other app)
Acitivites and Intents are just a great thing, love the concepts.


I’ll have to research Activities and Intents. It sounds counter to the app model on iOS, which—arguably—is bad for technical users. However, I consider the the fact that the UX enables my parents to use an app out of box, and not have to enable a DLL for some certain functionality. Either/or is sometimes an important part of UX.

I’m not sure why you like XML so much, is it that you can write an interface programmatically? While it’s true that a nib is nothing more than a writeout of a view’s object graph, it features a higher-level mode of internationalization (nib-level) meaning that interfaces don’t have to be shoe-horned into text fields. Besides, it’s always possible to create a blank view that’s drawn into.

However, Dalvik’s JIT is more a ripped feature of the JVM (hah), and Apple has worked against implementing similar, their memory management techniques are still mainly reference counting.

And the open source thing? Apple’s core OS is OSS as well, Google’s strategy is the same: open source the fundamentals, leave the important bits proprietary. Apple’s children are UX and native apps, Google’s is online apps, which is why the Open Source tide line is a bit lower on iOS: Google couldn’t care less about churn and boring, long-range updates, as long as they get the users doing web stuff. Both Google and Apple both protect what’s important to their business interests.


I didn't mean to start the whole apple vs google debate here..

But let me tell what i find so nice about activities and intents by example of a simple usecase. I am browsing in my RSS reader and find a good article. Now if i want to share this article, i usually have a "share" option which sends the intent to the OS. Depending on the registered applications it let's me send this article via mail or twitter or sms or even bluetooth (or really whatever app supports this intent). After deciding i want to send this as mail to a friend the mail activity opens up, let's me send it and seamlessly send me back to right where i was (reading the article). This is integrated throughout the whole OS.

Now, if i am reading some rss article in Pulse on my iPad, i have two options: Use the facebooks-share button of Pulse. Ok, but if i want to mail it or the app doesn't offer that at all? I'll have to copy the URL, close pulse, open the mail app, write the mail, close the mail app, open up pulse again.

Another example is: Google places offers me a restaurant i want to visit. Now depending on the apps i have installed i can use google maps, some other navigation software or the public transport app i have to show me the way to get there. It makes the user experience quite seamless, despite the applications not "knowing" of each other. I don't have to write down the adress, open up some other app, enter the adress again.

It's also the way to replace core functionalities of the UI. Want another home application? When pressing the home button on the device it's firing an intent and this can be handled by some home app of your choice. Same for the search button.

The nice thing about intents is that it's very flexible. Depending on the apps i have installed it offers me interaction between those apps.

About JIT: If you want to believe Wikipedia, JIT is no JVM originated feature but was invented somewhere in the 60s. I find it quite hard to imagine how the Dalvik JIT could be a real rip-off of the JVM JIT, as those are based on quite different architectures. The only thing in common is that they both use the same syntax.

About Open Source: I may be corrected here but it's perfectly possible to have a working phone by taking the sourcecode from android. It will have a running kernel, a working UI, i can install apps and live with it. What would be missing would be gmail or the android market. But there are other markets and other mail applications. Could you please point me to where i can find a compilable open source version of iOS?


Yes, and you could put QT on top of it!


A C++ framework on top of a mobile OS in which most interesting things happen in the Dalvik VM? What for?


I think the hacker expectation is that a free open mobile OS would not be tied to a single programming environment and making it easy to port the mass of existing qt code would be useful.


Most interesting things including lawsuits. If things turn sour with Dalvik, Qt already runs on Android.


N900, the only phone you can own that you will really own yourself.


Which, coincidentally, can also run Android (if you really want to hack it that much).


...or MeeGo, and I guess Ubuntu and Debian are also possible. That is one part of the phone being truly open.

Here was the original announcement: http://flors.wordpress.com/2009/08/27/software-freedom-lover...


One of the big problems with Android at the moment is phone manufacturers not playing ball with its customers. Samsung have repeatedly neglected their phones in favour of releasing more new Android phones. At the moment, HTC is probably the king of Android phones, and most non-casual Android users will probably want to go with them, or with a newer hyped phone.

If Nokia were to enter the Android market and promote their open ethos throughout the Android community then the company could make a mint. Something as simple as releasing driver code for their phones so people can modify code to be run on their phones would put them miles in front with the Android community. If Nokia were to do these simple things then projects like the GAOSP wouldn't be so relied on to provide a usable phone with support.


Please stop thinking like a HN-er when discussing the entire market. If Nokia were to enter the Android market they would be just another Android producer. No one cares about drivers except hackers.


People don't care about different drivers, but they care when they want to download the Twitter app, only to realise that their new phone is on 1.6 and that they require 2.1, and Samsung will not upgrade their phone. A lot of open-source projects for community builds of Android get plenty of casual users wanting to get the most out of a phone they're currently tied to that the manufacturer has effectively dropped support for.

These problems exist because manufacturers have not thought about these issues, and would rather line their pockets with new customers than provide support for existing customers/suckers.


Frankly, I don't think most people care, either. They just want a phone that works, where they can find the features they use, and maybe some useful other things, like syncing contacts with gmail.

Most people I know with Android devices have never downloaded apps, some have downloaded a few in the first few days they had their phone, and only my most hard-core tech friends download any regularly. Most studies seem to confirm this behaviour. Most people don't even know what a 'phone update' is, and are caught off guard when their phone asks them about it.


I'd be interested in seeing these studies, as all I have to go on is personal experience and experience with the GAOSP, MustyMod and the popular custom builds on Android forums.

So, you buy a new Android phone, try to download the Twitter app, and realise that your 2 month old phone will never be able to run it. Does the phone work?

A lot of custom OS projects wouldn't exist today if consumers believed it did.


I googled a bit, but can't find any numbers any more. I thought I remembered a few 'studies' (I'm using this very lightly, this included self-reported sales numbers from manufacturers and blog posts from industry watchers with estimates) mentioned last fall. All I can find now is how many more average purchases iPhone users make (compared to Android), but that doesn't say anything about the shape of the curve of course - if iPhone users are overall equally likely to buy apps, and only 10% of the most hardcore Android users buy the same amount, the average for Android is down, but with a lot of users not buying (this is my assertion, like I said I can't back this up with credible numbers).

Anyway, my main point is that 'twitter' is something most users have only heard from on TV and don't even know what it is. For a regular user, a phone works when you can make phone calls with it, send text messages and set reminders/use it as an (alarm) clock. Then there are fancy features like using it for navigation (which is something they're already familiar with from standalone devices), contact/full agenda sync, and password management; and reading news sites; and post on facebook when they're so bored out of their mind that they really don't know what else to do.

And then there's the uber-advanced, only-nerds-do-this, full phone-centered lifestyle, where as much as possible is automated through phone apps. This is where twitter-client downloading people fall into - web nerds, turtle-neck wearing marketing people and art students. Of course in absolute numbers this is still a sizeable market, but it's only a fraction of the overall 'mobile phone' customer base. It will become more main stream in time, but not now...

How many OS projects are really used? A couple of hundred users, a couple of thousands for popular custom android roms? That's still marginal.


> phone manufacturers not playing ball with its customers

They do. Their customers are the telcos. most phone manufacturers will do whatever they are told, without much regard of how much this will affect the life of their users.

As long as we prefer to buy locked-up, subsidized phones from our telcos, this unfortunate arrangement will persist.


What about Meego? If they actually gave it some resources, rather than treat it as an afterthought, it could be great. To date Symbian has sucked all the resources from Meego, but one of the clearest messages was finally admitting reality on Symbian - 'if we continue like before, we will get further and further behind'.


War of ecosystems.. Google is their worst competitor. They either join smaller ones like WP7, WebOS, Bada etc. or keep on their own.


I worked for Sony Ericsson when the iPhone was revealed. My job was to translate the thousands of pages of operator requirements that came in (within my technology area: Java) to a technical roadmap for the coming 2-5 years. So I have a fairly good picture of how the market for mobile phones work wrt to the interplay between operators and manufacturers.

It's hard to grasp just how revolutionary the iPhone was. There are so many tiny things that's not by itself a revolution, but adding them all up and you're going disruptive.

I tried to compile some of it in a list here:

http://blog.opportunitycloud.com/2011/01/21/what-apple-did-w...


Apple releases iPhone, from the well-thats-not-very-exciting dept.

...

No 3G, no MMS, no video calling, shitty camera & bluetooth. Lame.


I worked for Accenture (then Andersen Consulting) in Paris in 1995 when a new team of Englishmen were brought in from London to "turn the French practice around".

Their theme? "Burning platform". The exact same story that opens the memo was their story too.

Maybe this Mr Elop is really an original thinker that will do great things; but the "burning platform" analogy is the most tired image EVER.

Oh, and did it work in Paris in 1995? Not really. It was not an absolute disaster, but in the end (two years later) the British threw the towel and went home, and the French partners who were there before stayed on (are still there to this day).


Totally Agree - while I loved the memo, it would have had more impact with me if it hadn't had it's central theme cribbed from 'the book of management phrases' that I hear from multiple CEOs. Ironically, I was inspired _the first time_ I heard those sayings- because I thought it was something clever our CEO had come up with. Imagine how depressed I must have felt when I heard the same phrases come up over, and over again.

Up there with "Burning Platform" would be "Problems are snakes. If you see a problem, don't hold a meeting, Kill the Snake" and "Our competitors don't have this problem as a central focus, it's like the chicken and pig at breakfast, we're the pig, the competitors are the chicken. The Pig is committed, the chicken is just involved", and, the one I've now heard no less than four times at four different companies - the story about the various people working on a church, and one character, sweeping his heart out, says that he's working for the glory of god (I.E. Do it because you love it, not because it's a job).

I never really got why dying to become someone else's food was supposed to inspire us - but I've heard it a couple times now.


I thought the idea was to become the chicken, not the pig? But my management lingo isn't fluent.


When I've heard it, at several workplaces (decades ago), the stated objective was always to be the pig-- to go "all in." The chicken was involved, the pig was committed-- thus we are asking you to be committed.

Usually, after the meeting, a few of us would quietly point out that the pig was eaten, and they were asking us to sacrifice ourselves to the project, but that never seemed to discourage the metaphor from coming up, again and again.


At least it wasn't the lighthouse/battleship story. If I hear that one more time I'm going to start laughing.


Where else have you heard it? What makes it a tired image beyond the fact that you heard it once in Paris?


I didn't hear it "once"; it was a central theme of the transformation story; there were posters everywhere, email campaigns, leaflets, etc. all based on the "burning platform" standard playbook.

The reality is that the "burning platform" metaphor is a classic story repeated ad nauseam in business schools and business books; see this for example (from 2005):

The term “burning platform” is a mainstay in business lexicon for many years.

For those not familiar with its origin, the story goes something like this:

A man working on an oil platform in the North Sea awakened suddenly one night by an explosion. Amidst the chaos, he made his way to the edge of the platform. As a plume of fire billowed behind him, he decided to jump from the burning platform even though jumping is a risky option for the following reasons: It was a 150-foot drop from the platform to the water.

There is debris and burning oil on the surface of the water.

If the jump into the 40°F water did not kill him, he would die of exposure within 15 minutes.

Luckily, the man survived the jump and hauled aboard a rescue boat shortly thereafter. When asked why he jumped, he replied, “Better probable death than certain death.” The point is the literally “burning” platform caused the radical change in his behavior.

http://www.imakenews.com/cppa/e_article000368179.cfm

(Please read the rest of this article to know how the story should be used in a business context; it really seems to describe the email, and it's prophetic since it was written six years ago).

Where do you think Mr. Elop heard this story in the first time? What's more likely, that he met an actual burning platform survivor, or that he read about this very common story in a business book?


The “burning platform” inspirational stories are probably based on an actual disaster:

“Piper Alpha was a North Sea oil production platform operated by Occidental Petroleum (Caledonia) Ltd. The platform began production in 1976, first as an oil platform and then later converted to gas production. An explosion and resulting fire destroyed it on July 6, 1988, killing 167 men, with only 59 survivors. The death toll includes two crewmen of a rescue vessel. Total insured loss was about £1.7 billion (US$ 3.4 billion). At the time of the disaster the platform accounted for approximately ten percent of North Sea oil and gas production, and was the worst offshore oil disaster in terms of lives lost and industry impact.”

http://en.wikipedia.org/wiki/Piper_Alpha


By "once" I was referring to the singular situation you were in, not necessarily literally "once".

In any case, I wasn't inferring that Elop didn't get it from there (and that he's a creative mastermind), but my question was specifically about what made it "tiring". I had actually never heard it, but am finding all kinds of sources to it now so it makes sense to me now why you would refer to it as "tiring". Thanks.

It is slightly disappointing to hear that he just reused the story, though. I don't even find the story that compelling -- there's nothing in there about the guy succeeding afterwards, but rather just surviving (and changing his behavior). I could think of a number of possibly more relevant stories.

Good luck to him though!


> I don't even find the story that compelling

Me neither. I think it's a rather weak analogy: shouldn't you first try to put out the fire? And if you're running away, jumping to a probable death to escape a certain death, how is that good or inspiring?

But the worst about this story is that you have to tell it.

I've never been on an offshore platform, much less a burning one, but I'm guessing if it were on fire I would notice. I wouldn't need to have the boss come behind me and pat me on the back saying: "hey, listen, I think we're on a burning platform, here's a list of reasons why".

But when it's used in a business context, it has to be backed up by evidence, which means either that the platform is not really burning, or that it's a matter of interpretation.


The “burning platform” seems to be a popular trope of change management. This is one of the many articles you can find about burning platforms: http://www.wisdom-works.com/lead-perform-sustain/change-burn...


Stephen Elop has finally put in writing what the market has said about Nokia ever since the iPhone came out. Props to him for finally initiating this intervention at Nokia; it has been long overdue. Someone has finally said "we have fucked up, its now time to get back on the horse and make it right" to the Nokia management.

Less than a decade ago, nobody could touch Nokia in the mobile handset market, Nokia defined quality... and then they got complacent and instead of innovating, they stuck to old principles. Its like Nokia witnessed the age old fable of the tortoise and the hare firsthand.


Your comment and Engadget's article seem to imply that Nokia failing in the smartphone market means that Nokia is failing generally. But wouldn't Nokia still be making a lovely profit even if they stuck to the more vanilla phones?

Don't forget that only a fraction of people can afford these >= £500 devices and only a fraction of those buy them without financing.


> Don't forget that only a fraction of people can afford these >= £500 device

No - fairly good Android devices are already available for US$150 unlocked (see Huawei Ideos). In the next year they'll fall below $100 and after that they'll be coming free with your breakfast cereal.

Elop is absolutely right with his analogy of a burning platform - there's a very real prospect that within 2 years Nokia could be entirely wiped out from the low end market - down to single digit market share and making very little profit on those. It's nothing short of an existential crisis for them.


I know very little about the smartphone market, but in the console market, Sony were happy to sell the Playstation at a loss to get the hardware out there.

Is this what you are predicting for the smartphone arena? Having the hardware at increasingly lower prices in order to make money on the app sales?

Surely, this is the only logical conclusion if Nokia move into an app store-like closed marketplace?


That only works as long as the console makers mostly lock out unlicensed applications from their platforms. Only AT&T and Apple seem to be willing to take this route.

Now, we have tons of carrier-subsidized phones that come with a service contract. (You get a cheap phone, but you have to pay $80/month for the next couple years.) That seems to be where the money is in phones.


Although you'll not hear about it on Engadget (as it's not interesting to high-end gadget hounds, they barely mention the low-end Androids, which are high-end by world standards), Nokia got demolished at the low end by a bunch of companies you've never heard of. It was basically coincidental that at the same time they missed the bus on the new portable computer (with phone capabilities) market that Apple invented.

Pretty bad luck for a company that was raking in billions selling lots of different low-cost phones to developing nations (which you wouldn't even believe is possible if you went to the John Gruber School of Business). Unfortunately those billions insulated them from the shocks, much like Microsoft happily ignored the internet for years. But the perfect storm of Apple, Android and low-end commodity competitors hit them hard from multiple directions (nice hardware, open ecosystem, low prices were all previous Nokia advantages).

Elop mentions it though, so at least Nokia is aware of the problem: "Let's not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally - taking share from us in emerging markets."


> But wouldn't Nokia still be making a lovely profit even if they stuck to the more vanilla phones?

Maybe. Until the smartphone market mostly cannibalizes the dumbphone market.

Then where are they?


The memo directly addresses how Nokia no longer owns the medium or low-end of the market either.

They're being squeezed by smartphone tech making its way down towards mid-range 'featurephones' (i.e. a cheap Android handset easily beats a mid-range Symbian featurephone), while the low-end stuff is becoming a commodity churned out by Chinese OEMs.


There is no such thing as "Symbian feature phone". Every Symbian phone is a smartphone.


Nokia used to be up around 60% of the mobile phone market (in terms of profit). Now they're around ~20%, while Apple is more than 50% (on less than 5% marketshare).

Nokia is still making money, but pretty much all new profit is going to everyone else (especially Apple).

http://www.freerepublic.com/focus/f-chat/2666565/posts


While I got schooled on some apple market share figures earlier today -- the IDC report that ZeroGravitas links to here: http://news.ycombinator.com/item?id=2192345 points out that Apple have 21.6% of the Australian market. (That's total market, not just smart-phone and not just profit)


Do you think there is a fixed "profit" out there for the taking?

Apple's profit margin is an extreme aberration, and it isn't sustainable. Any comparison that relies upon profit numbers is...disturbed.


Do you think there is a fixed "profit" out there for the taking?

Definitely not. But I do think that there's been incredible growth in Nokia's core business, and they haven't seen any of the growth.

Apple has been able to do this in four markets now:

1) iPhone -- a carrier subsisized market.

2) iPad -- see (3)

3) iPod -- Large margins based on industry leading large volume.

4) Computers -- Expensive niche product with huge margins. I believe the are the single most profitable computer company (if you look just at their computer division).

Why is a comparison based on profit disturbed? In business that's pretty much the only thing that matters. Profit yesterday, today, and tomorrow.


> Apple's profit margin is an extreme aberration, and it isn't sustainable. Any comparison that relies upon profit numbers is...disturbed.

So the goal of a phone maker should be to sell as many devices as possible regardless of whether they're profitable? That sounds a lot like, say, Motorola before they adopted Android - not exactly a picture of a healthy business.


Apple has been making similar margins on all of its products for the past 10 years. How can you say it isn't sustainable?


10 years ago Apple had 5 billion in revenue. Now they're pushing 100 billion in revenue. They butting in on competitors who operate in the 5% margin range, and who are all desperately starting to claw back at Apple's gains.

No, it isn't sustainable. History will prove me out, and in 3 years I would bet that Apple has seen a significant margin haircut. Quote me on a 50% decline.

As a comparison, by the way, look at Sony (which was the Apple before Apple). Once a purveyor of high margin audio equipment, they saturated that market and started moving to high markup mobile audio equipment...and then TVs...and then lower markup mobile equipment, etc, and then everyone started fighting back.

Apple is exactly following the Sony curve.

EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned.


One downvote on a site where the voting arrows are tiny and close together and votes can't be reversed is a "seminal moment that speaks volumes about a community"? I think you're being a little melodramatic.

Anyway, Apple has always had a disproportionate share of any market it seriously participated in — the big difference is that 10 years ago Apple was a very small part of a single market. Some fluctuations will probably happen over the next half a decade, but you can bet that Apple will remain absurdly profitable in a way that embarrasses most of its competitors. It's just something that Apple is good at.


you can bet that Apple will remain absurdly profitable in a way that embarrasses most of its competitors. It's just something that Apple is good at.

I'm betting it's not. It's something Steve Jobs is good at.


It's a very easy bet that their profit margin is not sustainable. Obviously it won't survive the heat-death of the universe, nor the sun's expansion into a red giant.

The most contentious statement you made, to me, is "any comparison that relies upon profit numbers is...disturbed."

Why is profit a disturbing business metric?


Apple and Sony do share some similarities, but at least one big difference exists... Sony focused on licensing technology, from CD to BetaMax. Whereas Apple is creating a walled garden to lock in customers.

Sony eventually got commodotized in the very technology they created. This won't happen with Apple. At worst they get undercut in their industry, but Apple has a rich ecosystem that has to stay with Apple to reap the benefits.

And just for the record, no downvotes from me.


No, Sony tried to lock-in as well, e.g. Memory Stick, Minidisc, etc. Sony anything worked better with Sony anything-else. You saw this in the marketing too, SonyStyle etc, you could buy every electronic device from them and they'd all integrate nicely. Exactly like Mac, iPod/Pad, iTunes, AirPort, AirTunes, AppleTV...


You're still thinking in terms of hardware and devices. Elop's memo clearly shows that he comprehends the challenge. It's not the hardware. It's the ecosystem that matters. Think iTunes, App Store, MobileMe etc. Why do you think Apple is building a data center in NC? They're skating to where the puck's going to be.


EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned.

I would say please don't let the door hit you in this ass on your way out, but you are a bog-standard troll and will be back again next week whining about Apple.


that was not necessary.


Apple looks for market segments where they can sell things at high margins, and abandons the segments where those margins are no longer sustainable.

Dell laptops start at about $400. The MacBook starts at about $1000. If you only want to spend $400 on a laptop, Apple doesn’t want your money. If you want to spend $400 on an MP3 player, on the other hand, you can get a very nice iPod.


|EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned.

Wow seriously, overreaction much? I don't know how long after you edited your comment but you're +8 now. It seems a little petty to dismiss all of HN because your comment was downvoted. Big deal. You just have to put up with some downvoting and realize not everyone is always going to have the same opinion as yourself.

My guess is you'll be back tomorrow or the next day judging by your comment history.


This memo is spot on, except for the optimism at the end. I think Nokia is toast.

At the end of the day, you can't create a best-of-breed product out of nowhere. You need the core competencies to be already present in your company's DNA.

Palm came back out of nowhere and created in the Pre a phone with great usability fundamentals, and an incredibly innovative contact/data management layer. But that didn't come from nowhere.... those are exactly the things that the Palm Pilot excelled at.

Apple created a phone with incredible industrial design that pushed the boundaries of what was possible in a category of device. These things, also, have lots of precent at Apple, in the Macintosh, the iPod, OS X, and the iTunes music store.

Google, in Android, built a phone OS that has incredible integration with networked apps, and is built on a well run open source project. But before they started, they already had the best network app development teams in the world, and many world class open source developers and evangelists on staff.

What does Nokia have? I'm honestly not that familiar with their history, but they appear to have had (at one time) world class supply chain management and global distribution. And solidly built hardware? Is that it?

Honestly, I think Nokia had the right DNA to make a huge contribution to cell phones when they were a brand new, untested product with limited global reach. But now that those issues have been nailed, the distribution channels are in place, and everyone's phones, from Motorola's Android phones to LG's crappy feature phones are "good enough" for the people who buy them.

My guesses for the big future developments in phones are the web maturing as a development platform (Google seems positioned to ride that wave), powerful new software APIs (social, location, augmented reality, AI, etc), new media distribution models (Netflix, iTunes, Shopify, etc), and of course design-driven expansion of the user experience (Flipboard, FaceTime, Google Maps, etc).

I don't see product teams at Nokia who appear to be executing in any of these areas at the level that would be necessary to dominate in them. And they would need to dominate in two or three to stop hemorrhaging customers.

I think they're toast.


Nokia already produces some of the best phone hardware there is. If they got Android onto it, I'd upgrade in a heartbeat.

They also know how to differentiate without creating fragmentation. Most Android products suffer because of fragmentation - different OS versions, different hardware, etc. Nokia should know to create a core platform or 2 (standard screen size, hopefully upgrade support), and then make money on marketing prettier models to the people who'll buy them.

It's obvious that they need Android, maybe with some "value added" features tacked on (but not in a tacky way).

OK, crappy feature phones may be "good enough", but mobile phones has always been something of a fashion business. Nokia is good at this game, they just got blindsided by the iPhone and Android.


Nokia could create a fairly vanilla Android phone with Ubuntu style LTS (long-term support) for upcoming Android releases. Buying one of these Nokiandroids, you could be sure to be able to run Android 5.0 in 2014 before the support dies out. Nokia was synonymous with quality ten years ago and while nowadays anyone can order a truckload of tegra2's and whip up a new Android model out of them, the end-user quality sucks because your new phone will be outdated sooner than you can google the Android version roadmap page. Nokia could show that they deliver what people want and still ride a different wave than the Q1/2011 trendweasels.


Exactly. 10 years ago, anyone could make a dumbphone. They all just made phone calls, and sent texts, kept memos, and had some terrible Java game system. Nokia came to the top because they offered quality dumbphones, not because they offered a completely different experience.

Now there's iPhones (which Nokia can't really do anything about), and Android phones (which Nokia can do better than anyone, if they really try), Windows Mobile (maybe) and burning platforms like Symbian (despite Qt rocking, or so I'm told).


Well, Nokia is probably only GSM handset manufacturer who has their own baseband implementation. Modern S60 are smartphones that are implemented in same way as normal feature phones and thus incredibly energy-efficient (and relatively cheap). I think that this level of technical know-how can get them very far - even in today's market.


I think Nokia have repeatedly been making really dumb decisions about both their marketing and implementation.

Some examples include:

* Code-naming their phones obscurely, making it nearly impossible to remember and later buying a phone you like. Compare "Galaxy S" and "iPhone 3G" with "N6310".

* Not bothering to place the phone's name anywhere remotely visible on the phone, so you have to yank the battery out if you want to know your friend's phone model.

* Repeatedly implementing really dumb design decisions without ever fixing them: When calling someone, the "Speaker" button temporarily means "End Call" in addition to the "End Call" button. What possible purpose does this serve? It means you need to bother your eyes and hands with the phone when explicitly need an eyes/hands-free experience!

Many more of Nokia's decisions seem simply stupid. Does anyone see justification for these dumb practices?


Code-naming their phones obscurely, making it nearly impossible to remember and later buying a phone you like. Compare "Galaxy S" and "iPhone 3G" with "N6310".

Nokia's phone naming strategy was certainly not dumb at the time. They built brand around 'Nokia', not around specific models. You had 'Nokia' phone regardless of the model, similarly as you currently have 'iPhone' regardless of the exact model. (And current iPhone numbering i.e. 2G, 3G, 4 is easy to remember just because there are so few models) It was an integral part of Nokia's strategy that there were many many models to choose from, any single strong model brand could have been hindrance for that strategy.

Now, we can argue that in smartphone era, building strong model brands might be wiser strategy (Galaxy S), but that's another discussion. Nokia's model naming strategy was definitely not stupid in earlier times.


Nokia had something good gooing with Maemo on the N900, they should just have pushed on with that. They had a software platform that was competitive with iOS, technology wise. Lighter, smaller and sexier phones with the Maemo software, it would have been awesome.

But instead they decided to start over with Qt and a partnership with Intel.

They ripped all progress out from under them.


The idea of a Nokia device running Android is pretty appealing. They've always had good hardware, but Symbian has become a develpment dead-end, and Meego isn't yet here.


Android on Nokia hardware is an appealing idea, but given Stephen Elop's Microsoft background I wonder if they won't shift to WP7. Or both.


I'm betting on both.

I think there is no way they could go only WP7 - WP7 is controlled absolutely by Microsoft and Nokia cannot afford to be subjugated that way.

If they are really bold - and I kind of hope hey are - I would base it on Android but make it "better" - as in, devote huge resources to solve the long standing problems with Android - the UI is not slick enough, not smooth enough, the compatibility story is problematic, the market is polluted with low end stuff and much of the high end stuff doesn't run on all the phones.

If they forked Android and put out kick-ass awesome hardware with compatible but totally redone and beautiful iPhone-quality UI, a more curated market (without Apple lock down), bold promises about upgrades ("we will guarantee any phone we release will get current versions of the OS for 3 years") - they could possibly even steal the market leadership from Google on the Android platform. They are one of the few companies that would have the resources to do this - I hope they give it a shot.

Having said that, I bet WP7 will be in the mix if only to convince the market that there is a backup plan.


I see two things to make me hope they might not go with WP7. The first is the ecosystem: he correctly points out that the ecosystem is what they're lacking; but WP7 doesn't yet have one to offer. The second is that MS apparently exercises strong control over the design of WP7 phones, which would leave Nokia little room to distinguish themselves.

An Android-based Nokia could come with improvements in the phone features that make it feel like a Nokia, so that existing Nokia customers who are considering jumping ship to the Android of the week will be more comfortable sticking with Nokia.


>The second is that MS apparently exercises strong control over the design of WP7 phones,

This is where I went wrong; Elop was able to negotiate an exemption for Nokia.


Nokia on WP7 would mean they would have to cannibalize their OS teams, their app.dev stack(QT), existing software etc. gutting a huge part their workforce.

It is far more easier to have Meego adopt an Android personality, since they're the same kernel inside. They could add Nokia flavor on top.

The far more important decision is positioning; they would've to leave the low-end phone market to chinese, and focus on the midrange.


a) not quite the same kernel. You appear to be unaware of what Google has done to the internals of linux

b) having an OS team has turned into a liability for Nokia. CEOs normally don't care about 'gutting' workforces. In fact, I predict that Elop will cut the 'deadwood' of the old company as soon as he announces whatever on Friday.

c) (edit) Elop has to pay attention to Oracle having sued Google over Java in Android.

No, this is Microsoft establishing a brand in the phone space via take-over of Nokia. Watch and see.


I understand Android is quite different from vanilla Linux - I meant Android is closer to the Meego platform than WP7. Moving from Meego to Android is less of a stretch. For example, porting QT to Android should not be too difficult.

I really hope Nokia doesn't follow the SGI way.


I am not sure how the branding would work. Nokia X2351 Windows 7 Phone? How would this be good for Nokia? They would basically be handing over the smartphone part of the company over to Microsoft. I'm pretty sure you are correct on your outlook, I just don't understand how it would work.

edit: just thought of this... maybe MS will convince Nokia to sue Google?


Microsoft is all about the cloud now - so the phone will run WP7 which will provide a remote desktop client to allow you to connect to your PC at home, where you can use IE to browse the web.


Nokia could innovate around an Android core, especially with the UI. I'd like to see someone offer a different UI paradigm than the current iOS/Android one.


I'm predicting an HP-Palm/Nokia combined effort. HP and Nokia already collaborate, and webOS is the closest Nokia will get to an existing "ecosystem" that they could thrive in. Palm has crappy hardware, and awesome software. Nokia has excellent hardware, but crappy software. Both of them are getting slammed by Apple/Android. The solution is obvious.

Also, Nokia's work on Meego would transition well to webOS, since they are both linux based.


Nokia should have bought Palm when they had the chance. The former has solid hardware and crappy software, the latter an inverse problem. It would have been a perfect match.


Hopefully they're able to restore competitiveness, but I hope they don't do it by simply adopting WP7 or Android. I'd really like to see them make something like MeeGo viable. IMO, the mobile space could use an open ecosystem without the Google tie-in.


I think they might be looking at Android rather than WinMo7 (ok, maybe I'm just being hopeful...)

The memo repeatedly mentions innovation and market leadership.

With WinMo7 locked down as tightly as it is it is very difficult for a company to be innovative in that market.

OTOH, Android already has quite a diverse ecosystem, and would allow Nokia the opportunity to do it's own thing while still supporting an active developer community.

If Nokia was interested in WinMo7, why would they invest heavily in a Silicon Valley Engineering office (as opposed to a Seattle office)?

Finally, there is already a (very active, community) port of Qt to Android (http://code.google.com/p/android-lighthouse/). If Nokia got behind that it would give them a roadmap that would avoid alienating app developers who were hoping to support MeeGo.


IMHO, this does nothing else than hurt morale. It's not that the Nokia engineers were so stupid as to not know where their platform stands. This memo only contains lamentations over lamentations, with only a small, general call to action towards the end: "We are working on a path forward -- a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. "

The way I see these types of memos work is like this: spend the first part of it describing the problem, and the second part should include the suggested solutions. I know a former boss of mine who , if I didn't do that in my "lamentation" emails, i.e. not suggest solutions, would have smashed my head against the nearest desk.


Nokia is standing where Nintendo once stood: struggling to hold market share against powerful juggernauts, and in dire need of a bold product that eschews conventional wisdom, challenges consumer's expectations, and tickles developers' imaginations.

The problem is that Apple already did that recently. The iPhone was Apple's Wii, and now it seems incredibly difficult for Nokia to innovate that much that quickly without creating something the world might not be ready for, like the N-Gage.

I hope they pull it off though. Respect for the candor in the memo.


I love the analogy. They were great, but they need to redefine the platform and what it means to be a smartphone again.


Ignoring the problems with WP7, if Nokia were to produce phones with other 'external' OSes why would they stick with just one?

No one criticizes Samsung and they are pretty much a mobile-OS whore: SHP, Bada, WP7, Symbian (albeit a year or so ago), Android, Limo, etc.

N.B. Regarding SHP: I can't remember the name properly but this was the old/existing Samsung feature phone platform, it probably has got rolled into Bada, although Bada has two configurations (with and w/o the Linux kernel).


> No one criticizes Samsung

Except me, maybe. I don't know anyone who's been satisfied with a Samsung device. I certainly wasn't with mine.


I'm thrilled with my Wave and the Bada OS.


IMO, that's because Samsung doesn't have a clue and would rather hedge their bets. Most people I know who has a Samsung Galaxy, Captivate, etc have complained endlessly about the wait for updates.

Samsung's business is in selling phones, not developing a software platform and therein lies the problem. They make their bread and butter on planned obsolescence and in the process screw over their customers.


> that's because Samsung doesn't have a clue

Maybe they just want to focus on selling profitable phones... Not every business model should depend on a single software platform.


But this points out a potential weakness with the model of taking someone else's OS and slapping it in your device.

Once the operators (typically) have added their crap on top it leaves you little margin to extract extra cash until you get someone to buy another device.


Seems to work alright for Apple - even though they're doing gangbusters on App sales, it seems the majority of iPhone's profitability comes from hardware sales themselves, and this is without any real shades of planned obsolescence.

Nokia is renowned for their hardware build quality - well in advance of LG, Moto, or Samsung. I think the market has spoken that they want the full experience - solid software, beautiful hardware, and impeccable integration of the two. Samsung IMHO has fumbled that ball up until now, producing cheap-y hardware coupled with lazy software integration. There's a lot of room for someone who knows what they're doing with Android to come and eat their lunch.


Except Apple is a bad example as it makes it's own OS and own the end to end user experience with out a dependency on a 3rd party?


A helpful tip for those arriving late: Skip the entire article and read the email directly.

The article is longer than the mail, says less, and says it less eloquently.


This is exactly where Steve Jobs found himself in 1997. He stood by and did what he wanted to [or may be not yet]. Hope Elop does it as well.


Unfortunately for Elop, there's only one Steve Jobs.


Would it be better for Elop if he was competing with more than one Steve Jobs?


There can only be one hero?


There can only be one!


A good memo and he's certainly correct about the phone market. I hope that Trolltech/Qt makes out OK.


In case anyone is curious about the full story behind Mike Williams and the "burning platform", watch the following video. You won't be disappointed.

http://www.youtube.com/watch?v=83EwglrnvlU

edit: part 1 for those interested

http://www.youtube.com/watch?v=XgkZtklS6xE


downvote? not sure why as i was only trying to provide context. :/


idea for how to create value in your brand when you're "just another android phone".

1. create a really awesome skin like HTC has.

2. create a suite of really awesome apps and release them on the apps market, but give them free to users of your specific phone.


3. Create some of the best hardware out there, as Nokia does.


I thought that this was the most interesting part of the article:

and that Elop would start looking to Nokia's new Silicon Valley campus as its center of gravity, with execs and senior management expected to start spending more time outside Finland.

That's quite an endorsement of Silicon Valley as a tech hub...


And also the part of the rumors that makes the least sense. Hack through the middle management and bureaucracy with a chainsaw, cut off all the incredibly inefficient contractors, clean all the dead wood from R&D, kill one or both of the in-house operating systems, give up on building services and just start preloading every phone with Bing services for big money, etc. One might not agree with those actions, but at least one could plausibly argue that they'd be beneficial to the future of the company.

But how exactly is moving the heart of the company into Sunnyvale going to help? Nokia isn't exactly in the position to compete for the best people in those horribly over-fished waters, especially soon after a round of brutal layoffs. Are the dregs of Silicon Valley really going to be that much better than the talent elsewhere? Does the world even need one more company centered around that echo chamber?


I agree -- I think the best thing Nokia could do is probably to relocate somewhere more central within Europe (Berlin? London?) and become the strongest European mobile phone option, vs. trying to compete for talent in SFBA. Arguably they could also try NYC or another major city with lots of development expertise but no strong mobile company.


At least in the US they'd be free to fire the dead weight. The laws in Finland are made to protect the workers, and a previously fired employee must be considered before hiring somebody new. This might be a reason why Nokia have so many external contract workers.


That's really interesting read, but doesn't tell anything about specifics. I'm not really sure what they will announce on Friday. As we can see however, it's about ecosystems, not about the OS.

1. Qt is really valuable asset, they are keeping it. Actually they are keeping everything they have now.

2. Joining WP7 or Android as an OEM would cut Nokia out of their ecosystems, not going to happen.

3. Adopting WP7 or Android as is would require Nokia to cut back some custom hardware features and make differentiation harder.

My best guess is WP7 with Qt allowing Nokia's services and apps on those phones. This would be additional to Symbian and MeeGo devices. However, I'm pretty sure they are starting to ramp Symbian down.


WP7 with QT doesn't seem an option. QT is C++ and WP7 is oriented to work with .NET and not native applications. (don't try to port QT to C++.NET...) and it's a bit redundant to have QT together with Silverlight/.NET


>My best guess is WP7 with Qt allowing Nokia's services and apps on those phones. This would be additional to Symbian and MeeGo devices.

If they adopt any third-party OS, I can't see them keeping MeeGo. That'd be stupid; it'd leave them having to build a MeeGo ecosystem instead of just taking advantage of the one they join.

And I don't see Microsoft allowing Qt on WP7; it'd undermine their whole .Net-based story.


On the other hand, I'd believe Microsoft would want Nokia to "catalyse" their ecosystem, because of the lacking success of WP7. The ecosystem of WP7 is now very weak, and not much of an asset for Nokia, except MS services like Bing. But, Nokia doesn't want to give up Qt apps and their own services.


I would work for that man.


I used to (at Macromedia). He's a great guy. Very approachable and down to earth, but certainly not afraid to make the hard calls as you see here.

I sometimes wonder where Microsoft might be if he'd replaced Balmer, but it's great to see him take on Nokia. Talk about a tough gig!


Not really impressed, yet. And here is why:

Zero points for coming out: Mr Elop was brought in by the board exactly with the goal of rescuing Nokia in mind. Looking from that angle the memo is a bit overdue.

Zero points for opening the letter with a metaphor - this is the way someone steering a major technologic corporation is expected to convey the direction - by projecting a vision.

Negative ten points for picking wrong metaphor. It broke down immediately. See for yourself: should Mr Elop's best employees take his advice literally and jump the burning platform? Followed with a change in behaviour meaning never again joining a severely fragmented bureaucracy ridden company? What was the lesson learned by the oil rig worker? What could he have done differently in the situation when he woke up on a burning platform in a middle of a sea?

I’d award one point for openly enumerating the challenges. But these are the symptoms of Nokia demise, he hasn't dug deep enough, the list is known at this point to every man and his dog.

Negative ten for the actual lack of a credible vision at this point. Let’s wait till the strategy comes out.


wow, that is one way to motivate the troops. The lack of mentioning of WP7 at all and the re-emphasis of Andriod as a competitor makes me think it's unlikely they will be running Andriod any time soon.


I don't follow your logic.

Windows 7 isn't much of a competitor. It had a smaller debut than Android and iPhone, by a large amount, and is being outsold by both so the gap is widening. If I were Nokia, I wouldn't be worrying about fellow also-rans in the industry, like Microsoft. I'd be worried about the products that were eating my lunch, and I'd let Microsoft figure out how to protect their own lunch.

If Nokia chooses Windows for their next generation, I'd wager they'll keep dropping like a rock. How could they generate any excitement over a Windows phone? Nobody likes Windows phones, even people who like Windows on the desktop.


Remember that Microsoft has a trick up its sleeve: Midori. It quietly incubated the Singularity research OS, a pure .NET operating system, a couple of years ago and is turning it into a commercial product. The advantages of the OS are increased security and massive parallelism, both due to the fact that .NET code is inherently memory safe.

My hypothesis is that Windows Phone 7 is a stop-gap measure introduced to build their brand and app portfolio while they're working on the 'real' thing. Note that WP7 apps are .NET apps, so transition to a pure .NET kernel would be relatively easy. Of course I have nothing but a hunch and some rumours, to base this on, but I find it highly unlikely that MS is just going to sit there while Google is building the dominant platform for internet usage (note that in some countries, like India, smart phones are now the most popular device for accessing the internet).

Remember that although us geeks are picky about the OS our phone runs, a the large majority of phone buyers really don't give a crap and switch easily. My girlfriend goes into a store and just picks out something shiny, possibly looking for specific features like a keyboard to type out email on. And app portfolio isn't just a matter of quantity. About 10% of the apps on any given platform probably satisfy 90% of a user's needs. Microsoft really just needs to have that 10% to be a compelling alternative, and they have the cash to simply write it themselves or pay people to write it for them.

So all in all, I don't think that Microsoft is out of the game just yet. On the contrary, they're just getting started, and this deal with Nokia is going to be very valuable for both companies.


"The advantages of the OS are increased security and massive parallelism, both due to the fact that .NET code is inherently memory safe."

So, what? Everything in userspace on an Android phone is Java and runs in the JVM. That's not really a feature users care about, but even if it were, the leading OS already has it.

You then go on to say:

"Remember that although us geeks are picky about the OS our phone runs, a the large majority of phone buyers really don't give a crap"

Which I agree with. Which is why there's no reason for someone to switch to a Windows phone, even if, on some technical level a .Net phone were lovelier than the competition.

Just because the next magical version of Windows is based on a smarter core, doesn't mean any normal user will have a reason to switch.

"On the contrary, they're just getting started, and this deal with Nokia is going to be very valuable for both companies."

You still haven't answered why Nokia would sign on with another sinking ship rather than simply choosing to make great devices for the leading (free) OS.

Of course, because the new CEO is coming from Microsoft, he may very well have loyalties that simply don't make sense for his new company...and if that's the case, he'll merrily drive the company into further insignificance while drawing a nice fat paycheck, and making his friends at Microsoft happy.


"Just because the next magical version of Windows is based on a smarter core, doesn't mean any normal user will have a reason to switch."

I agree, but chip makers, handset makers, and ultimately carriers do care. Apple, Sony, Microsoft, and Nintendo sure care a great deal about people jailbreaking their devices.

My point was not that a new kernel would directly persuade potential buyers, but I do think it is needed to support the features that users have come to expect from modern phones (i.e. multitasking). In my opinion WP7 is just not up to the task, so if they want to compete, they need to step up their game in the OS department.

"You still haven't answered why Nokia would sign on with another sinking ship rather than simply choosing to make great devices for the leading (free) OS."

I don't know, maybe MS is giving them a truckload of money? Nokia has a large software development group, so maybe the deal is that Nokia will develop apps for WP7? Maybe they just want to differentiate from the Android horde? I really don't know why they would go with MS, if indeed they choose to do so, but all I'm saying is that I don't think Windows Phone is a 'sinking ship'.


My point is that he specifically called out Andriod and IPhone as competitors. While I agree with you that WP7 is not a serious threat at all, in my mind it doesnt make a lot of sense to say "we have been unable to compete in this field against Andriod", and then 2 days later announce "the new company plan is to use Andriod". With the rumors going around with them dropping Meego for Andriod or WP7, from this memo, in my mind the odds are increasing for the WP7 route.


If you can't beat them, join them.


> Nobody likes Windows phones

That's a bit categorical, no? I know at least two people who quite like their Windows Phones. Before you ask, not all of them work at Microsoft.


"Before you ask, not all of them work at Microsoft."

This leads me to believe that 50% of the people you know who like their Windows phone do work at Microsoft.


50% of the people I know that I know like their Windows phones do work at Microsoft. Even if it was 100%, this still invalidates your original claim.


Point conceded. At least two people like their Windows phones.


Today at work I met a third one. The confirmed user base grew 50% within less than 24 hours! :D


That's phenomenal growth! If we extrapolate that, in two months there will be 73 billion Windows 7 phones! Microsoft might just turn this thing around, after all.


The only way forward is to embrace WP7 and become the WP7 phone. Build apps and an ecosystem around that. Hell, get Microsoft to acquire Nokia and make WP7 exclusive. WP7 is a much better platform than Android anyway (in a couple of OS updates at least).

There is no way that Nokia will ever win using Symbian/MeeGo or Android.

If they stay the course then Nokia's dead and will never recover.


I agree with everything you said except I think there's a 0% chance of Microsoft buying Nokia, it doesn't fit their business model. Companies would not be as willing to license WP7 if MSFT were competing directly with them and able to undercut their competitor's prices.


The point is that Microsoft would no longer need to license WP7 (and quite frankly, I doubt they really care about those licensing fees when ecosystem market share is a far bigger revenue source).

Both companies are at a point where they're about to enter irrelevance in the mobile space (Nokia actually entered irrelevance as soon as the iPhone launched, but it took them a while to figure that out due to pride and thinking all that matters is how many widgets you ship -- they're about to hit the bottom of the abyss).

The problem Microsoft has is that all the existing licensees don't care at all about their platform. Samsung, HTC and LG all have their hands in multiple pies, not willing to commit to any platform because they don't care about who wins, as long as they make money.

They need someone to focus exclusively on WP7, delivering the best integrated experience the platform can offer. Nokia's not going to go exclusive unless Microsoft does too.

There are issues on both sides though:

* Nokia used to build great hardware. They need to start doing that again to convince Microsoft it's worth acquiring.

* Microsoft needs to recognize that WP7 isn't going to go anywhere unless something major changes.

The upcoming announcement might be a precursor to the above scenario.


The Xbox doesn't fit MS's business model either. If MS were to go that way I think they could make a decent go of it.


If they don't want to alienate existing developers, a logical choice would be official Qt support for Android. Meego could also be tweaked to run Android, as it is already being done by others, see for example http://www.aavamobile.com/


They could run Myriad's Alien Dalvik engine. I also agree that official QT support for android would be great as well. I think 2 open source mobile OS's rising at the top of the mobile market would be a great thing for wold. I think Apple will provide enough contrast with their closed iOS platform to balance things out.


A strong Nokia is good for smart phones. I hope Elop is smart and doesn't get bogged down in the tablet fight. Nokia needs to focus on doing smart phones well. Plenty of market there as 6 billion people will be buyers.


I'm very curious how this will effect QT...


It's worth noting in this context that Nokia has reinvented itself before; for instance, the company started in 1865 as a pulp mill and paper manufacturer. They've pivoted a few times in the years since.


This is a great PR campaign from Nokia. :)


There are at least one reputable source that claims it is false: http://communities-dominate.blogs.com/brands/2011/02/the-nok...


Is it obvious to everyone that he is preparing Nokia for a transition to Windows?


This is interesting, but wouldn't a move to say Android or Windows make them "just another Android or Windows phone". I understand the reasoning behind this but it seems to me that they would also lose something here.


Nokia should ally with Facebook to make the Facebook phone. That is the only thing I can think of that would put them back in the game.

The downside is that MS probably has the inside track on that with Windows Phone 7/8.


http://twitter.com/#!/vicgundotra/status/35182523650801664

Looks like Nokia is going with Windows Phone 7


This is the point where someone argues that Nokia is doing just fine, since they still have 110% market share in Tanzania...


compare and contrast with this statement from the company, several months ago:

http://news.ycombinator.com/item?id=1481354

this new memo makes me think better of them. if Nokia can get out of the new CEO's way and let him execute, then maybe they can turn it around.


Is anybody else thinking "Manchurian candidate"? I mean if he decides to go with Windows phone 7.


absolutely agree




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