Looks like Nokia won’t hit the bottom and bounce, but will become part of Samsung. Why didn’t Elop sell to Microsoft to begin with, when Nokia was worth something?

8 June 2011 9 Permalink

I was part of the Nokia Bloggers program for several years, and I am unsurprised that Nokia has shed 75 percent of its market value in the past 4 years. I was in Barcelona at the World Mobile Congress in ‘08 when Olli-Pekka Kallasvuo gave a lackluster talk about Nokia’s plans, and his contempt for the iPhone was evident. I knew then they were doomed.

Peter Burrowes, Stephen Elop’s Nokia Adventure*

Nokia’s initial reaction to the iPhone is the most embarrassing example of what went wrong. When Steve Jobs unveiled the device in January 2007, “it was widely disregarded,” says former manager Dave Grannan, who now runs Burlington (Mass.)-based voice recognition company Vlingo. “The attitude was that we’d tried touchscreens before, and people didn’t like them.” It had no multimedia messaging (MMS) capability. The reception and sound quality were poor. It couldn’t be used with one hand. There was nothing to fear.

As iPhone sales took off, Nokia remained strangely detached, say a dozen current and former executives. The company didn’t sit still, exactly. It opened its own app store, Ovi—but never put marketing muscle behind it. With no runaway hit like the iPhone, app developers largely ignored it. When Elop euthanized the Ovi brand name on May 16, it had 50,000 apps; Apple had 500,000. “It was an ignorant complacency, not an arrogant complacency,” says Nokia human resources head Juha Akras.

Whichever variety, complacency was rampant, and it left Nokia particularly vulnerable to Android. While Apple cleaned up the high end of the market, Google flooded the low and middle by giving away its sophisticated software to all of Nokia’s handset rivals. Nokia executives seemed content trumpeting their success selling marginally profitable low-end phones in Asia, until Android’s smartphone share flew from 4 percent to 23 percent in 2010. Says Elop: “It’s often hard to see a challenger when you’re dominant, but what happened with Android was faster than anything we’ve ever seen.”

This is going to be the biggest train wreck ever. Compares with Google fumbling the ball on social, but that hasn’t actually driven Google out of business, which is what Kallasvuo and Elop have done.

A year ago I wrote this about Nokia:

Stowe Boyd, Nokia: The General Motors Of Phones?

They are the leading producer of cell phones in the world, but at one point GM was the largest producer of automobiles. Like GM, they are confronted with a span and scope issue: should they pour their time and money into a few niches and build highly differentiated products? Or should they continue to have many product lines, leveraging production scale and common platform components?

GM is going to be down to Cadillac, Chevrolet, and GMC Trucks before too long, selling off or closing down a long list of brands.

Could Nokia specialize at the high end, like the very best camera phones? (I talked to them about a line with interchangeable high quality lenses, but they haven’t gone there.) There is certainly a growth area there, and they have invested heavily in services for social sharing of images and videos.

Or should they focus on the low-end, and become the Toyota or Honda?

Or develop breakthroughs in modular phones, where people can roll their own, upgrading different elements of the phone independently of the others?

At any rate, I think they need to pick and focus, or they will find their future defined by the choices that others make.

2 June 2011 7 Permalink

A rumor, but one that makes sense. I suggested at the time that Nokia announced it was dropping Symbian that it should be acquired by Microsoft if it was going that way. Actually could increase the value of the Skype deal, and vice versa.

Note that Microsoft is retrenching into a (enterprise) mobile communications business, since it lost its way in so many other places. Why doesn’t it buy RIM, too?

16 May 2011 6 Permalink

fredericguarino:

The Canadian technology icon has bet a lot on its new device – the PlayBook tablet. Failure could make the company a historical footnote.

The PlayBook is a part of the blueprint for taking RIM deeper into the consumer market, as well as finding growth in its traditional base of government and corporate clients. It’s an audacious strategy. If it succeeds, RIM just might regain the ground it has lost in the smart phone market, while finding new sources of revenue. And one day the PlayBook may come to replace the universal remote control, as the tablet already has done in Mr. Lazaridis’s own living room.
But if the strategy fails, then arguably so does RIM. At the very least, it would relegate it to No. 3 status for a long time to come, a poor cousin to Apple and Google – two companies that five years ago were not even in RIM’s business of wireless communications. It would also damage Canada’s prospects for a more innovative economy.

I am betting that RIM’s PlayBook will be a huge bomb, and will crater the company’s future as an independent. I could see Microsoft buying them for a nickel afterward, and making RIM just some software that works on Microsoft — and Mokia — phones.

18 April 2011 1 fredericguarino Permalink

Looks like Elop is betting the ranch on… something.

He says Nokia has to join a successful ecosystem or build one. I have no confidence that Nokia can rally an ecosystem around Nokia products and standards, like Symbian. Here’s what I wrote in October 2009: 

Stowe Boyd, Nokia Is Lost

I recall when I last spent serious time with the Nokia folks was in Barcelona, at the World Mobile Congress in early 2008. [Disclosure: As part of the Nokia Bloggers program, they subsidized my travel there, along with a handful of others.] There was a press conference with the CEO presenting (his name escapes me), and he was visibly upset by the press questions about the iPhone touch interface and how it was going to revolutionize cell phones.

His response was oddly passive. They had things in the works, he suggested. They had a long range development plan, and touch was only one element of the innovations to come, he said. Blah blah bla, woof woof, he seemed to say.

That was 18 months ago, and the phones coming out these days look like they were designed in the late 90s.

I admit that I miss my 5 megapixel camera in my old Nokia, but I sure don’t miss the horrible software, the weirdo navigation, and trying to figure out where files were stored on the device. I will never go back to that sort of old school, DOS-feel Nokia hell again. And I am sure that is going to be true of nearly everyone who has experienced iPhone.

I am not saying there is no room for experimentation, or alternatives to iPhone. Android, for example, may yield some very fruitful results. But Nokia and Symbian just isn’t innovative. It’s like GM in a world with Mini Cooper, Toyata Prius and Smartcar.

Given his past, Elop is likely to jump to a Microsoft partnership, which is like two drowning people holding on to each other.

There is huge room in the Android space, but Elop seems averse to getting into Googleland:

In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

And that’s where Nokia should be, finding and building in Android niches. I think there is an Android niche to replace Blackberry, for example.

But I bet he’ll aim toward his comfort zone: Microsoft.

9 February 2011 2 Permalink