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.
Buried in a long, long piece about Stephen Elop’s challenges at Nokia, is the following characterization of the balancing act that might undo his efforts:
Georgina Prodhan and Tarmo Virki, Welcome to Nokia, Mr. Elop
Nokia has an enormous number of older, more basic phones in circulation, and it likes to make new features back-compatible for the mass market, taking up valuable research and development time and money.
That presents a dilemma: on the one hand, Nokia needs to focus its efforts more closely on the top end of the market, the high-spending North Americans and the Europeans who have traded their Nokias for iPhones and BlackBerrys; on the other, it is enormously proud of its size and the trust it commands among the 1.2 billion people who use Nokia phones and the more than one million people a day who buy a Nokia — more than its three nearest rivals combined.
Any move to slash the portfolio or take resources away from the bottom end of the market would cut at the heart of what many Nokians believe in and work for. That means that even as he goes after Apple and Google, Elop will have to celebrate and build on the company’s successes elsewhere.
"Nokia needs to Americanize while simultaneously protecting its assets in the rest of the world. An injection of Silicon Valley attitude will play well in the United States, but the company must take care not to unsettle staff in Europe and elsewhere," says Neil Mawston, analyst at research firm Strategy Analytics.
There’s the nub. Nokia has built its mission around delivering billions of low-cost ‘dumb’ phones to the world market, largely missing the surge in smartphones in the US and elsewhere. These are high cost, full featured micro computers, and Nokia doesn’t have a place at that table.
But this is the future. The world’s masses of, say, five years from now will be using phones that resemble today’s top-of-the-line smartphones, not today’s bottom-of-the-barrel dumbphones. They will have web browsers, GPS, touch screens, streaming video, cameras, and book software: tomorrow’s phones they won’t be used principally for telephone calls.
Unless Nokia wants to wink out of existence, Elop is going to have to make a sudden right turn, and a lot of Nokia’s management team — and the corporate DNA — will have to be jettisoned.
Kevin O’Brien, Nokia’s New Chief Faces Culture of Complacency
A few years before Apple introduced the iPhone, research engineers at Nokia prepared a prototype of an Internet-ready, touch-screen handset with a large display, which they thought could give the company a powerful advantage in the fast-growing smartphone market.
The prototype was demonstrated to business customers at Nokia’s headquarters in Finland as an example of what was in the company’s pipeline, according to a former employee who made the 2004 presentation in Espoo.
But management worried that the product could be a costly flop, said the former employee, Ari Hakkarainen, a manager responsible for marketing on the development team for the Nokia Series 60, then the company’s premium line of smartphones. Nokia did not pursue development, he said.
His [Elop’s] biggest obstacle, according to Mr. Hakkarainen, as well as two other former employees and industry analysts, may well be Nokia’s stifling bureaucratic culture. In interviews, Mr. Hakkarainen and the other former employees depicted an organization so swollen by its early success that it grew complacent, slow and removed from consumer desires. As a result, they said, Nokia lost the lead in several crucial areas by failing to fast-track its designs for touch screens, software applications and 3-D interfaces.
In 2004, one said, the company rejected an early design for a Nokia online applications store — an innovation that Apple, Nokia and other handset makers adopted three years later. Nokia also did not improve its Symbian operating system, needed to support a more sophisticated smartphone. And though it introduced the industry’s first touch-screen devices in 2003 — the 6108 and 3108 phones, which worked with a stylus — it did not perfect the technology to fingertip precision before Apple did.
Nokia still lacks a convincing response to the iPhone. Last week it announced that software errors would delay shipments of its long-awaited N8 touch-screen phone.
It doesn’t matter if the company was once worth $250B, and sells 1 million crappy phones a day. There must be five companies in China doing that right now. Maybe ten. It is unclear if Elop’s Nokia can turn on a dime and challenge Apple, Google, Microsoft and RIM. My advice for Elop would be to acquire RIM, and leverage its brand in the professional world, while expanding its cachet as a texter’s device. But I bet he’s going to get sucked into a Nokia design-from-the-bottom-up approach, though.
It doesn’t matter if the company was once worth $250B, and sells 1 million crappy phones a day. There must be five companies in China doing that right now. Maybe ten.
It is unclear if Elop’s Nokia can turn on a dime and challenge Apple, Google, Microsoft and RIM.
My advice for Elop would be to acquire RIM, and leverage its brand in the professional world, while expanding its cachet as a texter’s device. But I bet he’s going to get sucked into a Nokia design-from-the-bottom-up approach, though.
Perhaps it’s just coincidence that this Jemima Kiss piece about Dopplr was published on the same day that Stephen Elop assumes his new role of Nokia CEO. But the disastrous course of events at Dopplr since they were acquired by the telecom giant does not inspire confidence that the firm is a hotbed of innovation:
Jemima Kiss, The slow death of Dopplr
Founded in Finland early in 2007, Dopplr was the great white, beautiful hope of the UK startup scene; a well-respected design and development team, and a service that imaginatively and stylishly captured the zeitgeist of business, travel and location services.
It published annual travel summaries for users and included their carbon output. It boosted the profile of money-spinning conferences. And – of most interest to potential investors – it attracted a wealthy, technophile and evangelical base of “upscale” business users. Backers included Esther Dyson, Tyler Brule, Joshua Schachter, Lars Hinrichs and Reid Hoffman. So what could go wrong?
In a word: Nokia.
The Finnish mobile manufacturer, which sells more phones than any other company, paid a rumoured $20m (give or take a few million) for the service almost exactly a year ago, with a deal that closed on 28 September, 2009.
Since then, Dopplr has fallen completely out of the web’s view. Its blog has not been updated since two days after the acquisition. While Dopplr was too young to have grown a large user base, the Nokia acquisition could, with some imagination, have given it scale. Instead, comScore shows its monthly unique user numbers falling from 39,000 in September 2009 to 29,000 in July this year.
While the Guardian has been told that Dopplr’s back-end system is still being maintained, its front-of-house appears woefully neglected, with no sign of the much-admired annual travel reports. Even if this was purely a talent acquisition, with the company bought for its staff, why allow the site to wither on the vine?
Dopplr’s design chief Matt Jones had already left, joining Schulze & Webb (reincarnated as Berg) but still tied to Dopplr one day a month as a design advisor. Jones already had close to ties with Nokia as a former director of UX design there. Not only that, chief executive Marko Ahtisaari became senior vice president for design at Nokia, chief tech officer Matt Biddulph and developer Tom Insam both moved to Nokia’s base in Berlin as strategist and developer respectively and are still there, working out lock-in periods.
At the time of the acquisition, people only saw possibility. “I’m guardedly optimistic that Nokia is smart enough to know not screw up a truly elegant service,” wrote Dopplr user Chad in response to the news. Duncan Semple added: “I just hope the service won’t get neglected or changed too much to fit with Nokia’s other services.” Trickles of comments this year have variously asked if anyone is still listening — and, echoing in an empty blog, talked of transferring to rival service TripIt.
Despite numerous requests over a number of weeks for comment about its plans for Dopplr, Nokia has not responded.
I think Dopplr had done a bunch of things right, but had made some serious gaffes as well, both in design and business orientation.
Talking to Marco Artisaari a few years ago, long before the Nokia acquisition, I wondered why the company wasn’t getting into managing travel related information — like hotel reservations and airplane travel, frequent flyer accounts, and the like — which TripIt has done so well, now. But he wanted to remain focused on the social interaction side of things.
But, as I pointed out, Dopplr wouldn’t let me even stipulate the time that I was planning to arrive in, say, Paris on 23 September, or what airline I was on. So that means I couldn’t use the service to alert a friend who was planning to pick me up at the airport.
And worse: what’s the most obvious social activity when visiting a place where you know you have friends? Setting up a get-together. Dopplr provided next to no good ways to do the obvious: inviting friends to get together, pick a place, set a time, etc.
Instead, Dopplr just dropped innovating. Yes, they added partnerships with various travel services — like Mr & Mrs Smith and Tablet Hotels — but they dropped the ball on the social context surrounding the app.
So, Artisaari sold the company to Nokia, where he had worked before, and he took the job of SVP of Design. I am sure he’s doing good things, like the X3 phone:
But Dopplr has fallen into the strange gravity well of Nokia, like Plazes, Cellity, Plum and other acquisitions.
We’ll have to see if Artisaari and Elop can change things within the behemoth to really innovate in software, like these many companies had been doing before their acquisitions.
So, Nokia finally boosts Kallasvuo and hires its first non-Finnish CEO, Microsoft’s Stephen Elop, which is perhaps a turning point for both companies.
Elop led the Microsoft Business Division which reported $18.6B in sales and $11.8B in operating income. He is just the most recent of senior executives fleeing the sinking Microsoft.
And at Nokia, is he going to try to displace the faltering RIM as the purveyor of choice to business smart phones? Microsoft tried that market, and hasn’t gotten far, but obviously, there are a lot of business people out there across the world with Nokia products ringing in their pockets right now.
Elop does not seem to be the guy to go after Apple or Google for the emerging consumer smartphone market, however. Even the recent acquisition of Dopplr’s Marco Artisaari as SVP of Design does not lead to a team that can really compete on innovation with Apple and Google.
Dan Frommer sums this up a bit aggressively, stating that Elop is not the right guy for the world confronting Nokia. But then again, who would be?
The standard criticism we hear about Nokia is that it’s a company overrun with managers, where decisions are always made based on business sense and never made based on product vision.
And it seems like Nokia’s board just hired another CEO who is a seasoned manager, but not a consumer product visionary. So unless Stephen Elop, Nokia’s new boss, has hidden talents, he may represent more of the same for Nokia — which would be a disaster.
Nokia needs someone who can leapfrog Apple’s iPhone and Google’s Android the way they leapfrogged Nokia. Is Elop that guy?
I am not sure that this is the only path for Nokia.
There are still a lot of green fields out there for low-cost phones, as well as a serious competitor for RIM. And Apple and Google’s battlefield for the expensive smartphone market might be a bad place to be, for the next few years.
I wonder if Elop will drop Symbian and try to head out for a new take on a Nokia operating platform? Will he lead a huge reduction in Nokia management ranks? Will he create a new design team, and make sure it’s not based in Finland? Let’s see.
But I thought Elop’s comments about Finland and Canada, his native country, having the Arctic in common were odd. Did he intend that as some sort of cultural sop to Finnish pride?
Will this week’s keynote by Nokia’s Kallasvuo demonstrate that Nokia can turn around their dismal performance in smartphones and their truly excreble UX? Is Symbian 3 going to be cool, or more crap?
Sounds like Juhani Risku has a screenplay for a plot to take over Nokia, perhaps where he was supposed to play the ‘co-pilot’ that would save the day, and push out all the executives who wouldn’t listen. No doubt Nokia needs to be shaken up, though.
Recent announcement of Last.fm partnering with Sony:
[from Last.fm Partners With Sony: WebProNews]
Online social music network, Last.fm has partnered with Sony BMG Music Entertainment.
As part of the partnership Sony BMG will offer its catalogue of recordings to the 20 million users of Last.fm’s radio streaming service. Users will be able to find new artists from the Sony catalogue using Last.fm’s recommendation system.
I had suggested in past posts, prior to CBS’ purchase of Last.fm, that Apple should acquire the product and build into a socialized version of iTunes (which is still desperately needed, btw).
Looks like Last.fm is destined for a strange collection of deals, rather than a strategic role in a contender to the iTunes/iPod/iPhone triumvirate. Although I am not sure who can mount a credible attack on that. Even Microsoft hasn’t got a chance. Nokia?
Well, its moot, since Last.fm is part of CBS. It has to make it or break it based on its own merits, and maybe some better economics for users acquiring music, not on some integration with other major software partners.
I haven’t sat still long enough to queue up for an iPhone (maybe next week), but David Hornik (the wisest of VCs), has been fooling with one for a bit. His prediction:
[…] if I were a betting man, I would bet that the next two significant product releases that Apple comes out with are 1) a touch screen iPod with the same gesture controls as the iPhone, and 2) a touch screen laptop that allows the same sort of browsing, etc. And I will be one of the first to buy the laptop. The iPhone experience is so good. And will absolutely translate to a bigger screen.
I am so spoiled with the Nokia n95 camera that I think I will have to drag the n95 around with me once I have an iPhone, because the feedback on the iPhone camera is bad. But I crave the rest of the experience, particularly a better integrated experience with music on the phone. I have tried the n95’s music capabilities — which are impressive, especially the stereo speakers — but the problems with copy-protection on iTunes music are so pervasive that iPhone (or iPod) looks like the only solution.