Nokia: The end of the line?

Raskolnikov

The mobile phone market is slipping out of its hands, but is Nokia getting the message?

Last year, the company’s global share of phone sales sank below 30 per cent for the first time since 1999. Its descent is destined to become a business textbook study of how a trusted business built on a simple product can, in a matter of a few short years, lose its way

In 2000, the Nokia 3210 (left) could make texts and play Snake. 160 million handsets were sold - making it one of the most popular phones in history. Nokia's share price stood at €65. In 2011 the Nokia N8 (right) can stream web video, take 12-megapixel pictures and navigate you through traffic jams. Nokia expects to sell just nine million this year: Nokia's share price stands at €4.3

Take the E18 west from Helsinki, through Finnish forests and round lakes, and in around 90 minutes you’ll reach a town called Salo. The place would be unremarkable were it not for the sleek, tinted-glass factory at its heart, the production hub of Nokia.

Here, in March this year, a small army of the company’s engineers and workers were invited to walk to a nearby gymnasium to be told why everything they were doing was wrong.

The message was delivered by Nokia’s new chief executive, 47-year-old Canadian Stephen Elop. His appointment had been hugely controversial for a close-knit, patriotic concern, but his speech would be more daring still. He drew attention to missed opportunities, bad decisions and complacency within the company.

Halfway through, he asked how many of the staff present used an iPhone or Google Android phone. After a nervous silence, clearly fearful of admitting to owning a rival’s product, a few timid hands were finally raised.

Elop was astonished at the response – not by how many, but by how few.

‘I’d rather people have the intellectual curiosity to understand what we’re up against,’ he told them baldly.

The gesture was typical of the man. On his first day at the company’s headquarters in Espoo, a drab, modern complex of connected glass buildings in a suburb of Helsinki, he sent an email to every Nokia employee asking what they thought he should do, encouraging people to speak up. He received more than 2,000 replies and, even more unusually, he answered each one personally.

He then sent a memo to everyone, offering an assessment of his new company by likening it to a worker who was caught on a burning oil platform: ‘When he looked down, all he could see were the dark, cold, foreboding Atlantic waters… He could stand on the platform, and inevitably be consumed by the burning flames.
Nokia workers in 1981 making rubber boots

Nokia workers in 1981 making rubber boots. Until the early Nineties, the company sold bicycle tyres, rubber boots - and gas masks to the Finnish army

'Or he could plunge 30 metres into the freezing waters. The man was standing upon a burning platform and he needed to make a choice. He decided to jump. We, too, are standing on a burning platform and we must decide how we’re going to change…’

He continued: ‘There is intense heat coming from our competitors. The first iPhone shipped in 2007 and we still don’t have a product that is close to their experience… If we continue like before, we will get further and further behind, while our competitors advance further ahead.’

His case was as unarguable as it was incendiary. Nokia sold 450 million phones in 2010, 402 million more than Apple. Yet in the past four years Nokia has shed 75 per cent of its market value.

While Apple has changed the game at the high end of the market, and Google’s Android has taken over the mid-market, Nokia’s share in emerging markets is now being ruthlessly plundered by Chinese manufacturers.

Here was a timely reminder that in the world of technology, businesses can be balanced on a knife edge. In 1997, Apple had been widely written off, before it dramatically turned itself around with the launch of the iPod, iPhone and iPad. In 2002, Nokia was Britain’s number two super brand; by 2010 it was 89th.

Elop warned his staff of upcoming layoffs and said, ‘We will get through this as quickly and transparently as we can.’ He was, in essence, asking the staff to help save the world’s biggest mobile phone company.

Last year, Nokia’s global share of phone sales sank below 30 per cent for the first time since 1999. Its descent is destined to become a business textbook study of how a trusted business built on a simple product can, in a matter of a few short years, lose its way.

The burning question is: how did Nokia manage it?

Until the early Nineties, Nokia sold bicycle tyres, rubber boots – and gas masks to the Finnish army. It had been founded in 1871 by Frederik Idestam and Leo Mechelin as a pulp mill; the name came from the town through which the mill’s river ran. Business gradually spread to rubber, electrical cable, telecommunications and consumer electronics.

‘The early days of the mobile phone were an adventure,’ says Juhani Risku, a former senior manager at Nokia.

‘Then, you had to combine mobile networks and gadget technology. At that time, Nokia was a small network business only, selling to the Soviet Union.’

But Nokia scored a big publicity coup in 1987 when Soviet president Mikhail Gorbachev was pictured using a newly launched Nokia Mobira Cityman ‘brick’ phone to talk to his communications minister in Moscow. Rowan Atkinson, too, was later seen using one of these iconic phones in an advert for Eagle Star Investment. Fittingly, the phone was soon adopted by City traders and yuppies.

From 1992, the new CEO Jorma Ollila steered the company into a golden age. Nokia dominated mobile phones throughout the Nineties, and helped create the GSM standard for voice and data. But it was Nokia’s cheap and reliable handsets that really caught the imagination. They shrank from bricks to chocolate bars to tiny flip-out clamshells, all the time falling in price while gaining features and battery life.

The Nokia 1100 is still the biggest-selling mobile of all time – more than 250 million were made. With it, texting became a new form of communication. Beyond Western city offices, the 1100 turned up in the hands of everyone from Bedouin tribesmen to Chinese workers.

Between 1996 and 2001, Nokia’s sales increased almost fivefold, to reach €31 billion; Nokia could sell basic handsets to developing markets while also selling new products to customers in Europe and the U.S. who wanted to keep upgrading. And that was helped by its unique British operating system and its creator, businessman David Potter, CBE.

Potter developed the first mainstream digital alternative to the Eighties yuppie icon, the Filofax: the Psion electronic personal organiser. It used its own software, Symbian, to create an easy-to-use diary and contacts list. A marriage was about to happen.

‘I remember having a joint seminar with Nokia in 1992,’ says Potter. ‘Both Nokia and Psion could see that the mobile phone and the organiser – the PDA – would merge into one device.

'In early 1997 we initiated a programme to merge our software capability on PDAs with a major company in the mobile-phone industry. At that time, Nokia was the world leader in mobiles.’

Together they created a new class of device that was both communicator and diary in one. Email, web browsing and games followed in later devices. Nokia and Symbian should have been a perfect match – and at one stage they were way ahead of the competition in the development of smartphones.

Nokia was leading at the time because of its technology.

‘It built a commanding market share by using Symbian,’ says communications business analyst Pete Cunningham.

‘People were buying its phones because they had the best cameras, the best displays. They were simply the best products.’

But then things began to slip. Juhani Risku points to a corporate arrogance on the part of Nokia during that period, as well as a string of bad decisions.

‘An invasion of businessmen and engineers took over highly sensitive design areas,’ he says.

‘They led Nokia’s visions, strategies and execution without any education, track record or passion. Their arrogance was a compensation for having too much responsibility but no clue as to what to do.’

This ‘invasion’ undermined Nokia’s traditional Finnish culture. One business partner, Mark Watson of Antenna Software, recalls: ‘When I went to my first meeting at Nokia in Espoo five or six years ago, everyone in the room was American. I asked them, “Aren’t there any Finnish people?” They said: “Oh, we exhausted the intellectual capacity of Finland some time ago.’’’

As Nokia grew, it took longer and longer to get anything decided.

‘There were lots of managers,’ says Watson. ‘You would get so far in talks, then it would emerge that some other part of Nokia had already bought a company doing the same thing as us, and was trying to work out what to do with it.

‘They just bought anything and everything. Nokia has a long list of companies it bought and has done nothing with. They even hived off Symbian, recruited senior management for it, then bought it back. Nokia had become so big and so self-congratulatory. It’s lost sight of its roots.’

Meanwhile in California Apple was busy working on the iPhone, which it unveiled in January 2007.

‘At first, we decided it was just one harmless phone,’ says Juhani Risku.

‘Internal strategy analysed touchscreen phones to be marginal, trifling. In 2006 we rejected their development… The funny thing is that Nokia’s touchscreen phone development was restarted in June 2007 by the same person who had killed it off.’

With the iPhone, Apple had performed a triple-whammy. It had taken the iPod – used for music and, increasingly, video – and combined it with a mobile phone. That meant having one rather than two media devices in your pocket.

But there was one more trick: Apple had developed a smartphone with a web browser that was easy to use. Suddenly, people weren’t just using their phone to send texts or talk – they were going online. This was revolutionary.

‘We had the Nokia N97 – Nokia’s first rival to the iPhone – for testing,’ says Watson.

‘We would fire off reports on our problems with the browser to Nokia’s team but they’d just reply, “Thank you.”’

Indeed, Nokia’s every attempt to do more than simply make good quality, basic phones, failed.

Its attempt to produce a gaming phone in 2003 – the N-Gage – was a disaster: with only a few poor-quality games and poorer network connectivity for multi-player or downloads, the phone was killed off by the Sony PSP and Nintendo DS. Nokia’s two-storey stand at the E3 gameshow in Los Angeles was looked at with amusement and bafflement by gamers.

The device barely worked, and games such as Call Of Duty showed the technical limitations of the device to excruciating effect. In 2005, UK sales-tracking firm ChartTrack stopped listing N-Gage games sales, saying bluntly that gamers simply weren’t interested in the device.

The idea for a gaming phone was, of course, only fully realised with the arrival of the iPhone and the iTunes Store. Ovi, Nokia’s answer to the iTunes Store, was another disastrous launch.

‘It was nearly impossible to use,’ says Risku.

Watson adds: ‘They thought it was a success right to the point it failed. In general, in all of these train wrecks, they were followers rather than leaders, and didn’t have enough differentiation to overtake other followers. It’s an issue of insular culture.’

Nokia’s refusal to add touchscreens to its top-end performers was another of the acts of arrogance that probably sank its best handsets.

Like the iPhone, the N95 and N97 had GPS, music players and internet. Email, navigation and the web were controlled by a keyboard that slid out from under the screen. Next to the slick, easy-to-use iPhone, the N95 and N97 were like TVs to which one had lost the remote control. Nokia had missed the crucial next stage in phone evolution – touchscreen control. And without it, fewer and fewer people were interested.

Then came the N8. Launched in September 2010, it is Nokia’s answer to the iPhone 4 – a breathtakingly engineered device with a cool, anodised aluminium exterior that feels like a Mercedes next to the cheaper, glassy finish of the iPhone. It has the best camera seen in a mobile phone: a 12-megapixel monster that was adopted by professional photographers. But when it hit the shelves, it was trounced by the iPhone 4, despite its mere five-megapixel camera.

At a meeting in March he drew attention to missed opportunities, bad decisions and complacency within the company

A survey by Morgan Stanley found that the N8 was being outsold six to one in Europe by Apple’s handsets. It was Nokia’s flagship and meant to mark the point at which the company reclaimed the smartphone market. But with projected sales of a mere nine million this year, it effectively sank without trace.

Initially, the iPhone only sold to a tiny fraction of the wealthiest early adopters in the U.S., Japan and Europe. But then Google began banging on the door with its cheaper Android-powered phones. Nokia had the opportunity to adopt Android but Elop felt Google wouldn’t let Nokia adapt the software to its liking.

Meanwhile, it was assumed there would be places even Google couldn’t reach. This would be the market in which it was presumed Nokia would be safe. In the event, the reality couldn’t have been more different.

The Nokia 3210 was a simple thing. Moulded plastic housing and no-nonsense, high-visibility, sturdy number keys wrapped around a primitive processor and monochrome LCD which could make calls, send texts and run for a week on a single charge.

It had an internal aerial (earlier Nokias had a big plastic knob protruding from the top) and a vibrate function, meaning one could receive calls on the bus or on the street without irritated people turning round looking to see who the show-off with the mobile was.

It came with three games pre-installed, including the iconic Snake, which sapped Britain’s productivity in much the same way Angry Birds does now. Where its predecessors were tailored for company phone users, this was the first of its kind to be aimed at the wider public, and in particular young people. It was a hit. It sold 160 million units. For Nokia, simple was successful.

This could have continued, but Lief Schneider, a London-based brand reputation manager, recalls Nokia’s panicked response to the iPhone.

‘They were like rabbits in the headlights,’ she says.

‘They could easily have responded by positioning Nokia’s key phones as the “non-iPhone”, the drop-it-and-it-won’t-smash phone, the simple, easy-to-use, non-techie choice; perfectly good kit, at a fraction of the price, that lasts much longer. No one was going to beat the iPhone immediately. But they said, “We’re going to catch up” instead of saying, “Forget the technology – this is all you need”.’

It’s worth noting that the world’s largest phone maker is still Nokia. And there are more Nokia handsets out there than anyone else’s. Even in the UK, 63 per cent of consumers still own a non-smartphone.

But elsewhere, the problem was – as Stephen Elop put it – manufacturers in the Shenzhen region of China. Cheap and fast Chinese phone manufacturers had started undercutting Nokia in emerging markets, vying for the crucial non-smart ‘dumbphone’ consumers who wanted traditional, inexpensive, text-and-speech-only handsets.

‘In Shenzhen everything is new,’ says Watson. ‘It’s like watching a SimCity game, where the city is just sprouting and reforming in real time in front of your eyes.’

There is some good news: rural China, Nigeria, Kenya and even Norway, Poland and New Zealand have boosted Nokia's market share recently. But all the time up-and-coming competitors are on Nokia's back

These plants are investing in cutting-edge design and manufacturing processes that previously were used to make Apple, Nokia and others’ products, and are now making cheaper rivals. The gleaming-white, sterile environments and hi-tech assembly lines remain the same, it’s just the name on the badge that’s different.

Elop’s leaked memo to Nokia employees concluded that Chinese manufacturers were now ‘cranking out a device much faster than – as one Nokia employee said only partially in jest – the time that it takes us to polish a PowerPoint presentation. They are fast, they are cheap, and they are challenging us.’

Even in emerging markets – India, Brazil and Saudi Arabia, for example – where people want simple, rather than smartphones, Nokia has lost market share. There is some good news: rural China, Nigeria, Kenya and even Norway, Poland and New Zealand have boosted Nokia’s market share recently. But all the time up-and-coming competitors are on Nokia’s back.

But perhaps Elop’s biggest decision has been to drop Symbian, used by 400 million phones worldwide. The system had become unwieldy and unable to cope, while both Apple and Google had steamed ahead and had helped outside developers to create apps easily.

Instead he has signed up to Windows Phone 7 software (used by four million) made by Microsoft, the very company from which he had just arrived. By doing this he has made sure that the guts of Nokia’s new Windows Mobile phones would, from when the first ones arrive later this year, be owned by Microsoft.

To say many commentators were unpleasantly surprised by the deal would be an understatement. Nokia immediately became the topic of Microsoft takeover rumours; after all, owning a mobile-phone manufacturer would allow the U.S. software giant to line up directly against Apple on smartphones.

‘I’m not sure that’s going to help Nokia in the long term,’ says Watson. ‘If Nokia has got its own design talent, who knows what it’s doing now? It’s not been obvious for some time. If it wants to be bought, it’s going along the right route. If it wants to be a major independent player it’s doing the wrong thing. It needs to innovate in its own right.’

So while Nokia’s traditional dumbphone market is being burnt up by cheaper Chinese competitors, Apple, Android and Windows Mobile are only just beginning to fire up the potentially huge – but currently tiny – smartphone market.

‘Our influence on the first Windows Mobile devices is limited,’ admits Mark Squires, communications director at Nokia UK.

‘But we’re already putting little Nokia bits in. For the next update in 2012 you will see tight integration of Nokia and Microsoft – our hardware and services – for something quite unique.’

A couple of weeks ago Nokia finally unveiled its new N9 smartphone. The device is to run MeeGo – what would have been Nokia’s replacement for Symbian before the Windows Mobile deal was inked in. In a sign of the times, MeeGo, the operating system thousands of Nokia engineers worked on, wasn’t even mentioned in the press conference or press release that heralded the N9’s arrival.

Instead, three days later, Elop showed off the N9’s successor – the first Nokia Windows Mobile, codenamed Sea Ray. At the public unveiling, he very halfheartedly asked reporters to put cameras and mobiles in their pockets, but of course they didn’t – with the happy result that pictures and reports were online in seconds.

Meanwhile, David Potter can only look back ruefully and reflect on what might have been for Symbian.

‘I believe a great opportunity was missed for Symbian with Nokia to have led the smartphone market into the future,’ he says.

Elop insists he has no loyalty to his old paymasters at Microsoft. He has created a secret engineer think- tank dubbed New Disruptions and is already looking to the future, asking them to ‘find that next big thing that blows away Apple, Android, and everything we’re doing with Microsoft right now and makes it irrelevant – all of it.’

He’s told designers to ‘go for it, without having to worry about saving Nokia’s rear end in the next 12 months. I’ve taken off the handcuffs.’

The only question remaining for him is whether he has done it in time. On this, at least, there is one business consensus: it won’t take very long to find out.

Read more: http://www.dailymail.co.uk/home/moslive/article-2011778/Nokia-The-end-line.html#ixzz1SScVjDwR

Pretty damning article I have to say, although reading that it's not hard to see why so many people have deserted Nokia. I'd be interested to hear from any Nokia fans who are still persisting with the brand, what's making you stay and will you be buying a Windows phone when they come out later this year?

GerardKeating

Raskolnikov wrote: »

Pretty damning article I have to say, although reading that it's not hard to see why so many people have deserted Nokia. I'd be interested to hear from any Nokia fans who are still persisting with the brand, what's making you stay and will you be buying a Windows phone when they come out later this year?

I ended my 10 year affair with Nokia last month and got a Windows phone. The Nokia can still do some thing I cannot with Windows phone, but most of these seems to be support in Mango.

BostonB

Raskolnikov wrote: »

Pretty damning article I have to say, although reading that it's not hard to see why so many people have deserted Nokia. I'd be interested to hear from any Nokia fans who are still persisting with the brand, what's making you stay and will you be buying a Windows phone when they come out later this year?

I never really liked Nokia but I've used them for the past few years. I have no interest in getting a new Nokia, as I suspect they'll leave me high and dry with support, and updates, as has been the case with the previous Nokia's I've owned and the providers in Ireland simply ignore any issue. I suspect I'd have the same problem with a Microsoft device, based on their track history with mobile devices. So I suspect Nokia have jumped from the pan into the fire with Microsoft.

kirving

The thing is though, Microsoft have got to succed with Windows Phone. The whole world is going mobile and there'll be real trouble for them if they dont join the party.

To this end, MS are putting a lot into WP and the platform really is something new. If Nokia can point them in the right direction as regards hardware, and Maps, etc, the partnership should be a great success.

ScumLord

Nokia make great phones but the problem is people don't want phones any more they want mini PCs.

The Corinthian

I gave up on Nokia a few months ago after almost exclusively owning only Nokia phones since 1998. Some high points over the years were the 3110, the 7110 (unfairly maligned, IMHO) and the 6600 (possibly the phone I have been happiest with).

But there were low points too, especially where it came to their habit of rushing what were effectively prototypes to market, such as the appalling 7650 and the, final straw, N97.

But even by then, it was too late for Nokia, as far as I was concerned. They had fallen so far behind Apple and Android, that as a consumer I found Symbian clunky and lacking in any serious range of apps and as a technologist, I found Symbian devoid of any real ROI and just a pain to develop on (although WRT was nice).

In fairness to Nokia, they weren't the only ones to fall behind. RIM is loosing market share hand over fist at present and is only holding on because of their corporate market foothold. Microsoft went so far as to suggest that touchscreens would never take off around 2005, and effectively had to reinvent their mobile offering altogether when this prophecy turned out wrong. Even Java (while not offering devices or OS's per say) lost the plot with J2ME after their acquisition by Oracle.

Additionally, Nokia was in an investor bind; they'd shelled out billions for Symbian, only to discover that it had become a lemon. Then tried a dual OS approach with Maemo/Meego, which they were never fully committed to (because they could not admit they'd screwed up on Symbian) and so they simply meandered rudderless for a few years.

Personally, I believe that they should have gone for Android, when Elop finally euthanized Symbian (and all but euthanized Meego), but from what I gather MS sweetened the deal with a chunk of investment, and so that was that.

But that means that they're taking a big gamble on WP7 (an untested product) making an impact and I for one am not convinced that there is a market segment for it as it seems to be trying to straddle both the iPhone and Android demographics. MS has never really gotten the hang of mobile, in the past, for some reason.

But as the article said, we'll know soon enough.

Needler

They were onto something with the N900 but they ruined it. It was running Debian Linux for phones. Debian is a great OS

Oafley Jones

I'm really looking forward to seeing their WP7 devices. Every time i'm in a phone shop I gravitate towards anything using the OS. So the prospect of decent hardware coupled with Mango might be something that could draw me away from iOS and Android.

kirving

ScumLord wrote: »

Nokia make great phones but the problem is people don't want phones any more they want mini PCs.

I'd argue that my N8 is more a mini PC than a phone, and is a better mini PC than the iPhone, as regards hardware features, file manager and openness/customisation options.

chrislad

Kevin Irving wrote: »

I'd argue that my N8 is more a mini PC than a phone, and is a better mini PC than the iPhone, as regards hardware features, file manager and openness/customisation options.

It's all well and good having fantastic hardware (which the N8 does) but it's all for naught if the software is terrible. Which it is. I will only consider another Nokia smartphone with Windows Phone 7. Symbian has had its day and has not transferred well to touch screen phones.

Raskolnikov

The Corinthian wrote: »

But even by then, it was too late for Nokia, as far as I was concerned. They had fallen so far behind Apple and Android, that as a consumer I found Symbian clunky and lacking in any serious range of apps and as a technologist, I found Symbian devoid of any real ROI and just a pain to develop on (although WRT was nice).

Back in the day before IOS and Android, Symbian was the biggest mobile development platform and had thousands of developers who were desperate to develop for Nokia. Instead of working with developers to build upon the Symbian platform, they ignored them. When Apple and Google came along and blew open the limited and closed shop of Symbian, developers couldn't drop it fast enough.

Raskolnikov

Kevin Irving wrote: »

I'd argue that my N8 is more a mini PC than a phone, and is a better mini PC than the iPhone, as regards hardware features, file manager and openness/customisation options.

There's no question that in terms of hardware and features, the Nokia N8 is right up there with any other phone on the market. The problem is that Symbian is just a complete pig of an OS to use.

https://www.youtube.com/watch?v=RB3jblrudoo

That video compares the older Iphone 3GS to the N8 and it still beats the pants off the N8.

https://www.youtube.com/watch?v=2dlVrrdS1lQ

Here's a comparison of the N8 Browser to a HTC Desire powered by Android. Again, the Nokia gets blown away.

Samson1

I have had Nokia phones for the last 15 years and never owned another mobile.

If the figures above are correct "Nokia sold 450 million phones in 2010, 402 million more than Apple." that means Nokia sold 450 million phones and Apple sold 48 million Iphones. Where is the problem ???

I cannot understand why no-one has identified the real problem here. Stephen Elop reversed into Nokia from Microsoft and is on the verge of destroying it. Any leader that has publicly humiliated the company/staff he leads, with talk about them "standing on burning platforms" etc - when they are still the leading phone manufacturer in the world can hardly claim to be engendering confidence in staff and most importantly, in consumers. I believe this huge public humiliation had one objective - to hide & distract from the crazy decision to switch nokia to WP7, the microsoft operating system - no apps, no track record - all decided by an ex-Microsoft executive.

Nokia phones were not perfect, but having tried many, none are. The N97 had many problems and yet was a fine phone, with many advances. If Nokia needed to step up a gear on its own, all it needed was to improve Symbian, coax in more developers (which it was in the process of doing pre-Elop) or perhaps run maemo/meego side by side with Symbian.

Maybe it did need to offer an alternative operating system in a dual approach together with Symbian - if so the clear choice was Android - open source developing, selection of apps which will surpass iphone, proven operating system. WP7 - as above, - "a big gamble - an untested product" - for the biggest manufacturer in the world - crazy.

As stated, I have been a Nokia owner, like millions of others, despite the flaws that people exaggerate, for so long because I was comfortable with it, used to Symbian as it developed and because it was a genuine competitor. I was ready, earlier this year to move on to the N8 as it was a progression and an improvement and I would most likely have moved on to its successor.

No more. After Elop's announcement early 2011 of the end of Symbian and move to Wp7, his humiliation of his own company's achievements, why should I buy anything from him? There is no future for the operating system I progressed with, no move to a better operating system - so I am now moving to the Samsung Galaxy S2. I am sure the many, many other loyal Nokia owners will likewise move on.

Elop/Microsoft = End of Nokia.

evolutionqy7

Samson1 wrote: »

I have had Nokia phones for the last 15 years and never owned another mobile.

If the figures above are correct "Nokia sold 450 million phones in 2010, 402 million more than Apple." that means Nokia sold 450 million phones and Apple sold 48 million Iphones. Where is the problem ???

I cannot understand why no-one has identified the real problem here. Stephen Elop reversed into Nokia from Microsoft and is on the verge of destroying it. Any leader that has publicly humiliated the company/staff he leads, with talk about them "standing on burning platforms" etc - when they are still the leading phone manufacturer in the world can hardly claim to be engendering confidence in staff and most importantly, in consumers. I believe this huge public humiliation had one objective - to hide & distract from the crazy decision to switch nokia to WP7, the microsoft operating system - no apps, no track record - all decided by an ex-Microsoft executive.

Nokia phones were not perfect, but having tried many, none are. The N97 had many problems and yet was a fine phone, with many advances. If Nokia needed to step up a gear on its own, all it needed was to improve Symbian, coax in more developers (which it was in the process of doing pre-Elop) or perhaps run maemo/meego side by side with Symbian.

Maybe it did need to offer an alternative operating system in a dual approach together with Symbian - if so the clear choice was Android - open source developing, selection of apps which will surpass iphone, proven operating system. WP7 - as above, - "a big gamble - an untested product" - for the biggest manufacturer in the world - crazy.

As stated, I have been a Nokia owner, like millions of others, despite the flaws that people exaggerate, for so long because I was comfortable with it, used to Symbian as it developed and because it was a genuine competitor. I was ready, earlier this year to move on to the N8 as it was a progression and an improvement and I would most likely have moved on to its successor.

No more. After Elop's announcement early 2011 of the end of Symbian and move to Wp7, his humiliation of his own company's achievements, why should I buy anything from him? There is no future for the operating system I progressed with, no move to a better operating system - so I am now moving to the Samsung Galaxy S2. I am sure the many, many other loyal Nokia owners will likewise move on.

Elop/Microsoft = End of Nokia.

Hmm let me see maybe because alot of people are using a high end HTC, Samsung, Apple handset and not a Nokia one. 48 Million phones is a large cut out of their pocket.

Sometimes the only way to open up people eyes is spit them right in the face and be out with it all rather than wait till its too late.

Symbian was always a burning platform. It had its time when it had many features every one else only was only dreaming off. But that was a long time ago when people still liked to use button rather than NUI.

Nokia didnt have that many apps. The UI wasnt very finger friendly. It didnt offer great rich web experience. The only thing at that stage what was offered was great hardware. Great design. But as said in the blog even that wasnt enough. The main problem was the OS rot. It made the phone slow after using it for a while and installing apps.

Why would some one buy the Nokia flaghship when competitors from HTC, Apple and Samsung offered consistent performance.

The only great thing i miss from owning a Nokia phone was radio streaming and Ovi Maps and their phone designs and reasonably better phone reception from my experience.

With a new consistent platform they can claim back the people who migrated, but migrated for the only reason because they couldnt stand it anymore.

Windows Phone 7 offers something new. Its not a copy of something, its easy to use, it has many strong brands behind it to replace Ovi Services.

Ovi Maps will merge into Bing Maps
Xbox Live Gaming will replace the N-Gage brand
WP7 Marketplace will replace Ovi Store. Its only a matter of time till WP7 catches up in app number as it was reported many times to be the fastest growing smartphone marketplace.

Obviously Symbian UI to Metro UI will be a big move for alot of customers. But theres really not a lot to learn as long as you read the titles under the Tiles/ Icons.

While most of us on this forum are one step ahead of the consumers when it comes to using technology. The rest of the world isnt.

They want something consistent, pretty, fast, fresh, feature rich and long lasting. Symbian didnt tick all of those boxes

48 million x 600 euro per high end handset is 28'800'000'000.

Thats a big loss in turn over. Taken away by apple.

Ive been to Android and i find it to be nearly just as bad as symbian at times. Manufacturers just rushing to see who can put a faster CPU into a phone shell and sometimes leaving software side of things a mess ending up making consumers coming in fustrated and me fixing my gf's phone so it wouldnt freeze and slow down anymore.

iOS and WP7 so far seem to be the only real choices for some one who is looking for a stable and consistent performance.

AntiVirus

I'm looking forward to seeing WP7 running on a Nokia phone, if its any good I'll probably get one. I haven't owned a Nokia for a long time but this could change my mind...

The Corinthian

Raskolnikov wrote: »

Back in the day before IOS and Android, Symbian was the biggest mobile development platform and had thousands of developers who were desperate to develop for Nokia. Instead of working with developers to build upon the Symbian platform, they ignored them. When Apple and Google came along and blew open the limited and closed shop of Symbian, developers couldn't drop it fast enough.

I don't think it's fair to suggest that Nokia were ignoring the developers. In reality, Nokia has had a very good history of developer support, certainly since 1999 and they were a lot better at releasing developer tools than most (the WAP toolkit comes to mind).

I get the impression, as a Nokia outsider, that their problem was as much that Symbian had become a bit of a monster and adapting or changing it or the tools around it had become a process akin to wading waist high through a swamp.

The use of C++ as the development language was an issue, as it is essentially now a legacy language that few want to learn, but this is something they'd inherited from EPOC. Then there was device fragmentation, something which they only addressed with Qt when the horse had already bolted. Overall, it made Symbian a pain to develop for.

The UI was another important issue, because you need to remember that what made Nokia popular in the first place is that it used to have the best UI out there. That's why people bought Nokia. When the iPhone came out, they'd leapfrogged over Nokia's aging UI (which also was ill suited to touchscreens) and stole that market from them overnight.

But most damning was not really technology per say, but the lack of any ROI. People tend to forget that one of the original points of success with the iPhone was that it was tied into 'all you can eat' data plans with the opcos. This then encouraged not only browsing, but also apps that used data. Combined with an already mature marketplace platform, this resulted in a culture of people actively downloading (often paid) apps and using them.

Not so with Symbian. With a higher entry level due to the difficulties of developing for it, there were far fewer apps and fewer people who wanted to use them. And no marketplace - it took Nokia two years after the iPhone came out to release the Ovi marketplace (by which time the iPhone had already raced ahead).

All this points, not so much to Nokia ignoring developers, but being trapped in an 1960's IBM-esque culture where getting the simplest thing done takes six months of bureaucracy and politics.

Samson1 wrote: »

If the figures above are correct "Nokia sold 450 million phones in 2010, 402 million more than Apple." that means Nokia sold 450 million phones and Apple sold 48 million Iphones. Where is the problem ???

The problem is with what types of phone; where Nokia is hemorrhaging is in the high-end smartphone market and this is important, because in a few years every phone will be a smartphone.

Remember when having an Internet enabled phone was to have one of the high-end phones? Or a phone that supported Java? Hell, I remember when having SMS was something that only came with the more expensive models. All of these are now standard, and in the same way, what we call smartphones now will before long become simply 'phones'.

And this is the important thing, because the real problem for Nokia is not one that presently exists, but will within a few short years as they are squeezed out of the market.

Is Elop the right man to sort them out? Personally I have my doubts, especially in light of his opting for WP7. But did he have to throw a bucket of cold water over the corporate culture there and effectively 'humiliate' them? Yes, that was long overdue.

The N97 had many problems and yet was a fine phone, with many advances.

Many advances - for a Nokia. It is easy to be impressed when the only phones you use are Nokia, but you have to compare the N97 against it's competition, and in this regard it was painfully backward.

First there was the year or so after launch that they repeatedly tweaked the OS until it became stable and even introduced automatic screen orientation (a slow and clunky version compared to either Android or iPhone). Many gave up during this period on the N97 because it was so fscking buggy - I didn't, but had to hard reset mine three times, for example.

But even after this, the interface is still stone age in comparison. The touchscreen is unresponsive. Screen transitions are notably slower than with either Android or iPhone. Much of the built in software has not picked up on new developments - no conversation threads, limited browser support or functionality, etc.

And to cap it all off, the appstore - Ovi - is the worst offering out there with a very poor selection of apps in it.

So saying that it "was a fine phone, with many advances" ignores the real fact that there are alternatives that left it in the shade, which is what Nokia users did long before Elop took over - why else was he brought in after all? It's not as if their problems started with him.

BostonB

As a developer myself, its obvious that S60 is a complete Frankenstein of lots of things bolted together, and its riddled with bugs and parts of the OS not talking to other parts. They also are very inconsistent, with the GUI and features between phones so its obvious the development teams don't communicate well with each other, and standards and consistency are controlled badly The OVI store is another prime example of terrible software.

Raskolnikov

Samson1 wrote: »

I have had Nokia phones for the last 15 years and never owned another mobile.

If the figures above are correct "Nokia sold 450 million phones in 2010, 402 million more than Apple." that means Nokia sold 450 million phones and Apple sold 48 million Iphones. Where is the problem ???

The problem is the trend that is developing.

The mobile phone market as a whole is still growing with more phones being sold every year. The problem for Nokia is that in an expanding market, they are actually selling less phones. The second problem (like Corinthian pointed out), is that their share in the high-end smart phone market is being obliterated. I believe that the Iphone 4 is outselling the flagship N8 model by nearly 10-to-1. What's keeping Nokia afloat is probably the lower-end/mid-range of phones that they're selling. This area of the market will almost certainly come under threat from the increasing number of Android phones and the possibility of Apple doing a budget Iphone. Potentially, a budget Iphone could be enough to put a stake through Nokia.

srsly78

Nokia does sell a huge number of phones, but most of those are low-end phones sold in "emerging markets" (what we used to call 3rd world countries). The profit margin on these is tiny. That's why Apple dominates even tho they sell 10 times less.

KrisW

That article reads suspiciously like a crib of a much better article in BusinessWeek a month ago... I'd agree with most of the points, especially regarding the Web browser, but it appears the Mail's author has decided on an analysis and is fitting figures to his opinion, rather than looking at the whole picture.

Comparing the sales of one model of Nokia's Symbian3 handset family with the sales of Apple's only handset is a little sneaky. N8 may sell 9-10 million units, but C7, C6-01 will sell many many more, and provide the same experience. Similarly, the N9 is mentioned in passing, but no mention of the overwhelmingly positive reaction to this phone received from the tech press. Didn't fit the tone of the piece, I guess.

To me, Nokia are now where Apple were in around 1997-1998. Back then, everyone in the tech world said they were no longer relevant, their market was slipping, they were making no money, and they'd be closed in a year. I worked there at the time, and the company was an utter disaster, with many of the same problems that are plaguing Nokia now: loss of technology leadership, strong competition from low-priced junk that's "good enough", a bewildering model range, dated software, and wishy-washy advertising.

The interesting thing is that, as a company, Nokia are in nowhere near the bad shape Apple were then. Apple lost nearly a billion dollars in 1996. Nokia have seen their profits fall badly, but have not yet recorded a loss.

Elop gets a lot of abuse from fanboys for "selling out" Nokia, and people accuse him of being a "Microsoft Trojan", but he's doing what needs to be done in Nokia. The company has enormous talent, but it has been suffocated by managment. Freed from this, I'm pretty confident that they'll make much better products. Windows Phone was the only rational choice for Nokia - they were two years behind on Android, couldn't get any concession from Google on Mapping and other services where Nokia have heavy investments (and to me, superior technology), MeeGo was another year from completion, and moving Symbian to the next generation of Silicon-on-Chip systems would bankrupt the company. That left Microsoft: strong in the US, where Nokia were weak; willing to come to agreement on services, and offering a slick, well-designed (if feature-short) smartphone OS.

In the past, and especially at the top of the market, Nokia's priorities were wrong - they kept playing the hardware and features game after Apple shifted the goalposts to UI fit-and-finish. The iPhone is a fairly mediocre piece of hardware, but it has really nicely presented software. Nokia are capable of reaching this level of quality, as the N9 shows, but the cost of doing this natively on Symbian, and keeping Symbian up to date on new hardware, was crazy. With so much time spent on stability, there's very little left to polish the UI. Nokia knew this, and bought Trolltech (Qt) in late 2008 to get themselves away from needing to write UIs in Symbian.

Ironically, it's now, after Symbian has been given an End-of-Life date, that we're seeing the results. Symbian "Belle" is the clean, simple, elegant user experience that Nokia have been missing for a long time. It borrows some features from Android, but wraps them in a unified, consistent design language - something that Android sorely lacks (and Apple excels in). But even if sales are amazing, it doesn't change Symbian's future: the crappy UI was an easy fix, what sealed Symbian's fate was the escalating costs of porting it to new platforms. New phones to 2013, all phones supported to 2016, then no more Symbian.

But, for Nokia, the future isn't Symbian. And it's not Windows Phone either; it's Series40 and its successors. Nokia sold hundreds of millions of Series 40 handsets last year. They are bringing the same Qt technology that runs the N9's beautiful UI to these phones, a move that will give developers access to this huge market without the constraints imposed by the aging Java 2 Mobile Edition platform currently used for S40 apps.
One major plus is that Series 40 is everything Symbian isn't from a Software Engineering point of view: S40's "Domestic OS" is simple, clean, stable, easily ported to new hardware, and most importantly - there's no need to expose its inner APIs to developers. That last point is crucial: Qt will the buffer between the developer and the underlying OS, whether that OS is today's S40, MeeGo-Harmattan, Symbian, or something completely new.

Windows Phone will provide the "Smartphone" and "PDA" end of the market, but this is actually pretty small. Despite Apple's roaring success, people aren't using iPhones or Android phones because they're good for organising email or calendars; they're using them because they play games, watch videos and browse the web. In short, they're using them as featurephones, and that's the arena where Nokia's non-WP7 phones will compete - bringing that same experience to a broader market.

So, I think that while Nokia are in some difficulty now, but they have a good plan for the future. Their recent settlement with Apple has provided a welcome financial boost (nearly $1bn now, and $11 from each iPhone from now on), Windows Phone will buy them revenues and mindshare in the USA which is important because so many of the self-appointed tech experts are Californians, with very little visibility of what happens outside of the Bay Area, let alone the USA. Beyond that, they will give developers access to hundreds of millions of users - figures that Apple or Google can not reach (yes, Android runs on cheap phones, but it really doesn't work well).

The other important thing is that, despite what you might read on the net, the vast majority of people don't give a rat's ass what Operating System their phone runs. They want something from a good brand that looks nice, is easy to operate, and lets them keep in touch with their friends. Nokia can deliver all of these.

I didn't count "apps" in there, because I do believe that about 90% of apps are redundant once you've got a good event notification system and a good browser to point at a mobile-formatted website. HTML5 offers most of what your typical brochure-ware or 'site reader' app can do, without needing Apple's approval, or the cost of re-coding for Android/Nokia/RIM/Windows too.

Anyway, sorry for the long post, but the original article was fairly long and rambling too.

(For the record, I like Nokia's products, I develop under Qt for mobile and desktop, and while I wrote this post on an Apple iMac, and love MacOS X, I'd never buy an iPhone).

KrisW

Sorry to double post, but:

The use of C++ as the development language was an issue, as it is essentially now a legacy language that few want to learn, but this is something they'd inherited from EPOC. Then there was device fragmentation, something which they only addressed with Qt when the horse had already bolted. Overall, it made Symbian a pain to develop for.

C++ isn't the issue; it's Symbian. And an argument against C++ being "a legacy language" (an incredible assertion, btw) falls down once you consider that Apple uses Objective-C.

On timelines, the iPhone might have been released in 2007, but the iPhone App Store did not open until June, 2008, over a year later. Ovi Store opened in May 2009.

Potentially, a budget Iphone could be enough to put a stake through Nokia.

There is already a budget iPhone - second-hand 3GS models. Apple are in a quandry: iPhone sells on its prestige, but is saturating its market. They can't spread into a broad market, or they'll be hit full-force with the Burberry Effect, and the product will lose its cachet (it's almost getting there now). Keeping the 3GS around may work, but iOS 5 doesn't work well on it, and future versions will creak even more. Making a cheapo will dilute the brand, and show up the technical shortcomings of the iPhone versus like-priced rivals. Plus, a cheapo iPhone would stack up very poorly against Nokia's mid-range hardware, because Apple haven't got the volumes to build quality product at the kind of price point they'd need to reach.

Apple are almost a fashion house, and I don't mean that in an insulting way - have a look at how a company like Chanel manages its prestige image, and you'll see a lot of what Apple have done in the last ten years.

Raskolnikov

KrisW wrote: »

I'd agree with most of the points, especially regarding the Web browser, but it appears the Mail's author has decided on an analysis and is fitting figures to his opinion, rather than looking at the whole picture.

I agree with most of your points. A lot of these apps are pointless and should be rendered obsolete by the browser and HTML5 in the future. The problem is that the browsing experience on the Symbian platform is painful and slow in the here and now. I was prepared to accept the poor user experience with my E90 back in 2007 because it was realistically the only show in town. However, with the increasing adoption of the browser being the application, any smartphone maker simply cannot get away with a sub-standard offering in this domain. I have a website that generates a few thousand hits a week. Google Analytics tells me that the most popular means to browse my site from a mobile device is from an Iphone (86% of all mobile traffic is through this device). Second place is Android at 11%, third is Blackberry at 2.6%, last is Symbian at 0.2%. If Nokia want to try and retake share in the smartphone market, then it's life or death that they get this right very soon.

You are correct in stating that it's foolish to write off WP7-powered Nokia phones at this stage, especially considering the reports coming out that WP7 may actually provide the fastest means of web browsing yet. Microsoft cannot allow WP7 to fail, therefore I suspect that WP7 will be driven into gaining some kind of decent market share even if it costs hundreds of millions.

srsly78

Dunno how exactly those stats are compiled, but I was surprised to find that a lot of android browsers show same user-agent as iphone (mobile safari).

Raskolnikov

srsly78 wrote: »

Dunno how exactly those stats are compiled, but I was surprised to find that a lot of android browsers show same user-agent as iphone (mobile safari).

Browser and OS come under two different headings.

KrisW

Visits to your site are not necessarily a good judge of web usage, unless you run bbc.co.uk or cnn.com or google.com

There are other surveys that show Symbian as the world's most-used mobile OS for browsing.

Personally, I take all of these surveys with a major dollop of salt, because the methodologies leave big holes in them (Google analytics, for instance, is known to mis-identify certain browsers, such as BlackBerry)

Raskolnikov

Nokia lost half a billion Dollars in their most recent quarter - http://www.guardian.co.uk/technology/2011/jul/21/nokia-reports-loss

:eek: If WP7 isn't a success, Nokia could go under.

KrisW

I think that €370 m loss accounts for the €420m Apple paid Nokia for patent infringments, so things could have been worse.

I think they've a year to get themselves back on an upward trend - there's still goodwill for the Nokia brand among buyers -- especially those who moved to Samsung or HTC -- but Nokia need to offer them a compelling product.

Products are the thing. Q2 had no new product launches until X7 and E6 at the end of June, and both are niche-market devices (even if E6 is in a big niche). Q3 is empty too: N9 won't go on sale until September, Windows Phone 7 devices won't be here until Q4 or Q1 2012; the Symbian Belle handsets may arrive earlier (there's leaked promotional assets for the cheapest one, the Nokia 500), but it's unlikely to be before August.

It's going to be another tough quarter for Nokia, but the longer-term outlook isn't too bad. Yet.

evolutionqy7

KrisW wrote: »

I think that €370 m loss accounts for the €420m Apple paid Nokia for patent infringments, so things could have been worse.

I think they've a year to get themselves back on an upward trend - there's still goodwill for the Nokia brand among buyers -- especially those who moved to Samsung or HTC -- but Nokia need to offer them a compelling product.

Products are the thing. Q2 had no new product launches until X7 and E6 at the end of June, and both are niche-market devices (even if E6 is in a big niche). Q3 is empty too: N9 won't go on sale until September, Windows Phone 7 devices won't be here until Q4 or Q1 2012; the Symbian Belle handsets may arrive earlier (there's leaked promotional assets for the cheapest one, the Nokia 500), but it's unlikely to be before August.

It's going to be another tough quarter for Nokia, but the longer-term outlook isn't too bad. Yet.

Lol most likely the N9 will never come here.
Belle handsets should hopefully come this Xmas, the ugrade for C7 anyway.

W series might not see the light here this Xmas cause as always Ireland has to delay everything. So Q1 but who will give a **** then.

Let em sink. They put a hole in their own ship. Tbh it will be one OEM less to look at

KrisW

One less OEM...

The market is better with Nokia in it. Competition keeps businesses looking after their customers, and Nokia are a more innovative company than HTC or Samsung.

A lot of Nokia's problems come from having an effective monopoly on smartphone sales until around 2008-2009. Monopolies make companies lazy, and make them disregard their customers' needs. I When you've got more than 70% of the market, you don't bother improving, because it actually doesn't pay off - the other 30% are likely to be people who won't buy your product for other reasons.

Arrogance and unresponsiveness put Nokia where it is today. Elop is doing a good job of shaking that out of the company.

As for N9, whether it comes here or not depends on the operators, not Nokia. If it gets good sales in other markets, they'll list it. Money is money.

Skerries

i will go back to Nokia if they give me the product i want as i have always liked them but they don't have me now as their product is dated
I haven't tried a WP7 phone but if what they offer is as good as the Android experience then i will happily change over