Finnish mobile giant Nokia today released its fourth quarter financial results, posting a €1.07 billion ($1.4 billion) loss as sales declined by 21% year on year with smartphone sales and mobile sales down 31% and 1% respectively. Whilst it shows Nokia still has a lot of work to do, it sold 19.6 million smartphones and 93.9 million mobile devices, meaning that over the quarter, sales were up 17% and 5% respectively on the last quarter.
(via thenextweb)
40% of European smartphone buyers plan to purchase an iPhone as their next device. 19% plan to purchase an Android powered device, 17% have their eye on a BlackBerry, and 15% plan to buy a Nokia smartphone.
Samsung reportedly preparing to acquire Nokia
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?
Stephen Elop's Nokia Adventure - Peter Burrowes
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.
Eldar Murtazin: Microsoft will enter negotiations to buy Nokia's mobile division next week -- Engadget
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?
RIM makes a play for its future
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.
Why Didn’t Nokia Sell Out To Microsoft?
Considering that Nokia has basically handed over its future to Microsoft, why didn’t they actually sell themselves? Instead, they have become a “puppet state” as MG Siegler calls it.
The rumors of Microsoft wanting to acquire Nokia has been going on for a long while, and the recent crash of the stock in the market suggests that analysts and investors see this capitulation as a negative for Nokia. Would the stock have fallen in a buyout? I don’t think so. So, at least in the short term, Elop’s plan is a disaster for Nokia shareholders, and a free gift to Microsoft.
Nokia CEO Stephen Elop rallies troops in brutally honest 'burning platform' memo? (update: it's real!) -- Engadget
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.
Nokia’s Dilemma
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.
Dopplr Disappeared Into The Black Hole That Is Nokia: Never To Return?
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.
Social anthropologist, clairvoyant, postfuturist.
