Nokia LogoNokia recently posted its Q3 2009 results and to say they’re disturbing would be a gross understatement. While net sales and operating profit didn’t fare well being down 1% and 4.4% from the previous quarter, the real startling figure is how Nokia is doing now compared to the same time last year. With a net loss of some 559€mm ($833.9mm USD) and sales tallying 9.8€bb ($14.62bb USD), YoY net sales were down 19.8% while operating profit plummeted a jaw dropping 57.8%.

Last year too in the smartphone category,in Q4 2008, Nokia’s smartphone sales had dipped a whopping 17 percent to 15.6 million units. As always, one company’s loss is another’s gain and no two companies highlighted this fact more than more than RIM and Apple. Both more or less doubled their smartphone market share, which than stood at 19.5 percent and 10.7 percent respectively. Apart from the big three, sales of HTC devices were then up 20 percent while Samsung saw its sales increase by an amazing 138 percent to 1.6 million units. Still, they each only commanded modest stake in the smartphone market at 4.3 percent and 1.8 percent respectively at the time.

This year, In terms of market share, Nokia neither lost nor gained ground having managed to hang on to its estimated 38% market share despite pushing approximately 108.5 million devices. Still, this does not change the fact that Nokia’s handset sales are down 8% as the world’s consumers focused their attention on devices made by other manufacturers.

The biggest gainer overall this year…Apple. Its financial results for the fourth quarter 2009, have beat out the predictions. This quarter has seen Apple hit its best results in the history of the company, boasting a rather hefty $1.67 billion profit. The results, found here, show that Apple managed just short of $10 billion in revenue, at a total of $9.87 billion. Apple sold 3.05 million computers during the quarter, giving it a 17 percent unit increase over the previous Q4 results. Additionally, the company sold 10.2 million iPods and 7.4 million iPhones, representing an eight percent unit decline and a seven percent unit growth over the year-ago quarter, respectively. Even LG’s managed better. Now with Palm’s amazing Pre and Android taking over almost all manufacturers, will Nokia will go the same way as Motorola especially since their initiative to make Symbian OpenSource has thus far proven ineffective?

This was the reverie I was in whilst at the launch of the new Nokia E72 Handset at Karachi, Sheraton today. Anyway, first the formalities:

nokia e72


Built on S60 3rd Edition FP2, the Nokia E72 is optimized for messaging and e-mail with a full messaging keyboard and support for EGPRS, WCDMA, HSDPA/HSUPA (3.5G) and WLAN. The device features two customizable Home Screen modes, active noice cancellation and a 5 Mpix autofocus camera. You can write messages with intelligent text input, enjoy videos, music, and graphics on the 2.36” QVGA display. Additional features include GPS and Nokia Maps 3.0, UPnP, Bluetooth 2.0 +EDR, and USB 2.0 High-Speed.

About Nokia E72
The E72 builds on the formula from the hugely successful Nokia E71, Nokia’s best selling QWERTY device to date. This latest arrival in Nokia’s Eseries family maintains essential elements of its predecessor, whilst still improving its capabilities in a number of areas.
“Despite the outstanding market performance of the Nokia E71, we still continually look for ways to enhance the device,” said Trude Gajland, Category Head Nokia Eseries, MEA. “So we included the desktop like email experience from the Nokia E75 and gave it a new optical navigation key for more intuitive scrolling through menus, emails and fast panning of images. We also upgraded the camera to 5 megapixels and added a standard 3.5 mm audio jack.”
On top of these developments, for the first time, owners will be able to set up instant messaging (IM) accounts provided by Nokia Messaging direct from the homescreen. In just a few steps, device owners will be able to connect to their favorite IM accounts such as Yahoo! Messenger, Google Talk and Ovi, amongst many others.
These new IM features are complimented by Nokia’s range of email solutions with a lifetime license for Nokia’s mobile email and IM service, Nokia Messaging, as well as onboard clients for Mail for Exchange and IBM Lotus Notes Traveler. Accessing popular accounts such as Yahoo! Mail, Gmail, Windows Live Hotmail, Ovi Mail and thousands of other email service providers is simple through improved on-device email setup, with the same easy to use UI integrating all of the owner’s corporate email accounts as well.

Other notable features which have been included in the Nokia E72  include A-GPS and compass with integrated Maps, including lifetime walk and 10 days of turn-by-turn navigation if activated within the first three months. Conversations are also clearer with active noise cancellation, and a torch can be activated with a single press of the spacebar key. The office capabilities have been updated with a new version of Quickoffice, which delivers Microsoft Office 2007 compatibility as well as free version upgrades when new features become available.

For further information, the RAM is 256 MB and the processor is clocked up to 600mhz but it is still an arm 11. Finally Nokia arrives to the 600 Mhz category and even then half-heartedly. Whew! Now let’s review what I think of the launch.

According to the Imran Khaild, GM Nokia, Nokia is not trying to displace the 25000 or so Blackberry users in Pakistan. Instead Nokia wants to use a 40,000 PKR phone to cater to the ‘Consumer Market’ as well as the ‘Corporate’……

Correct me if i’m wrong here. It’s one thing that Nokia’s having trouble penetrating the Pakistani corporate market (and even international i’m supposing) due to international policies, IT Policies and the first mover advantage by BB with the Pakistani telecoms. However, the belief that the E-series can cater to a  consumer market requires serious re-thinking. In a world dominated by affluent teens and young adults who thrive on IMs, SMS and increasingly social networks on their phone (incidentally Facebook App on Nokia is the worst i’ve used) are being targetted via a 30 year old technology whose behavior requires that a person think

Copyright @ SenseApplied 2009
10 Points For Guessing Right. Which Is The New Phone? Copyright@SenseApplied 2009

and reply in a more fuller answer than 160 characters. Not the behavior observed in our youth.There’s also a reason why though 300 million people have tried mobile email, only 10% have retained their accounts there (source: Gartner). Mobile behavior is just not conducive towards email messaging beyond short messages and reading. Yet Nokia believes it can cater to the 80% of the people who still don’t have email accounts when they (the people) have already jumped to technologies like SNN and SMS for most of their needs. Anyways, let’s see if this strategy would work.

The other thing observed at the launch was regarding the nature of the questions and general discussion over lunch. The most popular questions asked at the launch were direct comparisons to the iPhone or its features especially touch (to which Imran replied they want to produce touch for the mass market than an elite market…..). This reminded me about Apple’s recent stunt. In a question as to how Apple viewed its increased competition for the iPhone, Apple COO Tim Cook said “they’re still catching up with the first iPhone”. Nokia… you just cannot do Touch. Touch is a nightmare on Symbian, no matter how cheap it is. I’ve used both the 5800 XM and a 5530 XM in my lifetime and neither gets marks for ease of use or accessibility. Both still require a stylus to use properly.

One of the FAQs often thrown at Nokia’s events is regarding number of iPhone Apps vs. number of Nokia’s Apps. Nokia’s answer usually is that we have countless apps and thus more than Apple. However, that is side stepping the issue very neatly. Apple just crossed the 100,000 Apps for ONE PHONE only. Nokia’s apps are spread over so many series and models, that none of the phones probably has more than 10,000 at best. I counted around 4000 for my Nokia 5730 on

Also If i were the brand manager at Nokia, i’d be getting serious nightmares. Instead of one of my phones being the benchmark / standard in the industry (e.g. N72 vs. Nokia 97) or even the current E72 phone being launched thought cool enough to define a new standard, i’m nowhere in the tech leader’s category. Instead for free my main competitor is gaining publicity at my expense. Though the questions were handled very deftly (full marks to Imran), it just shows that people belief that Nokia’s losing its technology lead to its competitors. Even during lunch the general conversation centered around a lot of topics but what was launched.

The problem is being multiplied moreso. The upcoming phones by Nokia are just more of the same. These include the Nokia N97 mini, Nokia X6 and Nokia 5230.

Now I agree completely that most of the sales for Nokia comes from mid-low end phones especially in the sub-continental and Chinese markets. Unlike the west also, we simply can’t afford iPhones or most smart-phones. We pay full price for ‘Unlocked’ phones rather than having them subsidized through telecom packages, thus Nokia’s offerings really makes sense in our price conscious markets. However, does the strategy of keep pumping out so called “new models” with minor differences (e.g. 6303, N95, N86, 7310, 7510 etc…) really work? Do potential customers of these phones really care if the cam has been “upgraded” or not? If sales are increasing whilst profit is shrinking, so does it still make sense to keep pumping out so called “new models” constantly? More importantly when YOY the sales results are showing that the strategy is not working, why is the strategy not being changed.

In marketing, we have a saying that ‘Less Is More’. Yet Nokia is increasingly trying to ‘cater to all markets’ and segments, not noticing that these are not the markets of a decade ago. GM had the same problem with low end Japanese imports (Chinese mobiles anyone) and premium brands and tried to get out of the situation then by launching Saturn.

Fundamentally, there are two ways to increase sales: (1) Expand the brand, or (2) Expand the brand’s market share.

Most companies focus on the first way, expanding the brand. While this might seem to work in the short term, expanding the brand will eventually weaken the brand and leave it in worse shape than before the process began. While it’s more difficult to expand a brand’s market share, this is the better way to go. The larger the market share, the more powerful a brand becomes. When a brand reaches 50 percent or more market share, it becomes so dominant that it is almost impossible for a competitor to overtake.

Perception dictates reality. Does Starbucks coffee tastes better because the consumer thinks it tastes better or is it really better?

The larger the market share, the more dominant the brand, the greater effect the brand has on the consumer’s perception of reality. All candy bars are pretty much alike, because no one brand dominates the category. Every one percent increase in a brand’s market share does two things, both favorable. One, it increases the power of the brand in the mind of the consumer and two, it decreases the power of competitive brands.

The ultimate goal of a marketing campaign should be to dominate the brand’s category so the brand itself becomes a generic name for the category.

Which brings up the sad saga of Saturn.

Here is a brand introduced by GM less than 20 years ago in a highly competitive category. In 1994, just four years after its introduction, Saturn hit its high-water mark, selling 286,003 cars. That year, the average Saturn dealer sold more vehicles than the average of any other brand. That was the year the Saturn spirit was in full bloom. That was the year 44,000 owners and families attended a ‘homecoming’ at the Saturn plant in Spring Hill, Tennessee. So what did Saturn do next? Did it try to expand its market share? Or did it try to expand the Saturn brand into larger and more expensive vehicles? You’re right. Expand the brand.

A typical quote from that year: ‘Many analysts feel that Saturn will eventually need a bigger model to retain customers as they older and more affluent’, reported The Wall Street Journal in its June 17, 1994 issue. In the February 9, 1998 issue of Automotive News, Ron Zarella, then vice president of GM’s North American sales, service and marketing, was quoted as saying, We’re doing everything we can to get them a wider product range. In the March 9, 1998 issue of AutomotiveSaturn goodbye News, Charles Child, news editor, said: GM has to bite the bullet and let Saturn spread its wings. That is, give Saturn a full line of cars and light trucks as soon as practical. In January 1999, Cynthia Trudell took over as head of Saturn and as you might expect, one of the first things she said was that Saturn is definitely looking for ways to expand the portfolio. (Ms. Trudell was the first woman to head a car division at any domestic or foreign auto maker.) Two years later, Ms. Trudell was gone and Annette Clayton took over. The strategy didn’t change, however. My focus for the immediate future, said Ms. Clayton, is to prepare us for the SUV launch and to position us to grow the portfolio. The larger Saturn (the S series) was introduced in 1999. The sport-utility vehicle (the Vue) in 2002 and a replacement for the original Saturn (the Ion), also in 2002. When Bob Lutz arrived at GM as vice chairman responsible for product development, he sounded the same tune. In the December 13, 2004 issue of Fortune, he was quoted as saying: We’re investing in Saturn’s future because the inherent health of the brand is quite good. It just needs a bigger, more exciting product portfolio. Nothing helped. Saturn sales fluctuated over the years, but never reached the high-water mark of 1994. Then in 2004, in spite of the fact that Saturn dealers had three models to sell, as opposed to the original one, sales were only 212,017 units, down 26 percent from 1994. Average sales per dealer were only 483 units, half the level of a decade earlier.

The E-series is starting to sound like GM’s Saturn. In catering to the Corporate Category, Nokia’s losing its focus on the consumer markets (My Nokia 5730 does not sync with OVI Store and doesn’t work with OVI Suite 1.4 out of the box). Worse, it’s not even doing corporate well. There’s virtually no distinction between the different phones in the E-series. The hyped up Nokia-Seimens venture NSN is going the Nortel way. (Do read up on The technologies being deployed are starting to sound old. On the consumer smartphone front, Samsung Star has swept the market in our part of the world because of which Nokia’s launched a mega-campaign promoting the 5530 to contest it. Nokia Pakistan is also not bracing for the fact that operators are starting to bundle phones with their packages and whilst it’s going to be impossible to route Nokia from the low-end phones market in the immediate future (they make up over 80% of Nokia Pakistan’s Revenues), over time the sexier technologies being bundled with Chinese (TV anyone?????) and other OEMs manufacturer will create a dent in the market share as the category shifts from voice to other forms.

Granted there’s a huge difference between cars & phones and markets and times… however in my opinion Nokia is starting to sound the same tune. They’ve lost what made them Nokia in the first place ‘Connecting People’ and are trying to expand the brand into areas where it doesn’t belong using the same technologies over and over, pushing them to death in all their series until there’s virtually no differentiation – a death knell for the brand. Here’s an excerpt from their press release ‘… we make a wide range of devices for all major consumer segments and offer internet services that enable people to experience music, maps, media, messaging and games….’. Sounds like a serious lack of strategy. For what customers really think about their Flagship N97 check out Toshiba’s recently announced that they’ll be mass producing a 14.6 megapixel CMOS sensor for fones in Q3 2010. Compare that to the highest Nokia 8 megs.

With the new enterprise / corporate trends like cloud computing devices, Enterprise 2.0, android, Winmo 7 (i’m really excited about this one), mobility computing, social applications, HD on phones and so much more, where do we place Nokia’s products in the upcoming smarter world especially its E-series?

17 thoughts on “Is Nokia The Next Motorola?

  1. Pingback: Tweet Me 3rd sense
  2. Ouch , it hurts , Umair , I agree with you on many points , that Nokia is now focusing more on the services , not their business , instead of devices , just how many devices can you have which has the same interface , Husnain Shaban while interviewing Ms Gajland did remarked if you have used one Nokia the others are all the same . But Nokia does deserves the credit , it brought cell phone innovation to the masses , Samsung , LG etc later came into the game and they are playing well , but the brand recall is usually Nokia . If you look at the history of E Series from E61 all the way to the E72 , the basics of the phone has not changes it has been the messaging device with E71 breaking all records , I’ve asked many of my business associates in Pakistan and abraod why they use E71 and the common answer was email and messaging . E72 may not be ‘consumer’ device but my friend who uses the device to their full potential not in Pakistan neither in the ‘developed’ west – one of the main reasons mobiles sell are on impulse , it’s nice it’s new I gotta have it and that’s what will make E72 sell 🙂

    For your 5730 , use OVI Suite 2.0 – Google it and you will find the download link , as far as ovi Store is concerned , go to , go to Account , change mobile and your 5730 is supported

    1. Farhan, i’m not denying Nokia’s past. It’s the reason why the developing world went into the boom it did. m-commerce would be impossible without its devices.

      I’m talking about the future. The next 5 years. The reason why you use an iPhone instead of N97. 🙂

      @E-Series. The question is not about what’s its for. It’s been messaging throughout, agreed. But in the world inhabited by quote “superior devices” such as as the Pros & Pres, where do they stand. Secondly, when you’re talking about Enterprise level, you’re also talking about gatekeepers such as the IT depts of the world. IT policies are the sole reason why the iPhone hasn’t managed to crack the market to date, though now that’s changing fast as the focus of the consumer shifts from Email to other forms such as Enterprise 2.0 technologies.

      Thirdly, the design language and technology hasn’t changed. It’s the old phone slightly updated. The E72 form factor is still E63. It’s still a 15 FPS cam when even lessor mobiles support 30 FPS now. No video out for presentations. Plus, despite having the technology for the best Cam in the world (N86), the cam on the E72 is still crap. I’m not saying it’s not a decent phone, but I am questioning where does this series stand in the world now where consumer expectations have increased manifold. The technologies on this phone have been around for at least three years now. Where’s the innovation?

      It’s not that the phone will not sell. The question is will it sell enough. I don’t see the passion people used to have for Nokia anymore. Search Twitter. Negative to Positive Tweets Ratio is around 1.8:1 during the time I was researching it.

      @OVI. Will check it out and let you know the results. Thanks for that.

      My two and half more cents:

      1. Read the new technology reports coming out. They’re outlining what is it that sets Apple and Palm apart from the crowd and why will their importance grow over time?

      2. Nokia is sending mixed messages to the industry that will cause the company problems for years to come if it doesn’t change course.

      3. Prediction: Nokia will try to buy Palm sooner or later. It will have to if it wants to remain a player in the market and not be relegated to the back.

    2. Update:

      Tried to access OVI. Nokia 5730 is not supported still. There’s 5700 and 5800 but nothing in between. So Sync is not possible.

      I’m trying to get 2.0 Ovi Suite. Will let you know on that too.

  3. Smart phones
    Dial L for lawyer

    Oct 23rd 2009 | SAN FRANCISCO
    A nasty legal spat among tech giants pits Nokia against Apple

    TENSION has been building behind the scenes for some time between two of the world’s technology titans. That friction became public on Thursday October 22nd when Nokia, the world’s biggest maker of mobile phones, lobbed a lawsuit at Apple, alleging that its American rival’s iPhone infringes a number of Nokia’s patents. Apple, in the words of one of the Finnish firm’s executives, is “attempting to get a free ride on the back of Nokia’s innovation”.

    On one hand, this is just another of a growing number of intellectual-property disputes in the mobile-phone and, indeed, the information-technology industry. Ever increasing complexity, the growing importance of software and the standardisation of manufacturing (most devices are made by the same bunch of companies in Taiwan and China) are all part of the reason. So too is the multiplication of “patent trolls”, firms with the sole purpose of trying to extract money for patents which they have bought somewhere else. All this make intellectual property an ever hotter and thus more disputed commodity.
    clear pixel

    On the other hand, the legal fireworks between Nokia and Apple is a clash of two civilisations. When it comes to patents, the mobile-phone industry has mostly operated like a club. Players jointly develop new technical standards, say for the next generation of wireless networks, which include intellectual property from all sides. They then license or trade off their patents among each other or to newcomers under “fair and reasonable” conditions. Having grown up in the computer industry, where standards and sharing of intellectual property has much less of a tradition, Apple seems to refuse to play by these rules or, at least, does not want to pay as much as Nokia demands.

    Nokia has apparently negotiated with Apple for quite some time. Its suit, which was filed in the state of Delaware, involves ten patents that cover everything from wireless-data transmission to speech coding and encryption technologies that it claims are “essential” to building a device that complies with standards used in modern wireless networks. Nokia argues that all of these patents have been infringed by Apple since the first iPhone was shipped in 2007.

    Asked about the allegations, an Apple spokesman said the company does not comment on pending litigation. But in private its top brass must be livid. The scope of Nokia’s legal challenge has certainly raised eyebrows among legal experts. “They’ve kind of declared war on the iPhone”, says Scott Lindvall, a partner at Kaye Scholer, a law firm. He notes that it is rare to see a single lawsuit that involves so many patents covering a wide range of technologies. Nokia has also chosen a legal battleground that has a reputation for dealing with patent cases relatively swiftly. Mr Lindvall says that one Delaware intellectual-property case he was involved in came to trial in a year, whereas in other states similar litigation can drag on for much longer.

    Why is Nokia spoiling for a fight now? Other handset sellers have licensed its technologies, so the firm can make a strong case that Apple should do so too. And if it wins, it stands to make a tidy sum of money: Gene Munster of Piper Jaffray, an investment bank, has estimated this could amount to $6-12 for every iPhone sold. As some 30m iPhones have been purchased, the Finnish firm could pocket $180m-360m. That would come in handy—the firm made a whopping loss in its most recent quarter.

    Although Nokia denies this, the move is related to Apple’s stellar performance in the smart-phone market, where it and other companies such as Canada’s Research in Motion, which makes the BlackBerry, have eroded Nokia’s lead. In the second quarter of 2009 the Finnish firm’s share of the global smart-phone market fell from 47.4% to 45%, while Apple’s soared from 2.8% to 13.3%, according to figures from Gartner, a research firm.

    By entangling its rival in legal red tape, Nokia may be hoping to slow its progress. But Apple, which rang up a record quarterly profit this week, will not be deflected easily. The chances are that it will look for an excuse to counter-sue Nokia—a common tactic in intellectual property cases—or find some other legal ruse to confound its assailant. Fee-hungry lawyers will have their smart-phones on speed dial.

  4. Nokia tries to reinvent itself
    Bears at the door

    Jan 7th 2010 | ESPOO
    From The Economist print edition
    Can the world’s largest handset-maker regain the initiative?

    Illustration by Claudio Munoz

    ASK Finns about their national character and chances are the word sisu will come up. It is an amalgam of steadfastness and diligence, but also courage, recklessness and fierce tenacity. “It takes sisu to stand at the door when the bear is on the other side,” a folk saying goes.

    There are plenty of bears these days at the doors of Nokia, the Finnish firm that is the world’s biggest maker of mobile handsets. Although it is still the global leader in the fast-growing market for smart-phones, its devices are losing ground to Apple’s iPhone and to the BlackBerry, made by Research in Motion (RIM). On January 5th Google took a further step into the market with the launch of the Nexus One, a handset made by HTC of Taiwan that the internet giant will sell directly to consumers, and which runs Android, Google’s operating system for smart-phones.
    Click Here

    Especially in America, where Apple and RIM reign supreme in the smart-phone market, many already see Nokia as a has-been. Developers are rushing to write programs for the iPhone and for Android, but shun Symbian, Nokia’s rival software platform. And Nokia’s efforts in mobile services, mostly under its Ovi brand, have yet to make much headway.

    When the company makes headlines these days, it is thanks to the patent lawsuits it has filed against Apple, which many have interpreted—perhaps unfairly—as an admission of commercial defeat. The latest suit, filed in late December, asks America’s International Trade Commission to ban various Apple products, including the iPhone, from entering the country.

    Nokia beats Apple in annual sales ($57 billion versus $37 billion) and market share in smart-phones (39% versus 17%), but it is much less profitable. In fact, Nokia’s share of industry profits fell from 64% in 2007 to 32% in 2009—not much more than Apple’s and less than RIM’s, according to Brian Modoff, an analyst with Deutsche Bank. Small wonder that Nokia’s market capitalisation is barely a quarter of Apple’s.

    Yet in Nokia’s headquarters in Espoo, near Helsinki, morale is far better than one might expect. Hardly anyone would deny that there are problems. But executives insist that they can be overcome. When board members met financial analysts in December, they made some bold predictions. Within a year, promised Olli-Pekka Kallasvuo, the firm’s boss, the ageing Symbian software will have been vastly improved, to enable Nokia to offer “magic devices”. As for services, the goal is to have signed up 300m users by the end of 2011. “I’ve rarely heard such explicit statements,” says Ben Wood of CCS Insight, a long-time Nokia watcher.

    Nokia has overcome many crises in the past. In 1995 poor logistics caused it to stumble. It responded by developing one of the world’s most efficient supply chains, capable of churning out some 1.2m handsets a day. A decade later it failed to anticipate the demand for “clamshell”-type handsets, but bounced back quickly to restore its market share in handsets to 40% and thus its industry dominance.

    But this time the problems go deeper. In more than one way, Nokia has to become a different company, says Jay Galbraith, a management expert. Until now, it has excelled in making and distributing hardware. This has trained the organisation to focus on planning and logistics. Deadlines are often set 18 months in advance. Teams developing a new device also work in relative isolation and even competitively, to make each product more original. And although Nokia has always done a lot of market research and built phones for every conceivable type of customer, it sells most of its wares to telecoms operators and designs its products to meet their demands.

    With the rise of the smart-phone, however, software and services are becoming much more important. They require different skills. Development cycles are not counted in quarters and years, but in months or even weeks. New services do not have to be perfect, since they can be improved after their launch if consumers like them. Teams have to collaborate more closely, so that the same services and software can run on different handsets. Nokia also has to establish a direct relationship with its users like Apple’s or Google’s.

    To Nokia’s credit, it anticipated the shift to software and services much earlier than other handset-makers. It launched Ovi in 2007, almost a year before Apple opened its highly successful App Store. A few months later, Nokia bought Navteq, a maker of digital maps, for a whopping €5.7 billion (then $8.1 billion), to be able to offer better location-based services. Shortly thereafter, Nokia launched Comes With Music, an innovative pairing of a handset with a digital-music subscription.

    These efforts have not been great successes, although Nokia says that 86m people now use its various services. The firm is still working at bundling a selection of them into a neat package that is easily accessible from its handsets. Moreover, most of its offerings have to compete against popular incumbents, such as Facebook, Apple’s iTunes store and Google Maps. To further complicate matters, telecoms operators are reluctant to let Nokia offer services directly to their customers, since they want to do the same.

    Worse, while dealing with these problems, Nokia has seemed to neglect its main business. The first version of its flagship smart-phone, called the N97, was a let-down. It has as many bells and whistles as a Swiss army knife, says Carolina Milanesi of Gartner, a market-research firm, but its software, based on Symbian, makes them almost impossible to use. “It is like having a Ferrari body with a Fiat Cinquecento engine inside,” she says.

    Last February Nokia’s management kicked off what is internally known as a “transformation project” to address all these concerns. “We needed to move faster. We needed to improve our execution. And we needed a tighter coupling of devices and services,” explains Mary McDowell, Nokia’s chief strategist. The firm has since introduced a simpler internal structure, cut its smart-phone portfolio by half, ditched weaker services and begun to increase Ovi’s appeal to developers by allowing them to integrate Nokia’s services into their own applications. While giving Symbian a makeover it is also pushing a new operating system, called Maemo, for the grandest, computer-like smart-phones.

    All this will no doubt help Nokia come up with better, if not magic, products. The firm may even reach its goal of 300m users by the end of 2011 because its efforts are not aimed just at rich countries, but at fast-growing emerging economies where Nokia is still king of the hill, such as India. There, services such as Nokia Money, a mobile-payment system, and Life Tools, which supplies farmers with prices and other information, fulfil real needs, says John Delaney of IDC, another market-research firm.

    Yet it is an entirely different question whether Nokia will manage to dominate the mobile industry once more—not just by handset volumes, but by innovation and profits. The example of the computer industry, in which the centre of gravity began shifting from hardware firms to providers of software and services over two decades ago, is not terribly encouraging: of the industry’s former giants, only IBM really made the shift successfully. Then again, Nokia has reinvented itself many times since its origin in 1865 as a paper mill. That, points out Dan Steinbock, the author of two books on the firm, is thanks not only to sisu, but also to a remarkable willingness to embrace change and diversity. Nokia will need those traits in the years ahead.

  5. December 13, 2009
    Can Nokia Recapture Its Glory Days?
    HELSINKI, Finland

    IF there’s anywhere left in the world where it’s still impolite to flash a BlackBerry or an iPhone, it’s Nokia’s annual analyst meeting.

    But earlier this month, as executives talked up the company’s plans for 2010, the optimistic message from the stage was belied by the behavior of the audience. In the back of the room, one money manager after another distractedly toyed with a competing device, typically a BlackBerry, even as cheery PowerPoint slides promoted Nokia’s latest offerings.

    Francois Meunier, an analyst with Cazenove in London, whispered doubts about the presentation as he tried to catch the eye of one of the floor managers handing out microphones for the question-and-answer session. Finally, it was Mr. Meunier’s turn, but before he could ask an actual question, he couldn’t resist declaring publicly what he’d been muttering all afternoon.

    “I don’t think anyone in this room is expecting an improvement in earnings next year,” he told the assembled executives, before asking whether Nokia’s 4 percent dividend is sustainable.

    Mr. Meunier’s downbeat assessment of the once-mighty mobile phone maker’s prospects in 2010 comes after an equally gloomy 2009, a year the company would just as soon forget.

    Although Nokia, based near Helsinki in Espoo, still commands 37 percent of the world’s handset market, it’s facing bruising competition in the lucrative high end of the industry, where Apple’s iPhone and Research in Motion’s BlackBerry have grabbed the cool factor in smartphones that can surf the Web and handle e-mail.

    “The whole user experience is a nightmare,” moans Nick Jones, a senior analyst with Gartner, which tracks the technology sector. “It’s just not in any sense a competitive experience with iPhone.”

    Olli-Pekka Kallasvuo, the company’s taciturn chief executive, admits the mood out there is gloomy, especially on Wall Street. “We are not getting the benefit of the doubt,” he said in an interview the day after the analysts’ meeting. “We need to change that.”

    Nokia’s problems are especially acute in North America, where its hold on smartphones equals a barely visible 3.9 percent, compared with 51 percent for Research in Motion and 29.5 percent for Apple, according to Gartner. As if to underscore its problems in the United States, Nokia announced Thursday that it would shutter its flagship stores in New York and Chicago.

    “We made wrong decisions in the American market,” says Kai Oistamo, executive vice president for devices. For example, Nokia was slow to make the change to so-called clamshell phones, sticking with “monoblock” models even as consumers abandoned them.

    And while Nokia first offered touch-screen technology in 2004 — three years before the debut of the iPhone — Apple’s models quickly made Nokia’s competing products look stodgy. Most of Nokia’s touch-screen phones can’t quickly transform their screen with the jab of a finger, which is among the factors that make the iPhone seem so much more slick.

    Until recently, according to both Nokia executives and industry experts, the company didn’t want to produce phones specifically tailored for American consumer tastes, and it resisted demands from the major carriers to come up with phones based around their brands and individual specifications.

    “The market in the U.S. has always been dominated by the carriers, so they call the shots,” says Carolina Milanesi of Gartner. “And Nokia has had a difficult relationship with the carriers.”

    Nokia has also been hobbled by its traditional weakness in phones employing C.D.M.A., the wireless technology offered by Sprint and Verizon Wireless that’s used by about 50 percent of American consumers. (Sprint’s current lineup does not include any Nokia models.) Nokia focuses instead on G.S.M. phones for AT&T and T-Mobile. However, AT&T’s exclusive deal with Apple has hurt Nokia in the high-end smartphone market.

    And though Nokia sells a lot of smartphones elsewhere in the world, its share of the global smartphone market has fallen to 39.3 percent, down from 42.3 percent a year ago. Even in Nokia’s home base of Europe, the iPhone is rapidly gaining in popularity.

    Nokia is finally responding — its lithe, BlackBerry-like E72 appeared in the United States on Tuesday — but it is facing looming threats in other segments.

    Google is offering Android, a rival to Nokia’s own operating system, which has been picked up by competitors like HTC, Motorola and Dell, while Asian manufacturers are turning up the heat with low-priced handsets in emerging economies where Nokia has long enjoyed outsize market share. Meanwhile, Apple and Nokia are locked in a legal battle over patents.

    “Nokia faces competition everywhere,” says Sherief Bakr, a Citigroup analyst. “At the high end from Apple, in the midrange by Research in Motion, and by the Koreans and the Chinese in the low end.”

    ALL in all, it’s enough to make the mood as grim as a December day in Helsinki, where the sun struggles to get above the horizon by 9 a.m and night falls at 4 p.m.

    Once a stock market darling, Nokia shares have fallen 20 percent since September even as the broader market has rallied. The company reported its first quarterly loss in more than a decade in October after a $1.3 billion write-down in its equipment business.

    Here in Finland, Nokia’s problems are felt especially keenly. Nokia accounts for 25 percent of the Helsinki stock exchange’s capitalization and one-third of Finland’s total research and development spending, according to Jyrki Ali-Yrkko, of the private Research Institute of the Finnish Economy.

    Deeper than the numbers, however, has been the damage to Nokia’s role as a wellspring of pride in a country historically known for exporting wood and paper products, not high tech.

    Nokia’s roots go back to 1865, and as recently as the 1980s, its products included not only cable and telecom equipment but also rubber boots and toilet paper. But in the early 1990s, many businesses were spun off in favor of the growing cellphone sector. By the mid-1990s, under its former chief executive and current chairman, Jorma Ollila, the profits were rolling in.

    Nokia quickly became one of Europe’s rare technology success stories, an exception in an industry dominated by American and Japanese giants. And in a traditional, social-democratic Nordic country where ostentatious displays of wealth are frowned upon, hundreds of long-time employees became Nokia millionaires, says Mr. Ali-Yrkko.

    “Nokia has been the flagship of Finland in terms of a company succeeding on a global scale,” he says. “But that sense of glory we had has disappeared, or at least diminished.”

    The problems have reached all the way to Finland’s national coffers. In 2007, Nokia paid 18 percent of Finland’s overall corporate taxes, but that dropped to 9 percent last year, and the contribution is expected to be even lower in 2009. The Finnish government may have to increase borrowing to make up for the shortfall, warns Mr. Ali-Yrkko.

    A lawyer by training, the C.E.O. Mr. Kallasvuo is a much more cautious leader than his predecessor, the charismatic Mr. Ollila, who some Finns thought might go into politics after he stepped down as chief executive in 2006. At times, Mr. Kallasvuo seems uneasy when pressed for his vision of Nokia’s future, and repeated earnings disappointments have led many analysts to question whether his dour style is what’s needed as new competitors circle.

    “The market believes this is a management team that can’t and won’t execute,” says Mr. Bakr. “There is a large element of investors who are not convinced that Kallasvuo is the man who can make this transition and compete with the likes of Steve Jobs.”

    Despite the pessimism outside, Mr. Kallasvuo insists spirits are still high inside the company. “Competition is nothing new; we’ve been attacked by many players,” he says. And while last quarter’s performance “was difficult for me and the C.F.O., it wasn’t a difficult moment for an excited Nokia engineer who wants to change the world.”

    IF Olli-Pekka Kallasvuo seems to have stepped off the set of an Ingmar Bergman movie, then Anssi Vanjoki’s charisma and sculpted features recall Michael Douglas. An 18-year veteran of Nokia, he is the executive vice president for markets as well as something of a standout in Nokia’s geeky culture. In a country where speeding tickets are directly tied to income on a sliding scale, he racked up a 116,000 euro ($170,000) fine racing his motorcycle through Helsinki, although he was able to negotiate that figure down somewhat.

    Much more feisty than Mr. Kallasvuo, he is unwilling to admit Nokia has lost any of its competitive edge. “We have not lost our ability to innovate; we have not lost our ability to truly understand the consumer and make intuitive solutions for them,” Mr. Vanjoki says.

    Indeed, for all the new competition in smartphones, Nokia remains the dominant player in conventional handsets, selling roughly 15 phones a second worldwide, according to the company, including the Nokia 1201, a basic model that is its best seller. Analysts project revenue in 2010 will top $60 billion, while profit is expected to equal $3.5 billion next year as the overall phone market grows 10 percent.

    And while market share might be minuscule in North America, the company commands a whopping 62.3 percent of the market in the Middle East and Africa, as well as 48.5 percent in Eastern Europe and 41.8 percent in Asia. “We are the incumbent behemoth of the mobile arena,” Mr. Vanjoki boasts.

    What’s more, Nokia has been written off before.

    Citing past crises in 1998 (the advent of smaller phones), 2001 (the bursting of the tech bubble) and 2004 (the sudden popularity of flip phones), Mr. Vanjoki says. “we’ve always had points where technology hit a plateau and had to be reconfigured.”

    SO why didn’t Nokia move more quickly to counter Apple and Research in Motion in smartphones? “We didn’t execute; we were aiming at too geeky a community,” he says. “Apple is made for the common man. It’s more for Joe Six-Pack than techno-geeks. But we understand Joe Six-Pack too.”

    The coming 12 months will show whether Mr. Vanjoki’s confidence is warranted, and he better be right as far as shareholders are concerned, since smartphones are where the growth is.

    By 2013, Gartner predicts smart device sales will represent 82.5 percent of the mobile phone business in Western Europe, and 58.2 percent of sales in North America and 18.2 percent in Asia. Nokia generated $5.6 billion in sales from conventional phones in the third quarter worldwide, compared to $4.6 billion for smartphones.

    Nokia executives say new offerings like the N900, which is as much a mobile computer as it is a phone, or the N97 Mini, which combines touch-screen technology with a qwerty keyboard, will win back buzz from Apple and BlackBerry while appealing to the company’s 1.1 billion customers. Then there’s the X6, out this month, which includes Nokia’s Comes With Music plan, allowing users to choose from millions of songs they can download free from Nokia’s Music Store.

    Another crucial development in 2010, according to Mr. Kallasvuo, will be a bigger push for North American market share, as Nokia works more closely with carriers and brings out more smartphones. “We have not invested enough there,” he says. “It’s a necessity for us.”

    Although it’s still secret, Nokia executives are also promising a smartphone for next year that will update the company’s aging Symbian operating system, combining the touch-screen coolness of the iPhone with a BlackBerry-like e-mail solution. “We intend to give R.I.M. a run for their money,” says Mr. Kallasvuo.

    And though Nokia’s flagship outlets in the United States may be folding, the Finnish giant is still trying to compete directly with Apple online, opening Ovi (“door” in Finnish) in May to compete with Apple’s hugely successful Apps Store.

    Looking out further, Nokia’s engineers are promising nifty new features like the ability to simply point your phone at a friend to connect to the person’s Facebook page.

    For all of Nokia’s mistakes, Citigroup’s Mr. Bakr says the company can bounce back yet again. “Sitting in London or New York, you don’t appreciate the dynamics of Nokia’s huge market share, especially in emerging markets,” he says. “I think they know what they’ve done wrong and what they need to do right. It’s just a question of whether they can execute in time.”

  6. Nokia board backs strategy, shareholders cry foul

    Thu, May 6 2010
    By Tarmo Virki, European technology correspondent
    HELSINKI (Reuters) – Nokia’s chairman said the board fully supported management’s current strategy, while small shareholders in the world’s top cellphone maker criticised management at the annual meeting.
    Nokia has started to build a new business by offering Internet services ranging from music downloads to e-mail, but these have gained little traction so far.
    “We support management in this,” Chairman Jorma Ollila told shareholders on Thursday.
    Nokia has 82.7 million users for its Internet services, and aims to generate revenues of 2 billion euros ($2.68 billion) from services in 2011. Most of this will be paid by phone business, which has to pay for installing services into phones.
    “It’s a bit like a dog eating its own tail,” said John Strand, chief executive of telecoms consultancy Strand Consult.
    Chief Executive Olli-Pekka Kallasvuo, who has been with the company more than half of his life, has been under increasing criticism from analysts and shareholders as Nokia’s share price has missed the market’s recovery.
    At the end of his speech he thanked shareholders for continuing support, and sighed deeply.
    “The numbers are shocking; the sales fall, the operating profit crash. I wouldn’t say operating profit was catastrophic, but the direction clearly was,” shareholder Pekka Jaakkola said at the meeting.
    Nokia’s revenues fell 19 percent last year, while operating profit dropped 76 percent. The value of company’s brand — one of its key assets — dropped 58 percent in just one year, according to a global study by Millward Brown.
    The company will also be one of the few to miss profit growth in 2010, the year of economic recovery, and software problems continue to haunt its smartphones.
    “In a few years our shares’ value has dropped 60 percent, our pain threshold has been breached,” said shareholder Kari Vainio.
    Last month, Nokia delayed the rollout of phones using Symbian 3, its software platform revamp seen as a first step to making its smartphones competitive again, triggering a sell-off in its shares.
    Kallasvuo said Nokia expected its new generation of devices to significantly close the gap with the competition in high-end smartphones.
    Nokia has not been able to make a serious challenge to Apple’s iPhone in the three years since it was introduced. Its last hit smartphone model, the N95, was unveiled in 2006, the year Kallasvuo, a long-time company lawyer, took over at the helm of the Finnish company.
    Nokia’s board chose Jorma Ollila, its long-time chief executive, to continue as its chairman.
    Nokia shares closed 1.6 percent lower in Helsinki, lagging a 1 percent softer European technology shares index. In New York Nokia ADRs were 2 percent lower at 1730 GMT.

  7. Nokia at the crossroads
    Blazing platforms
    It is not just the world’s biggest handset-maker that has lost its edge. So has Europe’s whole mobile-phone industry

    Feb 10th 2011 | From The Economist print edition

    APOCALYPTIC language fuels the technology industry as much as venture capital does. But Stephen Elop, Nokia’s new boss, may have set a new standard. “We are standing on a burning [oil] platform,” he wrote in a memo to all 132,000 employees of the world’s biggest handset-maker. If Nokia did not want to be consumed by the flames, it had no choice but to plunge into the “icy waters” below. In plainer words, the company must change its ways radically.

    On February 11th, at a “strategy and financial briefing” in London, Mr Elop is due to announce the change he has in mind. The main question is whether Nokia will continue with its own operating system for smartphones, team up with Microsoft or perhaps even make a bet on Android, the fast-growing system developed by Google. There has even been talk that Mr Elop, the Finnish firm’s first American chief executive, will fire senior managers and move the firm’s headquarters to Silicon Valley.

    This would be an astonishing upheaval for what was one of Europe’s hottest firms. Behind Nokia’s woes lurks a dismal reversal of fortunes, not just for the Finnish company but also for much of Europe’s mobile-phone industry. In the 1990s Europe appeared to have beaten even Silicon Valley in mobile technology. European telecoms firms had settled on a single standard for mobile phones. Handsets became affordable, Europe was the biggest market for them and the old continent’s standard took over the world. “Europe was the cradle for innovation and scale in mobile”, says Ameet Shah of PRTM, a management consultancy.

    This changed with the emergence of smartphones, in particular Apple’s iPhone, which appeared in 2007. Nokia still ships a third of all handsets, but Apple astonishingly pulls in more than half of the profits, despite having a market share of barely 4% (see charts, below). More Americans now have smartphones than Europeans. As for standards, Verizon, America’s biggest mobile operator, is leading the world in implementing the next wireless technology, called LTE.
    Cheap as chips

    Nokia, along with the rest of Europe’s mobile industry, is also being squeezed in both simple handsets and networking equipment. Cheap mobile phones based on chips from MediaTek, a company based in Taiwan, are increasingly popular in developing countries. By some accounts this system and its users now account for more than one-third of the phones sold globally, Mr Elop wrote in his memo. And at $28 billion in 2010, the revenues of China’s Huawei almost equal those of Sweden’s Ericsson, the world’s leading maker of gear for wireless networks.

    At its most fundamental, this shift is the result of Moore’s Law, which holds that microprocessors double in computing power every 18 months. The first generations of modern mobile phones were purely devices for conversation and text messages. The money lay in designing desirable handsets, manufacturing them cheaply and distributing them widely. This played to European strengths. The necessary skills overlapped most of all in Finland, which explains why Nokia, a company that grew up producing rubber boots and paper, could become the world leader in handsets.

    As microprocessors become more powerful, mobile phones are changing into hand-held computers. As a result, most of their value is now in software and data services. This is where America, in particular Silicon Valley, is hard to beat. Companies like Apple and Google know how to build overarching technology platforms. And the Valley boasts an unparalleled ecosystem of entrepreneurs, venture capitalists and software developers who regularly spawn innovative services.

    Nokia had some additional problems to deal with. The firm realised its world was changing and was working on a touch-screen phone much like the iPhone as early as 2004. Realising the importance of mobile services, it launched Ovi, an online storefront for such things in 2007, a year before Apple opened its highly successful App Store.

    But turning a Finnish hardware-maker into a provider of software and services is no easy undertaking. Nokia dallied and lost the initiative. Historically, Nokia has been a highly efficient manufacturing and logistics machine capable of churning out a dozen handsets a second and selling them all over the world. Planning was long-term and new devices were developed by separate teams, sometimes competing with each other—the opposite of what is needed in software, where there is a premium on collaborating and doing things quickly.

    Olli-Pekka Kallasvuo, Nokia’s boss from 2006 until last September, was keenly aware of the difficulty. To get an infusion of fresh blood Nokia bought several start-ups and was reorganised to strengthen its software and services. And it tried to turn Symbian, its own operating system for smartphones, into a platform in the mould of the iPhone and Android. “But just like Sony, Nokia has not found a way to shift from hardware to software,” says Stéphane Téral of Infonetics Research.

    To allow Nokia finally to shed its hardware skin, Mr Elop, a former senior executive at Microsoft, was brought in—and apparently given what Mr Kallasvuo never had: carte blanche. This is why most observers expect him to carry out thorough changes, concerning in particular the operating system on which Nokia intends to bet its future. The firm has to move fast if it wants to have a chance to create a third platform for mobile software and services next to Android and the iPhone.

    Nokia is unlikely to throw in its lot with Android. The software may be open-source, but it comes with strings attached—notably Google’s mobile services and advertising. This would reduce Nokia to being a device-maker and render obsolete many of its investments in services. Nokia could go it alone with MeeGo, a technically advanced but still incomplete operating system it is developing jointly with Intel, but some think that is unlikely. Or it could bet on Microsoft’s new mobile operating system, Windows Phone 7.

    Investors seem to prefer the Windows option. When rumours began swirling early this month that this was what Mr Elop was planning, Nokia’s share price, which has dropped by two-thirds since early 2008, surged by nearly 7%. Teaming up with Microsoft would indeed have benefits, says Ben Wood of CCS Insight, another market research firm. Given his background, Mr Elop could surely make such a partnership work. And it could help Nokia make a comeback in America, where its market share is in the low single digits. On the other hand, argues Mr Wood, Windows Phone 7 has not been a huge success so far. It would also take at least six months before the first “Windokia” phones hit the shelves—a long time in a fast-moving industry.

    Other bits of Europe’s mobile-phone industry are already showing signs of revival. The revenues of ARM, a British firm, may only be in the hundreds of millions, but most microprocessors found in handsets and other mobile devices are based on its designs. Ericsson now generates 40% of its revenues with services, for instance by managing wireless networks around the world. And on February 7th Alcatel-Lucent unveiled technology that reduces the size of a wireless base station from a filing cabinet’s to that of a Rubik’s cube.

    But for a full comeback, Europe will have to wait for an entrepreneurial culture like Silicon Valley’s. This may not be as hopeless as it sounds. The beginnings of such a culture have taken root in recent years, and some successful start-ups have sprouted. One of the most popular games for smartphones, for instance, does not hail from the Valley but from Finland. “Angry Birds” has been downloaded more than 50m times since its release in December 2009. It is so addictive that compulsive players have been asking their doctors for help in kicking the habit.

  8. Finland-based Nokia faces a key test this week when chief executive Stephen Elop finally unveils a plan to reverse a sharp slide in the fortunes of the world’s number one mobile phone maker.

    Nokia holds a strategy and financial briefing in London on Friday, two weeks after it reported a 21 percent slump in fourth quarter earnings and
    Elop promised: “The industry’s changed and now it’s time for Nokia to change faster.”

    Engadget has reprinted a copy of the text from an internal Nokia memo from the CEO Elop to the company’s employees. Here’s over
    to the letter which several analysts have termed ‘brutually honest’.

    Hello there,

    There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud
    explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way
    out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

    As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by
    the burning flames. Or, he could plunge 30 meters in to the freezing waters.
    The man was standing upon a “burning platform,” and he needed to make a choice.

    He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters.
    But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning
    platform” caused a radical change in his behaviour.

    We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

    Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and
    from you. Today, I’m going to share what I’ve learned and what I have come to believe.

    I have learned that we are standing on a burning platform.

    And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

    For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market
    by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

    In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are
    enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would
    buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

    And then, there is Android. 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.

    Let’s not forget about the low-end price range.
    In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to
    produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us
    in emerging markets.

    While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we
    lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

    The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the
    scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

    We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought
    MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

    At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North
    America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements,
    leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we
    continue like before, we will get further and further behind, while our competitors advance further and further ahead.

    At the lower-end price range, Chinese OEMs are 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.

    And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to
    approach each price range on a device-to-device basis.

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

    This is one of the decisions we need to make.
    In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

    On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit
    watch. This is a similar rating action to the one that Moody’s took last week.
    Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies
    contemplating these changes? Because they are concerned about our competitiveness.

    Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is
    8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are
    traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

    How did we get to this point? Why did we fall behind when the world around us evolved?

    This is what I have been trying to understand.
    I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked
    accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering
    innovation fast enough. We’re not collaborating internally.

    Nokia, our platform is burning.

    We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will
    be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

    The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step
    into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.


  9. First of all I want to say fantastic blog! I had a quick question that I’d like to ask if you do not mind. I was curious to know how you center yourself and clear your thoughts prior to writing. I’ve had
    trouble clearing my mind in getting my thoughts out. I truly do
    take pleasure in writing but it just seems like the first 10 to 15 minutes tend to be wasted
    just trying to figure out how to begin. Any recommendations or tips?
    Appreciate it!

  10. You’re so awesome! I do not believe I have read a single thing like that before. So wonderful to find another person with some original thoughts on this topic. Really.. many thanks for starting this up. This web site is one thing that’s needed
    on the web, someone with a little originality!

  11. Hello are using WordPress for your site platform?

    I’m new to the blog world but I’m trying to get started and set up my own.
    Do you need any coding expertise to make your own blog?
    Any help would be greatly appreciated!

  12. Your style is unique in comparison to other folks I’ve read stuff from. Many thanks for posting when you have the opportunity, Guess I will just bookmark this page.

  13. Hi there, I discovered your web site via Google at the same time
    as searching for a related matter, your web site got here up, it appears
    good. I have bookmarked it in my google bookmarks.

    Hi there, just became aware of your weblog thru Google, and located that it is truly informative.

    I’m gonna watch out for brussels. I will be grateful in case you proceed this in future. A lot of folks might be benefited from your writing. Cheers!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s