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back to article Nokia posts massive loss, blames 'ambiguity'

Nokia posted a large operating loss of €487m today, only its second quarterly loss in 19 years. And without the royalty settlement with Apple it would have been much worse: the settlement gifted Nokia a one-time bonus of €430m. "Our new strategy introduced ambiguity," admitted CEO Stephen Elop. The figures tell a story of unit …

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FAIL

Chop Elop

Elop's screwed Nokia.

Announce a new strategy & then wait for more than a year to execute on it: unheard of, pitiful.

The Finns should lynch him for treason.

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Shareholder value

Can't see them taking this lying down. EGM and friendly takeover by Microsoft?

My heart goes out to the many hard-working and talented people at Nokia. Personally, I always preferred Ericsson's design and UI but there is no doubt that Nokia was largely responsible for turning an executive toy into something everyone could use.

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WTF?

Nope, not unheard of at all

"Announce a new strategy & then wait for more than a year to execute on it: unheard of, pitiful."

Not unheard of, this exact thing happened maybe 30 years ago when Osborne announced a new better portable PC and their business promptly died as everyone waited for the new model and stopped buying the existing ones.

Whats pitiful is, even with such a classic lesson from history, these morons went down the same path but with an even longer wait!

Lynch him for stupidity, by all means.

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Anonymous Coward

And the N950 with MeeGo/Maemo is stunning

Nokia would have done decent business if they'd remained committed to their original Qt/MeeGo/Symbian strategy as revenue and profit were increasing Q on Q with growing developer interest. Instead they are left to peddle "unwanted" Symbian products after the idiot CEO publicly took a dump on his own product line and killed off a clearly viable high-end alternative which no doubt scared the shit out of Redmond..

Posted from my N950, as AC obviously.

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Silver badge

This time it isn't overhang

The problem Osborne experienced is called "overhang". That's where you pump up the market about what you're going to be bringing out in a year or more and the market stop buying current product as they wait for the new stuff.

In Nokia's case I don't think it is overhang. How many people are really waiting for Nokia to bring the Winphones?

Nope. Most people who were firm Nokia fans have just walked away to Android/iOS.

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Unhappy

nokia chop suey ...

.. it's amazing how fast Nokia fell, in the public eye.

Steve Elop has been Nokia CEO for less than a year, and there's you saying he'd been waiting for more than a year to execute on a newly-announced strategy. Time's relative ?

One can blame him for a lot, not the least communication skills unworthy of a CEO anywhere. But the time since the "burning platform" note is the longest period in the last four years that Nokia has spent _without_ major focus / strategy / platform shifts.

Remember the years before ? What was Nokia's strategy for touchscreen phones again ? The developer/apps story ? Abandoned breakthrough touchscreen devices shortly _before_ the iPhone, then re-vived but badly-executed S60v5, horrible delays and even worse execution combined with lie-into-your-face marketing for the N97, then shift-to-Qt but-also-shift-to-Maemo stop-move-to-Meego stop-Qt-and-S^3 stop-gap-S60v3/5/S^3+Qt stop-some-new-Symbian stop-Meego-plus-Qt, oh-stop-forgot-to-ditch-Symbianfoundation ... all the while spending myriads on fixes-for-N97 that were late (or never came), while incurring delays on the N8 (and all S^3-based devices) and the N9, beyond the point where either could've made the impact that it would've made had it shipped closer to the time the specs first (were ?) leaked out.

Show me anyone who actually could/can see "strategy" in Nokia's dithering during the four years _before_ the burning platform memo.

Nokia's pigeons have come home to roost. It'll be painful to clear the mess up.

Elop was at least open, and, for a CEO, surprisingly honest about how bad the state actually was/is. He must've known he'd get the all the public blame, and said things that needed to be spoken nonetheless. For that, and that alone, I respect him.

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Mushroom

Smart phone loss attributable to unwanted OS...

No one wanted MSes mobile OS. They were warned & ignored that warning. Damn shame & as you said they should have gone down the MeeGo path completely & dumped Symbian completely...

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Megaphone

Idiots...

The only people who wanted Nokia to follow the MS path was the new CEO & MS themselves. If they'd stayed the MeeGo path some would have waited. So they've released one version after telling everyone they'd dumped it. The board are idiots...

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N950!

You have no idea how jealous i am. I love my N900, but a chance to play with the next generation device, even if it's the last before the line slides into extinction, would be great.

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FAIL

By any name, calling current products dead will screw up sales...

Granted, nobody is 'waiting' for Windphone 7 models... the few people who had to have one of those could already buy them elsewhere.

But calling the entire existing product line dead, without pressing need to do so, is still retarded and surely doesn't help selling what you have.

I was never much of a Symbian fan, but I did buy 2 phones based on it in the past, figuring there would be updates coming. Once they call it dead, you can be sure I won't be caught dead owning one.

And MeeGo...? I would have preferred a MeeGo phone over Android. But if they won't continue on MeeGo, why take the pain of using the first version, if it won't go anywhere?

And if Nokia sells nothing but Windphones in the future, I simply won't be a Nokia customer at all. I'm not interested in voting with my dollars to extend the windows monopoly to mobile.

I think Nokia is getting close to loosing more money than M$ paid them for this breakneck shift.

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FAIL

agreed

That guy should have his head elopped off - either for being retarded, or for being a trojan horse, working to sink Nokia, so Microshuft can pick up the company for pennies after bankcrupcy.

First, you never announce discontinuation of all existing products when you have no new products to sell.

There's past examples of other companies that suicided like that. Elop must have been sleeping through the lectures in business school.

Further, there was no need to announce everything dead. Any smart manager, not biased by pre-conceived notions would have gone for keeping up cashflow and sales first. That would have meant announcing continued support and improvements for Symbian, MeeGo, with Windphone7 and Android getting announced as as 2012 additions to the program.

Nokia needs volume to remotely compete with Samsung and HTC's hardware, and they're not going to get that volume out of Windphone 7 alone.

In their current position of being technically behind, they need to make one high end model that can run several operating systems, make a lot of them, and see what OS people want to buy the most before making any further decisions.

But Mr. "idiotic smug grin" Elop is living on another planet.

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wow

NSN posted a lower loss than a year ago, with net sales up 20 per cent to €3.642

Wow, a whole three and a half euros! That's almost four euros!

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thanks for clarifying this

Sometimes with english texts i'm unsure which symbols are used for decimal and which for thousand seperators.

So, it wasn't immediately clear to me whether their income came from the coffee machine in the break room or whether they once sold a sandwich to a visitor while coffee is free.

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Anonymous Coward

"Our new strategy introduced ambiguity"

I'm sure shareholders will find no ambiguity in his performance.

Time to elope with few £M golden handshake?

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Still doing the wrong things

Nokia keep shipping quite decent phones and failing to make any noise at all.

Many of the recent s60 phones have been fantastic, and had spectacular cameras etc.

Yet, Nokia keep their mouth shut.

a) The BBC announced the iPhone was the first phone that could download apps, now I know the BBC are huge apple fanbois but to be honest Nokia should have taken them to the cleaners, billions should have been demanded in compensation for the damage done to a device family that had been happily downloading native apps for more than 10 years

b) Apple keep powering on about the 'features' they have, despite many of them (such as playing videos et al) being available on the completely unadvertised Nokias

c) How many apps? The iPhone probably does win now, but 2 years ago? Nokia should - and could - have claimed many more apps than Apple, and then perhaps people would have thought

d) How many devices, even now the main media reports on this weeks device shipments, but what about all those old devices people are still using - after all, my 6 year old Nokia is still a useable device and still downloads apps quite happily.

e) Phone calls, the phone is for making phone calls, Nokia happily outstrip Apple in this rather important feature.

But, Nokia just keep their mouth shut and allow the only Nokia news to be that of disaster after disaster - phones late (they strive for idiotic levels of perfection), phones not selling fast, Symbian being ditched (I mean come on Elop, where is that brain you are supposed to have, still in Redmond? I think it must be, probably stuck up somewhere it shouldn't be... if you were going to change horse (from a perfectly good OS to one thats not really a phone OS ) then you should keep quiet until oyu have a phone ready to launch. Just because your S60 UI is not as good as it should be don't chuck away the superior OS underneath - go and write a decent apps and UI layer... it was possible and wouldn't really have taken long now the engineers know what they need to do.

Frankly Elop is an over paid mistake, its not the engineers that should have been choped but the marketting people who clearly still aren't marketting, the 'product managers' who barely know what a phone is but know their way around an expense account, and the people on the board who have no clue, no strategy and few functioning brain cells.

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second toughest in the infrants

I've seen a fair few adverts on bus stops etc for nokia phones recently, almost all of them seem to be going on about the camera, saying that it is the best camera you can get in a phone. Now, maybe it is or maybe it isn't but it seems to me that they are being forced to boast about marginals. Really, to what % of the population is the quality of a camera the deciding factor in what camera they buy? " Never mind the app store, never mind the screen or the call quality or the baterry life or the compatability with other things, look at the camera."

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Gold badge

Look but don't touch

Nokia's have always had lots of features. The problem is you needed about 10 keypresses and a trip down about 5 menus to get to them.

If they had adopted touchscreen much sooner then things would have been different.

Going back about about 5 years, dumbphones from Sony Ericsson were much cooler, nice animations, nice user interfaces. Nokia's phones however were clunky, ugly and much more basic from a user perspective. The only think about a smartphone that was smart was being able to install software. But since there were no easily accessible app stores then I would imagine few people bothered. I can only recall installing one application on my Nokia, *one* app. Sure, lots of things were built in including Sat Nav.

Apple and Google make smartphones slicker and more user friendly. Nokia got left behind and people don't tend to want to go back unless the offering is much better. But Nokia's modernisations weren't enough, it looked like the same old tired Symbian with a facelift.

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Go

A camera was important to me

I don't use my mobile for making calls very often nor for texts. It's mostly just for emergency use. The advantage of having a decent camera is that I'm more likely to take it with me when I'm out. That in combination with decent audio output were the reason I bought my last Nokia (an X6).

Unfortunately the software was such an unmitigated pile of poo that I jumped ship and bought an HTC Desire. The camera ain't as good nor is the audio(*) but there was no way in hell I was going to by an Jesus phone.

(*)The audio app is pretty good though which sums it all up really. The X6 was marketed on the basis of being good for music fans and yet it had an appallingly bad music app.

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Mushroom

I doubt the underneath layer would have worked...

With the way the Win OS runs I doubt that a UI could have worked. Anyway, the Win OS has been & will remain a failure as far as I can see. Programmers don't want to rewrite their programs from a long way back just so they'll run on this system. Stupid system...

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They're dead

Thank's to Elop's bizarre strategic blunders, their current phones are dead-end that no reviewer will recommend, no phone seller will promote and no educated consumer will purchase. No-one's asking for Windows Mobile, so nothing will change when the new products come out. And the typical life of a handset is only 24 months, so, when the Windows phones finally appear, there'll be few existing owners declaring undying loyalty to the brand.

It's astonishing to see how quickly the toilet of consumer choice is able to flush away a hugely influential multinational business. Goodbye Nokia; it was great while it lasted.

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Anonymous Coward

Loyalty to Windows

I worry about both consumer and developer loyalty to Windows.

Apple and Googlephone seem, to my imagination, to be brands which can embody the aspirations of young, hip app developers, and consumers, far more than Redmond's offerings, which in brand-speak are probably suffused, in the minds of a certain generation, with the aura of provincial corporate hopelessness, of dusty Dell desktops in stale back offices in Reading business parks.

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Unhappy

Loyalty to Windows

For every HTC and other Android handsets sold goes 5 USD to Microsoft. So Android is NOT open source either. This is how M$ will remnain in the running. Nokia is the sore looser out there. They killed their best asset to the future (meamo/Meego) for an OS nobody wants. Definitly NOT symbian users whom choose Symbian to avoid Windows Mobile in the first place.

Who's running Nokia! I want NAME AND ADDRESS! I'll TELL THEM what's going on. I'll give them a true rescue plan. YFM

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Terminator

Anyone Remember Ratners?

Advertise that you're peddling effluent to the masses and act surprised when said effluent hits the blades. Elop is a fool.

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I see no ambiguity, here

I hear "Run for your lives! We're all going to die!", accompanied by a soundtrack heavily inspired by the Carmina Burana. But I see no ambiguity.

Quite the reverse, in fact.

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Windows

"Our new strategy introduced ambiguity," admitted CEO Stephen Elop.

No.

YOUR new strategy introduced absolute destruction. Piss off, Elop/Wallop whichever. You have single-handedly destroyed Nokia. Now, about the remnants of our pensions...

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Anonymous Coward

singlehandedly?

He hastened the decline.

Nokia was headed for the buffers before Elop joined. It must have been their desperation to find a way out of the corner they'd painted themselves into that led to them appointing him.

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Low end smartphones

One thing that Nokia has/had are low end smartphones. Since there are minimum hardware requirements for WP7, and WP7 is the only smartphone OS for Nokia in the future, are they giving up on the low end smartphone market?

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FAIL

Reaping the fruits...

So, without Apple's €430M gift, Nokia would have bled close on to a €1Bn loss.

Again the Apple haters (Dave 15) indirectly blame Apple for Nokia's demise.

I believe the Android powered handsets are equally, if not more of an influence to draw people away from Nokia.

Not everyone likes the iPhone and Android makes a convincing alternative to both an Apple handset AND a Nokia handset.

Nokia have had every opportunity to stay ahead but they've lost direction. Sure a phone is to make calls, but times are changing and people want smart phones, Nokia make great phones but aren't smart enough as a company to make them appealing enough.

Nokia rested their laurels on Windows Phone 7 and I recall the ElReg article titled "Nokia deal to 'rocket Windows Phone 7 past iPhone'" published on March 30th 2011

Well obvious this is not the case.. perhaps Nokia should have taken a better look at Android opposed to relying on Windows Phone 7 which is still in "catch up mode" to both Android and IOS.

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Anonymous Coward

In defense of David 15

He wasn't in the slightest bit anti Apple -but almost entirely anti-Nokia for being stupid enough to let Apple marketing strategy beat them in to the ground. David 15 is right - they had many of the things Apple have be advertising, for years before Apple had them - but did anyone hear about it? Nope.

Elop's (curse his eyes) big mistake was announcing that Nokia would use WinPho7 before they had a phone ready. It buggered sales of anything coming out between then and the Winpho release. (early next year? Ha ha ha. One phone out running Winpho, 10 others still running Symbian)) Current gen Nokia smartphones are pretty good (and yes the cameras are the best on a smartphone) and do everything that most people want - but nobody wants to buy them because they are a *perceived* dead end.

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Anonymous Coward

RE:Reaping the fruits...

As long as Nokia makes profits which they do they make profits. Simple as that. The reason why they don;t make proifts NOW is because that US-jackas prematurely made assumptions that their current OS (Symbian) and future OS (Meego) are dud. The finn's should have jacked him right there on the the spot but they didn't. They saw M$-dollars.

Nokia doesn't need to a thing. Just clean up Symbian's UI but keep evolving the underlying OS which IS good (and therefore the very best basis to build upon). And keep a low profile. In time ppl WILL get fed up of numerous screens filled with icons or power-hungry widgets on an in-efficient java engine. Over time they will want to record phonecalls. And then they will want Symbian back!

I'm a new Symbian user after my years of Windows Mobile use. I defected from iPhone (2G) and didn't want to touch Android's splintered world or WP7's inability to do even the most basic things. And guess what, I like S^3! It's good, fast and does what I want, NOW!

So Nokia, stop Elop! Keep doing the things you're doing you WERE on the right track. Just needed some more time.

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Thumb Down

Time and tide...

>So Nokia, stop Elop! Keep doing the things you're doing you WERE on the right track. Just needed some more time.

..waits for no man. Product history is full of wonderful kit that was the best of its kind..but failed because it was late to market. If modern electronics companies have forgotten the Betamax/V2000/VHS lesson then more fool them. Being the best product does NOT guarantee success.

Anyway in Nokia's case they only had half the best product - the hardware. Their software was crap. You wanna see how bad? Use Ovi maps (maps.ovi.com) to plot a route from Llandudno to Stranraer. Two choices are offered - one goes via the Mersey Tunnel. The other goes via ferry to Northern Ireland. Gawd only knows why the software considers the M56 to be so objectionable.

Then there's the music app. Lacking in several features including 'Shuffle by album'. On startup it had to be left for nearly half a minute before I used it to give it time to catalogue my music (all 800 tracks of it, sheesh).

Then the whole UI crap and 'click guessing'. Do I double click? Single click? Click and hold?

Screw that. My HTC Desire doesn't have as good a camera and the audio is naff but at least the UI is intuitive.

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Windows

"Coventrated"*

That's what Elop's 'new strategy' has done. Makes me shake with rage, Amazingly, he'll keep his job, and his millions. Tens of thousands of others will be on the dole, wondering if they can feed their families.

*(It's what Hitler did to the English city of Coventry in WW2)

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Gold badge

Mission Crash and Burn

1. Plant Microsoft friendly exec at Nokia - Completed

2. Drop existing platforms for WP7 - Completed

3. Massively devalue Nokia stock - Completed

4. Microsoft buys Nokia/Nokia patents - Pending

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Mushroom

Was talking to a CEO the other day...

About this very topic: he replied to me "I'm not concerned by two losers joining forces". If MS buys Nokia they'll buy a company now bleeding money. Addind WP7 won't magically make the Nokia devices on par with the iPhone 5 nor with the latest Android niceties out there. MS's strategy now seems to be lawsuits against phonemakers (they make more money out the deal they settled than by selling WP7 phones). They'll probably buy Nokia for their patents. Nokia's is free-falling and the crash is going to be very hard: they haven't reached full fall velocity yet.

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Facepalm

Embrace, Extend, Extinguish writ large

It's exactly the same Microsoft strategy they used to wipe out many other innovative companies.

You can't say they don't think big or long term... if only they applied as much effort to innovative products.

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Megaphone

RE: Embrace, Extend, Extinguish writ large

but previous EEE executions have been to threats on their big money maker, Windows. Nokia was not a threat to Windows but Apple and Android are. As another mentioned, this is probably a poly to get Nokia's patent portfolio cheaply. Unlike others have mentioned, it will not and is not being used to generate profits for Microsoft. A couple hundred million is a drop in the bucket compared to what funds the company. I'm talking about the billions in PROFITS every quarter which come from Windows.

Microsoft's plan for these patents is to shut down the competition by making them too expensive and at the same time they'll be handing out WP7 or WP8 licenses like Skoal at a NASCAR race. I wouldn't be surprised to read about millions in marketing funds making an instant profit for OEMs while giving Windows Phone phones away for free. All in the name of cutting Apple and Google out of being in control of application API's and pushing Windows app development into the basement.

EEE is about protecting the money and a few million from patent licensing is nothing compared to what is threatened. That's their billions per month coming from Windows. I just heard someone tell me they use their computer at home about once per week now because they do everything on their iPhone.

SHOUT because there's a guy behind the curtain pulling strings people are not noticing.

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Bronze badge
Windows

Sendo?

No further comment needed.

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Unhappy

I can't see Google getting suckered a second time

once the Nokia IP comes up for sale.

If Nokia attempt to sell themselves to Microsoft, which seems inevitable, it would be illegal for any sale to proceed if Google table a better offer.

A fantastic scenario if you're a Nokia shareholder as the resulting share price premium will likely be astronomical as everyone scraps to own the biggest mobile patent pool likely to ever come on to the market.

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Anonymous Coward

Loss is easily explained.

They burn 20 euro notes to keep the snow off the roof.

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Anonymous Coward

Title

...and they do it in the basement.

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Holmes

Blame Canada

I think I said that before.

As I previously noted, and another poster here has done, everything is on schedule.

Dweeb

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Black Helicopters

Hmmmm...

"Nokia reported a negative margin of 4.5 per cent (+6.7 per cent on a non-IFRS basis), confirming it was paying people to take its phones away."

Not a very good way to stay in business.

But, perhaps staying in business isn't the plan....

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You should buy one

They are cheap, so it is not as if it will hurt you

And its obvious that Nokia will be dead in 2 years

No more Nokia phones

So any left become collectors items

The more so those still untouched in the original box

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re: You should buy one

particularly these N9 phones.

'Because I dont see anyone else making these. Sure, they're talking about them but only Nokia seems to make them and get them available to (some) ppl.

Perhaps I should pretend to be a developper and apply for an N950.

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How do I get an n950?

How do we apply to buy an n950. I'm a registered developer but I haven't gotten any notification from them.

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Anonymous Coward

Good point @You should buy one

I'd buy one. The current and next gen Nokia Symbian phones are really very good. Better HW than the iPhones/Androids, better selection of software in built than Android, better call quality, better cameras, better video. Only disadvantage is a lack of apps (and even then there are still quite a few). GUI not as polished, but still perfectly usable.

And they will be cheap and future collectors items!

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Blame people like me Mr. Elop

In 2010, I was responsible for 6 personal high end Nokia Symbian handset sales and took part in decision to buy 100 handsets for a company that hates anything taking photos (movie guys) as I told such a Nokia exist and does support mp4.

In 2011, I made 5 people give up the idea of buying anything Nokia and recommended the movie guys to ask RIM whether they can soft-disable camera. Why? Because this genius destroyed the remains of Symbian development with his Windows switch.

I am happy with my E71 here but I come from modem ages, anything supporting modern html/imap and couple of meaningful apps are enough for me. I just can't recommend Nokia to ordinary users expecting a full glory smartphone since future really looks dull.

Hope they will take down MS current management for them. That will be good for all IT industry starting with MS customers themselves.

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Facepalm

Next year this will be a case study for MBA students

I do wonder if the N9 as it is today would have happened without Elop, if what is being said about the development timelines are true. It's also possible the Windows Phone strategy was the right one.

Unfortunately Elop's execution plan of denying Nokia any profits for an entire year by following Gerald Ratner's awesome marketing strategy might mean Nokia don't survive long enough to get a decent Windows Phone out.

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FAIL

Ellop not cut out for this role

At almost every opportunity Ellop has proven to be an ineffective leader. I gotta give him some credit for recognizing some of the issues, but for the most part he is way over his head. He should have stuck to Meego and an alliance with Intel. Intel and Nokia must have had over $300 million invested in Meego. Sure Meego was a bit behind, and over budget but it was really a clean slate, state of the art software stack. The N9 proves this as it is not only the best Nokia phone built to date, but the only phone out there which rivals the IPhone on quality (In some cases ahead of it). And the software version for the Meego is still pre 1.0

Now Windows is a stop gap till Nokia can circle the wagons and try to reinvent themselves. Are they really going to take on another Meego project themselves. Can they afford it in terms of time, talent and financial resources.

Listen up Nokia board members. Get rid of Ellop. Send him back to America to do something he is more suited for like selling chicken dinners.

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Unhappy

Elop has effectively neutered Nokia

Even if they survive under Elop and remain an independent company, they will never again scale the heights of the old Nokia, and that alone is a great shame.

Nokia as an organisation is now cowed, and entirely at the mercy of Microsoft. It has no fighting spirit left. Nothing remains that made Nokia "special" in terms of doing things it's own way without relying on anyone else, and that is why I think many former Nokia fans no longer care what happens to the company.

Elop has broken Nokia.

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