"The company carefully avoided backing the wrong smartphone horse by plonking wads of cash on all of them."
Surely that only guarantees that you've backed the wrong one ?
Samsung has overtaken Nokia in phone handset shipments according to Q1 2012 figures from analysts. Ten years ago a Samsung executive told your correspondent the South Korean electronics giant was going to be bigger in phones than Nokia, and today that's apparently happened. The numbers come from Strategy Analytics and show that …
"The company carefully avoided backing the wrong smartphone horse by plonking wads of cash on all of them."
Surely that only guarantees that you've backed the wrong one ?
No, that also guarantees you backed the right one as well.
If you CONTINUE to back the wrong one, then you're screwed, but that's the trick - try different things, and back the ones that work, but can the ones that don't pay.
For those who care to study corporate history, the long term winners are not the one or two good idea exceptionalists (sorry, Dyson, Apple etc) but those who try different things and evolve (so the GE's, IBM, HP). You might laugh at the last couple of those, but take HP - originally a printer maker, then a computer company, now increasingly a BPO company. In fact, Nokia got where it is today by trying different things and picking the winners, because it started off as a rubber boot company, and even at one point made toilet paper, and by backing the winners it became the biggest mobe maker on the planet.
Sadly, when it demerged the non-telecoms activity during the 1990's, it became obsessed with itself, and that sowed the seeds of the current debacle, because its telecoms success persuaded the company that it knew best. Hence the endless stream of candy bar format phones. Arguably the way forward would be to cover a range of OS and formats, and maintain a plan B and plan C at all times. But Elop has seen that idea off.
Nokia did indeed at one point make toilet paper. Once microsofts rape is complete it will do so again, but this time it will only be issued to shareholders.
Well they could have made an open hardware standard where the OS is stored on a micro-SD card and loaded into memory each time you boot your phone. That way the customer could just buy any hardware with any OS. That's not rocket science, that already works for PCs.
Elop has bet the house on Microsoft because that is what he was brought to Nokia to do. Microsoft was never interested in the success of Nokia, obviously. They just wanted to kill the possibility of another successful open source mobile OS (Symbian or Linux-based MeeGo) which would have rendered their business model obsolete (unlike Apple, they don't have something some people are willing to pay a premium for, either technical excellence or shiny-shiny appeal).
The question is: why did Nokia shareholders agree to this. My strong suspicion is that Jorma Ollila, chairman of Nokia and of The European Round Table of Industrialists, the union buster, was so incensed with Nokia R&D at some point that he decided to kill it, no matter what. Ironic that he is also Vice Chairman of the Independent Reflection Group of the Council of the European Union considering the future of the European Union, after he's done so much to destroy European R&D.
Such a complicated theory which makes no sense. Symbian was yesterdays news in 2010, and MeeGo only existed in theory. It would have been a waste of time and money for Microsoft to kill either when iOS and Android were clearly the future.
We can but wonder: if there was no 'burning platforms' speech and Nokia kept on doing it's own thing, where would Nokia be now? I suggest they would be dying on their arse without any viable plan to revive them. I draw your attention the recent interview of the former boss of the Symbian Foundation here:
The important quote is "When I was at Nokia and we shipped a Symbian product and it was bad, in its worst incarnation we knew that if we just flipped the switch, we could move 2.5 to three million units -- overnight, no matter how bad the product," he tells me. "That was Nokia. That was Nokia's brand, we knew we could count on that."
When viable alternatives to Symbian came about, consumers switched on a sixpence.
Not a complicated theory if it fits in two paragraphs, is it. And remember that Intel was investing in MeeGo, so it may have been doomed but it wasn't obvious to everybody then... And some things in the strategy did even make sense, like basing the UI on Qt (Trolltech already had support for S60, and with so many things Nokia it was just a matter of improving the execution, which was slow given the horrible bureaucracy but not impossible).
As Shelley wrote:
I met a traveller from an antique land
Who said: "Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
`My name is Ozymandias, King of Kings:
'It was just a matter of improving the execution.'
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away".
> HP - originally a printer maker
What a bizarre statement (and odd that no one else here at the Reg has pointed that out).
HP was originally a manufacturer of sophisticated electronic tools (particularly test equipment) and components, such as amplifiers and oscillators. Then they got into calculators, small computers, and workstations (circa the 1970s). They didn't get into the printer market until the mid-80s, a good half-century after the company's founding.
As for what's happened with HP in recent years - well, the less said about that, the better.
That's based on sales, not shipments, surely?
Isn't the usual business matra spouted by the Dragons and other TV entrepreneur types:
"Turnover is vanity, profit is sanity"
Profit is what buys the beers...
"Profit is what buys the beers..."
Only for investors. For employees, and particularly directors, turnover (or rather operating costs) are what buys beer.
good luck getting a pay rise with little to no profit.
That's like saying 'the Titanic has taken on a little bit of water'.
I know we're British and all that, chaps, but come on.
The word to describe Nokia's situation is 'gangf*ck'.
And honestly, the Samsung satsuma has become the biggest fruit in the bowl not because of superior Hanguk horticultural husbandry. It has become so because someone took out the Nokia grapefruit and chucked it at the wall.
Nokia destroyed themselves by focusing on Symbian. I still wonder why. Samsung did well because Google gave them an operating system with a shot at reaching critical mass for free, and unlike Nokia they had nothing to lose by grabbing it.
And this is wrong too:
"Samsung's ultimate victory shouldn't be very surprising; the company makes consumer electronics of all kinds, and as the mobile phone became a commodity product, the skills needed to make money out of manufacturing them have changed to the skills with which Samsung is well-equipped."
Nokia's current phones are made very well, RIM's problems aren't in manufacturing and Apple went straight in at the top of profitability having never made a phone before-they just designed it and let Foxconn do the rest. Still, I won't deny being able to rapidly tool up a very comprehensive product range helped Samsung invade the market at every price level they could find.
I actually think manufacturing may be Samsung's problem: they make far too many phone designs just because they can. HTC are cutting back their range to ~5 Android phones and I think Samsung will soon too.
I beg to differ, at the risk of encouraging the flames. In the world of techies and city analysts it is received wisdom that Symbian was the problem, and the hardware was ace. But as somebody who is agnostic about many, many things, I think that's fundamentally wrong. Even today the aged N5800's that I've given to the kids can do almost everything that my shiny SGS2 can. But the problem with the 5800 was the ghastly plastic resistive touchscreen, the small screen size, and the thick candy bar format. You'll note that the 5800 and the SGS2 weren't contemporary, but my point is that software wise there's surprisingly little in it. And before people start carping on about the availability of a crapp store, the vestiges were there,albeit poorly executed. Throw in that Nokia's software update three years ago was notably better than Android's upgrade approach now, that Nokia maps is far easier to use and more practical than Google Maps, and the main difference comes back to the fact that Nokia's early smartphones weren't good enough hardware against contemporary iPhones and the like. The N8 was the first Nokia which had competitive hardware, but Nokia were playing catch up by then.
Received wisdom from where?
Symbian wasn't the problem on its own, and neither was Nokia. The problem was that the two didn't mix like they should have done. Symbian was expertly designed for constrained devices, but Nokia didn't really know how to use its cleverer features - also Symbian quickly ceased to become a genuine joint venture, and became basically an OS chop shop for Nokia, which didn't help (less targeted research, more shove OS's onto products in a hurry). On top of that of course, they didn't talk to each other properly, and you had two layers of bureaucracy where in a single company there would only have been one. Finally, neither side built apps, and neither side built UIs - Nokia built phones, Symbian built OS's.
> Nokia destroyed themselves by focusing on Symbian.
No. Nokia destroyed themselves by focusing on Windows.
Nice troll though.
>> Nokia destroyed themselves by focusing on Symbian.
> No. Nokia destroyed themselves by focusing on Windows.
No, Nokia killed themselves by changing their minds every few months.
Symbian is the future, develop this, no that, no the other way!
Meamo/Meego is the future, develop with Qt!
Symbian and Meamo/Meego are the future, develop both with Qt! (sigh of relief)
Actually, no, **** you all. Windows Phone is the future, develop with Silverlight.
Now bend over again, the next version of Windows Phone will need WinRT! (If you're lucky it'll still run your Silverlight but you won't have access to anything new.)
Telling their third party developers to throw away their codebases every few months is what killed Nokia, and part of the reason Windows Phone is flatlined.
No third party developers want to waste paid man hours on Windows Phone. Tiny userbase and they already know that it's all getting thrown away - so the only things worth doing are "coffeeshop fart apps", and things Microsoft or Nokia have paid you directly to write.
Actually no. Symbian was their bestseller, and Elop shouldn't have killed it. What they did before him was actually quite smart. They developed side projects to explore new markets so they would be ready when Symbian becomes unpopular. It would be a natural transition to Meego/Maemo driven by the relative sales of those models.
Nokia's big problem is that they killed off everything except for Windows. And at least Windows Phone is far from being ready, and while Windows 8 seems to reach a small part of what Maemo used to be able to do in 2008, it still falls into the same pitholes as the other systems by trying to please operators.
a parallel between a Korean company and a Chinese fruit with a Japanese dynastic name?
now there's a mixed metaphor...
Yeah right. Print the figures and we'll work it out for ourselves.
Next week : Burton Albion apparently came close to winning the Premier League this season. League table unavailable.
And the house of Windsor agrees to a DNA test for "Prince" Harry.
I'm sure it's doing great compared with other Windows phones.
My analysis data says US sales volume of 83,000 units in Q1 (of 175,000 global) so yes, it is relatively great in the US. Though those were the typical volume shipments in a few days of their Symbian devices. Oh and their launch ad spend was greater than all the revenue generated to date... but hey, it's early days in 2 years they'll be back and flying, like this parrot I have ere.
Its actually doing well when you consider that they dropped their price to $99 w a 2 year contract.
Much less than Apple or Samsung's smart phones.
In short, they are buying market share.
Indeed, the its blinding obvious that paragraph is utter horseshit.. Lumia is flopping bigger than even the optimists predicted.
But then shit OS and endless hardware problems will have surely helped it flop hard.
No - it's actually doing *worse* when you consider they dropped the price to $99, and still people wouldn't go near it.
In fact, when they shipped the latest Lumia with a serious software bug, they then dropped the price to $0.
Now they can't even give them away.
83,000 in US out of 175,000 global... in a quarter...
Look at market figures for all devices, and see how disastrously low those figures are - for Nokia it's a nightmare beyond the worst expectations.
If you want context, I'll take Bloo over the Lumia any time. It looks better, it freshens my toilet, and it flushes gently away leaving no nasty waste.
Selling lots of $10 phones may get you headline 'numbers' but no profits to back them up - more interesting to look at overall 'value' or even value of Samsung / other iPhone clones vs. iPhones.
The only sane metric is profitability.
I believe apple enjoys 40%+ of all the profits generated in total from all phone sales off all types from all manufacturers.
Quite clearly Samsung is only winning the race to stay out of the mire and only because android copied iOS and Samsung copied Apple's form factor!
And Apple, they copied nothing, I suppose....
I can't believe people are still wheeling out this tired "android copied IOS" meme. Ooh, it's a touch-screen OS on a phone, it's exactly the same! If anything it's more like Maemo.
More Nokia's loss,
Nokia are down from shipping over a million phones every single day.
so does ikea. they produce "furniture" the most but we all know what they're worth.
Actually we don't have a scooby what they're worth. Last time I looked their operations were privately held through a Dutch quasi-charitable tax structure into offshore companies that I suspect are beneficially owned by somebody living in tax exile in Switzerland. We can guess their turnover, then guess their margin, then guess their costs,then guess the net profit, then guess the implied buyout multiple, but that gives you a number hardly accurate to one order of magnitude.
If you know better then I'll be pleased to be educated.
The Economist did an analysis of Ikea's ownership structure a few years ago if anyone is interested.
Americans are stupid.
Stupid people want Windows Mobile ( because they're stupid ).
Nokia ships with Windows Mobile.
Therefore Americans are going to want Nokia phones.
But that's just the point. Nokia *didn't* do well in America with the Windows phone. Quite the opposite.
If corporations are people, can Elop be brought up on charges of attempted murder?
You're joking, but seems likely that the only hope for Nokia right now would be that Finland's government put Elop on jail for corporate sabotage and replaced him with some manager not on MSFTs payroll...
You have to look higher. Elop is just a stooge. As I said before, look at Jorma Ollila.
Elop did the correct thing in killing off Symbian.
Symbian could have been great. But the development direction never had clear goals, too much effort (and time) was wasted going around in circles. So it stagnated, and what's worse, got worse with cruft.
So Nokia was losing blood, it wasn't competitive in the smartphone biz, despite the hardware know-how. So what were the options?
iOS is closed, so no go there. WebOS did not hold, despite it's beauty. Meego, while geekily cool, wasn't there yet.
That left Android and (gasp) WP7. Personally I'd have loved to have a Nokia running Android, but that would have put Nokia in a fight for marketshare with entrenched rivals such as Samsung, HTC, LG, (as it was back then) Sony Ericsson, etc.
Microsoft on the other needed a dedicated, high profile OEM partner. All the others (LG, HTC, Samsung) were more invested in other stuff (namely Android) and did not exactly _need_ WP7, they just kept it around to cover their bases.
Bash Elop, bash Microsoft, hell bash anybody you like. But I hardly think what he did was stupid. Whether the gambit will succeed is, of course, another story.
He put all of Nokia's resources into backing a single (completely unknown) horse. That was beyond stupid. It was criminally negligent.
Meego could have been anything Nokia wanted. They simply had to work at it. Worth the R&D to own that chunk of the stack as a long-run item.
Android was (and is) a competitive market, but at least there is a market. It's the short term solid bet, even if it makes no practicable sense to sit on it long term. With Symbian to cover the featurephone range, it would have made a good source of income to fund corporate transition to something else.
WP7 is a reasonable medium term gamble, but certainly should not have been an “all in” choice. Everything about it is unknown. There is no market for it. Worse, the vendor guarding the operating system development has a terrible reputation of medium (to say nothing of long!) term consistency for developers, end users or “partners.”
Microsoft may “plays for sure” you, or “.NET, no Silverlight, no HTML5, no WinRT no…” you at any time. They have planet-wide enmity creating a highly disgruntled user base. They also completely fail at marketing. Utterly. Pants-on-head retarded. They do not comprehend the consumer market at all.
Taken together then, that’s a huge bloody risk. Despite all that, Windows Phone might still be worth it, depending on the back-room deals that get made, and the commitments Microsoft is willing to make to platform stability, etc.
I’m trying hard not to look at this from the standpoint of hindsight, honestly I am. But even when you consider “the information available to Elop at the time he made the decision,” he made a ridiculously stupid decision. It wasn’t just “he chose Microsoft and Microsoft are bad, herp, derp.”
The issue at hand is that “he bet the farm on a dark horse contender with a marginal reputation in an incredibly volatile, unpredictable and rapidly evolving market.” No backups of any kind.
Maybe it’s because I’m a sysadmin, but when I make decisions about my company with my CEO hat on, the first question to mind is “and what if that fails?” In an Elop world, the answer is “well then, we’re ****ed.”
Considering that numerous alternatives existed which could have formed the basis of adequate layered contingency plans, I don’t feel that I am going out on a limb here by saying “that’s just bad business.”