back to article Foundering Nokia pushes 10,000 bods, 3 veeps overboard

Nokia will shed another 10,000 staff by the end of next year, and has shuffled its VP pack in the ongoing struggle to make money against increasing competition. It's not just the workers getting the boot this time around, three existing vice presidents are "stepping down ... to pursue other opportunities outside of Nokia", and …

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They're making the wrong one redundant

title says it all....

Backed the wrong horse - WP is too late and too limited.

Maemo/Meego had rough edges, but were better, more polished and had more features than WP.

sounding the death knell for Symbian they way they did was the second single worse mistake Nokia made. The first was Elop himself!

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Re: They're making the wrong one redundant

Oh, grow up.

Maemo/Meego would have been a 1-horse platform meaning it would have entirely reliant on Nokia to spend money on enticing devs to code for it. Let it die. Face it, it's not as if anyone's using it or coding for it. All it did was delay grabbing an OS not restricted to Espoo and cost a metric fuckton of money for no return on investment.

Nerds whining about Meego is possibly the most ridiculous whinge on the Internet, barring only nerds claiming that an OS that runs well on low specs is a bad thing (wtf?) which also happens all the damn time.

So what were Nokia's choices? Stick to S40/S60 and featurephones? Possible but low margin/low return. Probably a (slowly) dying market.

Android? Feasible, but requiring Nokia to do all the device drivers, no cosy-cosy relationship with Google for features, competing with Google on maps and services leading to likely marginalization of those services, and the likelihood of sinking beneath a sea of Samsung and HTC handsets and Apple lawsuits.

Or WP, which doesn't look like money now but throws in a big cash injection from Microsoft and "most favoured nation" status on builds, software, services and mapping. MS are a fair bet, given XBox history. They're not about to let their pet platform die just because Internet retards want them to.

Frankly, given that HP had already bought Palm at the time Nokia were forced to make their decision, I can't see that they had any option.

Like it or don't like it, that's your call. Just stop being a dick about it.

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Re: They're making the wrong one redundant

What's being a dick about it?

It was obvious that WP was a terrible move from the get go - an extremely late entrant to the market from a company with a history of failed consumer electronics products and shafting business partners. The Xbox does indeed stand out as a counter example, but I'll see your Xbox and raise you a Zoon.

New direction was needed, yes. But even a muppet could see that it was a bad choice, foisted on them by Microsoft's new man at the top.

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FAIL

What new direction?

What new direction?

Are you suggesting that they could have licensed Bada?

I don't really see that one flying, do you?

Come on, since we're playing Armchair CEO here and given the breakdown I posted above, what new direction are you thinking of? Because frankly, Android would have meant a profit write-off on every single one of Nokia's service offerings which would make the current restructuring losses look like dropping a 20p piece down the back of the sofa.

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Re: What new direction?

Your breakdown is nonsense.

There were no problems with symbian and maemo/meego were coming along nicely. The 'new direction' they needed was to get some UI design folks on board, and fire half the management. Cut the number of models down from the hundreds of similar-but-not-equal handsets they were chucking out and get all the engineers pulling in the same direction instead of competing internally on hundred of different teams. Nokia wasn't one company at that point, it was about 8.

By ditching what was at the time the world's leading smartphone OS for one from a company with a history of failing in this arena, they simply torpedo'd existing business and pinned their entire future to a lame donkey.

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Re: They're making the wrong one redundant

They should have licenced WP7 as well as producing an Android phone. When you're struggling you keep your options open.

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Anonymous Coward

Re: They're making the wrong one redundant

Care to discuss the N9 sales figures or would you prefer to just sweep those under the carpet?

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Re: They're making the wrong one redundant

@AC - Sure. Would you like to compare them to the Lumia 900?

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Re: They're making the wrong one redundant

While I don't think there was a future in Meego or Symbian I consider your justification for going with Windows Phone to be tenuous.

Nokia has to "do all the device drivers" for Windows Phone 7 and it's competing with Microsoft on "maps and services" too. What's the difference? Maybe you can point me to the Ovi store in the Lumia because I can't find it. None of the "value add" apps are preinstalled with the phone either requiring users to explicitly install them. Bing maps is preinstalled of course.

The main advantage of going with Windows was the big hat of money and other concessions that went with it - free licences, gold technical support, advertising subsidies etc. Longer term it represents an enormous gamble especially as Windows Phone has singularly failed to make a dent in the popularity of Android or iOS. Perhaps Windows 8 will give the platform a boost, or perhaps it won't.

Nokia is bleeding money in the meantime as these redundancies clearly demonstrate and one wonders if the layoffs are part of an effort to make the company look more attractive to a potential buyer.

I'd also point out that if they had gone with Android they could have skinned the thing six ways to Sunday, making it ooze Nokia styling and existing Symbian themes from every pore. They'd get to make the experience their own while still benefiting from a huge ecosystem brought about by a common platform. They could have their own store, and their own apps with it if they wished. They could have even stuck their own software stack on the phone to support QT developed apps ensuring they kept their developers happy rather than hanging them out to dry.

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Re: They're making the wrong one redundant

dogged -

They sold the N9 in a limited number of markets, with virtually no advertising. The Lumina 900 has has massive advertising, available in far, far greater markets, and in the US has been often available for free with contract.

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@DrXym

Couple of fatal errors in your argument.

Nokia have MS people on site coding their device drivers - no expense.

Bing Maps are (even right now!) entirely powered by Nokia Maps and Microsoft pay Nokia to use them.

Nokia Music (formerly Ovi) appears on every Lumia handset on the main home screen and is (apparently, I do not own a Nokia handset or work for Nokia or MS) extremely popular, displacing Zune/XBox Music/WhateverTheHellItIsThisWeek for many users.

Every Nokia service is fully exploited and making money. Would it, against free Google Maps/Play/TitleOfTheWeek? Unlikely. Very, very unlikely.

Had they gone with Android, all those skins would need to be rewritten with every Android release - or they could just not bother with updating their phones, like most Android manufacturers - and their low-end handsets would (WIldfire-class, etc etc) run like a one-legged tortoise because Android really doesn't support low-end hardware very well.

You have to remember how important the low-end market is to Nokia. Far more so than to HTC, Motorola or Samsung (and Apple don't even admit that it exists).

That leverage that led to the Tango release could never have happened with Google, even assuming that the garbage collection under Dalvik wasn't a horrific bag of crap.

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@dogged

dogged:"Android would have meant a profit write-off on every single one of Nokia's service offerings"

What's the point of owning services if you cant sell devices to consume them? If you can't or won't sell the services to anyone that does sell devices?

Nokia were losing their smartphone share and that part of their services market with it. Worrying about a profit write off when there's no profit to write off is a great way to lose a business.

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Re: @dogged

@Paul Shirley - I imagine they think they can sell devices, and as mentioned, Nokia Maps is actually making money already, based purely on Microsoft's licensing of it.

They may be wrong. If so, that's how it goes but really, I see so much hate for attempting to make a good decision. Just because it didn't support your (not specific your, just generic your) favourite mobile OS doesn't make it the enemy.

And it doesn't make Elop a trojan horse, either. I've tried to show here how the decision looks when you don't have a vested interest and aren't either a) consumed with hatred toward a particular company* or b) a fanatical cheerleader for some technology you feel a need to define yourself by.

*DISCLAIMER - alright, I'll freely admit to a hatred of the Cult of Apple but that's not relevant to this discussion so it doesn't invalidate anything here.

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Even with Qt, Symbian was doomed

What good is a smartphone platform no self respecting developer would ever code for unless bribed or forced?

Symbian was the shittiest platform I was ever forced to code for and the nasty end to end hacks like moving critical sections of the memory management into hackish macros instead of extending the compiler or language was unforgivable. It just didn't work. Maemo was ok... I liked it... but really, Nokia's biggest mistake was the lame ass approach it took to making phones... Series 30 and 40 were great... series 60 and higher were just garbage.

Nokia's biggest problem now is probably their name... no one wants to be seen with a Nokia... it's like being seen wearing a beer hat.

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Re: Even with Qt, Symbian was doomed

All the damage was done at Nokia long before Elop arrived, which is what few want to hear. We can talk about whether Nokia should have gone with Android, but the status quo was not an option. Nokia's smartphone market share was in a tail spin at the end of 2010.

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@ DrXym

"Longer term it represents an enormous gamble especially as Windows Phone has singularly failed to make a dent in the popularity of Android or iOS"

For Nokia, all the options were gambles. I think the MS partnership is the least risky given the reality of where Nokia must compete for sales. You have to bear in mind that Nokia are not competing with Apple, they are competing with the Android manufacturers, particularly Samsung. Nokia's ability to offer a different experience to all of the Android manufacturers is key, but their resources and ability to maintain the quality of their own OS offering in the face of the strength of Android is was questionable. So how to differentiate?

Their options were, as I see them:

1) They could have continued to spread their focus between hardware and OS, risking the possibility of not being able to invest enough in either to actually compete with the Android user experience, making themselves totally uncompetitive. 2) Or they could have focused on hardware, joined Android and risked being lost in the crowd of other cheaper manufacturers also running Android, particularly the Chinese in a few years. 3) Their third option was to focus on hardware but partner with MS to become their dominant manufacturing partner, leaving the OS development and investment to them but still having enough influence to steer them, meanwhile offering phones to the market that are genuinely different.

The supposed fourth option so beloved of commenters here (keep themselves different with Symbian or whatever) is actually in my opinion just option 1: spreading themselves too thin. It's a war of ecosystems now apparently, and I don't think Nokia's independent offerings could keep up with Android.

To me, that third option sounds like it has a chance of keeping Nokia in a decent shape. Microsoft has the resources and will to fight, and a heap of other potential levers available if they can execute them (Xbox integration, seemless PC Windows integration) that Nokia never had. The other options were never really options

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Re: They're making the wrong one redundant

Maemo/Meego would have been a 1-horse platform meaning it would have entirely reliant on Nokia to spend money on enticing devs to code for it. Let it die. Face it, it's not as if anyone's using it or coding for it. All it did was delay grabbing an OS not restricted to Espoo and cost a metric fuckton of money for no return on investment.

Apple seem to do rather well with a 1-horse platform. At any rate, no-one's using it or coding for it thanks to it being killed off a year back. Therefore also no return on investment. And giving up this upgrade path hastened the demise of Symbian, which would be the cause of the financial difficulties. But be that as it may, Maemo/Meego was killed off over a year ago and it's too late to lament for it now. The only relevance is that now Meltemi is also dead. Tempted to add that so is Nokia, but let's wait a couple of years for that to be official.

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Re: They're making the wrong one redundant

"Apple seem to do rather well with a 1-horse platform."

They also had their platform out 5 years ago, long before everybody else's modern smartphone platform.

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Re: They're making the wrong one redundant

@dogged

"Or WP, which doesn't look like money now but throws in a big cash injection from Microsoft and "most favoured nation" status on builds, software, services and mapping."

Or more succinctly and truthfully: be another OEM bitch of Microsoft.

"MS are a fair bet, given XBox history."

Xbox division is still losing lots of money. Nice job using that as a success example.

"They're not about to let their pet platform die just because Internet retards want them to."

Better an 'Internet retard' than some pro-Microsoft astroturfing shill.

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Re: They're making the wrong one redundant

Oh Barry, I knew you'd show up.

It was the "XBox division is still losing lots of money" lie that gave you away.

You pro-Sony FUD-spreading shill.

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Anonymous Coward

Re: @dogged

Nokia Maps aka Navteq was making money before Nokia bought them.

Where Navteq messed up was in not seeing Google as a threat while it supplied map data to Google.

There's more, but what's the point now?

Nokia dies a slow death, then sells off its assets now rebranded as Nokia L&C.

All said anon for a very obvious and good reason.

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Re: They're making the wrong one redundant

> Maemo/Meego would have been a 1-horse platform meaning it would have entirely reliant on Nokia to spend money on enticing devs to code for it.

You appear to be entirely uninformed.

With Maemo there was a whole community developing for it, but not only writing new applications but porting Linux applications such as Gnumeric spreadsheet and Abiword word processor. Maemo had a subset of GTK so many Gnome apps were relatively easy to port. I had written stuff in Python/GTK/Glade which would run on Windows, Linux desktop and N800/N900 without any coding changes. Maemo would also run OpenOffice.

Meego changed to Qt rather than GTK which was a problem because it broke existing stuff, though there was a project for running GTK.

The inheritor of all this is Tizen.

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Re: They're making the wrong one redundant

"Maemo/Meego would have been a 1-horse platform meaning it would have entirely reliant on Nokia to spend money on enticing devs to code for it. Let it die. Face it, it's not as if anyone's using it or coding for it."

Wrong, wrong and wrong. First, in Q4, Nokia sold more N9's than the combined WP7 sales from ALL manufacturers. So more people bought it than WP7. Next, you don'r have to code for it, Nokia was just on the cusp of realizing the Qt initiative. So a developer develops an app and then they could create install files for S40, S60 and MeeGo, So while each have a different install method, the code is the same. Nokia sells a lot of S40 handsets and a lot of S60; that alone meant an ecosystem, a very large one.

Just the Internet retards want WP7 to die? Look at the sales figures, it is quite clear not many want it to survive. Market share for Q1 2011 was 2.7%, Q1 2012 it was 1.9%. All that money, all that marketing and they LOST market share and became even more irrelevant. It doesn't matter how much money is thrown at it, it is just not going to work. They call it a smartphone OS but in reality, it is more feature phone that smartphone. That hardware is the same as Microsoft has it so locked down and limited that it is pathetic. How long did Microsoft let WM languish and they still are. Pet project or not, it is dead. Microsoft just doesn't want to believe that though, but sales show the truth and when MeeGo outsold it in Q4, that just speaks volume in how the market has said time and time again that WP7 is not what they want and have voted with their wallets.

Lastly, before Nokia decided to abandon S60, you do realize that they saw growth right? They went from 100 million per year in 2009 to 134 million in 2010. They even saw higher sales in Q1 2011 than what Q1 2010 had. The Elop calls it a burning platform and starts the WP7 path and sales fell. If S60 was a burning platform and they were selling over 134 million per year, or over 10 million per month. What is WP7 when they are selling less than 10 million per year? If S60 is a burning platform, WP7 is in an incinerator.

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Re: Even with Qt, Symbian was doomed

It was in a tail spin? 2009 they sold 100 million smartphones; most of which were S60. In 2010 they sold 134 million, once again, most were S60. So 34% growth is a tailspin? While Nokia saw 34 million more smartphones sold over 2009, Apple sold a total of 40 million at the end of 2010. So the total increase that Nokia saw was almost equal to what Apple sold. Even Q1 2011 Nokia saw an increase over Q1 2010. So they were on track to sell over 134 million smartphones in 2011 as well. Look at WP7, as a whole around 10 million will be sold in 2012. Nokia sold more than that every month of S60 phones.

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Re: They're making the wrong one redundant

One sold fairly well considering it had no support, the other is selling quite poorly despite enormous resources.

Begging the question "why" but there's where we swerve into speculation.

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Re: They're making the wrong one redundant

Some further up posted: "There were no problems with symbian"

The UI was like something from the 90s and wasn't getting any better. Symbian were pretty belligerent at times in requests to change anything, and so moving it into a state where it could compete for ease of use for the average man in the street used to a post iPhone/Android world was going to be an uphill challenge - I don't imagine Nokia could stomach dealing with it, and for once they made a sensible forward looking decision and dropped it.

Coupled with the fact that writing applications was unnecessarily long winded, nobody wanted to do it, nobody ever would (developers had over 10 years to get into it, and they chose not to), so no real promise of any kind of app store of the type its competitors could offer - again a big turn off for consumers.

Symbian ruled the business smart phone market at a time the smart phone market was only business, and there was little option aside from Symbian. It simply couldn't compete once other people got into the game - and really Symbian only have themselves to blame - they simply needed to be less arrogant and more accepting of change.

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Re: They're making the wrong one redundant

"Nerds whining....", "barring only nerds" - you know which site you're on, right?

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Re: They're making the wrong one redundant

An ability to recognize a species does not mean one considers oneself a member of a different species.

Consider it merely a reminder.

What we think and what we type here is pretty much bullshit.

Joe Public doesn't give a shit if his phone is Android or WP or even Symbian as long as it's a "good phone". He probably wants an iPhone because it has an (in my opinion unjustified) good reputation but sees it as an unreasonable expense.

Beyond "iPhone, Blackberry, HTC, Samsung, Nokia" it's all just nerds talking bullshit. The public don't care about OS.

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Anonymous Coward

Re: They're making the wrong one redundant

Replacing/improving the UI on Symbian did not require throwing away Symbian. I realise this is difficult for most people to understand, but it is none the less fact. The N8 is not all bad these days, and my N9 (meego etc.) is pretty good. UI != OS.

Prior to Eflop, NOK was selling more smartphones than Apple and Android combined. Just not in the USA. World != USA, and I wish the fuck Americans were intelligent enough to get a clue and realise this. NOKs "Americanization" with the influx of Eflop's old buddies from Microsoft is a guarantee of failure, and NOK will have failed within 12 months - the money burn rate cannot be sustained, and WP is not going anywhere in the market place, because Eflop has managed to piss of every carrier in the world, and he is too arrogant and/or stupid to realise that the carriers are NOK's customers. (Footnote: WP is an interesting new take on the smartphone UI, but it is so immature as to be embarrassing. It might have legs several years from now, but at the moment, no one wants it, and with good reason - better alternatives exist!)

Anyone who who can read a balance sheet knows why NOK earnings were depressed, it was a one-time write-off, something you do when things are going well! NOKs smartphone (symbian) sales were impressive and year over year growth was 27% IIRC. Less than the market growth, but when you are at the top of the pile, it is very hard to maintain the same growth as the underlying market.

The Symbian eco-system is large, especially in foreign languages, and WP is more or less non-existent. WP has a log way to go before it can be competitive, and NOK (the only real WP player if we are honest about it) will be bankrupt long before that.

Eflop is on track and I am pegging final meltdown during Q2 of 2013.

Dr. Dweeb

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Re: They're making the wrong one redundant

"Replacing/improving the UI on Symbian did not require throwing away Symbian."

True, but if you were to port a UIQ application to S60, you'd throw away a good chunk and what you'd be left with is a bunch of crappy framework classes with crappy APIs. I.e., you'd still be sitting your new UI on something that's far from any modern set of libraries in terms of ease of use and stability.

Nokia might have been selling more Symbian devices (I'll take your word for it) but Symbian was losing market share. Smartphone sales increases likely as not propelled it along with Nokia die-hards, but Symbian handsets were experiencing less growth that they should have been compared to their competition.

You're right about Windows Mobile though. Symbian beat it in terms of stability hands down (at least WM 6.5 which was my last experience of it). Windows Mobile had a .net mobile API which meant anyone could knock up apps quickly, but they rarely worked well because the underlying stuff was so flakey.

"The Symbian eco-system is large, especially in foreign languages"

Well Symbian supports a lot of languages (something it has over the competition undoubtedly), not sure I'm aware of a large eco-system so to speak though...

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Re: They're making the wrong one redundant

Someone here pointed ut they sold 134m Symbian smartphones, up from 100m the year before. It was also NOKs most profitable division. When you are the biggest in the world, by a large margin, it is very difficult to maintain the same growth rates as the market. Please re-read those numbers and compare what APPL and Android (combined) were doing at the time. And NOK had plenty of things in the pipeline. Americans really have no clue how big NOK's symbian franchise was before Eflop "burned the platform" and along with it NOK's profit and NOK's very future. USA != World, and NOK is a global company.

If the other poster's 34% volume growth (IIRC it was 27% revenue growth) is accurate, then it becomes really clear that Eflop is on a path to destruction, planned and now executed. The burning platform was invented to pave the way for WP and destroy everything else at NOK. The quickest, most dramatic destruction of a corporate giant and global market leader in the history of humanity.

Every other phone manufacturer in the world would give ANYTHING to have numbers as bad as NOK's figures last year - Eflop saw profitability as a liability for his real masters, so it had to be destroyed. Job now done. He has now hired his useless cronies from MS in key positions as well. The assimilation will occur shortly and I predict WP will still fail. Eflop and MS simply do not "get it". The customers are the carriers, and they hate MS and Eflop personally, with a passion, and they are quite large enough and powerful enough to do without either forever! Who cares if a few people buy a WP phone on Amazon? it is irrelevant in the great scheme of things.

I had an HTC windows mobile 6.5 (or whatever it was called). It was a company phone and it was diabolically bad. WP 7.x is sort of an OK take on a touch UI, not bad IMHO, but not anything to obsess about.

Dweeb

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R&R?? Rest & Recreation?? Shouldn't that be R&D? Research & Development?

Unless all the guys from R&D got shifted out in the last batch of "purging". I think the first to go should be the ex Microsoft guy, just for signing that rediculous deal with Microsoft for the Smarthpone OS.

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Holmes

What's this "ex" shit?

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Terminator

bright side

Stop talking about the future King of Microsoft like that.

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No chance that Elop is one of those 10,000? Where's all this M$ cash he was suppose to be bringing in?

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Stop

It's not going well for Nokia. A lesson there to us all about complacency I think.

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Anonymous Coward

Complacency

It is also a cautionary tale about not letting foxes enter the chicken coop.

No partner of MSFT has ever had a good ending. Not one of them.

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Anonymous Coward

Re: Complacency

No partner of MSFT has ever had a good ending. Not one of them.

Yeah, HP, Dell and Asus have never made money shifting hardware with MS operating systems- oh wait. You lie again Barry.

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Paris Hilton

Never heard of vertu before

Guess I'm not rich enough.

Damn those are some ugly phones though.

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Re: Never heard of vertu before

They look destined to do a Burberry - luxury designs for the rich and famous, leading to cheap knock-offs, popular with chavs. I'm sure I could get the Vertu look by popping to the nearest market stall and purchasing the nastiest looking case for my [insert handset name here].

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Re: Never heard of vertu before

Not just ugly but extremely vulgar too. I suppose some rich people, Russian oligarchs etc just want to flaunt their wealth by buying vulgar tat and Vertu is there to capture that market.

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Get tar and feathers ready for Elop.

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FAIL

... and success follows because?

I can't see any way in which this ends well for Nokia. They've pulled the rabbit out of the hat before, sure, but this time?

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Re: ... and success follows because?

If they are to survive, they need to get rid of Elop. He is no magician, if anything he is a puppet with Balmer pulling the strings.

Nokia was profitable until Elop enacted his plan. Nokia saw sales growth in the smartphone market, until Elop enacted his plan. The share price of Nokia was over $10 until Elop enacted his plan. If they lose another $1.40, they face being de-listed. How will Elop survive that? Even the members of the board have to look at their stock options and see that they are now toilet paper.

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Mushroom

Let them die

Nokia is the past, they had their time in the Sun

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jai
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bs = business speak?

[C]ompetitive industry dynamics are negatively affecting the Smart Devices business unit

That's business speak for saying "no one likes our products, but it's obviously the fault of our competitors and not our fault at all" ???

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Meh

Whatever happens to the hardware sales of Nokia, they will continue as a services company earning money from the IP list of Patents.

What did Apple pay them in Patent charges last year? $350M??

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Living on IPR income?

Nokia might survive in some truncated form on income from IPR, but it's not a long term plan. Without being big and innovative they won't generate any new IPR and eventually one of the large players will get fed up of paying the fees and just buy them out. It already happened to Motorola's hardware biz.

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