Nokia Finally Faces the Hard Truth

[PanterroR]

I know i'll never pay a single cent, EU or US one, for anthing that starts with i...

I'm more than happy with my Samsung Galaxy S:

 

[Centurion]

Here's some inside information that I have heard from a Nokia engineers son. Nokia is working hard on a new secret OS that will replace Symbian entirely in a few years time. I will try to fish some more info

There'll be plenty of fish for you this Friday. Nokia will be holding a keynote about its future. We should be seeing a roadmap for this year.

 

[Cashmere]

Nokia's CEO compares its situation with a burning oil rig: Either jump in the water or burn to death

By CHRISTOPHER LAWTON And JOANN S. LUBLIN

Nokia Corp. as soon as Friday could announce a partnership with Microsoft Corp., Google Inc. or both to adopt a new handset operating system.

Scrambling to revise its strategy and reverse deep declines, Nokia is in talks with Microsoft about supplementing the Finnish company's Symbian operating system with Windows Phone 7, according to a person familiar with the situation. If both sides reach an agreement, Chief Executive Stephen Elop is likely to announce the deal Friday, when the company is expected to present its strategy to investors in London, the person said.


In an internal memo, Nokia CEO Stephen Elop has described the company as besieged on all sides by competitors and in desperate need of a huge transformation. Plus: the company may soon announce a partnership with Microsoft or Google to adopt a new OS for phones.

Mr. Elop, hired from Microsoft less than five months ago, had already signaled that a major overhaul is in the works and hinted that the company might adopt an outside operating system.

In a memo to employees this week, he said Nokia is besieged on all sides by competitors and in desperate need of a huge transformation. Comparing the handset maker to a man standing on a burning oil platform who jumps into icy waters to escape the flames, Mr. Elop says dramatic action is needed to reverse a decline that has left Nokia "years behind" the competition.


"Nokia, our platform is burning," Mr. Elop writes in the memo, reviewed by The Wall Street Journal. "It will be a huge effort to transform our company," he adds.

A Nokia spokeswoman declined to comment.

Nokia has seen its market share in the fast-growing smartphone market taken by Apple Inc.'s iPhone and smartphones running Google's Android system. Research firm Gartner Inc. reported Wednesday that smartphone sales rose 72% last year from a year earlier, to 297 million units. Meanwhile, Nokia's share fell to 28.9% from 36.4%, Gartner said. Though sales of Android-based phones increased almost tenfold to 67 million units, Nokia's Symbian operating system remained slightly ahead of Android in the fourth quarter thanks to combined Symbian sales of Nokia and smaller handset vendors such as Japan's Fujitsu Ltd. and Sharp Corp.

Nokia's low-end handset business meanwhile faces stiff competition from Chinese manufacturers.

Mr. Elop on Friday is expected to announce a high-level management shake-up, with several senior members of the executive board expected to leave the company, the person close to Nokia said. Mr. Elop's plans are so secretive that even the executives aren't expected to know their fate until there are briefed Thursday, the person said. At the same time, the company has cast a wide net for strong software talent, people familiar with the situation said.

It appears the memo was aimed at preparing employees for what is in store.


Mr. Elop in the memo offers a detailed, blunt analysis of the handset maker's recent past. "The first iPhone shipping [was] in 2007, and we still don't have a product that is close to that experience. Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable," he writes.


He also says that the company's strategy of pushing its Symbian operating system while creating a new MeeGo platform isn't enough to keep up with competitors. He says that while the company thought MeeGo would be a winning operating system for high-end smartphones, at the company's current pace, Nokia will only have one MeeGo product on the market this year.

Mr. Elop writes that some of the blame for Nokia's position can be attributed to an attitude inside the company and a lack of accountability and leadership.

In closing, he calls on Nokia to shift its behavior, much like the man on the burning platform did: "Take a bold and brave step into an uncertain future."

 

[Cashmere]

The thing that baffles me about Nokia (and Microsoft) is that they are amongst the top 10 companies in the WORLD with the highest annual budget on R&D. Were people sleeping on the job? Nokia and Microsoft have been forcing winmo and symbian down consumers throats, merely ignoring the innovation taking place in their surroundings. W.T.F have they been doing for the last decade?

 

[bmer]

If you want an insight into the underlying reasons behind Nokia's decline you should read this excellent four-part article:

Part 1: Helsingin Sanomat - International Edition - Business & Finance
Part 2: Helsingin Sanomat - International Edition - Business & Finance
Part 3: Helsingin Sanomat - International Edition - Business & Finance
Part 4: Helsingin Sanomat - International Edition - Business & Finance

Here's an excerpt:

The next person to be interviewed for this article is a man who has a lot to say. He worked in the past decade in middle management positions within Nokia, for example in user interface design, conceptualising, and brand management tasks.
He does not mince his words, and in his view the ranks of Nokia's middle and senior management are altogether too crowded.
The foggy grey mass of the organisation critical hinders the progress of the engineers' clever inventions towards their intended destination in mobile phone handsets.

The man recounts a "thoroughly typical" example:
A novel application or feature has been dreamed up that should end up installed in a phone a year from now.
This is the beginning of a long day's journey to nowhere.
The first thing that is missing is the conceptualisation of the feature in question, and then comes the design phase, and after that the bedding of the feature into the phone.
People have to sign off on actions at every stage in the process for it to go forward.
According to the ex-manager, everybody who knows anything about this particular feature approves of the idea, albeit with one or two modifications.

"But then you run up against some Vice-President who gets cold feet, because he doesn't know the subject-matter. The innovation is going to tie up money and resources if it gets the go-ahead. He is very aware of this, and he sits on it. He might for our purposes be an engineer with a background in HVAC or systems engineering. He doesn't know squat about user interface software design."
"What he does know, mind you, is that developing this particular feature is going to require the input of fifty people for the next year ahead. He does not dare to commit people to the project, because they might be required elsewhere. For him, it is safer to freeze the innovation process or at least keep the handbrake on. Then in time the innovation will no longer be so novel after all, and it will not make any sense to carry it forward."

According to the ex-manager's own calculations, there are around 300 vice-presidents and SVPs within the Nokia organisation.
A hundred would probably be quite enough.
"If the company goes on with the current structure, one thing is certain, and that is that nothing will ever change."

 

[Top Secret]

Well, it's official: Nokia's will be running Windows 7.

 

[coolraoul]

Can't say I'm particularly pleased, but it was to be expected given the ex-employer of the new Nokia's boss...

I hope Nokia will not focus only on Win but develop its own OS in parallel. I really love Nokia's handsets, and hope Win can compete with Android... which I douibt, but at least they made their "revolution" with WinMobile7.

 

[Gene]

I'm pretty happy.

Been following the smartphone wars closely since I had my first smartphone O2 XDA2 Mini (i.e. a little while back).

I'm not fond of Apple, because I despise Apple, and I haven't really been that fond of Android, despite being a tech-user. With Windows Phone, no doubt there is a heap of work to be done, but it has all the potential in the world. They've done something different and something new in an industry which is new and open to change. Comparatively, both iOS and Android's UI paradigm feels like been done to death and there isn't much potential really left there anymore. i.e. its boring.

With Nokia and Microsoft effectively joining forces, they have a lot of work to do, but their sizes really means they can force their way into the industry, and in the end it only be good for the consumer.

People say that Android and iOS and the be all and end all of Smartphone OS. But with only 30% of the mobile phone industry represents smartphones. That leaves 70% of the market that is still fair game.

I say bring it on. I for one will probably get myself a Nokia Windows Phone.

 

[jack]

the good news is that their partnership is deeper then a simple software hardware exchange. with nokia, microsoft finally has a partner who understands the mobile phone market and nokia finally has someone who shows them how to do software in 2011. winmob 7 has great potential, personally i am already bored by android 2.3. the next thing from nokia could actually make me buy a nokia since their 3210

 

[bmer]

Video from the press conference (12 min):

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Well, they did exactly what I hoped they wouldn't. Elop already revealed that he had three choices. First one was to continue with Symbian & Meego, second one to add Android and the third to join WP7. Elop decided to choose the last one.

I hate to see Nokia abandoning their independence. This is an extremely risky bet by Elop, he basically plays with the future of Nokia by making the company reliant on Microsoft.

What this decision means: WP7 becomes Nokia's main smartphone OS. Symbian will stay for the transition period, which is estimated to take two years. S40 stays as the OS for entry-level phones as before. Ovi brand will in all likelyhood vanish completely as Nokia's most important services get integrated into Microsoft's. MeeGo is now going to be more focused on next generation models, especially on other devices than phones. It will also be directed more towards developers. WP7 won't support Qt which made Nokia developer community feel that they've been betrayed.


BTW Eldar just dropped another bomb. He has been wrong before so take this with a table spoon of salt at this point.

View attachment 4e2b241c0ae7e6f445ef4a70a8f8d0d7.jpg

 

[bmer]

Sorry for double post but Nokia's share has severely plunged, right now it's -15 % down!

EDIT:

Nokia has just appointed another ex-Microsoft exec as the head of US operations.

ESPOO, Finland, Feb. 11, 2011 /PRNewswire/ -- Nokia has today announced the appointment of Chris Weber as President of Nokia Inc. (US), and head of Markets, North America as of February 11, 2011. Chris Weber comes to Nokia from his own consulting business focused on helping companies develop world class sales cultures. He is a Microsoft veteran, who during his 16 years with the company held several senior executive positions in sales, marketing and professional services. Among his key roles were Corporate Vice President leading Microsoft's US Enterprise and Partner Group as well as heading the US EPG National Sales Excellence and Industry Organization.

 

[Centurion]

I hope Nokia will not focus only on Win but develop its own OS in parallel. I really love Nokia's handsets, and hope Win can compete with Android... which I douibt, but at least they made their "revolution" with WinMobile7.

Nokia is dumping Symbian. It won't perish today, tomorrow or this year but it won't be featured on Nokia's mid to high-end phones we'll see in the near future. WP7 will have no problems competing with Android. Android being open source is it's biggest strength and biggest weakness. To sum it up in one sentence Android has poor quality apps and Android users are unwilling to pay for apps. iOS is still THE mobile operating system to emulate and that can only be achieved with a closed eco-system which is supported by a unification of hardware and software. WP7 can potentially have more quality apps than android in 12 months time and won't suffer from fragmentation which is currently ever Android developers biggest nightmare.

Today's announcement by MS and Nokia is a golden partnership. Nokia is in desperate need of an OS and MS is in desperate of hardware. It's a marriage similar to Palm and HP. What's worth mentioning is that Microsoft have given Nokia the luxury of being able to modify and tailor Nokia to their phones. So it will be a case of "Nokia, powered by WP" as opposed to WP7 slapped onto a Nokia phone. This is an exclusive agreement that will allow Nokia to be unique and charge premium prices. HTC, Samsung or LG cannot charge premium prices because their phones are near identical and no phone from either manufacturer offers something rival Android products don't. This is why Nokia has decided not to adopt Android. It's basically bad for business in the long run.

Megoo will continue to exist but it has been relegated to a "hobby project" which will allow Nokia explore possiblity of running their own OS in the distant future. But for now their objective is to earn money in the short and mid-term. For that purpose WP7 is excellent. MS has already done the grunt work , developers are on board and MS will assist with development and marketing funds.

 

[klier]

I know i'll never pay a single cent, EU or US one, for anthing that starts with i...

Uhm......iDrive? Oh wait, LOL. You pay more than just the knob

 

[MikeJ]

It'll be interesting to see how things work out for the Nokia employees my town. Nokia currently has about 1,000 people working on Symbian here, and another 500 who are working on Meego...

 

[Gene]

It'll be interesting to see how things work out for the Nokia employees my town. Nokia currently has about 1,000 people working on Symbian here, and another 500 who are working on Meego...

I wish those people all the luck in the world. I'm sure its friggin stressful having your job in limbo like that, but at the same time I'm quite happy with the Nokia/MS deal. In fact, if they had a handset out now, I'd probably get it since I'm in the market for a high-end smartphone.

Nevertheless, some from news reports it sounds like most of those developers will be merged into the Windows Phone development platform. Programming is programming, and if you're a good programmer its easy to transition to another language. Not to mention, the .NET languages and tools are by far and away the easiest languages and tools to learn and utilise.

 

[jack]

via engadget.com

 

[Nicks]

Ovi brand will in all likelyhood vanish completely

Thank god for that. Ovi is even worse than Itunes

 

[Centurion]

Nevertheless, some from news reports it sounds like most of those developers will be merged into the Windows Phone development platform.

Don't count on it. Elops has already announced that he'll be doing some cleaning, so expect Nokia only to retain a small portion of the failed Symbian team. The department will most likely be headed by an outsider with vision and flair for what consumers circa 2011 wants out of their phones.

 

[Gene]

Don't count on it. Elops has already announced that he'll be doing some cleaning, so expect Nokia only to retain a small portion of the failed Symbian team. The department will most likely be headed by an outsider with vision and flair for what consumers circa 2011 wants out of their phones.

Fair call. In any case, someone loosing their job is horrible under any circumstances.

I've been reading all about the alliance since I heard about it this morning at 8am UK Time. Part of that, I've been reading the blog sites and the comments made by various people. I don't understand people... everyone wants choice and competition, yet alot of individuals (Apple or Android fanboys I assume), want to beat down this alliance. I don't see where the problem lies. The Microsoft/Nokia deal can only improve competition by hopefully adding a strong third player into the mix. If Nokia joined with Google, it would be continue to be a duopoly with effectively two smartphone OS's how smartphones should be, which in turn would stifle innovation. I mean if you take a look at Android and the iPhone as it is, their UI's are basically the same and there has been and probably won't be any drive to improve that UI ever.

So I'm all for this deal. Plus I'm looking forward to getting my first Nokia Windows Phone.

PS: Has anyone noticed how immature the Android team have been at this annoucement?

 

[Cashmere]

I know i'll never pay a single cent, EU or US one, for anthing that starts with i...

I'm more than happy with my Samsung Galaxy S:

haha, Tyc, the actual model number for the Galaxy S is i9000 so you have splashed out quite a few cents already

I reckon the WP7/Nokia partnership is a bit of a gamble but there is light at the end of the tunnel. They can both succeed if they devote they're resources to each other and work really hard at it. Hope things work out. I am already looking forward to getting back with Nokia / WP7.