Nokia’s difficulties….

Elop is turning into a disaster. If you need the details of why read this devastating post. http://communities-dominate.blogs.com/brands/2011/06/will-the-real-stephen-elop-please-stand-up.html

The authors theory of what has happened to Nokia can be summarised as;
1) Start of 2010 Nokia was struggling to bring out S^3 and previous iterations of Symbian were not competitive on touchscreen phones.
2) Nokia looked for a new CEO – Elop looked at what was going on and decided that they should stop throwing good after bad and end of life Symbian (this is before he got the job). He gets the job.
3) Symbian^3 comes out on N8 – to the surprise of neutrals in the industry (and evidently Elop) – although late (by a year) it is actually competitive (not withstanding TR’s pre-written review etc) and starts to give Nokia momentum.
4) Sales of N8 are great – for the first time in years Nokia has a hit smart phone. Nokia’s average selling price rises by 15% – which is unprecedented for them in recent times.
5) Elop sees it soon becoming impossible to go through with his original plan due to the N8 success. And here he makes his fundamental error (and why will be debated for some time I guess). In the notorious Feb 11 press conference he announces the end of life of Symbian 12 months before he has a successor WP7 phone. Quite naturally all momentum is stopped dead in its tracks and Symbian sales nose dive. Elops burning platform indeed occurs due to his “Ratner” moment. Nokia sales tank (look at their Q2 results) and they lose 50% share value.
6) MS then buys Skype which sends the carriers even further against Nokia (deep integration of Skype? Unless you’re 3 no thanks very much!) WP7 now looks less attractive (to carriers which is the most important customer base)
7) He is now back tracking furiously (Symbian goes onto 2016, N9 is announced, Qt is for S40 etc) but has he managed to completely trash Europe’s once proud flag bearer of hi-tech equipment?

Sad fact is he should have re-assessed what was going on and hedged his bets. No plans survives contact with the enemy etc. Announce intention to build a WP7 by all means on Feb 11, many manufacturers have multiple phone OS products – but you have a hit on your hands with N8 and Ovi store has been growing steadily. A developer evolution to Meego with QT was credible and compelling. If come the time you actually have a WP7 phone that is well received – and perhaps Symbian/Ovi/QT is not developing as an eco system – kill it then. But NOT before you have an alternative product to sell. That is business school 1.01 and no doubt it will be an interesting case study in the future. MS paid Nokia a lot to go “all in” on WP7 but did they pay them the $6bn of lost smartphone sales (estimated in the above post) in the past 2 quarters??

I confess interest in that I have a N8 and I am delighted by it. It is definitely a competitive touch screen OS – in some ways it is miles ahead, in others it could be better – so I am not saying it is the best OS – but it is (was) competitive. So I find Elops decision on Feb 11 very strange and did not recognise his memo for the truth (at the time – it is of course true now). I suppose only Elop really knows and I doubt he will ever really confront the real reasons as to why because it will be too painful but it is a fascinating story for those who take an interest in why people do the things they do.

Advertisements

Leave a Reply

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

WordPress.com Logo

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

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s