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Why Nokia Is Toast
CWmike writes "It's hard to remember now, but there was a time when Finland was at the center of the cell phone universe. No more. Nokia is being killed by complexity. Along comes Microsoft with Windows Phone 7, delivering more complexity. My view is that Microsoft doesn't matter, writes Mike Elgan. Although Windows Phone 7 is a way better operating system than Symbian, Nokia's problem isn't Symbian, and the solution isn't Windows Phone 7. Nokia's problem is that it follows the losing strategies of the other losers in the market, and rejects the only two known winning strategies. There are way too many Nokia phones. This causes either choice paralysis, sending buyers screaming to Apple for relief, or buyer's remorse. Nokia should take the advice Steve Jobs gave to Nike CEO Mark Parker: 'Just get rid of the crappy stuff and focus on the good stuff.'" And maybe Nokia isn't toast at all:
reader high_rolla points out an interesting bit of speculation that the Nokia-Microsoft pact is part of a grand plan "to become the exclusive manufacturer of hardware for MS phones and tablets."
At one stage I was a Nokia user, then went over to Sony-E and am wondering about Blackberry, not liking the idea of a phone in my iPod, Windows in a mobile or the stuff that Sony-E is now coming out with.
John_Chalisque
He loves it when a plan comes together
I'd be shocked if Nokia were "toast". They're still one of the biggest handset makers in the world, and their name recognition alone is worth billions in the market. And while guys like Steve Jobs are going "simplify!", there are millions of customers going "Really? This is all you've got? Where are all the choices?". Just because Apple's strategy is good for Apple doesn't mean it'll be good for Nokia, just like Mercedes isn't going to pursue the same strategy as Ford. They're both still going to make a lot of money.
Life is hard, and the world is cruel
It pains me to say this is the a correct business move for both companies. Combined they have a much better chance of standing out in the crowd (other android-phone makers). Many will hate it, many will love it. A new Apple has been born.
"I'm taking this loop off." - Jack O'Neill
Nokia better come up with some exotic hardware that no one else can produce and tie WP7 tightly to it (so it's reliance on their hardware) if they want to do this exclusive thing.
Else they are completely at the mercy of MS, where MS can dump them for another hardware manufacturer and they can't drop WP7 without losing their customer base who has invested heavy in WP7 applications.
Both the "Nokia is dead" and "Nokia will thrive" articles say the same thing. They only differ in whether or not the authors think Nokia will follow the strategy.
The first article says that Nokia should ditch everything and release 1 really nice WP7 phone. This article says its their only chance, but they won't do it because it is against everything Nokia has ever stood for.
The second article says they will become the exclusive WP7 shop. Maybe they'll have more than 1 phone, but they'll be the only WP7 game in town, and they'll make really nice integrated phones that provide a slick experience (ala Apple). This is exactly what the first article says they should do, article #2 just says he thinks they will be smart enough to take this route.
Qt should be fine, too much heavyweight software uses it, and in worst case scenario - it's LGPL, ex-Trolltech people could pick it up.
... but considering main negotiator, it's not surprising they most likely didn't (though I'm not sure how workable it would be anyway, considering Metro UI...)
Still, sad - Nokia was in great position to say "want us to use winmob7? Allow Qt"
One that hath name thou can not otter
There's currently an unveiling going on covering Sony Ericsson's new products , seems to be Android phones loaded with Gingerbread, the "PlayStation Phone" included.
Microsoft today most reminds me of a coral reef in the Caribbean.
Still standing there, huge, menacing, misshapen and barnacle-encrusted.
But dead. The environment has changed around it and it can't adapt.
Nokia is a huge ship battered by the storm coming in toward the reef
for shelter.
What do you think is going to happen?
Where are we going and why are we in a handbasket?
Funny timing, I'm uninstalling Qt and Symbian as I write...
I think Nokia has fumbled too long between Symbian and Meego and now Qt; one can't get a clear sense of where they are going and thus, as a developer I must move to greener pastures.
Goodbye Nokia! Hello Android!
Be very, very careful what you put into that head, because you will never, ever get it out. - Cardinal Wolsey
Nokia isn't leading, Apple and Android are doing very well, RIM still has solid market share and MS is going to fight like hell for WP7. There isn't room for 5 players and even 4 is a stretch. It doesn't matter what happened in the past, Nokia was in a weak position and needed to do something. Bottom line is that the stage is set for the phone OS players and Nokia is not one of them, so they have to change where they fit into the eco-system.
Cite? Nokia's low-end phones are still produced in the company's own factories and in places like Romania and South Korea. Indeed, the company has called "Chinese slave-labor garbage" their major competitor in the low-end market.
In memoriam : Microsoft's previous strategic mobile partners. lol
Nokia has been amazing at undercutting all other phone manufactures's prices on the low end, yielding amazing sales in poor countries. Yet, now we're seeing Chinese companies who'll basically just copy all Nokia's products, and produce phone even more cheaply using almost slave labor, which'll obliterate into Nokia razor thin margins.
We're entering a time when Nokia's western low-end phones will run Symbian while other low-end phone remain simply feature phones because Symbian requires less resources than Android, iOS, Blackberry, WP7, etc. I donno how long that bright period will last of course, well maybe it'll depend most upon the marketing for Android, iPhone, Blackberry, etc.
In smart phones, Nokia could've easily run with MeeGo plus Andoird apps, giving themselves the largest app selection plus differentiation. It's dubious however that WP7 will deliver either the developers given that Apple and Android own the market currently, or the users, given that Android delivers all the choices you mentioned.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
To become the one and only maker of MS hardware? That is a position NOBODY wants, EVEN Foxconn is NOT that stupid. Because that is exactly what Nokia would become, a mere factory stamping out goods at FINNISH prices. Look at how nice it is to become the sole supplier for a certain Redmond based company when it comes to graphic chips... Nvidia, oh oops ATI. Loyaltie? MS knows none.
Have people really forgotten WHY Symbian came into existence? Do they not know WHY no other phone makers WANTS to be a MS only shop? Because the phone makers like most in IT KNOW what it means to be a MS lapdog and sought to escape it.
What kind of deranged mind thinks that ANY company would of its own choice consider becoming the next Dell to be desirable? Oh and that is NOT the Dell of the desktops where MS software is the near absolute ruler but the Dell of Windows ME, Bob, Vista! Dell by the way that is outsold by Apple which does NOT sell MS Windows.
It would be as if HP be loosing out in desktop sales and go all for the massive Linux desktop market to save its fortunes... might work... but not bloody likely.
Windows Mobile 7 is not some price that is hard to get either. Everyone phone maker out there can make a WM7 phone. MS is going to chance this when it has so much trouble getting any of its phones to markets already? It is a bottom feeder. The consumers have said countless times they simple do not want MS software on their phone. This is after all their Xth attempt at it, people have made their choice.
To be clear, Nokia used to have a higher market share then MS ever had. So it is trading what made it unique for a smaller market share?
Oh but maybe with WM7 it will create some great phones? Unlikely because it has failed to do so before. Nothing stopped Nokia from making the next or indeed the first iPhone itself. What both Apple and Google have shown is just how silly easy it is to create a new phone + OS and make it in the market. For that matter, so has Rim. Nokia didn't fail because it didn't have access to MS software, its competitors didn't and did very well despite OR because of it?
And here is the real irony: PC makers believe that unless their hardware comes with MS software it just don't sell. Apple doesn't count in this bit of logic. See the swift end of linux on the netbooks.
But on the mobile phone, this just ain't true. The OS makes VERY little difference in peoples choice. Even if it did, the sales figures clearly show that putting Windows on it will just chase people away.
Nokia had to either re-invent itself, possible with Linux as a base OR become one of the many hardware makers using an existing OS... and it did the latter with the least selling OS.
A brilliant move? Maybe for some MS stock owning CEO, but I think Nokia's slide to the bottom will only be hastened by this move. We shall see within the year.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
The #1 reason Nokia is toast is that Elop is still CEO, after what did last friday. The rest is secondary.
Despite all the evil MS may represent, I'm sure MS don't want to kill Nokia.
Like most companies, MS is only really interested in how the Nokia deal serves them. They really don't have Nokia's best interests in mind. When they get all they can out of the deal, they'll screw over Nokia like so many of their former "partners". I'm guessing that is what the investors are reacting to at the moment. Nokia could have done other things: (1)Push Meego. (2)Push Symbian. (3)Adopt Android. (4)Develop their own OS. But instead they went the choice with the fewest benefits.
There are many that would argue that going with Android would have made Nokia another "me too" phone manufacturer and less distinctive. I would argue how is going with MS any better. MS has already put some massive restrictions on WP7 so that one phone model really isn't very distinctive from another model in terms of UI. With Android, Nokia would have more the ability to customize it to their own purposes.
Well, there's spam egg sausage and spam, that's not got much spam in it.
If this quote is accurate...
Elop doesn't know what the fuck he's doing. He needs to steer the company back towards growth and away from the rocky shoals of loss.
Taking on Android is like trying to stop a train by standing on the tracks and putting your hands out and asking nicely to stop. Android's going places because the OS is usable and free.
Non impediti ratione cogitationus.
Nokia could have done other things: (1)Push Meego. (2)Push Symbian. (3)Adopt Android. (4)Develop their own OS.
(1) Tried, it's not ready enough yet.
(2) That platform is a zombie walking around asking for more brains... I mean, R&D budget millions to gobble.
(3) Join the race to the bottom, compete in services with Google who happen to control your platform. Feel the fragmentation.
(4) What? Create another R&D sinkhole, while MeeGo is still around? Just what Nokia needs now.
My exception safety is -fno-exceptions.
Nokia could have done other things: (1)Push Meego. (2)Push Symbian. (3)Adopt Android. (4)Develop their own OS.
(1) Tried, it's not ready enough yet. (2) That platform is a zombie walking around asking for more brains... I mean, R&D budget millions to gobble. (3) Join the race to the bottom, compete in services with Google who happen to control your platform. Feel the fragmentation. (4) What? Create another R&D sinkhole, while MeeGo is still around? Just what Nokia needs now.
True, but making a deal like this with Microsoft isn't a viable No. 5, when you get right down to it. Pact with the Devil and all that. And the GP is correct when he says, "like most companies, MS is only really interested in how the Nokia deal serves them." And that's okay ... the question is, is Nokia's leadership interested in how the deal serves Nokia, or just in how it serves Nokia's leadership? Something smells here, but I can't put my finger on it.
The higher the technology, the sharper that two-edged sword.
"eyeballs" aren't revenue unless you're in the cornea business.
And they don't have "control" of the living room, they just have alot of video game consoles which seem to be made at a loss. What exactly is the X360 doing for Microsoft?
It's not like everybody is using the Microsoft Video Store, and getting all their TV from the Ballmer Network, and Microsoft isn't getting money for every TV program they watch. (And neither is Google or Apple, despite their desire---the most successful is NetFlix, because they offer a simpler product and are good at it).
What phone "tie" to X360 is there and would make sense? The hardware & software is completely different.
Why do you want to access your video game remotely from your phone?
The best upside is that by working with Nokia they'll make Windows Phone 7 better as it will have better software design for real hardware.
Instead of grandiose "control of eyeballs", let's have Microsoft make a phone which doesn't really suck. That's plenty hard for them already.
Could it be that with Nokia dependent on MS for phone software, the biggest holder of smartphone related patents is no longer a threat to Microsoft? Apple and Microsoft have some kind of patent sharing deal, which is good for Microsoft, but does Apple no good against Nokia's phone patents.
And Google's pretty much on their own. Maybe Motorola's got some protection to offer Android, but I personally don't like the idea of an emboldened Microsoft waving bullshit UI patents as a threat to Android with nobody left to countersue.
Posted from my Android phone. Oh, I can change this? There, that's better...