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Former Nokia Exec: Windows Phone Strategy Doomed
itwbennett writes "Slashdot readers will recall that back in January, Nokia CEO Steven Elop blamed the company's Windows Phone woes on commission-minded salespeople, who pushed phones they thought would actually sell. Now, ex-Nokia exec Tomi Ahonen is calling the Nokia's Windows Phone strategy 'a certain road to death.' He bases this grim assessment on UK market shares from Kantar Worldpanel: 'When Nokia shifted from "the obsolete" Symbian to "the awesome" Windows Phone, Nokia lost a third of its customers! In just one quarter!' Can MeeGo or Tizen save Nokia now?"
I think everyone who follows closely the industry was already aware of that fact. It was a shit move for Nokia, I'd go so far as to say it wasn't just a bad decision: the guys in charge should be prosecuted.
The royalties from their vibrating tattoo patent will keep them afloat...
It doesn't hurt to be nice.
Pretty much the only thing I see saving Nokia is Android. Make some awesome quality Android handsets and customers will return. Make them with a nice clean stock Android loadout instead of some dumbass custom crapware laden ugly UI and you'll stand out from the pack even more. (Geeks will embrace you too. Word of Mouth is powerful advertising!)
Official Heretic from the "Church of Global Warming". Proven right thanks to whistle blowers. AGW = Flat Earth Theory
Cause Microsoft paid them more than Google.
Nokia's Windows phones continue to tank, meanwhile sales of the 'dead' and most excellent N9 (which was killed to make way for Nokia's WP handsets) are doing well. People are clamouring for Nokia to reconsider its position on the N9. Will Nokia listen and respond in time? Probably not.
That's an easy answer, and a very unfortunate one for Nokia. It's a classic trojan horse. The Nokia CEO was hired from Microsoft. And suddenly Nokia became very MS-friendly... eventually becoming Microsoft only. And that's the whole story. There was really little benefit to Nokia, it was more of Nokia taking a big risk to help Microsoft. Great for Microsoft with no risk; big risk for Nokia for questionable gain. Even a dual strategy of Microsoft and Android would have made sense, but nope, why go with Android that is a major market force with lots of backing and third party support when you can put all your eggs into the MS basket with 1.5% of the market and a tiny fraction of the third party support. It's a shame, I don't know if the shareholders could make a lawsuit stick, but I'd be really angry if I had counted on the exMS new Nokia CEO being there to grow Nokia.
I know you're probably saying that as if it's bad, but in reality Google offers effectively no support to manufacturers who make devices for Android. Microsoft offers legal support to all manufacturers, and for Nokia they are offering technical engineering support and cash, which is a pretty good deal compared to what Android is offering.
So it seems to me Nokia had three choices:
There are pros and cons for each option, so it's easy to argue all day about which is best. In my opinion they chose the one with the best risk/reward ratio. Option 1 is the riskiest, but with the most reward. Option 2 is the safest, with the smallest reward. Option 3 is risky, but not as risky as going at it alone. Although many here on /. believe Option 3 is doomed to fail, those who use the WP platform see it as a rising star, and obviously Nokia sees the same thing.
He's been vehemently against Nokia's decision to leverage their smartphone strategy on Windows Phone. For more awesome reading explaining why, check this out.
As explained in the link above, it's not Nokia's decision to use Windows Phone on their smartphones that is the chief problem. They are, essentially, hedging their entire existence on the platform, which is a very bad bet for a company whose popularity has always been stronger in Europe, Asia and developing nations. It's almost like a Kodak in reverse in that they are, more or less, giving less importance to their bread and butter and more importance to a huge, HUGE risk. (Notice that HTC and Samsung, the top dogs in the non-iPhone smartphone world, use more of their resources for building Android and their own OS's than Windows Phone.)
The sole fact that, to this day and despite a very recent system update, Windows Phones still have the crippling text-message-of-death bug clearly demonstrates where Microsoft thinks they're at with the OS. I haven't seen any of the major players on Android/iOS commit serious time to Windows Phone yet; until this happens, it's a sinking ship.
There, FIFY. It is like C-people can't bother googling a company name before closing multi-billion dollar deals with them.
Rethinking email
Have you ever used maemo or meego?
Maemo is perfect for developers/geeks.
Meego is perfect for everyone else.
All the backends/insides are the same, BTW.
They didn't even need to change platform, just keep doing what they were doing already.
1. Continue on their own with Symbian/Meego/Maemo or whatever they develop in house and try to carve out a niche for a 4th (or 5th depending on how you count) OS in an already highly competitive market.
Given that they are really the only manufacturer making a serious play with Windows Phone, they were still in this position of trying to carve a market for a niche OS. It made no sense for them to abandon the traction they had already gained with their preceding developers models and return to shaky ground with a new, untested platform.
Moreover, Elop did his best to sink their flagship MeeGo device, the N9, by deliberately only selling it in low-income, low smartphone areas rather than the core markets you'd expect to place any device you actually want to succeed - and despite being made into a pariah, it outsells their entire Lumia (Windows) line 3 to 1. This is a device that that Nokia don't even list on their website as a product, but it still outsells all their Windows phones combined? I don't think Elop succeeded in his mission to make Linux phones look bad.
The bottom line is that despite taking his paycheck from Nokia, Stephen Elop appears to still work for Microsoft.
They really didn't have to gamble everything on a single platform. Other smartphone vendors manage to support multiple platforms - if HTC and Samsung can make Windows Phones alongside their Android offerings, why couldn't Nokia do that?
I'm guessing the cash injection from Microsoft came with the stipulation they don't support android. I haven't heard about anyone else receiving money from MS, so this is probably a situation specific to Nokia.
Further, if they go with Android they're probably looking at legal issues with Microsoft and Apple, without any help from Google, just like every other Android manufacturer.
Do you realize the massive patent portfolio Nokia has? Apple went after them, and if my short term memory is correct it ended up with Apple having to pay Nokia (can't be bothered searching for a reference). If there's one company who do not need any patent protection, it's Nokia. Patents were not a factor in the choice.
The big factor is that they believed they would have an easier time being a leader in the WP ecosystem, and that it would be a positive differentiation vs. Android. Any money from MS is a nice sweetener, but if it drove their decision then they were nuts: it's only a small part compared to expected sales.
But in the end, they still have to compete with the Android ecosystem on price and features, and WP is not a positive differentiation at this stage for most. For now, it's a flop and it would take a lot of faith to believe it can get much better quickly. Nokia said they want to refocus on low cost WP phones now, but with all the Chinese and Taiwanese vendors targeting low cost with Android and extremely dynamic with 2G/3G/AP integrated silicon (not all markets care about LTE yet) and a large experience of extremely cost optimized designs, good luck to them. I'd put my money on the East for low cost.
I'm quite pessimistic on Nokia strategy, and believe they would have had a better time differentiating on an Android base with superior hardware, camera and possibly a hybrid Meego / Dalvik system --- add on top of Android, but still ride a very dynamic ecosystem. But we'll see. Things won't be able to last for too long as it is with some big change happening anyway. As sideliners we can enjoy the drama, but let's have some thoughts for the Nokia employees (not the managers who killed the company with silly internal bickering between Symbian and Meego and poor execution, but the ones who delivered so many great products and innovations in the mobile space).
You're obviously going to get modded troll when you phrase it that way, but you're actually dead on.
Think about the possible outcomes of this for Nokia: The worst case is probably what is actually happening, which is that nobody is buying Windows phones. But even if they actually succeeded, what do you think Microsoft would do then?
Nokia currently has the option of Microsoft paying them to make phones nobody is buying, but as soon as anybody starts buying them, Microsoft is going to want Nokia to start paying them. Nokia ends up in the totally perverse situation that the more Windows phones they sell, the stronger Microsoft's leverage over them becomes, because demonstrating a market demand for Windows phones would get other phone makers into bed with Microsoft and thus into direct competition with Nokia.
Right now Microsoft needs Nokia more than Nokia needs Microsoft, but Nokia has put itself in the position that in the event Nokia succeeds, that situation reverses and then Nokia fails. In the long term it's totally lose-lose for Nokia.
It really feels like the focus on quarterly profits has doomed them. The Microsoft deal, if the market hadn't decided that it doesn't want Windows phones, would have been the most profitable for them in the short-term, but it completely ignores that inserting Microsoft into your supply chain does nothing but drain your margins in the long-term. And it completely ignores the very strong possibility, which has now been realized, that Windows phone would fail to sell.
This is such an amateur strategy mistake. I see it all the time from investors who think that they know how to run a business.
Something different (e.g. Windows Mobile OS) does not equal a competitive advantage automatically. You need to ask if there are actually any advantages to that something different. And the reality in this case is... no it doesn't. And then you need to factor in that the apps ecosystem is an area dominated by the network effect. The bigger the network of phones using the OS, the bigger the apps ecosystem. And apps are the biggest driver of smartphone purchases at the moment.
So, in effect, you've sacrificed the benefits of a big apps ecosystem to go with something different that provides no competitive advantage. In other words, you're dead on arrival.
They already made the N9, which runs Meego. They did everything in their power to kill it, including only selling it in a few markets, not listing it on their website, publicly announcing that they were abandoning the platform no matter how well it sold.
According to the figures in the article it is still outselling the their Lumia WP7 line 3:1.
They don't seem to be dropping Microsoft like a hot rock.