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Although Microsoft Corp. will now get the remaining of what once was the world’s largest maker of handsets, this will not help the company to become a serious vendor on the mobile market, according to Tomi Ahonen, a renowned industry expert. The analyst believes that the lack of vision at Microsoft and unwilling of Nokia to truly innovate for different market segments will further reduce market share of the combined company.

Steve Ballmer and Lack of Focus

Microsoft started its efforts to create operating systems for mobile devices in the 1990s when Bill Gates was heading the company. By the time Mr. Gates stepped down as the CEO in the year 2000, the company had Windows CE 3.0/Pocket PC platforms for personal digital assistants (later rebranded to Windows Mobile) with the same appearance as Windows 98/ME/2000 operating systems. Until Mr. Gates continued to be chief software architect as well as chief research and strategy officer at Microsoft until 2006 – 2008, Windows Mobile platform has been developing rather well, commanding 12% of the global smartphone market share in 2006 – 2007.

But after Steve Ballmer started to head further development of Microsoft’s mobile efforts, everything started to get wrong. Following several releases that had compatibility issues, Microsoft decided to scrap Windows Mobile in favour of all-new Windows Phone platform, aiming primarily customers, not businesses like its predecessors. In addition to new user interface, Windows Mobile is usually blamed for the lack of vision when creating a platform. First of all, Windows Phone lacked backwards compatibility with Windows Mobile 6/6.5 despite the fact that both were based on Windows CE technology. When it was released in 2010, it could only run on rather expensive hardware at the time; it took Microsoft two years to make Windows Phone 7.5 “Tango”, which could enable low-cost smartphones. Then Microsoft released Windows Phone 8 in late 2012, which is based on Windows NT kernel and is not backwards compatible with previous-gen Windows Phone apps. Needless to say that after three incompatible major OS releases in four years Windows Phone market share declined sharply to around 3.5% in Q2 2013.

“[Bill Gates] believed strongly in smartphones and Microsoft grew to become the second largest smartphone OS behind only Nokia's Symbian. At its peak, Microsoft handset partners owned 12% of the smartphone market using the Windows operating system. That crashed under [Steve] Ballmer's mismanagement and lack of focus. By 2010, Windows [Phone/Mobile] only held 5% market share in smartphones and had fallen from second place behind Blackberry OS and iPhone iOS and Android. From second place to fifth, and with the difficult transition in place from Windows Mobile to Windows Phone, actually the Windows Phone OS would fall one slot further down to sixth, behind Samsung's new bada OS at the time,” said Tomi Ahonen, who once worked as a vice president of Nokia and who is now among the most renowned experts in the field of mobile communications, in a blog post.

Stephen Elop and the Lack of Creativity

When Mr. Elop came to Nokia in 2010, he took the reins of the world’s largest maker of smartphones, who had competitive Symbian-based products covering almost every single niche that was out there back then, but only finding it hard to create a viable competitor for a single device, Apple iPhone.

In a bid to fight for the top segment of the smartphone market, Mr. Elop decided to scrap Meego platform that Nokia was developing as the “next big thing” along with Meltemi operating system for affordable smartphones in addition to Qt set of tools for software development for all three Nokia OSes (Symbian, Meego, Meltemi). Instead, in early 2011 Mr. Elop chose nothing other, but the Windows Phone 7 operating system which lacked a lot of things the main one being vision behind its development.

When Nokia controlled its smartphone operating system, it could address certain market niches and create products that would appeal business or consumer users. For example, the former needed QWERTY keyboards and extremely good battery, whereas the former would like to have rich multimedia capabilities, excellent camera and so on. Nowadays Nokia offers Lumia 1020 as the premium consumer smartphone, but now it cannot address business users, the market share has been stolen by Apple and Samsung. Moreover, first generations of Lumia only tried to fight Apple’s iPhone, but with the same feature-set and Windows Phone operating system it did not have much chances.

“Compare Symbian-based smartphone portfolio to Lumia running Windows Phone. The early Lumia were all total iPhone-a-clones. No QWERTY variants. No better cameras (even Nokia's own N8 had a better camera than the iPhone and all Lumias up to the current flagship 1020). The early Lumias did not support full Bluetooth, did not have microSD slots, did not have removable batteries, no TV-out, no HDMI-out, etc. All feature sets taken from Apple's iPhone and differing from Nokia past. Nokia had previously made bigger screens than (then) iPhone, Lumia did none of that (on early models). So we can see what was 'Nokia thinking' i.e. a wide product portfolio that caters to many Nokia customer types and regional international differences, vs. the Apple envy view from Redmond, epitomized by Elop and the early Lumia line. Make them clones of the iPhone. […] Now look at Samsung. They have taken every niche that Nokia abandoned, and produced devices for it. Both in smartphones and in dumbphones. And they dominate the handset space and keep growing and generating ever bigger profits. The strategy was not wrong, Samsung is proving it can be done. But Elop's vision ruined Nokia (handsets),” said Mr. Ahonen.

Will Microsoft Turn Nokia Around?

Can a team of sub-par players win the world’s cup? Generally no. Just like in sports, in business it is all the same. While Microsoft will indisputably be able to produce new smartphones at a faster pace than Nokia did, its lack of a unified mobile operating system that spans from low-cost handsets to high-end smartphones to advanced media tablets will hardly allow it to win a significant market share.

Moreover, since Stephen Elop will continue to rule the “Nokia devices division at Microsoft”, it is hard to expect the company to cover all the niche markets that are out there, which is something that once made Windows the dominating operating system on the planet. Even Microsoft itself does not believe that its own Windows Phone-based handsets will be able to command more than 15% of the smartphone market in five years, even despite of the fact that it will obtain Nokia’s sales teams, device distribution and sales as well as Nokia’s cheap Asha line of smartphone-like devices.

“So, if you think that Nokia could 'come back' now with Microsoft money, the opposite is likely. The issue before for Nokia was an 'Elop Effect' inside Nokia, trying to turn the dominating global powerhouse into an Apple iPhone-clone, and abandoning profitable market segments (to Samsung). […] The next generation of Lumia under full Microsoft ownership, will be no closer to what we all loved about Nokia, but will be ever more distant from it. They will be, however, all the bad things you hated about Windows or Office or Zune or Kin or Surface. The best people of Nokia's true talent have long since departed. The last remaining good skill people know and can see the writing on the wall, they will quietly depart too. The Microsoft purchase of Nokia handsets is a dead end. It cannot ever succeed, so as a career move, its bad news for those who were employed by Nokia handsets,” concluded Mr. Ahonen.

Tags: Nokia, Lumia, Microsoft, Business, Windows Phone, Windows 8, Windows Phone 8

Discussion

Comments currently: 22
Discussion started: 09/05/13 02:26:26 AM
Latest comment: 11/20/13 02:05:41 AM
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1. 
I guess he never tried a Windows Phone. The reviews are generally quite good.

So he thinks Nokia would have been better off with Symbian? Just like BlackBerry stuck with their OS way past its prime? Or I guess he thinks they should they have adopted Android, which has been a losing proposition for every hardware manufacturer except for Samsung?

Easy to be an armchair quarterback, but this pseudo-historical rewrite reads like "the moron's perspective" (http://www.hulu.com/watch/270623) take on the smartphone wars. Maybe he shorts Nokia's stock? That makes more sense than the story put together here.
2 0 [Posted by: bluvg  | Date: 09/05/13 02:26:26 AM]
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- collapse thread

 
I have not tried WP, but I am pretty sure it is head and shoulder with Android. However, I will not buy a WP phone because

My kids grows up with iOS. My wife uses OSx, and I use Android and Chrome. We will switch to Android phones soon, and WP is not on the list. Why give my kids a WP phone that is different from all their friends' phone, but not better nor cheaper.

The Windows experience has been so bad over the years that there isn't any love or excitement with anything associated with "Windows" or "Microsoft" anymore. If there is a choice, I will take the other.

So replacing the NOKIA badge with Microsoft badge will do nothing to increase sale, and I can only see the reverse.



2 2 [Posted by: Tukee44  | Date: 09/05/13 09:12:57 AM]
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I'm not so sure you can condemn it based on past Windows experience when Windows Phone really bears no resemblance to traditional desktop Windows.

Like many, you haven't tried it. You may prefer to buy something else, but doesn't not trying it make it rather difficult to give it that harsh assessment?
1 0 [Posted by: bluvg  | Date: 09/05/13 10:45:57 AM]
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Yes, but in one thing he's right: too many times the new smartphone os by MS wasn't backwards compatible. And they have yet to merge Windows (RT) start menu apps with Windows Phone...
0 0 [Posted by: Arend Hamming  | Date: 09/05/13 07:29:42 PM]
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It would have been nice if they offered an emulator or something for the old Windows Mobile apps, but at the same time, they would have looked pretty funky, and by today's standards, the app catalog wasn't that great.

The 7.x to 8 transition wasn't bad from an app perspective, but the part that sucked was primarily for those that bought newer phones that would not be updated (e.g., Nokia 900). Looking at how the carriers hold back even minor updates, though, I can't imagine AT&T, T-Mobile, etc. allowing a 900 to be updated to a totally different OS. We'd probably still be waiting for it even if Microsoft gave the OK!

It would be nice to have a more unified API between Windows 8 and WP, definitely.
0 0 [Posted by: bluvg  | Date: 09/05/13 08:19:22 PM]
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Android, which has been a losing proposition for every hardware manufacturer except for Samsung?


Right, I'm sure companies such as Sony, HTC and LG does not exist.
0 0 [Posted by: Samik Sengupta  | Date: 11/20/13 02:05:41 AM]
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2. 
shameful-

persons like elop are shame for humanity, why elop joined nokia why??
our company is like our nation,our family,our mother who give us financial protection,self-respect, meaningful life , a target to achieve .our company not gives a job only, it gives us entire life.

today just bcoz of elop nokia is like crying raped helpless woman and elop did it with own company, own family.

elop said nokia is not using android coz of samsung right.....just for one day just one day launch lumia 520 with jelly bean and see it will break all records if i am wrong change my name.

peoples like elop are worst creature of world there is no suitable abusive word for such person.

elop when u will die sure u will remember this moment how u ruined such a beautiful company,not only a company u ruined thousand of life, workers of nokia who lost their job just coz of your personal profit.

now i will never buy any nokia product in my life tribute to those workers,, this is really a heart-touching moment for me.

shame on u elop shame on u..

my frnd is in nokia and he is also going to resign
4 2 [Posted by: mudi1  | Date: 09/05/13 07:39:27 AM]
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So they should have stuck with Symbian? And ride it down a death spiral just like BlackBerry?

Or no, they should have gone with Android? And lose quarter after quarter as did HTC, Sony, LG, etc.?

The mobile world shifted under Nokia, and it didn't respond. Apple led the way, and Android shamelessly copied them, getting to market faster than anyone else. Samsung capitalized on that. This all happened before Elop--it has nothing to do with him. You may question whether or not they should have gone with WP, but if you think that Android would somehow have automatically solved Nokia's problems, you're just not facing reality.
2 0 [Posted by: bluvg  | Date: 09/05/13 10:56:42 AM]
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I am sure u read this funny stuff on other sites by googling why nokia is not on android. Frnd this all stuff is spreaded by MS just to make himself innocence . this type of stuff we see usually as this is also a type of marketing for that MS paid to sites for posting such stuff.

U said that I am imaging and u r in reality…….. ohh nice buddy.just coz of people like u, asians says that US citizens have iq euals to a chimp.they don’t use their own eyes they sees what websites shows and what their stars says to them in ad.

Now I am going to share something with u, correct me if I am wrong(welcome)-
Consider nokia on android- lumia 520 running on android jelly bean+8gb internal memory+dual core krait S4 SoC+720p recording VS Samsung Galaxy S Duos S7562 4gb internal+dual core A5,VGA recording. Both are equally priced, now what people will buy sure nokia coz samsung cpu A5 stands nowhere close to lumia’s S4 SoC its like haswell i7(s4) vs nehelm i3(A5),nokia has much better gpu,better camera,build everything. Nokia have outlets all over the world including small areas with best service support

Now just for ur information just see sales figures of huawei ascend y300 which is outselling sony,htc,lg in its price range why coz its best in its range and when it comes to nokia much respectable name than huawei so nokia will do even better.

Why htc fails- just see their product spec desire C(same price as lumia 520) having 600mhz A5…WTF.htc gives less spec at higher price,their support stands nowhere near to nokia,samsung. Also they are not robust design like nokia.

Why lg fails-same as htc,their entry level lineup is pathetic 320*240 resolution at price of xperia tipo.

Why sony fails- previously they made a big mistake of not giving expendable storage older OS etc .now just see their finencial figures (if u can understands) , Sony sold 4.6 million Xperia Z phones in 40 days and number icreasing day by day with ultra Z and recently launched xperia M is crushing samsung’s designs.sony is now on 3rd rank. Then how anyone can say sony fails only dumbass blindly believing on websites in their room said like that.

So if in anycase nokia comes on android I m not saying it will dethrone samsung but yes it will be number 2 with much better than today.
1 2 [Posted by: mudi1  | Date: 09/05/13 07:33:57 PM]
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The 520 is selling very well without Android. For a single phone model, the numbers are quite good.

Sony is far from out of the woods. They are hoping to jump from current 7th place--behind LG and Lenovo. Case in point: when did they start using Android, and when did sales start to improve? Those dates are NOT the same. In other words, Android is NOT a cure-all.
1 0 [Posted by: bluvg  | Date: 09/05/13 08:28:06 PM]
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MR Elop joined nokia to merge nokia with microsoft and did his job , may be expense of workers /shareholders /finland everyone else outside the microsoft .
The day elop joined nokia it was obvious microsoft would buy nokia , it was elop's only duty ,sorry for people think elop joined for anything else .It looks like Elop did everything in favor of microsoft ,destroyed alternatives etc , sad day for nokia
0 1 [Posted by: jagd  | Date: 09/05/13 04:41:16 PM]
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3. 
I totally agree that instead of WP, they should have gone Android, sales would have been exponentially increased.
The phones themselves aren't the problem, it's the operating system, and those too blind to see, or stubborn to change.
0 2 [Posted by: caring1  | Date: 09/05/13 10:41:02 AM]
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How are you so sure Android would have helped Nokia? Has it helped HTC? No. Sony? No. LG? No. It's helped Samsung, and only Samsung.

Have you even tried WP? Android looks rather unpolished in comparison.
2 0 [Posted by: bluvg  | Date: 09/05/13 10:48:33 AM]
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Nokia needed to compete against two smartphones that existed on the market back in 2010 - 2011. One was called Apple iPhone 4 another was called Samsung Galaxy S II.

Meego operating system could have been competitive enough against those two at the time. Remember that it was developed by both Nokia and Intel, until Mr. Elop scrapped the development.

More affordable smartphones could have run Symbian or Meltemi (remember that Qt allowed one app to be developed for all three Nokia platforms).
0 0 [Posted by: Anton  | Date: 09/05/13 02:49:26 PM]
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Symbian by that time was a patchwork OS, and not sustainable for the long-term. Nokia knew this. Meego was not ready, and they needed something immediately.

The only options left were 1) go Android, or 2) go WP. After Samsung. we see what happened to everyone else that went the Android route.
1 0 [Posted by: bluvg  | Date: 09/05/13 08:00:57 PM]
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The only Meego-based smartphone from Nokia (which was spec-wise comparable to Apple iPhone 4) was significantly delayed to September 2011, when it became outdated compared to Apple iPhone 4S.

Problem is that Lumia 800, which was launched in November, 2011, was based on similar hardware than N9. Its WP7.5 OS was not competitive against Apple iOS and even Google Android.

Current WP8-based Lumias still cannot match Apple iPhone 5 and leading-edge Android-based devices feature-wise... So, the choice Elop made was a bad one. Meego/Meltemi would have been better (especially when UI is considered).
0 0 [Posted by: Anton  | Date: 09/05/13 11:40:05 PM]
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I really don't follow.

Option 1: go with Meego:

- Nowhere near ready
- They'd have to develop it--and the dev tools--themselves and shoulder those costs as Symbian tanks
- Zero ecosystem to start and zero support other than what they could generate--with a completely new OS on the market

Option 2: WP

- Microsoft develops the OS, but they get preferential treatment
- The OS is already on the market, is getting good reviews, and has a growing ecosystem
- They get an influx of cash to support the effort (as Symbian inevitably tanks) and marketing
- Microsoft shares the responsibility for building the developer community and the tools

Really, you think they'd be in better shape with Meego? Rather than watch their Lumia sales grow, I think we'd be watching them in a death spiral just like BlackBerry.
1 0 [Posted by: bluvg  | Date: 09/06/13 12:49:08 AM]
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Here is the main point that you miss. Nokia sold 24.2 million Symbian based handsets in Q1 2011 (http://www.xbitlabs.com/p...rtphone_sales_q2_2013.png), more than Apple did in the same quarter (18.65 million - http://www.apple.com/pr/l...cond-Quarter-Results.html). Life-to-date sales of Lumia are now at 27.5 million units after 1.5 years on the market. Is that a success?

Symbian could sustain high sales in case Stephen Elop did not make the "burning platform" announcement in February, 2011. This is when Symbian started to sink.

Meego phone was launched in 2011. Moreover, apart from N9 Nokia also had N950, which was Intel Atom-based. In case Stephen Elop did not cut the Meego development, it could reach the market in a better state, but he threw all the resources onto Lumia (which sales in 1.5 years reach one quarter sales of Symbian). Nokia was profitable in 2010 and maybe even in 2011, it had all the resources to continue developing Meego and Meltemi. With Qt tools and vast Symbian installed base, the support for Symbian, Meego and Meltemi from software makers would have come automatically.

In late-2010 - early-2011 Microsoft's WP was on the market, but it was not competitive (the majority of Microsoft's mobile sales came from Windows Mobile, not Windows Phone), was not ready for mass market and did not have a competitive library of applications.

All Nokia needed in 2010 - 2011 was to start transition of high-end line to Meego. Over time, those phones would have become more competitive than WP-based Lumias simply because Nokia could implement better hardware support into its own OS faster. Currently WP8 does not support high-res displays, quad-core/hybrid application processors and a lot of other functionality.

Meego would also have allowed Nokia to build tablets. Windows Phone can only be installed onto phones, Windows RT is nearly dead and Elop failed to take advantage even from this one.

Well, Blackberry 10 was just late. Meego was commercially launched in 2011.
0 0 [Posted by: Anton  | Date: 09/06/13 08:09:23 AM]
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Android helped alot of that brands ,sony is back with android , it was non-existant before android at alot of country now back and selling nice numbers.
What you dont get is; give what customer wants,
Answer is simpe not a brain surgery ,your alternatives
a- Best phone
b- A phone with good price/performance ratio
c- a niche phone with specs tailored for spesific custonmer needs (business ,music etc )
If other companies could not understand these basics better than me ( an outsider to that world ) they should not be on mobile business
0 2 [Posted by: jagd  | Date: 09/05/13 04:55:52 PM]
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Give them Android then? Just like HTC? LG? And Sony is a mere shadow of their former self. They are not doing well with Android, either.
2 0 [Posted by: bluvg  | Date: 09/05/13 08:01:57 PM]
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4. 
Well, this is how the Free Masons think and operate. Laugh all you want, but this is true. This was a planned move for sure. I only see it now more clearly. What you guys need to know, is that this is no different from the other companies in question. Apple, MS, Sony, Samsung, LG, Google... they all work with the same rules (or absence of those rules).

0 0 [Posted by: Johan Steyn  | Date: 09/06/13 12:35:36 AM]
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5. 
No, Nokia could have been second to Samsung if they produced handset with Android and not leaving Symbian so early. Not on top but better than almost dead. As many have mentioned in other forums, this a play by Microsoft for acquiring Nokia.
I could have bought the Nokia Pureview 808 if they upgraded it pretty quick with just an OS change to WP but no, they thought it was too bulky/ugly and took their sweet time to create the Lumia 1020 which is not truly an upgrade from the 808.


Nothing will change. Microsoft is uncool and slow versus Google and Apple. They're also a mess right now, trying to be everything. It will be years for the next big thing which I just hope MS gets on.
0 0 [Posted by: zodiacfml  | Date: 09/06/13 02:20:34 PM]
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