I think it would be good to talk a little about the “Burning Platform Memo”. I have never really addressed it as much as I should. Tomi Ahonen on the other hand has talked about it a lot. The interesting part is that when the memo came out, Tomi Ahonen really agreed with it.
He did! In a level so deep he even said following:
“The point is that I – Tomi Ahonen – TOTALLY AGREE with all major sentiments in this supposed memo. I am not in denial about any of the issues reported in it, as being problems with Nokia. I am finding astounding faults in how it is written – on specific items that to me, are not professional, and to me, could not have been expressed as they are written. That is why I feel this is a hoax. I have never said in this blog that the main points of that supposed memo are not true. I AGREE with the memo, ok? I just believe, that a Nokia CEO would not be making these basic errors in basic facts. Are we clear now? Tomi fully agrees with the ‘sentiment’ of that memo. Not partly agrees, fully agrees! Ok?” [1]
What did the memo say so that Tomi agrees so much with it? These are some key points from the memo:
- Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.
Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range. - The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience.
- Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.
- Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.
- We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough.
We haven’t been delivering innovation fast enough. We’re not collaborating internally. - Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.
And these are same topics from Tomi’s blog (told you he said he agrees):
- “Nokia had somehow managed to offer some of the most innovative phones, with the best customer satisfaction, while also offering many of the cheapest phones – and to do this all profitably. What we know from applying competition theory – is that it must be, that Nokia was not really facing ‘full competition’ up to 2006. Motorola was a weak rival, they were drastically lost in the transition from 1G to 2G, and they had their brief hurrah moment with the Razr, which they could not carry further and fizzled away. Several of Nokia’s traditional rivals, Siemens, Philips, Panasonic – quit the handset business. In Smartphones the biggest rivals to Nokia came from North America – where smartphones were still considered only to be business phones – hence RIM, Palm were the main offering. And then there was the little HTC out of Taiwan with the quirky Microsoft Windows Mobile OS. Of Nokia’s ‘real rivals’ Samsung, Motorola, LG and SonyEricsson – all made smartphones primarily on the Symbian operating system where Nokia was biggest co-owner, so Nokia would never be ‘blind-sighted’ by rivals doing something wild and weird – like Apple managed with its bizarre touch-screen phone.” [2]
- “At the ‘customer satisfaction’ end, where Nokia was head and shoulders above all rivals in 2006, after Apple came onto the scene, today clearly the world’s highest loyalty is with the iPhone. Nokia lost the corner where it used to rule as the best phone at usability.” [2]
- “The worst part is that its ‘partners’ all abandoned Symbian and went to support Google’s Android – so Nokia smartphones are not even ‘second best’ in that category, being stuck using the obsolescent Symbian OS, which no matter how much you may love Nokia, is not up to par in terms of usability compared to iPhones or Androids. Yes, Symbian is getting better, but this is a race of catch-up, and Nokia has to also prepare MeeGo its new OS, which is the only one that can hope to fight for the future.” [2]
- “Nokia is not fighting on even terms for customer love, it is losing that fight. We saw it in the UK customer satisfaction survey last year, when even those Nokia current owners who did say, that they wanted their next phone to be also a Nokia – were not willing to recommend Nokia to friends – they were, in effect, ashamed to own Nokias. This is not a recipe for market success in loyalty. Nokia has just about lost this front, of the war already. Compare that to Apple owners – who will stick their brand new iPhone in front of the noses of anyone, to show how incredibly cool and clever their latest iPhone is. That is the difference. While Apple owners proudly display their iPhones, Nokia owners hide their gadgets in shame. If Nokia had been managing to make a come-back, then in Q4 they should have sold Nokia N8 models in comparable numbers to Samsung Galaxies and iPhones and HTCs – they did not. Not even close.” [2]
- “Then the innovation front. Nokia has been promising us wonderful things, but has not delivered. Rather, Nokia has issued apologies and delays. Take the N8. It would have been a hot phone in early Q2, before the iPhone 4, if facing off against the iPhone 3GS and very early Android devices. But it got onto store shelves for Q4, by that time there was the ‘Retina Display’ iPhone 4, and the magnificent Galaxy 2 series of Samsung phones, and vastly upgraded Blackberries and HTCs and Motorolas etc. The N8 could have been a contender half a year earlier, but was not shipped in time. Nokia was not fast enough, or – its rivals had learned to become faster than Nokia, whichever way you want to see it. Now what of the truly hot new phones? Apple created the phone in 2010 that had the sharpest screen ever produced (not Nokia). Among the major brands, Sharp created the world’s first phone with a 3D display (not Nokia). And Samsung’s Galaxy Beam was launched in 2010 as the first phone with built-in Pico Projector (not Nokia). Around 2005 – 2006 – 2007 – 2008 Nokia top end N-Series and E-Series phones astonished the industry with phenomenal technology – remember the N93? With 3x optical zoom – the ‘real’ zoom that only ‘real’ cameras have. And with TV out. With QR reader. Etc. A technology masterpiece, years ahead of rivals. Now Nokia has lost this lead, and its N97 or its N8 or its N900 or its E7 are only ‘me too’ devices, nowhere near the real global leadership. Nokia has lost the battle in the second of the corners.” [2]
- “And what of the last of the three fronts, the low cost corner? ZTE and Huawei and G’Five and other Chinese and Indian manufacturers are carving up the low-cost markets. Nokia is there, but is losing the low price war. Part of it is Nokia’s brand, trying to do ‘world phones’ but these markets need their own peculiarities, like dual SIM slots for example. Samsung was there a year before Nokia doing dual SIM slots for its low-cost phones. As to low cost smartphones – yes, the ‘marketing spin story’ sounds good, that Symbian was designed to run on phones with modest technical requirements, ie weak power CPUs and low memory requirements etc, but Moore’s Law moves on, we have faster CPUs at low cost, as well as more memory at low cost. Samsung introduced its bada OS to target low cost phones – and had the most successful new OS launch ever selling over 5 million bada devices in its first half-year, and meanwhile Android – being free – is being used by the low cost manufacturers like ZTE, Lenovo, G’Five etc to sell cheap smartphones in the Emerging World markets. Nokia is fighting a three-front war, and is losing at all three” [2]
Those were the six topics he agrees with the memo so much he had to really underline that “Tomi fully agrees with the ‘sentiment’ of that memo. Not partly agrees, fully agrees“. Fine. We should not be surprised. Here’s Tomi’s blog writing captions prior to memo. First of all he aligns quite weel to the “loud explosion, which suddenly set his entire oil platform on fire” part:
“For the first half of the year 2010, Nokia grew rougly as fast as the industry. It ended year 2009 with 39% market share in smartphones. At the end of Q2 it had 39% market share. Then in Q3 and Q4, suddenly – catastrophically – Nokia growth slowed to anemic, for the first time for as long as I can remember, Nokia’s quarterly growth was the slowest of any of the biggest 6 smartphone makers, and far slower than the industry. Nokia’s market share crashed to 33% after Q3 and down to (about) 28% after Q4. In six months, Nokia destroyed 11 points of market share – it abandoned one quarter of its total market – in half a year!” [2]
Furthermore, Tomi ahonen made it clear that Nokia’s dive was unlike anything he has heard before:
“This level of Nokia market share loss is pretty much unprecedented. I have been a close follower of global business for over thirty years, I honestly do not remember any such instance in any industry where any major global brand lost a quarter of its total customer base in a period of only six months. Even airlines with air crashes or devastating strikes do not suffer this badly. Cars with ‘unintended acceleration’ (ie ‘killer cars’) like Audi experiences in 1995 did not destroy a quarter of their customer base globally in six months.” [3]
And even finds the situation so bad he described it as a death-spiral and compared to Motorola (falling down to 2% market share):
“Nokia’s market share is in death-spiral, crashed from 39% to 28% in just six months and warnings from management suggest Q1 will continue the bad news, so it may end somewhere near 24% by end of March and who knows where the bottom is. Motorola was in a similar position in 2006. They had 21% market share. The crash-dive started, Motorola went from very profitable to very unprofitable, and lost customers everywhere, and the blood-letting ended in 2010 when they managed to stop the decline – and found themselves with 2% of the market.” [4]
So Tomi indeed was not denial of Nokia’s problems. He was afraid Nokia might lose market share to some unknown rock bottom. But then we get to the memo. When it got out Tomi said he agrees with it but finds certain things incorrect and therefore thinks it’s a hoax. You probably read it before that he is finding astounding faults in how it is written – on specific items that to him, are not professional, and to him, could not have been expressed as they are written. So what were those things?
- Statement about Apple owning 61% of the ‘over 300 dollar phone’ segment is patently wrong, more proper would be 38%.
(Would need to check. This could be that measurement stick was not unit sales but profits, where Apple indeed takes huge chunk.) - The memo mentions MediaTek but it does not mention Chinese brands like ZTE, Huawei, G’Five etc. by the name.
- Memo dismisses Samsung and talks only about Android. This ignores Bada. Also, Tomi Ahonen wants to point out that “Samsung is using its world-record speed to catch up on Nokia (and has now in public even stated that its goal now is to become number 1).“
Good point, Samsung should definitely have been mentioned more in the memo. But that would only add to the “platform is burning” intent, not somehow revert it. - Tomi Ahonen agreed that Nokia has recently been executing poorly, and its early steps in new areas have been clumsy. But in his opinion Nokia did not “miss big trends“.
Perhaps it is wise to refer to my english translation of the T&T article (visit link) as it points out that Nokia did not miss new technology, but missed the trends themselves. So Tomi actually was wrong here. (One bullet here or there, no big deal, moving on.) - Tomi Ahonen could see, that last summer, when the N8 was again delayed, and Symbian S^3 had not shipped, that perhaps, perhaps a Nokia CEO could say, they were ‘years’ behind. But not today. Symbian S^3 sold on 5 million handsets, on only 3 Nokia models, vs Microsoft’s brand new and fresh ‘from the ground up’ OS, Phone 7, which on about a dozen phone models from several manufacturers, shipped 1.5 million units in the same period.
Good argument, good point. “Years behind” sized gap was indeed a bit narrower when bringing in Symbian^3. It would have been nice to have MeeGo ready, too but it wasn’t as we have read before from Story of Nokia MeeGo: (visit link) - Furthermore, Tomi Ahonen did not buy the statement of “by the end of 2011, we might have only one MeeGo product in the market.” In his opinion if the CEO wanted, he could easily accelerate MeeGo development and give it resources and bring more devices to the market. (Time to read the Story of Nokia MeeGo in the previous link if you did not do so yet.)
- Qt is not mentioned in the whole memo. Apple or iPhone four times and Google or Android four times but no mention at all of Qt.
- Memo says “Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes.” Tomi points out (refers to Canalys numbers about Android OS overtaking Symbian in Q4 of 2010) that the Canalys report was not supported by any other report.
Now let’s get this one straight here. Canalys is not mentioned in the memo. And it’s Nokia CEO speaking. he has on his table almost full set of contracts for shipments that will take place in Q1 2011. He knows that in week or two any contract made will no longer ship in Q1 2011 but Q2 2011. He should be quite aware if Nokia has somehow “reversed” the trend of losing market share to Android. So is he refering to Canalys? Could be. But he knows it’s the first report of something that either has already happened or will happen before the end of quarter. I find it weird Tomi counts this as something “Nokia CEO would never say”, considering the info Nokia CEO should have in front of him.
- No mention at all of NTT DoCoMo, Nokia’s biggest remaining partner in Symbian.
Now Tomi actually was then – and has always been a bit off with this topic. Why would there be mention of NTT DoCoMo? NTT DoCoMo never used Series 60 UI so there was no direct dependency. Heck, NTT DoCoMo got its phones from Fujitsu, Mitsubishi, Sony Ericsson and Sharp – not Nokia. Nokia stopped selling non-Vertu phones in Japan year 2008. Oh yes, according to Wikipedia NTT DoCoMo users could not install C++ apps to their phones. So no matter the user base, there was no 3rd party developer ecosystem benefit. - There is a contradiction between ecosystem chapter and “years behind” chapter.
- Tomi Ahonen agreed about the fact that Nokia loyalty and customer preferences are in decline, and that is very bad for Nokia but could not understand why UAE is in the list, especially since according to Tomi “Nokia has been bleeding markets share in China and in India“.
As said, he agreed on the memo, found some details to be lacking and added some very good points to the topic. I assume Tomi could have helped to fine-tune the memo. Actually, I totally encourage to read Tomi’s pre-strategy change post about memo. It is here: (visit link)
What I find rather interesting that Tomi Ahonen one year later said that “so-called facts in the memo were wrong throughout“. I hope he won’t go on that path again now that 2-year anniversary approaches.
But my short thoughts about the memo:
- Was it damaging?
Absolutely. CEO Elop said that himself. - Was it planned to be leaked out?
Of course not. There would have been no benefit in such. - Should Nokia CEO realize it will leak out anyway?
Definitely he should and absolutely he did not.
You see this is the problem: Stephen had (I don’t know but hope still has) faith in his employees. He assumed they do the right thing. My previous post had tons of stuff about lost Nokia values. Those were things Stephen was bringing back before I left. Respect, trust, honesty. Now there were employees not worth the trust as they leaked the memo. Stephen sticked with the honesty and admitted it was his writing.
I’m confident he would have never written the memo the way we know it had he known it will leak out. - So was the memo even necessary?
Not in a million years.
If your company is in trouble, do not create a panic mood by telling everyone that “platform is in fire”! Encourage people, fix the problems in internal operations, focus, focus, focus. Don’t distract people with fire alarm.
So we do agree with Tomi that memo addresses right topic but does it in a harmful way. And we both agree Nokia had done better without it. That being said, let’s have the memo rest in peace. Nokia cannot act as if it never happened but they need to move on, not stick with some past blunders.
Kudos to your analysis! you’ve expressed exactly what I thought of the burning platform memo. I strongly suspect the man who leaked the memo is an avid fan of Symbian inside Nokia, and Elop’s memo literally cracked his bubble of illusion. The guy also didn’t realize how big the damage that he caused.
I guess the big remaining issue is whether Elop needed to panic Nokia. I’m going to stand by my previous analysis that Nokia needed panic. In fact I still think it needs panic and likely more panic then it has. Nokia is still reacting far too complacently to their situation.
Elop was facing a situation where Nokia institutionally had for many years a strong emotional investment in the Symbian to MeeGo transition. People were emotionally invested in a plan that in his opinion had failed. He needed to turn the ship and turn the ship fast. He knew he was going to get tremendous institutional resistance to jumping the company through hoops as quickly as possible, and he was right.
Using that sort of extreme language made sense. Elop made a command decision that Nokia was going to reposition itself with respect to a disruptive technology earlier than it absolutely had to. That means deliberately losing existing marketshare to focus on technologies that would at best serve a smaller market. That is a very, very hard thing to get a company to do. Had he softened the language he would have wasted years.
RIM is a nice counter example here. RIM moved for the QNX strategy in April 2010. They released BB10 in Feb 2012, 22 months later. Burning platform was Feb 2011, the first Lumia was January 2012, 11 months later. Nokia is a bigger company with a more complex product line, and a more diverse market. Nokia also has a more cautious and slow moving culture. Under normal circumstances what it should have taken Nokia longer, not 1/2 as much time. If we assume it took Nokia 150-200% as long as RIM from Feb 2011 we’d be talking about Windows Phone, Lumia being their flagship products 33-44 months out from Feb 2011 i.e. Nov 2013-Oct 2014. Imagine where Nokia would be today if Lumia were a 10 months away. Imagine where it would be if Lumia were 2 years away.
The alternative universe isn’t hard to picture. Nokia’s burn rate sinks the company and Nokia is being sold for the patents. There is no Nokia. What Elop and burning platform bought Nokia is the time to make a turnaround even possible.
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One can look at the reaction of Nokia since the Lumia 920 has been successful and Nokia is supply constrained. Instead of the fast pace of change they’ve returned to being careful risk adverse and deliberate. Heck if anything Nokia employees need more burning platforms to make it clear that they can’t stop refocusing and creating a value add premium brand.
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For example March 2012 Verizon announced that Windows phone is the core of their enterprise telephony strategy. In the year since then
– Major institutions and governments have switched to iOS.
– Samsung has announced and started positioning the SAFE (Samsung for Enterprise) program, a collection of technologies to allow companies that wish to adopt a Galaxy to get an out of the box enterprise solution.
– RIM has released their business product.
Conversely Verizon a year later still doesn’t even have Nokia’s line of phones, no 920, no 620s. The only step closer they are is at least there is one 822 phone on their network. Verizon is not going to give Nokia 5 years to meaningfully begin implementing their Microsoft enterprise strategy.
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For example Nokia has indicated their core sales strategy is to go after new customers. The only Windows phone on Sprint’s Network is the Motorola ES400S, a 2 year old device running WP6. They have 0 phones on the network with most of the new customers. And where they do have the most phones, AT&T is the network with the most experienced smartphone user base.
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For example. Nokia is not branding themselves in the USA. I still talk to people in the industry, every week who don’t know who Nokia is or have terribly wrong information about them. If people in telco don’t know who Nokia is very much, they have an urgent need to develop their brand identity.
What did Nokia do this week to fix their problems? If your answer is nothing, then I think that answers why the Burning Platform Memo was necessary.
It is interesting to look at the take of another Ex-Nokian, Horace Dediu from asymco.com, on Nokia’s response: http://www.asymco.com/2009/07/07/assessing-nokia’s-competitive-response.
2007.There would be no response within the first year, meaning there would be no perceived threat of any kind. No process change, No roadmap changes and no business review. Apple is not considered a competitor.
2008.There would be plans made to respond with press releases, dismissing the challenge as a non-threatening “positive” for the industry. No process changes, no product plan changes, no business model changes. Apple would not be considered a competitor except in “high end multimedia” (invisible in any of the segments Nokia uses to define markets).
2009.In the third year, product development teams would be asked to begin roadmapping some of the hardware features that would keep Nokia ostensibly competitive (unfortunately for Nokia, hardware is not what sells iPhones). Results from these efforts would emerge in 18 to 24 months. Apple not considered a competitor except in “high end converged devices” (i.e. a few consumer segments/categories are considered vulnerable).
2010.Realization that iPhone is a threat from new dimensions (user experience). Planning begins on reshaping the software base as a market-driven (not technology-driven) asset (5 year cycle). Apple begins to be evaluated as a competitor in devices and services, although still not compliant with current market definitions.
2011.The realization that the iPhone competes as a platform. Planning begins on repositioning Symbian/Ovi. Products planned in 2009 begin shipping–this means first capacitive touch screens but crude, almost unusable software.
2012.The realization that the iPhone is an integrated product and that integration is a key to competitiveness enters management consciousness. Planning begins on organizational change and a realignment of incentives to account for this new threat. Crude shuffling of internal assets and management musical chairs begins. Organizational change amounts to mostly new names for old departments. Touch screen phones with slightly better software begin shipping (similar in feel to Blackberry Storm from 2008). Incentives are added for employees (in across-the-board performance objectives) to hit user experience targets.
2013.Management begins planning a new organization structure that takes into consideration the fundamental causes of iPhone’s success: integration, software, user experience over the objections of sales and markets org that depends on shipping plastic to distributor. Another reorganization that is slightly more rational and aligned with the market is initiated. The plan is to have the assets in place by 2019 to compete effectively as a platform.
2014.First products that are roughly comparable with iPhone version 1 begin shipping. The required software redesign started in 2010 is coupled with the integration efforts. Nokia’s response to the iPhone has begun.
@Sander –
Great article! That was rather funny. This sort of casualness and lack of urgency at Nokia is a deep deep character flaw in the company. It would be one thing if after careful thought and consideration they came up with great plans. But to take a long time and then not plan well … is enough to possibly kill the company.
That author, Horace, recently has said that he believes the core problem with Nokia at this point is, “the dependence on operators as primary focus of requirements and business model”. Which I’m not sure if I understand, from my perspective it seems like Nokia is mostly indifferent to the requirements of operators. Operators ask for X with the promise of billions of dollars, and they tell them to go pound sand. I can’t think of any phone manufacturer more hostile to operators than Nokia. And BTW this is not Elop Nokia got in huge fights with US operators all during the 00 decade and got themselves mostly kicked out of the market. I gotta figure HTC, Samsung, LG… are at least as accommodating abroad as they are in the USA since that seems core to how they do business. If anyone is operator led I’d say it is then. Moreover, even Apple would say that AT&T taught them the phone business and dependence on AT&T’s requirements and business model is why the iPhone is where it is today, what worked for AT&T’s customers worked for the world, more or less.
Obviously operators can be shortsighted, but especially given the breadth of Nokia’s operator channel doing what operators want should produce rather excellent products.
About the “the dependence on operators as primary focus of requirements and business model”:
If I am correct he is saying that Nokia gets its requirements and business model from operators, not from their own R&D. That would have been true to some extent 2010, I don’t know what now. I know few very small features – good features – that were obviously required to the phone UI but were never put into actual product before operator required those. They were obvious UI improvements but not seen worth the trouble prior the operator requirement.
Couple that with the fact I’d say it was around 2009 when tone towards operator requirements changed from “we need to do this” to “why do they think we would bother to do this”?
To me it looks like Nokia acted much more quickly that Horace predicted. The Qt announcement was in feb 2008, which is rather quickly.
The dependence could be on European operators. Nokia became the biggest in the GSM era, which was in the beginning a European affair, AFAIK. The way business was done then has defined Nokia, I can imagine.
Interesting remark about the Apple and AT&T relationship. Apple is seen here as the device maker that is least dependent on operators. Example: the seamless handovers between WiFi and phone network for data traffic. In Symbian this has never been implemented, and the reasons behind that people guessed was because the operatirs wouldn’t like that.
@Sander
anon and I had written about this before. But generally new platforms develop on a carrier. Arguably:
Verizon = home carrier for Android
AT&T = home carrier for Apple
T-Mobile = (when they came out) home carrier for RIM/BlackBerry
the seamless handovers between WiFi and phone network for data traffic. In Symbian this has never been implemented, and the reasons behind that people guessed was because the operatirs wouldn’t like that.
In America the carriers love that. The financial models for most carriers is that they want customers to subscribe to 3G/4G data plans and not use much data. Up until 2012 3G data was sold at a fixed cost for 2g (or sometimes 4g) of data. So semi-frequent light use, where the person feels they need a data plan but don’t use much data is ideal for the carriers. The iPhone was the first phone to really implement that model perfectly, it is one of the many reasons iPhone customers were some of the most profitable customers those generating higher subsidies thus allowing Apple to make more money.
This reluctance to allow higher usage is why up until recently tethering a computer wasn’t allowed, except for more money on phone plans.
The dependence could be on European operators. Nokia became the biggest in the GSM era, which was in the beginning a European affair, AFAIK. The way business was done then has defined Nokia, I can imagine.
I think that’s true. But European carriers don’t seem to be deeply strategic. They are kinda boring. I suspect this is mainly because they don’t have to be. European population centers have enough population density that delivering signal is intrinsically profitable. Everyone would rather have good, cheap access and not be making complex tradeoffs if it were possible.
We talk a lot about SmartPhone here but… I’m watching a T-mobile commercial aimed for international, particular Mexico and the advantages of using a QuadBand GSM dumb phone with T-Mobile. Well I can think of someone who makes a QuadBand GSM … and it isn’t even mentioned.
One thing I keep wondering about is Nokia not selling the Asha to the low end of the USA market. The phone is obviously successful elsewhere. It goes for about $120 in India and electronics are more expensive there. At $100 retail MVNOs on prepay might be willing to subsidize it down to $0 or something like $29. The Asha is clearly better than the phones on most prepay plans, and frankly dual sim would make a lot of sense for US prepay plans.
This isn’t a high margin segment, but it is an easy way for Nokia to establish a good relationship with many of the MVNOs who could be pushing the Lumia for customers that want data. Also the Asha customers seem like good future recruits for the Lumia 620s.
I know that Nokia used to sell feature phones in the US when general statement about Nokia was that it is “non-existent” in US market. But were those advertised? I don’t know. With Nokia it is safe to bet for “no”. But I do know that European operators wanted single-SIM version of the dual SIM phones. They did not like the idea of selling dual SIM devices and that’s why those are not seen in Europe.
Ashas seem to be targeted to Asian market, I have no clue if Nokia understands that Lumias and Ashas do not compete each other so they could promote both in US.
If you ask in certain circles, you get to hear that Microsoft has “for sure” denied Nokia sales of other OS devices in US when the co-operation deal was signed. Even though I’m not a huge fan of Microsoft I still count that option out.
But were those [US feature phones] advertised? I don’t know.
You gotta go back to hit Nokia doing a big advertising push. The Nokia 8110 and 7110 were very popular here. OKP had wanted to sell phones in the USA but never
did.
There have been Nokia ads, particularly when Nokia was selling to US consumers directly, But they just didn’t make any sense. For example I remember them pitching high end Symbian phones that sold without a subsidy but they didn’t even work on the then expensive carrier (Verizon). Who was the target market?
There are a bunch of problems that would have required focus to fix…
1) The USA is majority CDMA and as we’ve talked about Nokia is weak there.
2) In terms of GSM Nokia lost interest in the USA very quickly in the early 2000s as the USA was still mostly at that point a dumb phone market and not even one with huge usage as a percentage of population. So America’s GSM networks (AT&T) were way behind Nokia technologically for the first half of the 00s. Nokia didn’t have the right products, except in the dumb phone arena where they could have done very well.
3) Nokia mostly wanted to sell to consumers not carriers. I don’t think they really understood that non-smartphone customers (which was more or less everyone not using BlackBerry at the time) saw themselves as Verizon, AT&T, T-Mobile… customers and not Samsung, HTC, Motorola customers. Their primary loyalty is to their carrier not their handset manufacturer.
4) Once EVDO smartphones becomes possible, RIM owned the USA smartphone space for EVDO because of their focus on data compression. They were a much better fit for America’s bad/expensive data networks. Nokia never built a product that was a fit for low density. I think one of the problems with Nokia in the last decade, and still today is Nokia wants to treat the USA like Bangladesh and not like a major market the size of 2/3rds of all of Europe combined. They never wanted to (and still don’t want to) build American products.
5) When the big GSM carrier (AT&T) was ready to make a major smartphone push it was Apple that got the deal. I have no idea why Nokia / Symbian didn’t land that contract. I’m not sure they even tried.
6) Nokia did got along well with the low end MVNOs like MetroPCS (now merged with t-Mobile) who sold a lot of the Nokias. I suspect low end MVNOs are more like European operators in terms of their strategic thinking so there was less cultural conflict. There were ads over the years for Nokia phones on the MVNOs.
Ashas seem to be targeted to Asian market, I have no clue if Nokia understands that Lumias and Ashas do not compete each other so they could promote both in US. If you ask in certain circles, you get to hear that Microsoft has “for sure” denied Nokia sales of other OS devices in US when the co-operation deal was signed. Even though I’m not a huge fan of Microsoft I still count that option out.
Why would Microsoft care about what phone people who aren’t buying a data plan are using? Microsoft doesn’t make an OS for a non-dataplan phone anymore. Someone paying $10 / mo or so isn’t an interesting customer for Microsoft. I doubt Microsoft is the problem.
As far as the opportunity there are still quite a few messaging and talk phones sold. … let’s take Verizon’s MVNO, PagePlus. First off PagePlus cannot sell 4G, Verizon doesn’t even wholesale it. So Lumia 822 wouldn’t even work on the network. Remember these customers get no subsidy at all and are mostly poor.
1) Their low end plan is $.50 / mo (not a typo). But nothing is included. Calls are $.04-.10 / min. SMS is $.05 / ea. Data is $1 / per megabyte. The idea is a very cheap plan for very light usage. That’s not the sort of customer that wants to carry a Windows phone getting regular email updates.
2) The next plan up 10mb / mo free + $.1 / mb extra. Still not someone who wants to use a smartphone.
On the other hand imagine someone who wants to make lots of calls using a Sprint MVNO (cheap) but wants this $.50 / mo PagePlus plan for when they can’t signal on Sprint i.e. a classic dual sim user. A Windows Phone user (higher socio economic class) would just buy Verizon or AT&T and not deal with this nonsense.
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This is another example of Nokia not understanding America. We have really poor people in the 3rd world sense.
Two more things I forgot to mention from the OKP days:
1) Nokia wanted to allow customers to switch carriers like they can in Europe. A deal which no phone AFAIK in the history of America’s postpay carriers as ever gotten. I can’t imagine this was even considered. In the same vain they didn’t want the carrier’s name on the phone. Which is very rare.
2) They wanted to run the store… through Nokia. Which was a deal that RIM got and later Apple got. But only because those brand names were able to attract users who were not cost sensitive, the top of the market. You get that deal your monthly fees have to be effectively higher.
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Anyway. Those issues aren’t a problem with the Asha. All the carriers are setup for JavaVM applications for dumb phones and feature phones.