• Hi gang.

    Once again I’m puzzled. Tomi Ahonen is supposed to be (according to his biography) “Author of twelve bestselling books on mobile, already into multiple printings and translated into several languages”. How come I get to read stuff like this from his blog?

    I’ll explain. This is from his very recent post:

    Windows Phone is so poorly received that even when supported by literally the largest marketing push of any smartphone series in history, the Lumia series was outsold most quarters by Nokia’s own smartphone alternatives

    [1]
    Okay, Lumia line did not sell as well as hoped, but what is this “largest marketing push of any smartphone series in history”? Samsung uses way more money to promote their Galaxy series than Nokia ever did for Symbian or Lumia.
    Let’s take a jump back. Tomi started this tale already after the initial Lumia launch:

    He had the biggest Nokia launch promotion budget ever, and that was then added to by literally several hundred million dollars of Microsoft marketing money to push the launch – inlcuding those famous free Xbox gaming consoles that you would receive if you bought Lumia 800s with some carriers/operators.

    [2]
    Okay, that’s biggest Nokia launch promotion budget ever”. Now we got down to Nokia level. Do you have any more specific numbers to show us, Tomi?

    The Lumia series has seen the world’s most expensive marketing push by Nokia (more than twice as much marketing dollars than the previous record)

    [3]
    MORE THAN TWICE AS MUCH! Wow! And still Lumia line lingers in single-digit market share! I mean – what could POSSIBLY be WORSE performance than that?

    Yes, Nokia launched Lumia – as CEO Elop promised – with the world’s largest phone launch budget of all time, by a wide margin – over 3 times more money thrown at Lumia than the previous biggest launch ever. And that was then added to, by Microsoft’s biggest-ever marketing support of its smartphone marketing, and that, added to by the carriers often doing their biggest launches ever.

    [4]
    Wow… I’m… I mean… This… Ummm… Who was writing this? Former Nokia executive who lectures at short courses at Oxford University? Shouldn’t he know difference between double and triple numbers?
    But hey, over three times is even worse! :D
    Fine. Now that we know how big marketing push Lumia line was supposed to be (compared to largest phone launch from Nokia so far), what should we compare it to?
    I know! Let’s compare it to N8 launch!

    ON TO THE FACTS

    There is nothing difficult with Nokia’s marketing budget. The quarterly reports very specifically list sales&marketing expenses per business unit. Keep in mind that numbers we use cover both feature phone AND smartphone sales & marketing. But – as tomi has correctly reported – Feature phones have been responsible for larger and larger fraction of Nokia’s sales since year 2010.
    In short: if the money spent on marketing has grown, part of the growth goes to feature phones sales & marketing. Okay? ready to go?

    According to Nokia quarterly reports the Devices & Services unit spent 535 million euros for sales and marketing in Q3 2010. This is pre-N8 launch. In Q3 2011 (pre-Lumia) D&S unit spent 497 million euros for sales and marketing. [5] So let me make this clear: Nokia spent LESS money on Lumia launch than they did on N8 launch. How can that be “over 3 times more money thrown at Lumia than the previous biggest launch ever”? It’s less than N8 launch and I think N97 launch was even bigger.
    But that’s prior to launch. How about actual sales quarter? On Q4 2010 (N8 sales quarter) Devices & Services unit spent 616 million euros on sales and marketing. In Initial Lumia launch that number was 587 million. [6] Yes, you read it correct. even during the actual launch quarter Nokia spent less on Lumia launch than they did during N8 launch.

    This is public data. Available for anyone. Why on earth someone who calls himself “best-selling Technology and Media Author, Strategy Consultant and Motivational Speaker” makes up stuff like this?

    TO THE BITTER END

    There is one last chance for Tomi. Perhaps Windows Phone 8 launch was indeed “literally the largest marketing push of any smartphone series in history”, “over 3 times more money thrown at Lumia than the previous biggest launch ever”?
    Well, no. From Nokia quarterly results we see that Sales and Marketing expenses of windows Phone 8 launch time are even less than what was spent at the time of original Lumia launch, Q3 and Q4 numbers being 409 and 423 million euros, respectively. [7] [8]

    Biggest Nokia launch promotion budget ever?
    Not.
    And far less “literally the largest marketing push of any smartphone series in history”.

    UPDATE:
    Our loyal commenter CD-Host very well noted that I have missed a crucial part of the text. His comment is below, this is edited version to have charts etc. visible. He was talking about this:

    Elop more than doubled the total marketing spending for Lumia than Nokia had ever spent before – and Nokia was then the world’s largest spender on marketing phones (today that is Samsung obviously).

    [1]
    So wait…
    Nokia was “then the world’s largest spender on marketing phones”?
    Then?
    We just witnessed that Nokia’s marketing spending decreased under Elop’s helm. It is mathematical impossibility that Nokia would have been spending more on marketing phones than they did in 2010. Period.
    But that’s just the other half. How about we return to the part where Nokia (at the time of original Lumia launch) was being “world’s largest spender on marketing phones“?
    Nokia?
    NOKIA?!?

    Samsung’s marketing budget per year (at the time of WP8 Lumia launch) exceeds the entire value of Nokia Corporation! In 2011 Nokia had higher market value and Samsung smaller budget but still… Check the scale!

    ALSO: Asymco has a chart indicating that the cost of selling Galaxies has been running about 15% of the purchase price i.e. $100 / phone.
    The idea that Nokia is or was anywhere near these number is insane.
    END OF UPDATE

    I was asked recently why I call Tomi a liar if we just disagree on something. Because he – man of certain respect and value – uses term “literally the largest” snd “over 3 times more” on something that cannot be largest – cannot be even larger than previous one – and that anyone can verify from public sources.
    That’s why.

    Hence: Liar, liar, pants on fire.

    (Sorry about saying it but someone has to.)

    SECOND UPDATE:
    WHOA!
    Tomi did something that is closest thing so far to actually responding to my blog post – he commented to his blog (after deleting the preceding comments) and added details to his numbers! His comment:

    As LeeBase has just returned to the marketing expenditure issue. He (and others) is confusing current Samsung with past. Elop said very clearly in 2011 as we approached Lumai’s first launch, that it would be the biggest in history and Elop had allocated twice the marketing budget just from Nokia’s side, to what it had ever done before. This is not my conjecture. At that time Samsung was a drop in the bucket and couldn’t possibly afford the marketing spend in that scale. Now that Sammy is the world’s largest handset maker and by far the largest smartphone maker – and this war is a war of marketing – of course they can AFFORD to overspend everyone. THAT IS WHAT MARKET LEADERS DO.

    (and math ‘discrepancy’ twice the budget BY NOKIA ALONE. Triple budget TOTAL SPEND when all others incl Microsoft and carriers are added.

    Tomi Ahonen :-)

    [9]
    Okay… I checked and double checked, he DID say that the budget was three times the previous record already by Nokia THEN Microsoft effort added THEN carrier effort (I thought they boycotted WP?) added. So Tomi’s recent comment on that part – also – is a lie. Or then the original text by him. Take a pick.
    Also, in the very recent blog where this all started we have (verbatim) “Elop threw all the marketing billions on promoting Lumia and Windows. And that Microsoft threw literally billions more into it – in many markets like the UK, Microsoft would hand a free Xbox 360 videogaming console for those who bought a top-line Lumia. And the carriers would throw the biggest marketing pushes of their history to promote Lumia” [1]
    Note: Nokia threw “billions” before any of the MSFT or carrier money is added. At the time their ENTIRE marketing budget (smart- and feature phones combined) of half a year is only one billion (and even less from that point onwards). Why these numbers don’t add up?
    And what comes to Elop saying that there will be twice the marketing budget by Nokia side… Even if so had been (why haven’t I read anything like that?)…
    …it does not magically decrease Samsung marketing money spending from year 2011, when Samsung advertising budget was on par with Coca-Cola company, total marketing twice the size of Coca-Cola advertising budget and Samsung spending four times the amount of money on marketing as Nokia on marketing its handsets.

    REFERENCES:

    [1] http://communities-dominate.blogs.com/brands/2014/04/the-microsoft-handset-opportunity-with-nokia-the-full-analysis-of-potential-its-not-looking-good.html

    [2] http://communities-dominate.blogs.com/brands/2012/01/how-many-lumia-sales-as-nokia-and-microsoft-ashamed-to-reveal-number-lets-count-and-compare-to-n9-me.html

    [3] http://communities-dominate.blogs.com/brands/2013/02/final-q4-numbers-and-full-year-2012-stats-for-smartphone-market-shares-top-10-manufacturers-top-os-p.html

    [4] http://communities-dominate.blogs.com/brands/2013/04/when-no-means-no-what-part-of-no-does-nokia-and-microsoft-not-understand-us-consumers-reject-lumia-a.html

    [5] http://www.results.nokia.com/results/Nokia_results2011Q3e.pdf

    [6] http://www.results.nokia.com/results/Nokia_results2011Q4e.pdf

    [7] http://www.results.nokia.com/results/Nokia_results2012Q3e.pdf

    [8] http://www.results.nokia.com/results/Nokia_results2012Q4e.pdf

    [9] http://communities-dominate.blogs.com/brands/2014/04/the-microsoft-handset-opportunity-with-nokia-the-full-analysis-of-potential-its-not-looking-good/comments/page/3/#comments

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