If you are someone planning to hire Tomi Ahonen, please read this post. You are planning to spend money, I plan to save your money.
Equally, if you are a media person planning to write about Tomi Ahonen or planning to use him as a source, please read this. I am going to cover multiple areas where Tomi Ahonen should be professional and show that he is either unbelievably incompetent or then intentionally spreading false information to the public.
Please, spend a moment of your time and read this. There are no advertisements, nothing to sign up to, nothing to buy. This is free to you but has huge ROI.
And now, when you are reading this, ask yourself: “Would I really want to pay for this kind of person to do consulting or keep speeches?”
You see, this has to be worst lie from Tomi Ahonen – ever. It’s dated June 14th this year, so it’s not old news in any standard. It’s combining multiple of his previous false claims and, as a coating, adds a huge pile of fouled-up data. Tomi’s blog post is long and data forgery is buried deep, so please try to understand it takes a long post for me to show it all.
So why this is so bad? Well, Tomi starts with this:
“I really hate doing this, these Nokia blogs make me so sad. But this is history, we have to record it, the facts have to stand.” 
After that he chooses to write his own history that is not based on facts. Well, I hate digging up the FUD he produces, I doubt he hates writing those.
As said, the blog post is made very credible looking, seemingly honest and written by influential consult on mobile business. That makes it even more criminal, especially since this post has already been referenced around the net. Example MTV3 – Finnish TV broadcasting company news and Yahoo! Finance news. Not to mention social media, that is.
I’m now going to tell you why it is not credible or honest.
FACTS AND LIES
Tomi Ahonen starts it with this:
“Some of the facts are not in dispute. The Burning Platforms memo did cause irreparable damage to Nokia smartphone sales. The matter is accepted by CEO Stephen Elop himself – he openly admitted to the Nokia Shareholders conference in May that yes, his Burning Platforms memo did damage Nokia Symbian smartphone sales.” 
“The Nokia-oriented MyNokiaBlog covers Elop’s admission in the best English-version text that I have seen of this part of the Nokia Shareholder’s meeting, but this is not a verbatim quotation of what he said, it is reporting of what he said (and unfortunately for this passage, we do not have video). MNB writes:
“On Symbian and the Burning Platform memo. Asked about did he think it hurt Symbian, Elop said he believes it did hurt Symbian. He was being frank about it. He maintained that Symbian was undeniably on a downward trajectory and was being rejected by more and more markets in their assessment before February 11th.”
So far we are going with the facts.
I agree the memo (and way strategy change was communicated) hurted Symbian sales.
Nokia CEO says they hurt Symbian sales.
Tomi Ahonen says they hurt Symbian sales. (Tomi Ahonen has written so much about the memo he could publish a book made completely out if his writings.)
I understand completely Tomi’s disappointment when Elop says Symbian was “undeniably on a downward trajectory and was being rejected by more and more markets in their assessment before February 11th“. It must be a dissappoitment to see that the memo (while hurting Symbian sales) is not the cause of all the trouble Nokia goes through.
So what should Tomi Ahonen – world class analyst and consultant – do now?
Say he may have exaggerated the issue in the past?
Note that yes, there were obvious signs about Nokia’s problems and he reported those too?
Now that could be expected from someone with that background.
Unfortunately I labeled this paragraph as Facts and Lies for a reason. He decides to make some half-truths to cover his previous mistakes related to the memo. Let’s hear them:
“The Nokia Symbian based smartphone sales grew – not declined, grew – unit sales (the first measure of performance). The Nokia Symbian based smartphone sales grew – not declined, grew – revenues (the second measure of performance). The Nokia Symbian based smartphone sales grew – not declined, grew – average sales prices (the third measure of performance). And Nokia Symbian based smartphones grew – not declined, grew – profit (the fourth and last measure of performance). By every measure that the industry uses, Nokia Symbian smartphone sales grew from Q3 of 2010 to Q4 of 2010, literally the last full quarter before Elop released his Burning Platforms memo.” 
“Nokia Symbian smartphone sales by EVERY measure grew (this was long before any Microsoft smartphones existed at Nokia).” 
That is compelling view. And it’s true that Nokia was able to increase its unit sales while losing 25% of its market share in six months – anomaly impossible in any other industry – reported by Tomi Ahonen just days before the memo leaked.
I too have pointed out that Nokia had world-class trouble in its hands with that market share decline and by checking the previous link, you can see yourself that Tomi agreed with that view until Nokia changed strategy to Windows Phone. After that he seems to have forgotten everything he knew about the industry:
“Elop continued his excuse lies by saying Symbian was being rejected by more and more markets.” 
“Nokia Q4 results tell a different story. Nokia does not break out the smartphone/dumbphone mix per region, but the overall markets by the 6 reporting regions for Nokia reported as follows: for unit sales, five out of the six units reported an increase from Q3 (Europe, MEA, China, APAC and LatAm). Only one region saw a decline (North America).” 
“The Nokia Symbian smartphone sales were not ‘being rejected by more and more markets’. They were only being rejected in the North American market. That is not ‘more and more markets’ it is ‘the one and same market only’ – in all other markets Nokia reported both a unit sales growth and a revenue growth! And your Q4 results say clearly, while the dumbphone prices were flat, the smartphone sales prices jumped. Nobody was ‘rejecting’ Symbian sales!” 
Good point about the smartphone/dumbphone mixture. No wonder Tomi reports it already in this blog, faking the very same data to suit his needs. I have covered the graph in detail here and Tomi uses it in this very post, therefore knowing that smartphone percentage of the sold devices was in decline already in Q4 2010.
However more important is (and Tomi HAS to know this) that Nokia’s sales for Q1 were written to paper by Feb 11th. It is no secret science, just fact about mobile industry. I have pointed out that therefore Nokia’s Q1 results were not affected by Feb 11th announcement, full coverage is here. That obviously means Nokia Management has known what the figures for Q1 2011 will be. Which – sequentially – means Nokia CEO refers to that info when he says Symbian was rejected by more and more markets. You would expect former Nokia executive like Tomi Ahonen to know that, right?
So Tomi uses outdated Q4 2010 results, instead of looking at Q1 results (visible to Nokia management at time and visible to all of us for over a year before Tomi wrote this). This way he does not have to notice that indeed all other areas than greater China region had sales dropping.
Either he is incompetent beyond belief, or this is intentional lie he feeds to public. I don’t know which is worse.
So far it has been bad, but this we have heard from Tomi before. Now starts the part why I said this is the worst.
After so willingly ignoring Q1 results and blaming it all to the memo, Tomi starts the ultimate lie:
“If you asked me, what is the fair base case to use, I would take the last full quarter (Q4 of 2010) before the Burning Platforms memo, and take the trends of that period, and project from there. So if Nokia smartphones grew 7%, the reasonable assumption is that the 7% rate would continue into 2011. If all things stayed the same, then Nokia would continue about 7% growth rate each quarter in 2011. That is one way to look at it, and I think it would be a fair way.”
Ummm… Right. Let’s remember what was just said about Q1 results not being affected by the memo? That Tomi has to know it? So using Christmas quarter (usually best selling quarter) of 2010 would be fair way to look at it?!?
Luckily Tomi does not use it. He does the worst:
“Lets not take Tomi Ahonen’s own view of what might be fair for Nokia performance in year 2011, lets try to find the best trusted expert source(s) that are independent of this squabble we cover here. Lets go and get the consensus opinion of the industry analyst houses. What did Gartner say? And Canalys? And Abi? And iSuppy? and IDC? (Stategy Analytics unfortunately does not have a specific quote in 2010 about Nokia or Symbian forecasts/projections). This is what the big independent handset industry analyst houses – all of them except Strategy Analytics – said about Symbian or Nokia. Four of them had a forecast about Symbian in 2010:
Abi Research said in February 2010 that Symbian would remain the biggest smartphone OS through year 2013.
Gartner said in September 2010 that Symbian would remain the biggest smartphone OS through year 2014 and would have 30.2% market share that year challenged by Android.
IDC said in September 2010 that Symbian would remain the biggest smartphone OS through year 2014 and would have 32.9% market share that year challenged by Android.
iSuppy said in August 2010 that Symbian would remain on top for at least 5 years.
And what of Canalys? They did not forecast Symbian but they commented on Nokia (which is only part of Symbian sales so its share is smaller than Symbian). Canalys said in November 2010 that Nokia would continue as the world’s biggest smartphone maker in 2011.” 
“But the analyst houses did expect Symbian to decline. Only two of the six had a number and both were for year 2014, Gartner 30.2% and IDC 32.9%. Lets use these two, and their average, 31.55% as the target percentage for year 2014 for Symbian. Where was Symbian sales in year 2010? 39.1%. So if we plot a straight line decline in market share for all Symbian smartphones from 2010 to 2014 we get this rate:
2010 . . . . 39.1% (actual)
2011 . . . . 37.2% (projection)
2012 . . . . 35.2% (projection)
2013 . . . . 33.4% (projection)
2014 . . . . 31.5% (projection)” 
Now since strategy change in February 2011, Tomi has focused on unit sales and completely ignored market share of Nokia. Interesting, since Nokia lost 25% of its market share during 2010. From 39% (at end of Q2) to 28,5% (at end of Q4) – this is what Tomi Ahonen himself has reported. And I want to make sure this became clear: Nokia lost 25% of its market share during 2010. That collapse did not start 2011. Tomi reported that in January 2011, before he knew nothing about memo or Windows Phone strategy.
So Tomi knows Nokia lost market share already at end of 2010. He has reported that in the very same blog. So what he does? He chooses predictions made before Nokia’s market share crash started – i.e. before Nokia released third quarter results! Only estimate he mentions that has been released in time frame where Nokia’s Q3 results were available is the one from Canalys. I assume I found the article he refers to  but the problem is it does not say anything even close to “Nokia would continue as the world’s biggest smartphone maker in 2011“. Nothing like that. Yet that is Tomi’s claim.
So figures he uses are market share figures. And he starts from 39%, which is that year average. He already uses invalid figure, because due to second half market share collapse, at end of 2010 Symbian had 30,6% market share with 31 million sold devices. In fact, Symbian was already bested by Android (32,9% market share with 33,3 million sold devices).  Already at end of 2010. Now either he knows this and ignores it (being incredible liar) or he is totally unaware of such collapse (being incredibly incompetent). He uses those predictions as a base for happenings of 2011 and this is his summary:
“The consensus view of the big analyst houses in year 2010 was that Symbian would continue to dominate the smartphone market.” 
Continue to dominate? Tomi starts by saying that Symbian would decline towards 2014 (down to 30.2% by Gartner and 32.9% by IDC). Canalys numbers tell it was below that “consensus” by end of 2010 already! I’m rather sure those analyst houses revised their views a bit before we reached February 2011 where memo was released. And making worst out of the worst, Tomi now uses those invalid figures to make his prediction, starting from 4th quarter of 2010 (where market share already was below those forecasts):
“Now that was Symbian, which included Japanese Fujitsu, Sharp etc sales. What of Nokia? Nokia’s Q4 2010 market share was 28.5%. Lets assign the same rate of decline, ie 1.9% market share points per year to Nokia as the consensus view of the industry experts in 2010. And that would be almost 0.5% on average decline in market share per quarter (4 x 0.5% = 2.0% so I am now a bit too negative about Nokia but lets let that 0.1% go to keep this simple in terms of the math. This is the worst case scenario, clearly, in reality Nokia would have done far better than this)
We get the following Nokia Quarterly performance expectation by the industry analysts in year 2010:
Q4 2010 . . . 28.5%
Q1 2011 . . . 28.0%
Q2 2011 . . . 27.5%
Q3 2011 . . . 27.0%
Q4 2011 . . . 26.5%
Q1 2012 . . . 26.0%
That is our base case. This is not Tomi’s view. This is the published, clearly consensus view by the leading expert analyst houses, five of six who had issued Nokia or Symbian-specific forecasts during 2010, and all agreed. Nobody with a history of global handset reporting had suggested Nokia smartphone sales would suddenly collapse in 2011. The above numbers are totally consistent with the average of the two analyst houses who gave a specific Symbian market share forecast for year 2014. This is what ‘any monkey’ could have done by simply continuing Nokia’s existing strategy in 2011.” 
Thank you Tomi. Now ‘this monkey’ used correct figures and I have to say Tomi’s setup is so ridiculous I have made a graph to illustrate what it actually means. Hopefully this clarifies how much sense there is in using those predictions. (You can click on the image to see it full.)
Now this is timeline. Whenever Nokia (or Symbian) market share drops a step, it’s the point where Nokia released their quarterly results. Any line starting from top of a bar happened when last report gave numbers indicated by that bar.
I needed to find the Gartner and IDC forecasts Tomi used before I could do the graph. They are references  and , green and purple line, respectively. You can see that lines are bent. That’s because both offered more than just 2014 number, Tomi just chose to ignore those.
Red dashed line is point of time from which Tomi starts his “consensus” line. Before that point Nokia was by his words doing fine. Now he said himself that Gartner and IDC predictions are “best trusted expert source(s)“.
See where those two are compared to actual Nokia performance when we reach the red line?
- Do you think those predictions from Gartner and IDC are in any way valid for predicting Nokia’s market share from February 11th 2011 onwards?
- Do you think Tomi’s line is “clearly consensus view by the leading expert analyst houses“?
- How about “totally consistent with the average of the two analyst houses who gave a specific Symbian market share forecast“?
- Do you think it continues Nokia’s market share development?
And most of all:
- Do you think “any monkey” could steer Nokia’s market share to that trajectory, like Tomi claims?
Thought you wouldn’t.
Oh yes, Symbian. We see Symbian market share drop from Q2 2010 to Q1 2011 (results of which should have been known for major figures by Nokia management at time of February 11th). You can compare it to those predictions by the leading expert analyst houses. Which describes it better? “Nobody was ‘rejecting’ Symbian sales” from Tomi Ahonen, or “undeniably on a downward trajectory” from Nokia CEO?
Now one must wonder how Tomi could ever make this sound credible? It’s easy. See the grey square that encapsulates bottom corner of my graph? That is the only part of this that Tomi shows in his graphs.
As said before, either Tomi Ahonen is incompetent beyond all belief or he is a blatant liar.
So Tomi does his “expected Nokia market share” with all invalid data. Then he uses the very market share to estimate losses caused by the memo. Do I need to say the figures are imaginary at best?
WORSENING THE WORST
Now that Tomi has created imaginary path where Nokia’s market share in his opinion should have been “simply continuing Nokia’s existing strategy in 2011”. Then he decides to make numbers out of it. That is: unit sales, revenues, sales (in euros) and profits. Compared to actual Nokia performance. From that joke of a market share line.
Now how much off is he? Nokia had pretty clear decline in market share. It’s in the next graph. The “Reference curve” is from my post “most accurate forecaster” and it is the line Nokia’s market share would have dropped if relative decrease of 15% (same for Q3 and Q4 2010 as well as Q1 2011) would have continued. And from Q2 2011 it’s higher than Nokia actual performance, indicating actual damage from strategy announcement. Let’s compare to that.
Here is a new graph.
Now red area is amount of market share loss according to Tomi. The part below purple line (reference curve) is in my opinion realistic market share loss caused by Nokia’s strategy announcement. Tomi’s area is about seven times as big!
Now I’m not taking into account Symbian Belle and MeeGo devices which both would have had positive impact to Q4 2011 and Q1 2012 sales. But neither is Tomi, so comparison stands. The direct impacts of strategy change (and possible postive impacts missed because of it) were well put in comment of Mark Wilcox, another ex-nokian:
“Nokia’s shipments in Q1 were almost completely unaffected by the announcement, the market basically didn’t grow in Q1, so Nokia’s lower market share (continuing existing fall) would have caused a slight drop in units. When the market growth took off again in Q2 at a greater rate than Nokia’s market share decline, you’d expect unit shipments to stabilise or even grow again – they didn’t. If Elop hadn’t destroyed the morale and motivation of the Symbian development organisation you might even have seen Anna shipping in volumes in Q2, improving things a little further, with Belle in Q3 or early Q4. I bet what happened instead was that everyone was either dragging their heels and waiting for their redundancy payout, looking for another job or retraining for Windows Phone development with as much of their work time as they could get away with.
Although Nokia’s shipments to the channel might not have changed in Q1, sales direct to end users did immediately as the Nokia devices were pushed much less aggressively by many and networks and retailers took much longer to clear their stock than they would have previously (thus ordering less/none in Q2).“
Now I have tried several evenings, but could not make any credible looking version of the “let’s stick with the old strategy” 2011 results. My creation could have been too pessimistic or too optimistic. So I stick to reference curve which is (as Tomi claimed his was) “what any monkey could have achieved by just sticking to old strategy”.
Actually, I think replacing CEO with a case of bottled water should have caused that trajectory just fine.
So with my comparison line damage caused by “communication mistake of the century” is 11 million units of smartphone sales (compared to Tomi’s 75,8 million).
I would love to throw in euros, but Tomi uses invalid average selling price (ASP) since he assumes that Nokia would have kept same ASP as in Q4 2010 without Elop effect. That is – as we know – a lie, since ASP started to decline in Q1 2011 which was immune to strategy change. And even more, market grew in cheap end of smartphones.
I simply lack the skills to estimate ASP trend for imaginary year 2011, so I will stick to Tomi’s euro numbers, but use higher multiplier than seven. I decided to go with round ten. If someone takes time to generate better multiplier, please tell me. (In any case, dividing by ten fixes Tomi’s numbers to correct ballpark.)
That would be 1.1 billion euros of sales and 317 million euros of profits.
But as said, it’s guesstimate, not estimate.
As said in the beginning, Tomi also adds the FUD of Nokia’s smartphone migration to the mix. He also adds other lies:
“There were many other businesses that were cut by Elop when the damage started […] ending many software and services projects like Nokia mobile banking and Nokia mobile advertising” 
First one is true, but his description about the size of business lost is interestingly 6 to 12 times the reality. Last one is just plain lie. He should be aware of both, he has been informed in th comments of his own blog.
I have covered them here and here.
WOULD YOU HIRE THIS MAN?
Welcome to the end of my posting and thank you for taking your time to read this. We have now seen Tomi creating a false prediction blaming Nokia’s current management of damage that is exaggerated literally order of magnitude beyond reality. All this based on data that is clearly invalid. And after he has done this fraud, we get all this from Tomi Ahonen:
“I have been able to do a fair, if very conservative analysis of how much the Burning Platforms memo and its follow-up actions have cost Nokia in the smartphones unit.” 
Wait, what? You call amounts multiplied by seven “fair, if very conservative”?
“This is what makes me weep when I think of my former employer Nokia.” 
“yes, I told you this will be another painful blog for me to write.” 
Tomi, seriously? After going through all that trouble to falsify your data you say you “weep for Nokia”?
I finish this by saying that Tomi Ahonen is – as said before – either incredibly incompetent or extremely unreliable. If you plan to hire Tomi Ahonen or use him as a reference, you know what you are dealing with.