Would you believe this all comes from same man?

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.
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.
-Tomi Ahonen, January 27, 2011 [1]

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.
-Tomi Ahonen, January 31, 2011 [2]

(Ex-Nokian comment: it ended exactly to 24%)

Symbian is holding onto its lead but Android is now running neck-to-neck with it, closing so fast. Remember in Q3 the difference was 36% to 25% (11 market share points). If this trend continues, Android is likely to pass Symbian in Q1.
-Tomi Ahonen, February 09, 2011 [3]

This was Tomi Ahonen, talking about Nokia’s 2010 results for fourth quarter (Q4 2010 results).
Soon after there was a “leaked Nokia memo” that was rumored to be written by Stephen Elop, Nokia CEO. Name “The Burning Platform Memo” came later.
Tomi said he doesn’t buy memo being written by CEO Elop but about the contents of the memo he said this:

I CLEARLY stated in my blog that i AGREE with the sentiment of the supposed Elop ‘memo’ but I find several statements in it erroneous or bizarre – I am of course deleting all comments that suggest I am somehow in ‘denial’ about Nokia’s troubles and comments that suggest I think Nokia is doing just fine.
-Tomi Ahonen, February 09, 2011 [4]

There. Please note Tomi Ahonen is not denial about Nokia’s troubles, nor does he think Nokia is doing “just fine”.
I have intentionally taken all above from Tomi’s blog after Nokia has already released Q4 2010 results. In these posts Tomi is talking about Nokia with Q4 results, not before Q4 results. (You understand later why this is important.)
Back to our timeline. We reached February 9th and after 2 days Nokia allied with Microsoft (which Tomi hates so much). So let’s see what happens to Tomi’s writings during next six months:

Symbian S^3 is very competitive and user-friendly and close to being on par with Android (nothing is as good as Apple’s iPhone obviously) and S^3 dramatically outperformed other touch-screen OS’s like Blackberry and Microsoft Windows Mobile and Samsung’s bada.
-Tomi Ahonen, June 02, 2011 [5]

Nokia smartphone sales grew unit sales in Q4 – yes, grew unit sales – and grew average prices (so the growth was not by giving price discounts) and grew PROFITS – so the growth in sales was not by big marketing blitz campaigns. It was genuine customer satisfaction with the N8 and its new touch-screen Symbian S^3 operating system.
-Tomi Ahonen, July 29, 2011 [6]

(That is the N8 that six months ago was “me too” device nowhere near global leadership.)

Symbian was not dead. It had a strong Phoenix moment of recovery in Q4, when Symbian S^3 established a Nokia record for most sales of a new handset and new OS version
-Tomi Ahonen, August 23, 2011 [7]

That’s six and a half months. In less than seven months he got that far from “not being denial of Nokia’s problems”. I say we give him full year more time and we end up to…

SYMBIAN WAS WINNING
-Tomi Ahonen, October 11, 2012 [8]

Note: Tomi is not saying Nokia should return to Symbian. He is repeatedly saying he does not mean Nokia should return to Symbian. Symbian is dead now. He just says Symbian was winning so Nokia never should have abandoned it.

HOW WAS SYMBIAN WINNING?

  • Symbian lost 30% of its market share during 2010 – three out of ten customers abandoning it.
  • Symbian fell in ranks from most sold smartphone OS to second place (Android taking the lead) somewhere between December 2010 and February 2011, depending on analyst house reporting the numbers. Even Tomi agrees with that.
  • Samsung announced already in October 2010 that they will stop making Symbian phones by end of 2010. Samsung advised developers to focus efforts on Android and Windows Phone 7. [9]
  • SonyEricsson dropped Symbian in 2010 and moved to Android.
  • Tomi Ahonen can name only one other Symbian “partner” to support the “Symbian was winning” idea – NTT DoCoMo. But NTT DoCoMo makes a terrible partner for Nokia, since they are selling in Japan.
    Nokia stopped selling non-Vertu phones in Japan year 2008.
    Furthermore, NTT DoCoMo never used Series 60 UI and got its phones from Fujitsu, Mitsubishi, Sony Ericsson and Sharp – not Nokia.
    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.
    And as a final nail to coffin, DoCoMo brought to shops Windows 7/Symbian hybrid in July 2011. That’s a product ready for sales 5 months after Nokia switched strategy to Windows Phone. Five months! That product was in R&D before Nokia announced they will abandon Symbian.

I do agree too that Nokia should have stick with Symbian for longer transition period, but I’m not so bold I would say Symbian was winning.
However, Tomi Ahonen is not done yet, he will tell us how Symbian was winning (with a graph even):

But look what happened during 2010? The unit sales (blue bars) – actual smatphones sold – grew every quarter. Nokia grew more new sales during 2010 than Apple’s iPhone! Yes. And Nokia did this profitably. If you are the biggest in your industry, and you grow more than number 2, and you manage to do that profitably, then your strategy is just fine, you don’t abandon this winner under any circumstances. But look at the other data.

The revenues (red bars) of the smartphone unit grew every quarter in 2010. But they were growing less fast than the handset business, before Elop came along. That is not a good sign long term. But look what happened after Elop took over, the revenues grew far faster than total unit sales. So Nokia had managed to get past the storm, and was on the mend, and actually doing VERY well indeed. Customers were liking Nokia products so much, they were paying MORE for them, not less. This is good news, very good news.

Then look at profits (green bars). Profits in the smartphone unit had been falling, yes, and that is a bad trend, obviously, while the unit itself was still safely profitable, the direction had been wrong, under previous management (and I had been very critical of Nokia at the time, on this trend here on this blog, critical of Kallasvuo’s leadership). Now look what happens to profits after Elop takes over – they jump, massively. They grew not just faster than unit sales – a good sign – but they grew faster than revenues! That is EXCELLENT. This smartphone unit is a hero at Nokia, they are doing all the things right (as they are, as I already said, dominating the market, so this is not done at the cost of winning the customer).

Lastly the yellow bars, the single most important element in this graphic – the profitability of the smartphone unit. The profitability of the smartphone unit had been in decline under previous management. Now with Elop in charge, the profitability takes a Nokia-record jump and is bigger than we’ve ever seen the data reported at Nokia.” [8]

That was quite a long text. In brief:

  • Unit sales grew every quarter.
  • Revenues were growing less fast than the handset business (not a good sign long term). After Elop took over, the revenues grew far faster than total unit sales.
  • Profits in the smartphone unit had been falling but after Elop takes over – they jump, massively.
  • The profitability of the smartphone unit had been in decline under previous management but with Elop in charge, the profitability takes a Nokia-record jump.

So all metrics except unit sales were going down for the whole year but after Elop got on board they jumped. So Nokia had “managed to get past the storm, and was on the mend, and actually doing VERY well indeed”.

WHAT’S WRONG WITH THE PICTURE?

Let’s remember dates here: Although Q3 results came out after Elop started, he became CEO at end of third quarter. Third quarter results are in no way related to Elop. But actually, Tomi never says so when he points out how things were improving after Elop came aboard. He says change to better was in fourth quarter.
Here’s the same already from July 2011:

Then came the new Symbian S^3 on several phones, led by the new flagship phone N8 which set a Nokia record for fastest sales in a quarter. All declining trends were turned into growth – this tells us the market loved Nokia’s new smartphones on the new Symbian S^3 operating system and this is absolute proof that Nokia was on a come-back. Whatever you may have thought of Symbian prior to Q4 of 2010, became obsolete. Nokia had indeed on its hands, a true hit series of phones and a hit operating system  with the N8 setting internal Nokia records for new phone sales.” [11]

How come a man who repeatedly tells he is “12xauthor on mobile” and who advertises himself as “most influential expert in mobile supporting Fortune 500 sized companies across the globe” says that one quarter (how conveniently Christmas quarter which is responsible of 33% of annual sales AND a quarter where a new product was sold for first time) is “absolute proof that Nokia was on a come-back”? One quarter?
And how come this same consultant ignores the fact that at February 9th (date when Burning Plaform Memo was leaked) Nokia had already signed sales contracts for deliveries six weeks onwards? (That is securing device shipments up to 22nd of March, possibly even later.) That little detail alone means that there is no way Nokia’s sales for Q1 2011 could have dropped due to “Elop effect” from February.

I know using that drawing is very rude but the summary there is ridiculous, if we take the full “Tomi Ahonen Agenda” into context:

  • Whatever happened before Q4 2010 became obsolete. It is totally irrelevant if you try to measure the state Nokia was at.
  • Nokia’s market share continued its dive in Q1 2011, dragging also unit sales to downfall. Tomi very clearly said that this unit sales crash comes from the Burning Platform memo, not from Nokia having problems.
    Hence:
  • Whatever happened after Q4 2011 is irrelevant if you try measure the state Nokia was at.

Let’s write this into a simple sentence (try to say that with straight face, I am unable to do so):

If you try to measure state of Nokia at end of 2010, the only thing that matters is fourth quarter results.

Tomi Ahonen has quite some nerve to isolate 4th quarter of 2010 and say “Symbian was winning”. But he’s not done yet, he wants to put some more push to it with additional misinformation:

This is a graph where all the data is good – and Nokia is poised to have it even better going into 2011, when Q1 has China sales – Nokia so utterly ruled the Chinese smartphone market, Canalys counted Nokia’s market share in the world’s largest smartphone market at .. 77% in 2010.” [8]

…except that Nokia was holding only 56% at end of 2010. [10]
Yes, you read it right. He is openly pushing lies against your face.
Market share in China was 77% after Q2 2010, but only 56% at end of Q4 2010, “where all the data is good”.
Nokia lost 21 points of its market share in China in half a year 2010, while still performing Symbian strategy. That is loss of 27% of market share Nokia had there!
Just so that everybody understands: of consumers that they were poised to have in China, Nokia lost more than one out of four before Elop did anything.

Try to understand the scale here:
Toyota was largest car manufacturer in 2010, holding 12% of market. Naturally Toyota cannot lose 21 points of market share, they would end up to negative 9. But if Toyota lost 27% of its market share 2010, instead of selling 8.4 million cars, they would only sell 6.1 million cars. Toyota would fall behind General Motors, AND Renault-Nissan AND even behind Volkswagen Group, landing in 4th place, just ahead of Ford Motor Company.
That is the size of error when Tomi ignores the market share crash that happened to Nokia at end of 2010.
That is how much Symbian was “winning” in China.

HOW ABOUT SOME UNIT SALES?

Tomi Ahonen clearly says that Nokia “grew more new sales during 2010 than Apple’s iPhone”.
In the past he has multiple times said Nokia was “over twice the size of its nearest competitor”.
And in this specific case he even says Nokia was “pulling away from Apple”.
I don’t buy it. Here are the numbers:

Q2 sales 2010: [12]
Manufacturer  units   diff. to Nokia
Nokia         24.0M    -
Apple          8.4M    15.6M
Samsung        3.0M    21.0M

Q3 sales 2010: [13]
Manufacturer  units   diff. to Nokia
Nokia         26.5M    -
Apple         14.1M    12.4M (3.2M less than Q2)
Samsung        7.9M    18.6M (2.4M less than Q2)

Q4 sales 2010: [14]
Manufacturer  units   diff. to Nokia
Nokia         28.3M   -
Apple         16.2M   12.1M (0.3M less than Q3)
Samsung       10.5M   17.8M (0.8M less than Q3)
  • Nokia was not “pulling away” from Apple. Apple was catching up Nokia.
  • Nokia was not pulling away from Samsung either. Samsung was catching up Nokia.
  • For Q3 and Q4, Nokia is not “over twice the size of its nearest competitor”.

Numbers Tomi Ahonen uses may work if you look at yearly average. But seriously – which matters more if you try to estimate where Nokia was heading:
the trend from last three quarterly results?
Or the average of last four quarterly results?
Tomi chooses the averaging, apparently. I think we are just hiding a nasty trend by doing that.

HOW ABOUT MEEGO?

Nokia’s future platform, MeeGo was ready to be shown to the world, with the first phone ready and at least 3 phones in the pipeline so ready, they would be able to be sold in 2011. The MeeGo OS ecosystem was the future for Nokia’s smartphone unit itself, based on Linux, open source, with partner Intel, several dozen equipment makers lined up, and even China Mobile as a carrier partner, the world’s biggest mobile phone operator/carrier.” [8]

I must hand it to Finnish site Taskumuro for interviewing ex-Nokians about the MeeGo project. [15] Tomi has read it too; after that story came out, he started to mention MeeGo tablet. (Of course he ignores the main message of the article.)
N9 (and 2 other products in pipeline) were running Texas Instruments OMAP 3 SoC which TI had stopped developing. The replacement candidate was – as Tomi correctly says – selected to come from Intel. Intel hasn’t by today been able to deliver the x86-based Atom SoC with LTE capabilities. Those are to be expected at 2013. First non-LTE ones were shipped 2012.
So Intel co-operation can hardly be seen as good thing.

Other things we learned from that group of interviews:
Other manufacturers did not want to participate in MeeGo.
European operators walked away.

How about China Mobile?
Apparently they are just as happy to work with Nokia on Windows Phone as they were with MeeGo. You see – China Mobile has reported to sell Lumia 920, but they won’t be selling iPhone 5.

All that considered, I don’t put much weight on Tomi saying that Symbian was winning (or that Nokia had its future secured with MeeGo).

MY APOLOGY

My more regular readers can tell I’m being repetitive here.

To a regular reader this post brings almost no value and I am sorry. My attempts to create “Symbian was not winning because” – list was ending up nowhere readable. I had to do it this way. And – seriously – someone saying that “Symbian was winning” is worth of a blog post.

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2011/01/undesirable-at-any-price-what-happened-to-nokia-who-invented-the-smartphone.html

[2] http://communities-dominate.blogs.com/brands/2011/01/return-of-the-jedi-nokia-can-be-saved-here-is-the-how.html

[3] http://communities-dominate.blogs.com/brands/2011/02/smartphone-bloodbath-2010-now-final-numbers-q4-and-full-year-2010-and-each-rival-awarded-their-final.html

[4] http://communities-dominate.blogs.com/brands/2011/02/the-nokia-ceo-burning-platform-memo-at-engagdget-doesnt-ring-true-to-my-ears/comments/page/2/#comments

[5] http://communities-dominate.blogs.com/brands/2011/06/do-i-really-have-to-ok-ok-ok-i-will-do-update-to-nokia-disaster-year-after-profit-warning.html

[6] http://communities-dominate.blogs.com/brands/2011/07/thinking-the-unthinkable-what-value-if-nokia-returned-to-symbian-and-meego-our-movie-today-back-to-t.html

[7] http://communities-dominate.blogs.com/brands/2011/08/why-europe-is-so-critical-to-nokia-in-smartphones-the-symbian-s3-sales-pattern-in-q4.html

[8] http://communities-dominate.blogs.com/brands/2012/10/the-there-pillars-of-nokia-strategy-have-all-failed-why-nokia-must-fire-ceo-elop-now.html

[9] http://www.digitaltrends.com/mobile/samsung-drops-symbian/

[10] http://www.cellular-news.com/story/47656.php

[11] http://communities-dominate.blogs.com/brands/2011/07/first-look-into-microsoft-nokia-smartphones-in-2012-and-2013-expect-climb-back-to-barely-20m-in-unit.html

[12] http://communities-dominate.blogs.com/brands/2010/08/final-numbers-q2-of-2010-for-smartphone-market-shares.html

[13] http://communities-dominate.blogs.com/brands/2010/11/bloodbath-q3-final-numbers-the-smartphone-race-gets-ever-more-tight.html

[14] http://communities-dominate.blogs.com/brands/2011/02/smartphone-bloodbath-2010-now-final-numbers-q4-and-full-year-2010-and-each-rival-awarded-their-final.html

[15] http://taskumuro.com/artikkelit/the-story-of-nokia-meego

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