Finnish economy magazine Talouselämä made an article about Tomi Ahonen and his (by Tomi’s own definition) “outrageous statement” that “Nokia will be sold within weeks”. [1] Tomi made the forecast 6 months ago so obviously Tomi’s it did not make it. Since articles go around, it has been published by Tietoviikko and MicroPC [2][3] which are both technology-oriented magazines.

Now normally I would just skip it and leave it be. Nice that someone else also notes Tomi does erroneous forecasts. But then, Tomi picked it up to his blog so I feel the urge to point few things out. First the best part: Talouselämä got it right, this is not a one-time shot and Tomi has really been behind his words:

nokia_sold_within_weeks

This was from July 17th 2012, so it’s 21 weeks ago. “Within weeks” indeed. But yes, this was way off and even Tomi calls it outrageous. I wonder what Tomi Ahonen says in his own blog right now?

What I unfortunately still feel, is that Nokia is on its way to be sold, and a suitor might show up any moment. So yes, I STILL think Nokia might be sold soon, but I acknowledge, that my statement six months ago was clearly totally wrong.” [4]

Wow. he still thinks Nokia might be sold soon. Yet it’s understandable; by Tomi’s definition three pillars of Nokia strategy have all failed. In reality the company has one leg with severe injury and three making profit. The whole Nokia (company, not just smart phones division) makes profit. If they would sell something, it would be the loss-making smartphone division. (Read here for more.)

UPDATE 24-Jan-2013: This. Is. Priceless:

nokia_sold_any_day_now[12]

Please note: January 23rd 2013 and that may happen “any day now“?
(I’m sure we will get back to that in few months. All business units of Nokia made profit Q4 2012, you know?)

END OF UPDATE.

Now why am I even bothering for this? It’s mainly because of this part:

And sorry about the Nokia to be bought comment. I honestly believed it last summer. I am surprised it did not happen. I still think it will, but don’t have a definite timetable now. And yes, we forecasters will always be wrong, the point is to try to be less wrong than the industry, by which you are then called an ‘accurate’ forecaster haha… ” [4]

Then called accurate forcaster, eh? I wonder how accurate forecaster Tomi is?
His own description is:

I was the most accurate forecaster for how badly Nokia’s market share would fall after the Elop Effect last year February” [5]

Most accurate forecaster, I see. Since I don’t buy it, let’s see his track record:

Nokia will have more than a third of the total smartphone market in 2011, and in 2012, and in 2013… mark my words.” – Tomi Ahonen, December 13th, 2010. [6]

Words marked!
Nokia market share for Q4 2010 was 28,5% after a drop of 15%. Mere 18 days later (Q4 2010 ends December 31st) Tomi’s forecast for next 3 years is off by at least 17% (or 4,9 points, whichever we want to use). That is if we accept 33,4% would have been OK to fulfill his market share prediction. And Please note that even Tomi himself did note expect things to get better in 2011, 2012 or 2013. In his own analysis on Q4 numbers Tomi expected market share to fall even more and gave forecast of 24% for Q1 2011.
But this was all prior to Elop effect (yes, you read it right), so now full coverage of Tomi’s forecasting capabilities after Elop Effect (including the previous Q1 2011 forecast):

  • 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.” [7] (January 31st, 2011)
    Q1 2011 market share forecast: 28%. (February 15th, 2011, outdating previous.) [8]
    Nokia market share for Q1 2011 was 24%. Tomi is off by 17% (or 4 points, whichever we want to use).
  • Q2 2011 market share forecast: 21%. (February 15th, 2011.) [8]
    Nokia market share for Q2 2011 was 16%. Tomi is off by 31% (or 5 points, whichever we want to use.)
  • Q3 2011 market share forecast: 16%. (February 15th, 2011.) [8]
    Q3 2011 market share forecast: 11%. (July 26th, 2011, outdating previous.) [9]
    Nokia market share for Q3 2011 was 14%. Tomi is off by 21% (or 3 points, whichever we want to use.)
  • Q4 2011 market share forecast: 12%. (February 15th, 2011.) [8]
    Q4 2011 market share forecast: 7%. (July 26th, 2011, outdating previous.) [9]
    Nokia market share for Q4 2011 was 13%. Tomi is off by whopping 46% (or 6 points, whichever we want to use.)
  • Q1 2012 market share forecast: 7%. (July 26th, 2011.) [9]
    Nokia market share for Q1 2012 was 8%. Tomi is off by only one point, which makes this indeed accurate forecast.
  • Q2 2012 market share forecast: 7%. (July 26th, 2011.) [9]
    Q2 2012 market share forecast: 6%. (May 1st, 2012, outdating previous.) [10]
    Q2 2012 market share forecast: 5%. (June 27th, 2012, outdating previous.) [5]
    Nokia market share for Q2 2012 was 6,7%. Tomi is off by 25% (or 1,7 points, whichever we want to use.) This is so close in terms of points that we could say it’s accurate. On the other hand we work in scale where one point of percentage is 20% of Tomi’s forecast, so perhaps not.
  • Q3 2012 market share forecast: 6%. (July 26th, 2011.) [9]
    Q3 2012 market share forecast: 4%. (May 1st, 2012, outdating previous.) [10]
    Q3 2012 market share forecast: 3%. (June 27th, 2012, outdating previous.) [5]
    Nokia market share for Q3 2012 was 3,7%. Tomi is off only by 0,7 points so this is accurate forecast.

Tomi has been correct two times and off 5 times. (Six, if we count pre-windows prediction.)
How did he put it? “the point is to try to be less wrong than the industry”? I wonder what I should compare this to?

Oh yes, someone probably wants to say that Tomi has had more correct forecasts than the most recent one. I know he has. I listed them there. But this does not work that way. If you buy multiple tickets and check which one takes the hit, it stops being forecasting and starts to be lottery. Anyone can make forcasts few % away from each other and say they are the most accurate forecaster. When he chose to revise his forecast he rejected the previous numbers. (Even though he now uses the old ones to back up him being “most accurate forecaster”.)

I do give one credit to Tomi, though: If we – unlike Tomi – do not forget Horace Dediu of Asymco, Tomi is (to my knowledge) the second most accurate forecast about Nokia Q4 2011 market share in February 2011. In addition to those two I am not aware of any more accurate forecasts from that period of time. Unfortunately Tomi chose not to believe in his forecast himself either.

(Perhaps we should always take the most outdated forecast Tomi has and use that? For all the we know all quarters except Q2 2011 and Q3 2012 were pretty darn well predicted by Tomi if we would. 😉 )

UPDATE 10-Jan-2013 & 15-Feb-2013:
Fourth Quarter numbers came out in Nokia’s positive profit warning. And we now have also market share:

Q4 2012 market share forecast: 6%. (July 26th, 2011.) [9]
Q4 2012 market share forecast: 3%. (May 1st, 2012, outdating previous.) [10]
Q4 2012 market share forecast: 2%. (June 27th, 2012, outdating previous.) [5]
Q4 2012 market share forecast: 3%. (December 24th, 2012, outdating previous.) [11]
Nokia market share for Q4 2012 was 3,1%. Tomi is off only by 0,1 points so this is very accurate forecast.
(Last prediction is from Twitter but he links to his blog so let’s assume number should have been somehow visible in there too.)

Yes, I was supposed to pause from blogging. I had the screenshot of Tomi’s tweet and I just had to post this. Now I’ll log off from this for a while again. Please feel free to comment, I check back for comments every now and then and tend to correct my posts if there is need to do so.
-ExNokian-

REFERENCES:

[1] http://www.talouselama.fi/nokialandia/nokialla+jaljella+enaa+viikkoja++kuinkas+kavikaan+synkalle+ennusteelle/a2159179

[2] http://www.tietoviikko.fi/kaikki_uutiset/nokialla+piti+olla+aikaa+quotviikkoja+korkeintaan+pari+kuukauttaquot/a862516

[3] http://www.mikropc.net/kaikki_uutiset/nokialle+povattiin+quotviikkoja+korkeintaan+pari+kuukauttaquot++puoli+vuotta+sitten/a862742

[4] http://communities-dominate.blogs.com/brands/2012/12/in-forecasting-racket-you-win-some-you-lose-some-talouselama-in-finland-mocks-me-for-my-nokia-to-be-.html

[5] http://communities-dominate.blogs.com/brands/2012/06/revised-nokia-2012-market-share-projections-revenues-profits-asps-by-quarter.html

[6] http://communities-dominate.blogs.com/brands/2010/12/some-symbian-sanity-why-nokia-will-not-join-google-android-or-microsoft-phone-7.html

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

[8] http://communities-dominate.blogs.com/brands/2011/02/when-things-get-even-worse-than-you-thought-1st-preview-of-potential-for-nokia-microsoft-partnership.html

[9] http://communities-dominate.blogs.com/brands/2011/07/stephen-elop-costs-nokia-10-million-dollars-more-of-lost-profit-every-day-he-stays-with-nokia.html

[10] http://communities-dominate.blogs.com/brands/2012/05/are-we-ready-for-the-numbers-nokia-smartphone-market-share-projection-2012-ends-year-at-3.html

[11] https://twitter.com/tomiahonen/status/283107709514051584

[12] https://twitter.com/tomiahonen/status/294112537283284992

Guideline for commenting: I hate the way Tomi Ahonen deletes criticizing comments from his blog. However, I plan to follow three of his principles: I’ll delete comments that are

  1. Personal insults to someone
  2. Duplicates
  3. Spam

In addition, if you wish to challenge my previous posts, please comment to those.

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