First of all I want to highlight that I currently still am a Nokia employee and therefore cannot take an objective stand on whether or not the sales of handset unit is a good thing. I’ll leave that to others. But I do want to make sure others get as little of the biased info as possible so I’ll do some fact checking on the representation of Nokia’s assets from Tomi Ahonen. This all is due his post about the incoming shareholders meeting and we have done this in the past. Problem is that I recently said (again) that Tomi is a liar or clueless and I think he opted for the clueless.
Here goes:

After sales of handset unit Nokia is left with three parts:

  1. Nokia Solutions and Networks, formerly known as Nokia Siemens Networks. Strategic focus of NSN has been 4G networks, so it makes more sense to compare them to other 4G infrastructure providers. Analyst company Dell’Oro reported in November 2012 that in the Asia Pacific region Nokia Siemens Networks led the LTE RAN market. The Asia Pacific region is reported as the the biggest by revenue with 41% of the total LTE RAN revenue, overtaking North America. Dell’Oro also reports that Nokia Siemens Networks is the leading non-Chinese TD-LTE RAN vendor. In global scale NSN was 2nd, just behind Ericsson.
    Nokia Siemens Networks just reported their sixth adjacent quarter of underlying profitability, with second highest gross margin in the company history (before specific items).
  2. HERE, mapping service resulting from Navteq acquisition. HERE provides maps to e.g. Garmin and provides in-dash navigation to 4 out of 5 cars that leave factory with a pre-installed navigation. HERE has maps of nearly 200 countries, offers voice guided offline navigation in 94 countries and in 50 languages – more than Google’s service. It has even been argued that HERE has better mapping data than Google.
  3. Patents. Nokia is said to hold close to 19% of the standard essential LTE patents, followed by Qualcomm at 12%. In addition to that they have a pile of patents for handset-related technologies such as Pureview camera technology and rich recoding audio. By licensig those patents to other manufacturers (which they have not done before due to competitive advantage given by the patent portfolio) patents unit can produce significant income.

Tomi Ahonen Clueless Edition:

If the handset unit sale goes through, Nokia will shrink so much, it will fall out of the Fortune Global 500. The primary business left would be the networking business (what used to be called NokiaSiemens Networks) that competes with Alcatel-Lucent, Ericsson and Huawei, providing telecoms networking technology to the telecoms operators/carriers around the world. This business is not very profitable, Nokia has posted losses in the unit for most of this decade. Nokia has its navigation/mapping business which is small compared to the rest (and has mostly been unprofitable).

Who cares about the previous decade if last 18 months have been profitable? And considering what I just typed about HERE, he really counts it as “small compared to the rest”? Either we talk about two different companies or then something is wrong here. But let’s see this further as it seems to get more funny.

Remember Nokia N9? It was sold in 37 countries. That list includes all “BRICS” countries save India. Actually, Nokia uses 6-country term BRIICA – Brazil, Russia, India, Indonesia, China, Africa. Of those, N9 was launched in ALL but India.
Yes, N9 was launched in China – world’s second largest smartphone market at the time – and a country where Lumias arrived way later.

Tomi Ahonen Clueless Edition:

Elop for example refused to let the most highly regarded Nokia handset of all time, the MeeGo based N9, be sold in any of Nokia’s biggest markets. The Best-EVER Nokia phone was refused by the CEO to be sold in Nokia’s biggest and best markets.

I wonder what those biggest and best markets are? United States where Nokia has market share of a whopping 1.6% market share with less than 400 000 units sold? Sure, India is big and sad that it’s lacking but honest?
Then we have Tomi throwing out some additional things like “Nokia own senior staff argued in favor of Nokia offering QWERTY based smartphones in its portfolio, because 40% of Nokia’s smartphone customers at the time had them and preferred them” that I have gone through before.

Oh, cameras. Nokia has traditionally provided state-of-the-art Cameras in their Phones. I want to point out that they kept the line with Windows Phone: Lumias 800 and 900 shipped with 8mpix camera and Carl Zeiss optics, not to Mention Lumia 92X -series and Lumia 1020. At the same time Nokia sold multiple Symbian models where only two go beyond those as they are “camera first” products: Nokia N8 (12mpix) and 808 Pureview (41mpix, same that came to WP in Lumia 1020). Both had Carl Zeiss optics, of course.

Tomi Ahonen Clueless Edition:

Elop refused to let good cameras be put on the first Lumia phones, they had worse cameras than contemporary Symbian smarpthones!

Worse than the ONLY Symbian smartphone that went beyond them at the time, N8?
Yes, I mentioned Lumia 1020, revealed July 11th. CEO Stephen Elop was first-handedly showing the device on stage. With AT&T CEO. And now considering that Stephen Elop stepped down when Nokia announced sales of its D&S unit September 3rd, we get to:

Tomi Ahonen Clueless Edition:

Only with the Lumia 1020 that was now released when Elop was removed from CEO position, did the Lumia series finally have a camera as good as last year’s best Symbian smartphone by Nokia.

What was that? Nokia engineers traveled two months back in time to tell that Elop will be moving with them to Microsoft so they can make camera phones again? How disconnected from reality is this man? He continues:

Elop HIMSELF said so, that the carriers don’t like Microsoft – because Microsoft bought Skype.

No he did not say that.

Its not that operator refuse to sell smartphones that have Skype – they hate Microsoft because it OWNS Skype. So they will not support Microsoft phones to the same level as they support for example Android phones. I did not invent this, Elop admitted it at the 2012 Nokia shareholder meeting. Some carriers even refuse to sell ANY brands of Windows smartphones – said Elop to Nokia shareholders.

And he DEFINITELY did not say that! There is a video of that specific statement so it is unbelievable how someone who claims to be a world-class consultant adds his own words to it and assumes that people are unable to check the facts.

I think I started this with the mention that Tomi has decided to go down the Clueless path? Here comes the mind-blowing example:

Tomi Ahonen Clueless Edition:

While we are at it, The new CEO should seriously consider rushing those 2 actually manufactured MeeGo devices (N9 and N950) that Nokia was manufacturing – and introducing them with whatever is the latest/last MeeGo OS version. And then rush into the market the other 2 MeeGo devices we know existed (the N9-00 and the original non-crippled MeeGo variant to the Lumia 800). These are no longer cutting edge hottest phones ever and cannot be sold for 500 or 600 Euros, but they are still very compelling mid-range phones that Nokia can make in its factories – that are IDLING – and rush to markets where they were not sold but who wanted them like the UK and Germany. If offered alongside the Lumia Windows devices, the MeeGo smartphones were always rated BETTER. Why not sell them now? They will not restore Nokia to 20% market share, but they will sell in several millions, definitely, and with no royalty due to Microsoft, they are INHERENTLY more profitable to Nokia than the Lumia series. Just introducing the MeeGo devices – and selling in the say 250-300 Euro range – they are quite competitive and reasonable mid-range products, while we await the new flagships on Android to arrive for Christmas. Nokia could put the N9 and N950 back into production now, and start to sell them by the first quarter of 2014.

Tomi just shows us that he does not understand a single bit of smartphone production or SW development. He has no clue what “expertise in house” means and seems to be still living in late 2010 or something.
I did this once before. N950 to production shape requires (by my calculations) 3 months – assuming that Nokia still has all the MeeGo experts in the house (which they don’t) and everybody would work on the bugfixing. If Nokia starts recruiting now, they plausibly could have N950 in production shape by Q4 2014. Then Nokia would be selling a 3-year old device with no compatibility towards any of the existing ecosystems and app store of what? 1000 apps? Real bestseller!
Also, what are those idling factories? As far as I know Nokia sold some excess manufacturing capacity in the past. Does someone who should be capable to offer business consultancy REALLY think that Nokia left factories stand unused, all of the fixed expenses running?

Nokia portfolio statistics, Tomi Ahonen Clueless Edition:

QWERTY type of hybrid phones, like for example the N900 and the E7, phones that have both a full touch-screen and a slider full QWERTY keyboard. 40% of Nokia smartphone users in 2010 had smartphones with some type of QWERTY on it (others were the Blackberry style).

…while 75-80% of the sales were Nokia 5230? I have to say that those non-touch non-QWERTY Symbian phones really were selling lousy if they account for negative 15-20 percent (assuming Nokia did not sell any other smartphones). 😀

Jolla – Tomi Ahonen Clueless Edition:

Using their OS which is called Sailfish, which is the latest evolution of what was then Nokia’s MeeGo. So obviously also the other older MeeGo phones should use Sailfish OS (the latest version of MeeGo, so to speak) and the beauty is, that in most cases, Sailfish OS is so clever – it runs most Android apps NATIVELY… So instantly, Nokia’s full MeeGo phone line is ‘Android-compatible’ in first Quarter 2014, as Nokia awaits its own full-Android phones to come on line, towards the end of the year.

Ignoring the fact that there are no Sailfish OS phones out yet and we have less than two months left of this year, certainly Nokia could produce its Q1 2014 MeeGo phones running OS they have never used before. Add some months to my previous estimate of Q4 2014.

The amount of downplay Tomi still pulls for Elop is amazing considering Elop is no more CEO and Tomi should be happy with that. But I did say just few days ago that Tomi should read my blog. Here’s one more reason again:

However this turns out, at least the cancer of Elop is gone and Nokia can now recover to something new.

Actually Tomi, “the cancer of Elop” is not gone. Elop stepped down while the deal is being worked on. I think he would return to CEO position if the deal was called off.
Interestingly, that is EXACTLY what you are trying to make happen…

REFERENCES:

All quotes of Tomi Ahonen come from his blog post here:
http://communities-dominate.blogs.com/brands/2013/11/my-thoughts-on-nokia-handset-unit-sales-to-microsoft-in-short-is-bad-sales-process.html

Advertisements