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Banned | Posts: 974 | Thanked: 622 times | Joined on Oct 2010
#129
Originally Posted by cBeam View Post
Deja vu - Nokia's WP strategy and its merits have been discussed on many forums previously - including tmo. What's changed is that we got Elop's PR piece in business week, and Nokia's profit warning for Q2.

Here are some facts:
  • Nokia's share price is in a downward trajectory that started 2007 reflecting lower and lower expectations for Nokia's performance.
  • Since Elop's burning platform memo and WP strategy Nokia shares lost another 40%.
  • According to Elop Nokia Windows phones will be available in relevant numbers in 2012.
  • Nokia says they will (try to) sell Symbian phones for a long time after Windows phones are released.

Now my opinion:
There are two major factors to make a company thrive:
  • Do the right things (here sits strategy)
  • Do them right (here sits execution)

Do the right things:
AFAIK Nokia was on a path to put in Maemo / Meego on the high end, Symbian in the middle (going downwards), and S40 for cheap feature phones. The first two tiers would be glued together by Qt, which would be the platform for Nokia's ecosystem. This was also Elop's announced strategy as I understood it until Feb 2011.
In Feb 2011 Elop did two things: He publicly announced that Symbian is inferior and dead, and Nokia will put all eggs into a partnership with MS.
I happen to believe that the strategy until Feb 2011 was the right one, and Elop's wedding with MS will leave Nokia without the chance for an ecosystem of their own.

Do the things right:
There is no sugar coating, Nokia did very few things right, at least since 2007. Wrong product decisions, unacceptable delays (N8 one year late, no acceptable browser on S3 until the update, N900 release with "Ovi maps" but without any usable map functionality, MeeGo announcement delaying Maemo updates, etc, etc).
However, even if the WP strategy is correct, the numbers now show that the transition away from Symbian is managed extremely poorly. Who in his right mind will spend $600 on an E7 when the CEO of the company offering the phone says that Symbian is inferior and obsolete? Fine, there is the argument that the end user does not know or care, the carriers do know, as do many sales people in the phone shops. And steer people to "superior" Android and iOS.

One way to execute the transition better would have been to announce WP for selected markets (especially North America where Nokia is not present), but continue selling Symbian phones in as high as possible numbers ("WP is really good for our U.S. customers, but the unrivaled functionality of our Symbian phones, the best in class battery live, and super features like our Zeiss cameras and multimedia connectivity makes us certain that our Symbian phones are very desirable devices, blah blah blah..."

This brings me to my conclusion:

Elop's WP strategy will be good for MS because they will sell more Windows Phones than they do today (a measly 1.6 mio WP7 in Q1), but devastating for Nokia as WP will not reach anything close to 27 million smart phones per quarter as Nokia's Symbian phones sold in Q1 2011.

Nokia's execution on a corporate level did not improve since Elop took office (might not be Elop's fault as changes in organizations take time, regrettably), however execution on the executive level (transition away from Symbian) is horrendous as the profit warnings show. And this is Elop's responsibility.

If Elop is able to fix Nokia's execution problem, Nokia might be very well doing the wrong things very well.

Not a good perspective from Nokia's point of view.
What has been underestimated in every blog and analysis is the difficult state Symbian is in, combined with lack of a top notch software engineering team at Nokia. This is seen as lack of execution, but the real problem is much more severe. The end result is strategic decisions that are not rooted in reality.

Elop did what he had to do, and probably was told to do by his employers.