What Nokia think of Apple and Google
10 February 2011, 12:46 PM
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What Nokia think of Apple and Google
Quote from a letter from the CEO of Nokia
"Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.
In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.
And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core."
"Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.
In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.
And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core."
Last edited by Trout; 10 February 2011 at 12:50 PM.
10 February 2011, 12:47 PM
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Full text of letter to employees at Nokia
Hello there,
There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform's edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.
As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a "burning platform," and he needed to make a choice.
He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times - his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a "burning platform" caused a radical change in his behaviour.
We too, are standing on a "burning platform," and we must decide how we are going to change our behaviour.
Over the past few months, I've shared with you what I've heard from our shareholders, operators, developers, suppliers and from you. Today, I'm going to share what I've learned and what I have come to believe.
I have learned that we are standing on a burning platform.
And, we have more than one explosion - we have multiple points of scorching heat that are fuelling a blazing fire around us.
For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.
In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.
And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core.
Let's not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally - taking share from us in emerging markets.
While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.
The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.
We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.
At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.
At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, "the time that it takes us to polish a PowerPoint presentation." They are fast, they are cheap, and they are challenging us.
And the truly perplexing aspect is that we're not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.
The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse or join an ecosystem.
This is one of the decisions we need to make. In the meantime, we've lost market share, we've lost mind share and we've lost time.
On Tuesday, Standard & Poor's informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody's took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.
Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It's also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.
How did we get to this point? Why did we fall behind when the world around us evolved?
This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.
Nokia, our platform is burning.
We are working on a path forward -- a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.
The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.
Stephen.
Hello there,
There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform's edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.
As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a "burning platform," and he needed to make a choice.
He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times - his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a "burning platform" caused a radical change in his behaviour.
We too, are standing on a "burning platform," and we must decide how we are going to change our behaviour.
Over the past few months, I've shared with you what I've heard from our shareholders, operators, developers, suppliers and from you. Today, I'm going to share what I've learned and what I have come to believe.
I have learned that we are standing on a burning platform.
And, we have more than one explosion - we have multiple points of scorching heat that are fuelling a blazing fire around us.
For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.
In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.
And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core.
Let's not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally - taking share from us in emerging markets.
While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.
The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.
We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.
At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.
At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, "the time that it takes us to polish a PowerPoint presentation." They are fast, they are cheap, and they are challenging us.
And the truly perplexing aspect is that we're not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.
The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse or join an ecosystem.
This is one of the decisions we need to make. In the meantime, we've lost market share, we've lost mind share and we've lost time.
On Tuesday, Standard & Poor's informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody's took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.
Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It's also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.
How did we get to this point? Why did we fall behind when the world around us evolved?
This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.
Nokia, our platform is burning.
We are working on a path forward -- a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.
The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.
Stephen.
10 February 2011, 12:54 PM
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I'm all too aware of what Nokia think of Apple 
The software in my current (and last) Nokia phone is so obviously a badly executed rip off of an iphone All the features that made every other Nokia I've owned easy to use are gone, replaced by icons for 'apps' I do not want
All mobile phone manufacturers seem to have lost touch with the fact that there is a sizeable market out there for simple, easy to use telephones, so desperate are they to jump on the Jobs bandwagon
The software in my current (and last) Nokia phone is so obviously a badly executed rip off of an iphone All the features that made every other Nokia I've owned easy to use are gone, replaced by icons for 'apps' I do not want
All mobile phone manufacturers seem to have lost touch with the fact that there is a sizeable market out there for simple, easy to use telephones, so desperate are they to jump on the Jobs bandwagon
10 February 2011, 01:13 PM
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I'm all too aware of what Nokia think of Apple
The software in my current (and last) Nokia phone is so obviously a badly executed rip off of an iphone All the features that made every other Nokia I've owned easy to use are gone, replaced by icons for 'apps' I do not want
All mobile phone manufacturers seem to have lost touch with the fact that there is a sizeable market out there for simple, easy to use telephones, so desperate are they to jump on the Jobs bandwagon
The software in my current (and last) Nokia phone is so obviously a badly executed rip off of an iphone All the features that made every other Nokia I've owned easy to use are gone, replaced by icons for 'apps' I do not want
All mobile phone manufacturers seem to have lost touch with the fact that there is a sizeable market out there for simple, easy to use telephones, so desperate are they to jump on the Jobs bandwagon
Brave comments to come out wth by a new leader of the company - but does show that he does know the market
Richard
10 February 2011, 01:13 PM
#6
Nokia have been burning since they switched to colour screens and started incorperating internet features.
Their menu and GUI interface just never gelled like it does with other phones. I don't know if its just rushed/poor execution of design, or just their developers being on a different wavelength to me (the user).
But eitherway its led to a top ranking phone manufacturer rapidly toppling from its podium in the short space of five years. Much like Motorola did when they also fell behind. Sony Ericsson are in the same boat IMO, but adopting android is some saving grace.
Korean manufacturers like LG and Samsung shouldn't be able to get a look in; their phones always used to be hopeless (be design or battery life/performance) but now they are on equal levels; They've played catch-up in a big way and are on the same level. They'll never innovate (doing what the East does best: copy it and then make it cheaper/faster ), but with an equal quality product, it take s huge chunk out of their competitor's market share. Add Apple into the mix for the cherry on the cake.
Their menu and GUI interface just never gelled like it does with other phones. I don't know if its just rushed/poor execution of design, or just their developers being on a different wavelength to me (the user).
But eitherway its led to a top ranking phone manufacturer rapidly toppling from its podium in the short space of five years. Much like Motorola did when they also fell behind. Sony Ericsson are in the same boat IMO, but adopting android is some saving grace.
Korean manufacturers like LG and Samsung shouldn't be able to get a look in; their phones always used to be hopeless (be design or battery life/performance) but now they are on equal levels; They've played catch-up in a big way and are on the same level. They'll never innovate (doing what the East does best: copy it and then make it cheaper/faster ), but with an equal quality product, it take s huge chunk out of their competitor's market share. Add Apple into the mix for the cherry on the cake.
Last edited by ALi-B; 10 February 2011 at 01:15 PM.
10 February 2011, 01:17 PM
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Very well written! The burning platform analogy is not a good one for me. Individuals in tight spots do amazing things to escape, massive organisations cannot respond in the same way.
How do you pour flames on something? What could Nokia have done to prevent the pouring of flames?
USA, India, China are massive markets. An 8% reduction in the UK could be countered by a 1% increase in any of those areas.
Its all BS. Where's the promise to increase R&D budgets for example. Looks to me as if he's hoping to get the employees to work longer for less to try and keep the company afloat.
Originally Posted by nokiaboss
"While competitors poured flames on our market share, what happened at Nokia?"
Originally Posted by nokiaboss
"It's also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on."
Its all BS. Where's the promise to increase R&D budgets for example. Looks to me as if he's hoping to get the employees to work longer for less to try and keep the company afloat.
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10 February 2011, 01:34 PM
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I have a Nokia E10. It's fantastic, it has two features that I have found to be most useful. It makes/receives phone calls and it sends/receives texts. Brilliant!
And the battery life is phenomenal.
Geezer
And the battery life is phenomenal.
Geezer
10 February 2011, 01:37 PM
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I have a N87 mini and I do like it. However, the software is just too slow to respond to commands (this may be processing power issue). Either way, there is a second or so delay when you ask it to do anything, even open up a text message window. For the slickness of operation, speed and developer support I'll be getting an iphone next time. That said, I'll bitterly miss my qwerty keyboard as I find it near impossible to type on an iphone at any speed.
10 February 2011, 01:39 PM
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You sir are in the minority of what people want from a mobile phone, hence the decline of Nokia.
10 February 2011, 01:47 PM
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The most interesting part of all of that was the North sea is a part of the Atlantic "all he could see were the dark, cold, foreboding Atlantic waters" I'd never considered it as such but as Wikipedia taught me it is a marginal sea of the Atlantic Ocean.
10 February 2011, 01:53 PM
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10 February 2011, 02:13 PM
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I've got one of the best Nokia's they made - 6310i, so doesn't say much for Nokia recently does it! I leave it off for months, turn it on and still have power 
I had an N97 and that was the final straw, same has gone for the missus with her N86....
I had an N97 and that was the final straw, same has gone for the missus with her N86....
10 February 2011, 02:24 PM
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It's like a classic Scoob, was a class leader in its day and still does what it says on the tin some 10 plus years later
10 February 2011, 02:38 PM
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Best phone i ever had was my first one about 11 years ago. That was a Nokia. Never lost a signal (unlike my Iphone) and 1 charge lasted nearly a week (Unlike my measly 1 day Iphone)
10 February 2011, 02:42 PM
#19
Nokia have made some classic phones but they need to set themselves afloat from their OS and go mainstream - Android/PalmOS etc etc.
For some reason tho' the asian subcontinent loves Nokia - I had a cousin come from India recently and all he wanted was a Nokia phone lol
For some reason tho' the asian subcontinent loves Nokia - I had a cousin come from India recently and all he wanted was a Nokia phone lol
10 February 2011, 03:15 PM
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Nokia 6310i - absolutely brilliant phone. Had one for years and the performance was superb. Even with older battery technology it rarely ran out of juice.
10 February 2011, 03:42 PM
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10 February 2011, 04:31 PM
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10 February 2011, 04:31 PM
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11 February 2011, 08:25 AM
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11 February 2011, 08:46 AM
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Nokia went down hill when they started with symbian
