Yes. Stephen Elop was right on Nokia Being a “Burning Platform”

March 16, 2016 John Obeto

Yesterday, a Twitterer, Carmen Crincoli (@carmencrincoli) posted the following on Nokia, Lumia, and Stephen Elop.

I find it comical that people continue to mock Elop's "burning platform" memo, when all facts still say he was 100% right.

— Carmen Crincoli (@CarmenCrincoli) March 15, 2016

Because guess what: Staying the course with Symbian was NOT going to save Nokia. That idea is beyond comical.

— Carmen Crincoli (@CarmenCrincoli) March 15, 2016

It's not clear to me that Nokia would have survived on Android, either. They'd simply end up another Motorola. Cost structures broken.

— Carmen Crincoli (@CarmenCrincoli) March 15, 2016

I wanted to weigh in, but went to bed early. Because paper stackin’.

Short reply is/was: “You’re 100% correct, right, and all that, Double-C.”

You get his point, right?

For those who don’t, let’s go.

I will not go over the entire memo* here, but the salient points are:

i) Symbian wasn’t the way. Remember Symbian? Neither do I. I remember whenever I spoke about mobiles back in the day, that an in-law loved his Nokia smartphones. I couldn’t explain enough to him that the lack of traction for those devices meant that they were niche. Very niche. I mean, Palm and the Palm OS were niche to Mighty Windows Mobile in those days!

ii) Maemo wasn’t the way, either. When the scales fell from the corporate Nokia eyes in the face of the complete and total evaporation of sales of their N-series of ‘smartphones’, they decided to create a new OS. As was the flava-o’-the- day, Nokia decided to create their own mobile Linux distro, initially called Maemo. And, as any sane person would expect, this kneejerk failed. Spectacularly too. It inexplicably lives on, a sad fantasy of its developers for world domination, rejected by just about all sane humans.

iii) The platform – Nokia – was burning. This is what Elop inherited upon becoming Nokia CEO. Immediately he realized that Nokia’s dominance in ‘feature phones’, those cheapo low end devices, had blinded executive management to trends, and that despite their dominance** in that field, they had been surpassed, and well on the way to ruin if they adhered to their then-roadmap. They had to do something new.

iv) Android was definitely NOT the way. Aaah, Android. The initial power in Android was Motorola. Motorola had a sweetheart deal with Verizon Wireless, whereby they branded the phones using the Android operating system as Droid phones. Moto shot to the top of the heap, and, remind me, where is Motorola today? Samsung took over, creating ever aspirational devices up until where it is today: the big dog in Android, taking about 80% of the profits available to device OEMs from their Android devices. Sounds good, right? However, Elop correctly separated the chaff from the true numbers, and realized a) there isn’t much, or any space, for great differentiation in Android devices, and b) while Samsung’s 80% Android profit share number looked good, it was 80% of the approximately 18% of the profits of the TOTAL GLOBAL smartphone market, with Apple’s iOS raking in 80% of the entire market! This, despite the fact that Apple’s global device market share number was about anecdotally the inverse of the profit number! Going Android, would be a me-too, and not deliver historical Nokia device margins, and relegate them to being a Google frontend.

v) The OS selection of Windows Phone. Of all the OSs available, Microsoft’s nascent Windows Phone was the best choice. It would allow Nokia to innovate, bring in co-dev and co-marketing funds, and based on the limited selection, help Nokia do great things.

vi) Why it – the Nokia OS and Windows Phone combo – failed. Lots of ink has been expended on this topic. All I will add to it are sadly pedestrian design, completely stupid branding – Lumia, what?, inept marketing, elephantine gestational periods between device releases or updates, limited telco coverage, zero sales motivation at mobile telcos, etc., etc.

That, in a nutshell, was Elop’s Burning Platform.

He called it correctly.

However, Nokia was d-u-n, done!

It was too late to save it.

Oh, Nokia is again flirting with Android.

Meaning that the lessons of the implosion of Motorola were lost on folks is Espoo.

*You can search for, and read the entire Stephen Elop “Nokia Burning Platform” memo online.

**Nokia’s fall from grace is yet another textbook example of what that great man, John Obeto II, calls ”The Myopia of the Dominant Incumbency”.

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