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Nokia: We depend on uninformed customers, deception preserves brand value and uncompetitive software will keep us competitive

In a previous post I asked whether Nokia’s strategy is dependent on a “built-in assumption that end users are inherently stupid.”

Nokia confirmed that this is indeed the case.

“Millions of consumers are oblivious to the announcements that we have made,” she said. Those consumers value Nokia’s brand, she said, and will continue to buy devices provided the company keeps making competitive products.

via Nokia’s Jo Harlow on the Move To Windows Phone, the Future of Symbian and More | Ina Fried | Mobilized | AllThingsD

There are three statements being made:

  1. Nokia is counting on uninformed customers, not just end users but the shops and operators which will keep stocking the end-of-life product lines. There needs to be a conspiracy of stupidity for this plan to work.
  2. Nokia’s brand will survive even after customers are deceived into buying lame duck products. The idea that buyers value a brand that is offering products that the company does not believe have a future is cynical.
  3. The absurd implication that Nokia’s products will be “competitive” even though management asserted clearly and emphatically that the software they run–the very basis of competition for any smartphone–isn’t. If a smartphone is expected to be competitive even though its software isn’t then it’s not competing on the basis of software. If it isn’t then how smart is this smartphone?

One gets the sense that Nokia is undergoing significant ethical decay.

[UPDATE]

To paraphrase the ethical dilemma:

“We want a three horse race. We’re not there yet. In the meantime we have a sturdy donkey that can still walk. We expect 150 million people to bet on it.”

[UPDATE 2]

I take issue with the ethics of jumping off a burning platform while selling tickets to tourists to come visit.

  • Duncan

    Hmm. I didn't read that much into it. Getting past the first sentence, replace 'Nokia' with You Favorite Company and it sounds like a pretty routine business relationship.

    So the point of contention seems to be “Millions of consumers are oblivious to the announcements that we have made”, which in itself is likewise innocuous. Not everyone follows tech blogs or even mainstream news when buying a product; many simply go out and shop at stores.

    I'm not defending Nokia here, but I think there are better arguments against them than this semantic sample.

    • r00tabega

      Yes. Effectively, Nokia the brand is not Symbian the brand… from Horace's previous posts, it's clear that Symbian was quite a weak brand if that.

      Nokia's brand promise is "hardware that is cheap, and does the job" not unlike Dell's (their valuation is based on how well that promise is fulfilled and how valuable it is for their customers).

      • Steve

        "Nokia's brand promise is "hardware that is cheap, and does the job"

        That works in the feature phone marketplace or if your smartphone ecosystem is at least minimally competitive. But Nokia is referring to the competitive smartphone space, suggesting that their Sybian smartphones will be snapped up by the great ignorant and unwashed even while the company leaves Symbian behind.

        This is the type of belief in unconditional brand loyalty that allowed the Japanese car companies to ultimately decimate Detroit in the 70s. And they found that consumers, even those ingorant, unwashed and not reading Road & Track, could hold a grudge.

        And once they were behind, they couldn't catch back up easily… Japan (and others) kept moving the target. It has taken bold leadership (Ford) and external bailouts (Chrysler and GM) for the US automobile industry to approach competitiveness.

        Microkia will face the same moving target. And starting out by hammering your supposedly loyal but uneducated customers is not a viable business model.

      • http://twitter.com/aegisdesign @aegisdesign

        "hardware that is cheap, and does the job"

        That really isn't true for all of Nokia's range. Yes, they do cheap and functional but they've also got some top quality hardware also. The N8 isn't 'cheap and does the job' by any stretch. Nokia are generally very well regarded for the quality of their phone hardware and electronics.

        Nokia's phones and generally dependable, across the range. Yes, there's some stinkers in there but generally Nokia is as dependable as Volvo, not cheap like Kia.

    • capnbob66

      It may be semantically thin but I think Horace has extracted the relevant meaning from it. It may or may not be as unethical as Horace makes out but the mechanics are undoubted.
      1) Why should stores/salesmen support this position when they know they are going to be put in a bad position by Nokia when their Symbian buyer comes back and they have to sell WP7 to them in the face of Android and iOS who, in the meantime, will have lowered prices and increased distribution. Why not just advise the client to move now and not blow any more $s on Nokia/Ovi?
      2) This will hurt the Nokia brand – not with everyone and not even irrevocably but significantly when users find out their phone has been EOL'd. People with no apps won't care, but those with any sort of reasonable library might. Those with expensive or irreplaceable apps will definitely care.
      3) With Ice Cream and iOS5 coming out soon, Symbian will only look progressively worse and worse over the next 5 quarters. It is becoming less competitive by the day.

      While 30M units per quarter produces a lot of momentum and won't fall off a cliff immediately, NOKs stranglehold on distribution to far flung corners of the world, and the relative poverty and uninformed nature of many of their users are no longer givens. As emerging economies increase disposable incomes, Chinese brands move in to the BRICs, Apple moves downmarket, Nokia is also losing any remaining sheen to its brand. That's sheen as in shiny, not Sheen as in taking large quantities of cocaine and then going crazy on every network that will interview you.

    • Yowsers

      Agreed. I think Jobs said something similar when asked – while still at NeXT – what he would do with AAPL were he to run it again. I forget the quote but he related that he'd milk the existing Mac for what its worth while getting started on the next big thing.

      It's practical (or mercenary, depending on your take). One problem — I don't get the sense that Nokia has a next big thing in it, or quite the capacity for it.

      I see Nokia's statement quoted above more neutrally. I think a feature phone is more than good enough for a large set of users out there, where smartphones and geniusphones are not all that necessary. And they're oblivious to it, too.

      • Hamranhansenhansen

        The thing is, with the Apple/NeXT split and later reunion, it took Jobs 10 full years after his return to get to the iPhone introduction, and 3 more to get to iPad. It was 14 years between Newton and iPhone even though they are essentially the same device, even down to ARM processors. With all that delay at Apple, Nokia should have beaten Apple to iPhone and iPad. iPhone was the second phone with a WebKit browser on it, Nokia did it first. Nobody remembers because Nokia didn't make us remember with a memorable product. So there is no next big thing coming from Nokia. It is up in the air whether they ever even ship a Windows Phone, which 3 or 4 other companies have already done.

      • http://twitter.com/davidchu @davidchu

        Oh yeah, don't forget that Jobs took the time to transition their developers and customers to OSX and then to intel chips. He didn't leave the customer base behind.

      • http://twitter.com/aegisdesign @aegisdesign

        I've always considered that quote to be something you'd say out of spite when being ousted from your own company.

        The proof in that is that when Jobs came back to Apple, he nixed the next big thing (Newton) and spent a fortune on the Mac.

      • huxley

        You need to remember that Steve Jobs' comment was contrasting with the prevailing opinions at the time which were that the Mac platform should be ditched entirely and that Apple should a) sell high-end Wintel PCs or b) become an OS and software vendor (ie let others build the hardware).

        And you could argue he did follow through with that comment, Mac OS 8 and 9 were milked for what they were worth, as Apple transitioned to a fully pre-emptive multitasking Unix-based OS. The fact that we still think of it as the Mac is a testament to how smoothly they managed to transition.

    • Relayman5C

      If this is a "routine business relationship" to you, count yourself among the uninformed customers Nokia is looking for. Most companies don't position their product so that they only reach the uninformed.

  • Sander van der Wal

    You could also say that most Nokia's smartphone customers don't care about apps. If that is the case, the Microsoft announcement is indeed irrelevant, Nokia could as well sell feature phones and kill Ovi.

    Or, people who care about apps do not buy a Nokia.

    • Frank

      As Ovi Store daily downloads were going from strength to strength, it seems that Symbian buyers were becoming more interested in buying apps. Now any app consuming Symbian buyer with a clue, or retailer interested in not pissing off their customers, will be giving Symbian – and thus Nokia – the swerve.

      If ever there was a master class in how to destroy trust and brand value, this is surely it.

      • Sander van der Wal

        Downloads aren't sales.

      • Sander van der Wal

        Replying on my own post, sigh.

        Given that Nokia has as many smartphones sold as everybody else combined (http://www.asymco.com/2011/02/21/platform-sunk-costs/), the fact that Ovi is only at second place in terms of app store downloads (also see http://www.asymco.com/2011/01/16/more-than-60-app… means that people buying Nokia smartphones are not that interested (yet) in installing Apps. If people were really intereste, like as with iPhone, then Ovi would be number one, plain and simple.

        So, apps availability is not yet that important for the Nokia brand as it is for the iPhone brand. The same as app availability is not that important for the Android brand, yet. Given that Android is third in place in terms of downloads you can even argue that Nokia users care even less about apps than Android users. This will/might change in the near future, but to me it appears that Nokia does have some time before app availability becomes a requirement for the Nokia brand.

      • Sam

        Agreed, but the point about Ovi Store is that downloads per day were/are growing at the rate of 0.5 million downloads per day per month, or thereabouts since September when it relaunched. Respectable growth and prospects given the potential market, now kicked into touch for a platform with barely any consumers and far fewer apps and downloads. That's what makes the decision to go 100% Microsoft all the more crass.

      • Sander van der Wal

        The majority of Nokia users is not yet downloading or buying apps. So Nokia will not loose the majority of users, because these users will not experience their apps becoming worthless in two years.

        With one of Nokia's problem being that too few developers developed for them, whether in native Symbian or in Qt, they would have an issue with Ovi Store anyway: few developers, few apps, little platform pulling power, little app stickyness.

        So they choose the best (according to them) of two bad scenario's.

        Besides, it is certainly possible to keep Ovi growing and migrate users with their apps to WP. If a developer can sell a file with both a Symbian and a WP app inside it (a zip file would work fine), then the native installer can choose either the Symbian app or the WP app. That way the customer keeps his apps, the developer keeps a revenue stream and Nokia keeps a live Nokia platform.

      • Bill

        Who mentioned anything about sales – the discussion was about apps? Ovi Store income exceeds that of Android Marketplace, if it matters.

  • Luis Masanti

    It is clear to me that the Microsoft's ethical decay virus already spread in Nokia's organization.

  • http://Sepharimgroup.com Bob Egan

    Your Nokia dirty laundry is showing a bit here…

    • asymco

      Familiarity breeds contempt.

      • http://tenayagroup.com/blog/ Brian Phipps

        And clarity.

  • Frank

    Pretty much how I see it too, and why the new Nokia strategy is doomed to fail as those Symbian consumers – once the competition bring them up to speed on their choice to buy Symbian – will abandon Nokia faster than Nokia abandoned it's own burning platform. And once those loyal Symbian consumers have left Nokia, they'll never return.

    This strategy will condemn Nokia to a future as a bit part player, at best. It's hard to see this working out well for Nokia, and will only accelerate their decline before they are snapped up by HTC, ZTE or most likely Microsoft.

  • http://twitter.com/cdelrosso @cdelrosso

    Most users are not aware of the OS installed in their mobile phones and Symbian has never been a strong brand. However, as you rightly point out, developers, operators and other stakeholders of the ecosystem know these details.

    However, if we believe that the smartphone war is of ecosystems and not of devices, than the fact that Symbian is at the end of the life matters.
    If you are a developer you are not going to invest in that platform now. If you are an operator, you are not going to invest in supporting the platform.

    But we can argue that Symbian is placed, (seeing its ASP) in the feature phone category. In that segment, with a low average selling price, the ecosystem story is not that important and people care less about apps but want the most value for their money. Symbian is pretty strong in this segment as it has been shown by the 28 Million devices sold in the last quarter.

    At the moment, Symbian is still the dominant smartphone/feature phone platform and Nokia has been able to ship million devices to people around the world to a price segment where Android and iPhone do not go into, yet.

    Things are changing and changing fast and Android is showing it can scale down to lower price points. As your older posts "Mobile World Congress: Revisiting the $85 smartphone" and "The price of Windows Phone: Nokia’s evaporating smartphone share".

    Interesting industry, isn't?

    • Frank

      The dominant feature phone OS is S40, which Nokia are still supporting (otherwise they'd have no business whatsoever).

      Symbian, or S60, or what was Symbian^3, underpins the Nokia smartphone business and it's this OS they have end-of-lifed and yet expect to sell 150mn devices, so it's hard to argue that Symbian is in the feature phone category – the 28mn devices sold last quarter were smarphones, not feature phones (they sold multiples more of those).

      But moving Symbian down to the feature phone makes sense – unfortunately that was the last strategy, based on Symbian/MeeGo/Qt, an elegant strategy that made bundles of sense, and might even have worked if Nokia had stuck with it for the longer term. Their new strategy though is a complete mess, even going as far as having Rich Green (Nokia CTO) stand in front of developers at Barcelona and with a straight face tell developers to learn Qt for the next 150m devices, then unlearn it all and switch development to Windows Phone using Silverlight/XNA. How stupid do Nokia think developers are? Fck that, I'll just learn Java/Dalvik once and target those millions of devices already out there, the development message from Nokia is a complete (and embarrassing) joke.

      • http://twitter.com/aegisdesign @aegisdesign

        Exactly. Although, it was nice to see there's a full port of Qt on Android now with dev tools, debuggers, deployment tool – the works. All done by 1 developer in their own time outside of Nokia.

        If you're already a Qt developer, that's pretty useful.

      • Sander van der Wal

        I would not call Nokia MeeGo/Symbian/Qt strategy elegant. It had the advantage of keeping their Symbian developers happy and unifying their Symbian and Linux OS'es. But it is making the best of a bad situation, which is having two OS'es competing for the same set of devices.

        Symbian's problems lay with the difficulty to program it, and it not being Standard C++. Nokia should have fixed that, by moving Symbian towards a much easier to program for third-party API that was completely based on Standard C++. There is nothing in Symbian that prevents it from running on devices other than smartphones. It started as a PDA OS, with the Psion netBook being the daddy of current netbooks and the Psion netPad being a very usable iPad-precursor.

        But Nokia added a competing OS with a different API, Maemo, creating more strife inside the company and making it move slower.

        Buying Qt was a way to reconcile the clash between Symbian and Maemo, and that might have worked. But Qt was not ported fast enough to neither Symbian nor Maemo. So the N900 got stuck with an outdated UI API nobody wrote new programs for.

        And what happened, both the Maemo and the Symbian camps started to develop competing and incompatible UI's with different API's on top of Qt. How on earth is that elegant? It would have been elegant if they created implementations using the same standard Qt API.

        If you want elegant, look at what Apple has been doing with their Objective-C layer on top of a C based kernel and C based low level middleware. One core OS, one core set of middleware and two different UI's.

    • r00tabega

      > But we can argue that Symbian is placed, (seeing its ASP) in the feature phone category.

      Horace has also been stridently saying that the feature phone market is going to disappear… and fast (with data and graphs to illustrate his point).

      So where does that leave Symbian? Like a polar bear on a quickly melting glacier headed south.

      Nokia had a good chance to carve out a win/win with Microsoft earlier this month. The fact that the deal was, in effect, Microsoft "buying out" Nokia with a $multibillion payment in exchange for a non-exclusive WP7 push showed how previous-century the deal sounded (just like the two companies in the deal).

      Investors rightfully fled the scene, as NOK lost 20% overnight and has yet to recover.

    • Hamranhansenhansen

      People don't know their iPhone has iOS, but they know it has App Store and iTunes, which is essentially the same thing.

      The last 10 people I met who had feature phones also had iPods. Does a Symbian/iPod user go to Windows Phone 7 on Nokia or to iPhone in the future? I would argue they go to iPhone because they are already in Apple's ecosystem. Especially if Apple does a low-end iPhone line, a smart feature phone so to speak, an iPod with a phone in it.

    • Kizedek

      "Most users are not aware of the OS installed in their mobile phones and Symbian has never been a strong brand. However, as you rightly point out, developers, operators and other stakeholders of the ecosystem know these details."

      OK, granted. I wouldn't know Symbian from any of the other phone OSs that Horace recently listed, outside of iOS, Android, Windows Phone and maybe RIM.

      But aren't customers who go to buy a new phone, at least if they are looking for a smart phone anyway, g to be asking a couple of questions? The are going to know what an Android phone is or does just by walking in the store; and I don't think they are going to be totally oblivious to the iPhone.

      So aren't they going to say, "what apps can I get for this"? Or, "how does this compare to that HTC one over there?" I think they have to know or be informed at some point in the conversation with the salesman that the Nokia phone they are checking out is not an Android phone, and doesn't run iOS or Windows Phone. I mean, I may be pretty clueless when I walk into a phone store, and the iPhone may be the only model I can actually name; but I can't reman clueless five minutes after I walk in, surely? Not nowadays with all the emphasis on Android and iPhone. Or do most people shopping for a smart phone simply walk in and say, "What's your special deal? Nokia? Yep, heard of that; looks nice. I'll take it."? If so, has Nokia got a thing going with the vendors?

  • Ian Ollmann

    Horace, you've written some strong words here. You may wish to tone it down a bit.

    I personally think that the Osborne effect is overblown. The fact of the matter is that even on the day before the Nokia Windows phones go on sale, the lame duck Symbian phones will still function as designed, as well as they ever have. There will still be millions of users using Symbian phones. All of these phones will continue to work just fine even after the Nokia Windows phones go on sale. On that day, there will be nothing more wrong with those phones than there is today, or indeed a few weeks ago before the announcement. Thus, there remains intrinsic value to these things, and many people will be glad to have them, especially at the right price.

    I'm not one of them. I value my phone as a computer first and second and occasionally use the nifty live talk feature. However, there are quite a number of people out there deluded, stupid and otherwise who think a phone should make phone calls first and foremost and all the rest is secondary. For these people, the OS and App situation is largely irrelevant except for the all important metrics of number of keypresses required to place a call. Nokia will survive on this market until such time as they are able to deliver something more exciting, and that demographic is brought begrudgingly into the mobile computer age, for lack of any alternative.

    • kevin

      But wouldn't those "deluded, stupid" people just buy a phone at the featurephone price (especially with no data plan attached). Will Nokia be making Symbian phones as cheaply as others can make excellent featurephones (i.e., those that just make phone calls with few keypresses)?

    • asymco

      The ethical dilemma is not on selling a product that does not make phone calls. It's selling a platform product whose platform you have declared to be "burning" and from which you've chosen to jump.

      • Ian Ollmann

        Not at all. See the immediately preceding paragraph in the story for context. Obviously the OS has no future, but that does not mean that the phones can not stand on their own merits, more or less as I described above. That seems to be pretty much what she is saying too. I don't think this is unethical, because Nokia is being entirely upfront about it. It is hard to imagine how they could have cost effectively made it more public.

        Many major consumer electronics companies have run into trouble at one time or another when their strategic vision fails them, and they find themselves having to scramble with a bet-the-company late course correction. Apple ran into trouble when Copland failed, for example. Palm has had a misstep or two. Microsoft had Longhorn, PlaysForSure, etc. It is an entirely unenviable position! No matter what you do, the customer banking on the continued success of your failed vision is going to get burned. The right thing to do is course correct as quickly as possible, be up front about the whole thing so that customers and partners who are affected can plan accordingly. Is it more dishonest to sell a product you know is EOL if you hide it from your customers, or if you tell them?

        What I see is a blogger that I respect highly going after a company for taking the high road. If there is an plausible way to get to where they want to be (windows) that is more ethical and still retains a workable business plan, let's hear it.

      • BobShaw

        Completely Agree. Nokia has been very upfront with all their stakeholders i.e. customers, partners etc. This is the reason it is a very valued brand and stands number one in India way ahead of other brands.

      • Charles

        Upfront? Are you serious? Do you consider them to have been upfront when they told everyone back in Sept/Oct 2010 that Qt was the future, yet on Feb11 they dropped the bombshell that Qt would not be available on the platform that is now the future for Nokia?

        Nokia as a company couldn't keep to a strategy for longer than 12 months if their life depended on it. This strategy with Microsoft will fall apart one way or another.

        It's this inability to stick to a plan that has alienated them from developers, who are switching to Android in droves, and will alienate them from formerly loyal Symbian consumers (at least some of those consumers) who would rather invest their hard earned money in a properly supported, funded and managed platform that has a future and not one that is being offered to them simply to allow Nokia to clear out some of their old inventory.

      • asymco

        I respect your point of view, however, even after lengthy consideration I do not see Nokia's approach as the high road. I am perhaps being harsher than necessary (which comes from familiarity) but my impression is still that Nokia is not begin up-front about what it's selling going forward with Symbian. To say that people will buy something that the tech press knows to be a dead end simply because the average buyer does not realize what they're buying does imply that they rely on an uninformed decision.

        In response to your question about whether it's more dishonest to hide the fact that you plan obsolescence, I think it comes down to the perception of value. I am happy to buy technology from Apple even though I know it will be obsoleted because I feel I will get value from using it until it is replaced and that what comes next will be better and worth upgrading to.

        But also there is an implied guarantee that what I invested in (software, data, knowledge of UI) will have a migration path to the new product. Perhaps not everything carries over but there is a transition roadmap. With a move from Symbian to WP this cannot be guaranteed.

        Perhaps my negative impression will be mitigated if the smartphones to be sold are marketed as feature phones and priced accordingly and if there is some plan to transition developers and apps to the new platform.

  • Omar

    3 years from now, Nokia will be far flung from the company and market share it was once known for. With the impending advent of Apples lower cost, scaled down iPhones on the horizon, who will want to purchase Nokia hardware much less distribute them?

  • BobShaw

    Nokia is a strong brand because it products provide a great value for money. In addition, Symbian is an extremely bandwith efficient OS. These two factors outweigh any disadvantages from not having many apps etc. for price sensitive customers especially in emerging economies. Nokia and Symbian are here to stay for a long time as long as they offer competitive products targeting the price sensitive customers.

    • Frank

      Have you seen the Android devices that are matching, if not undercutting, Nokia and their Symbian devices?

      Given the choice of a platform with a future, or a platform that won't exist in 12-18 months time, what would you buy? And if the Android competition have any sense, they'll be making this very argument wherever Symbian devices are on sale.

      Nokia was once a very strong brand, but with this latest move they are accelerating the decline of the company and any value that remains in their brand. It's a great shame, but really just the culmination of years of mismanagement. They had strong properties and platforms that could have succeeded, and still could, if only they'd been managed effectively.

    • Sander van der Wal

      If Nokia's current and future customers are price sensitive, meaning not willing to spend significant amounts of money on apps, it is no surprise that few developers were attracted to the Nokia value proposition for them. You get a couple of hobbyists programming for it and that is it.

      • http://twitter.com/aegisdesign @aegisdesign

        Hobbyists like Rovio, EA, Gameloft…

      • Sander van der Wal

        And Angry Birds became a world wide hit first on Symbian, and the iPhone version was created later to fill a gap in the market, right?
        http://venturebeat.com/2010/08/13/angry-birds-sel

      • huxley

        Let's see how many apps Rovio, EA, Gameloft, etc release 3 months out from now.

        Nokia may think they can get 150 million users but I doubt developers agree with them.

      • Frank

        3 months out, there may be some new apps released, assuming they're almost ready to go now. But in 6 months time, I doubt there will be any new releases.

        No developer will be starting new development on Symbian/Qt now, and there's a very good chance they won't be working on WP7 either (unless Microsoft pay them too, which is more likely).

        Pretty much every former Symbian developer I know of is switching to Android. They have zero interest in WP7, because as an eco-system it's still non-existent.

  • Steve

    "people will talk, get fed up, and go somewhere else."

    Absolutely. Even the oblivious ones. Could "the point person overseeing the Finnish cell phone maker’s shift to Windows Phone 7" express any more arrogance?

  • Senator Gronk

    IMHO, to ignore the importance and immense value of phone-as-laptop for price sensitive consumers is folly.

    Indeed, the feature phone is capable. But so was the IBM Selectric III when it arrived in the 80s.

  • yellow ghost

    you go Horace…no need "to tone it down a bit"

  • JohnatNokia

    For the record, we don't agree with the characterizations expressed in this post and would certainly like to echo the "semantically thin" sentiment of some of the commenters.

    • kevin

      Is that the best defense of Nokia you could offer?

      • Ian Ollmann

        Probably. It is extremely rare that a company benefits from engaging in a public brawl. .

  • Hamranhansenhansen

    The problem is Nokia did not show up to their recent Microsoft/Nokia press conference with a phone! If they were at least selling a Windows Phone 7 device right now, you could say they were offering their customers an honest product lineup of feature phones and smartphones. Then Windows Phone 7 replacing Symbian would be a function of smartphones replacing feature phones, not a result of a Microsoft/Nokia deal. It's so Microsoft to show up without product and talk and talk and talk. They are a 100% marketing-driven company. And I guess Nokia is now, too. Buy Symbian now for the brand, buy Windows later for the ecosystem.

    • http://twitter.com/aegisdesign @aegisdesign

      They couldn't replace Symbian 'featurephones' with WP7 'Smartphones' simply because WP7 is less smart than Symbian is currently. Some of the S40 phones do more than WP7.

      They completely bungled their transition strategy by abandoning their existing developers and not giving future developers any reason to develop for a platform that sells a fraction of their existing Symbian phones. The choice they gave was to develop for a burning platform or to jump into a cold icy sea and they're somewhat surprised it seems that developers chose instead to be airlifted off the burning platform by the Android Search & Rescue helicopter.

    • http://twitter.com/megachan @megachan

      I think you are on to something. Nokia seismic reboot of their HW with Microsoft SW is a knee-jerked reaction that left not only their customers burning on the platform but the whole organization as well. The only one safely in the water is Mr. Elop, that is until the sharks come circling.

      The thing they should have done, as you stated, was to first ready new superior phones instead of this snake oil of a showmanship.

  • kevin

    Most customers, even smartphone customers, don't really know what the OS is for their phone. They know the brand, like Apple or Nokia, and they'll know if there is a way to buy apps (App Store, Ovi Store). So Jo Harlow's statement is not off the mark.

    Most operators (and even cellular retailers) do know about the long-term viability of the phones they sell, and they'd know that app developers have begun abandoning the Symbian platform. But not all operators care about long-term relationships with their customers, so if Nokia offered the operators more revenue per Symbian phone than rival handset makers, they'd sell Nokia Symbian phones to their customers. As usual, it's buyer beware.

    • http://twitter.com/Niilolainen @Niilolainen

      "Most customers, even smartphone customers, don't really know what the OS is for their phone"

      C'mon.Please.

      Can't believe folks on here keep agreeing with JH that consumers don't know which OS is on their phone.

      Let's review do a Wireless 101 recap
      Smartphones are growing at a massive CAGR, while feature phones decline
      In the smartphone segment the mainstream choices are iPhone, Blackberry and Android
      Android is the fastest growing OS
      You don't need to know which OS iPhone and Blackberry use as they have dedicated OSs (vertically integrated)
      Android is driving consumer choice more than who makes the box for the Tegra 2/OMAP/Snapdragon it runs on
      Android is a brand
      Android is a brand
      Android is a brand

      Carriers and retailers advertise it, consumers select it, let me say it again. Android is a brand.

      So to say that "even smartphone customers don't really know what the OS is for their phone" is just plain wrong.

      (end rant)

      • http://twitter.com/Niilolainen @Niilolainen
      • Sander van der Wal

        What customers know is brands: iPhone, RIM, Nokia, Android, GSM. Whether that brand is an OS, an complete package, an ecosystem or a way of doing wireless telephony doesn't matter. They don't buy the brand because of the OS, they buy a given brand because the advertised value proposition seems better to them than other competing brands.

      • kevin

        You're definitely wrong, at least in the US.

        Android as a brand went absolutely nowhere in the US for over a year – T-Mobile and HTC buried it under their brands. Verizon broke through by advertising Droid (not Android) as a Verizon brand, and directly taking on the iPhone (since they didn't have iPhone) in its marketing.

        Even today, if you go to US operator websites or handset maker websites and look at smartphones, the OS is buried way down, usually only in the list of technical specs, not in the list of features. If you go to an operator store, the OS is not listed on the card next to the phone. They may mention the name of the app store because in the end that's what matters in the mind of the average consumer. What consumers care about is "social networking, web browsing, up-to-date contacts, voice-guided GPS, camera, messaging, music, video, apps"

        So I'll qualify my previous post to just the US, since I don't regularly visit stores or websites outside the US. Most consumers in the US don't care or know what OS is on their phone.

      • Niilolainen

        I also live in the US and feel like you can't move without seeing a little robot picture. The VZ Droid franchise has been very successful. I feel like there is a wave of Android mania sweeping the country. So I guess we will have to agree to disagree.

      • kevin

        Droid is different from Android. But I guess we do disagree.

  • asymco

    The statement that consumers buy only what is offered to them implies that they don't have options. It implies that Nokia phones will be purchased because they are more widely distributed not because they are better. It's a statement declaring that the strategy depends on distribution. It implies that Nokia depends on consumers that are not only uninformed but that have limited choice in what they buy.

    • Duncan

      I still think the argument made in this entry would be stronger if you also include the preceding paragraph from the source article. I think it provides more context for the quote you're dissecting.

    • http://twitter.com/Niilolainen @Niilolainen

      I think that consumers often do have limited choice, thanks to carriers controlling distribution. But carriers have plenty of choice.

  • Tim W.

    What I think Jo Harlow means, is that the "non-consumption" market – the one that currently uses feature phones – still values Nokia as a manufacturer of rock-solid phones, and will continue to do so in the transition from feature phones to Symbian phones.

    From my own experience, it still surprises me how many people keep referring to the 3310 and 3410 models as the ones you could "throw over the fence or accidently drop in the toilet and still have it working without a sweat".

    • asymco

      I believe she was specifically asked about how they will sell 150 million Symbian phones after declaring the platform dead and pointing out that they will reduce investment in it to zero.

      The viability of the non-smartphone business is another matter. Jo Harlow is not in charge of that business.

  • http://twitter.com/davidchu @davidchu

    Who cares about Nokia anymore. They became irrelevant in 2007 and only recently woke up from their doldrums. They will remain alive through case studies at MBA schools.

  • TN_Finland

    When there's a fool in the market, there's always a profit opportunity on pointing that out to them, because nobody wants to be a fool. In this case, the fool is Symbian buyer. Even if they don't care one iota about what OS their phone has, they need to be able to rationalize it somehow against the nosy neighbour or annoying brother-in-law who asks "why did you get a Nokia Symbian phone, don't u know it's so bad they gave up on the system?".

    • http://twitter.com/aegisdesign @aegisdesign

      If you're not bothered about too many apps, then the same reasons Symbian phones were bought before the switch apply. eg. best mapping on any phone in Ovi Maps, solid VoIP support, batteries that last two days, good signal and voice quality.

      If they price them right then they'll sell on that basis. That's not really foolish. In any case, people change their phones every 18 months or so anyway.

  • Evan

    you are harsh on Nokia, I do think consumers are in fact stupid in the sense that the average consumer is quite stupid when it comes to tech matters and so some of them will in fact continue to buy symbian phones. I think where Nokia erred was in publicly commenting on it, they should have kept their big mouth shut.

  • CTI

    What are phones for = voice communications primarily. I have my Nokia 2300, which has; Contact list, SMS, FM Radio, Alarms, Memo etc.. Pretty much all I need. And I am not bothered by all that smart junk causing me a headache and draining the battery. But albeit, I am a vivid notebook user. So, the iPad has my attention. Maybe I will get an iPad2 with WiFi? The updated MacBook Pro is missing the mark. And I might update my notebook to HP Corporate Elite 8460p, which can handle spilled coffee without disruption of workflow.

  • BSA2

    While Symbian may not be competitive with the very high end of the market, it still provides value and reliability to millions of consumers around the world. Horace, you take a very narrow view of what is a very broad market that Symbian still serves, and serves well. I have a Nokia N8 and it works great, takes better photos and video than any other smartphone out there, and has plenty of apps to keep me entertained and productive. The UI is not as slick, but that is being addressed in the next software update, and Nokia has made it clear that they plan to support the OS for many years to come.

    So get off your ethical high horse. Did you really expect Nokia to pull its Symbian-based phones off the market? That would be like Ford eliminating its product line because BMW and Mercedes-Benz sell cars that are slicker and run smoother (thought at a much higher price). One size does not fit all, and you look silly implying that it does.

    • http://twitter.com/samanjj @samanjj

      Thats his point mate. They announced that they are dumping symbian but didn't do it. Even worst

      • BSA2

        They didn't announce they were dumping Symbian. In fact, they said they plan to proceed with launching several more Symbian phones, targeting sales of 150M units. The first Windows7 phones won't be on the market until later this year at the soonest. And one would guess they will continue to market Symbian phones in the value end of the market for some time to come. What would the point be of halting Symbian sales now, other than to go out of business? I see nothing deceptive or unethical about this, which seems to be his point.

      • asymco

        In a presentation aimed at investors the CFO said they will reduce R&D headcount for Symbian to zero.

        See: http://press.nokia.com/wp-content/uploads/mediapl
        Page 32

        No specific time frame given but that is very much a driver for the decision to move to WP. He also said that they will ramp volumes down to zero (page 30) and make WP the exclusive smartphone platform for Nokia. There was a very strong, almost triumphant declaration that Symbian was finished.

        Then after all that they said they'll still sell 150 million Symbian phones.

  • Guest

    Nah, it just looks like Hralow and other Mokia execs are refusing to jump off the burning platform, despite being explicitly directed to jump. You could even understand their deep existential anxieties if they weren't already equipped with large safe golden parachutes.

    C'mon guys, get your golden parachutes and jump with pride! The whole world awaits your spectacular jump!

  • O.C.

    "In a previous post I asked whether Nokia’s strategy is dependent on a “built-in assumption that end users are inherently stupid.”"

    I read these blogs and sites and I can't even remember what BlackBerrie's OS is.

    I think there is an built in assumption on your part that end users know or care about software on their phones. Most just want a phone that works and if you put Android, Symbian, Win Phone 7 or iOS on it doesn't really matter. If they like it they'll use it.

    You should really mingle more with people not so tech savvy as yourself to form a broader picture.

    • asymco

      I am well aware of how consumers see phones vs. phone platforms. I also believe that what they see today is not what they will see tomorrow. Mobile computing is a sea change of perceptions.

  • RobDK

    Great article Horace! Spot on! I thought exactly the same when I read the article yesterday.

    Harlow is so condescending and arrogant. Nokia deserve what is coming to them. In reality they were DOA in January 2007 after Jobs’ iPhone intro.

  • Guest

    They must ship their EOL-ed smartphones with stickers containing big warnings for buyers:

    "This product contains EOL-ed software. Buy and use at your own risk. Purchased apps will not work on future products."

    That would be ethical.

  • http://www.bang.co.in Vinay

    Nokia is known in India for making devices that last for 5 years, and I dont think that is going to change. I wager that a significant number of smartphone buyers in emerging markets are not going to spend on apps. They will download the free ones that anyway have a different business model and are likely to be available on as many platforms as possible.
    Which means Nokia would already have everything it needs to compete across all segments
    1. cheap phones where it scores a bit over the Chinese dumps in most markets because of distribution and brand muscle
    2. Feature phones with and without touchscreens where it is already very price competitive and popular
    3. Entry level smartphones which are inexpensive or have a singular upsell function (such as audio or a high end camera). These could run symbian as they always have because people would be happy to download just the apps that are already available for free.
    4. High end smartphones (which will always be the smallest market) with Windows Mobile, which in time will include gestures that both companies are working on, as well as enterprise apps. I'm guessing a new MSFT enterprise apps market is coming which Nokia will ride on (and MSFT needs a visible branded partnership to give this credibility).

  • Analyst

    It does seem that Nokia is highly distraught right now:

    "Nokia offers pay rises, big bonuses to MeeGo developers" http://www.totaltele.com/view.aspx?ID=462953
    http://www.helsinkitimes.fi/htimes/domestic-news/

  • http://twitter.com/aegisdesign @aegisdesign

    Apple, Google and Microsoft are paragons in the field of good ethical behaviour of course but it took a special effort on Nokia's behalf to outdo them.

  • http://twitter.com/aegisdesign @aegisdesign

    Surely the big ethical story behind your conclusion is that Nokia have chucked away their relatively smooth transition from Symbian to the next platform, casting out thousands of staff and destroying the plans of 3rd party developers along the way. That's pretty indefensible.

    They've still got to sell smartphones but the transition could have been handled much, much more cooperatively with their existing community.

    • Sander van der Wal

      Why is that indefensible? Which developer would stay with Nokia if there is lots more money to be made at the competition? Lots of developers left Nokia already when iPhone became a viable option. Was that unethical of them too? The people who stayed had revenue streams from their Symbian apps. Nokia promised a smooth transition to MeeGo with Qt, so these revenue streams would be protected as much as possible.

      In the past there were few options, and Nokia played hardball with developers, because they could. And Nokia was also taken for a ride by some other developers (try looking up the Riot Entertainment story). Now developers have more power, so they choose. They did not choose Nokia and so Nokia has to do something different.

      The only people I might feel slightly sorry for are the ones who contributed to Nokia's Open Source effort without pay, as that effort was clearly wasted. But in fact I am not feeling sorry for them either. They will now have a very valuable experience in the economics of software.

      And because such things happened lots of times before, this is the reason why a developer wants platform-independent code whenever possible.

  • gotwake

    Poor Nokia, still living in La La land just like 2007.

  • http://tenayagroup.com/blog/ Brian Phipps

    Your post raises some very pertinent questions about the nature of brands themselves. It’s entirely possible for a company to use brand strategy as an excuse not to innovate. If “the brand” can be turned into a psychological prop, with iconic, mesmerizing powers, “positioned in the mind,” etc., then customers might buy whatever crap the company makes. The brand has turned customers into total tools. Ad agencies make this promise. A lot of firms buy it. It’s the heart of a cynical brand, as you accurately point out.

    It’s also dead end. Companies only fool themselves. Cynical brands destroy companies, and can destroy entire industries. Look what they did to Detroit.

    On the positive side, brands can be a powerful way to create customers, in the Peter Drucker sense. Brand strategies can create disruptive value. But their focus must be on value innovation–to advance customers beyond the mental and technical impediments (from lazy, laggard companies) that now hold them back. Nokia might learn from Apple in this regard.

  • Mark Wilcox

    Not defending the strategy because I think both the technical and marketing aspects are mental. The financial side may make sense but we don't have the details. However, I don't really see a valid complaint against the ethics – they're continuing to evolve the Symbian UX and they're pushing a lot of incentives to developers to try to keep them interested. They've been completely open about what they're doing. Customers have a free choice. No company in the world is going to sell products with an end-of-life warning on them and nearly all companies end-of-life a product range at some point, selling as much stock as people will buy. Expect Symbian devices to be priced very competitively.

    What Jo Harlow said is true. The fact that she said it publically is a mistake. If she'd been listening in her media training she would have said something like, "we believe our Symbian products still offer great value to consumers in many markets and segments" – that would also have still been true.

  • http://twitter.com/Branedy @Branedy

    Very conspiratorial, but the first rule of conspiracy is this, is it more likely conspiracy, or incompetency?

    read:
    'Most of our customers couldn't care less what we announce as an OS, just so long as it has our quality name on it, one that means, It's a phone, and it works reliably'

  • steffen_jobs

    i've been saying that nokia (and rim) have been dying since 2007. nothing new here.

  • steffen_jobs

    hilarious how some people think microsoft will save nokia, and qnx will save rim. they both have terminal cancer and can not be saved… it's too late, game over.

  • HTG

    Sounds like Nokia is reading from the telco playbook… confuse the customer, use subterfuge and make empty promises…

  • chandra2

    Horace, I am big fan of Apple and a fan of your blog, but this article does not make much sense. The spokesperson probably did not choose the best words but I do not think it is a lapse in ethics. If you apply that standard, most product transitions are unehtical. Apple transitioned from Mac OS to Unix, from power pc to intel etc. and they kept selling the older ones even after the announcement of those transitions. Is that unethical? No. Same thing with iPad 2. By your logic, the moment they decided to sell iPad 2 at $499.00, they should have immediately cut the iPad price to $399.00. Because, those who are outside of the 14 day window were sold something inferior at that price point.. Well, not really, but hope you understand my point.

    The concept of brand is a complex psychological process. People root for a sports team even after the owners, coaches, players have changed. It is true sometimes even when the team moves to a different city and changes jerseys. What remains? What is it the people are rooting for? Complex things, really!

    • asymco

      This is not about obsolescence or the upgrade cycle. This is about platforms, which are a promise of value beyond what is in the box. That option value is now zero, but the product is still sold as if it has some platform value.

      The remedy is for Nokia to sell Symbian phones as feature phones. Perhaps they will but it begs the question of whether they will be priced as feature phones.

    • asymco

      If you bought an MacOS computer after OS X was shipping you were offered backward compatibility for MacOS apps on OS X (Rosetta). Microsoft offers backward compatibility for most of its applications as they move to a new OS. The data you held on your hard drive would still be usable after the transition.

      What transitions are offered for Symbian users? What is offered to Symbian developers and anyone else who is expected to keep investing for two years in a platform Nokia themselves don't believe is worth investing in?

      • chandra2

        Horace, good points. Agreed. My main issue was making it into an ethical one. Here are some points.

        1. It is still a platform. It is not like it simply stopped being a platform on the day Nokia announced the WP7 deal. Your definition of platform as a 'store of value beyond what is in the box' is still true, but not as potent before the announcement. If the customer really perceives it as how you define it, they have a choice of buying Nokia or not.

        2. The issue of ethics is, is Nokia really disclosing this fact to every customer who purchases a Nokia smartphone now, to make sure they are buying it for the value it offers now. Probably not. But that is no different from when Apple swtiched to OS X, the number of developers developing for Mac OS is going to dramatically slow down and they can not run OS X apps on their existing MAC OS purchase.

        3. To a smaller extent, it is similar to how Apple is dropping support for the first generation iPhones and iPod touches for new features.

        3. The case of running Symbian apps on WP7 is interesting. That is a really high bar to set for the smart phone eco-system, but that is not the critical point here. If they bought an app on Symbian, it will continue to work on Symbian until the user decides to upgrade. In that sense, there is no degradation of platform value. Only degradation is, there may not be an active eco-system for symbian. But that is similar to what happened when developers moved to OS X from Mac OS.

      • Sander an der Wal

        1) at the moment, nothing. That might change if Nokia listens to some good advice on how to make multi-platform apps transparant to their customers.

        2) there is the E7 and some other goodies, worth about eur 1000.
        Seriously, though, the amount of investent going to be done will be tiny. Keep apps running. No major new developments.

        The question that still needs to be answered is how many Qt developers will not be happy, compared to the number that will be happy to apply their C# skills on a mobile platform.

  • Steven

    I think that many of us who consider ourselves tech savvy to a degree would be shocked, shocked at how many consumers are oblivious to what goes on in the tech world. We techies say, "How dare they continue to sell what's not the latest and greatest!" That Nokia is depending on these folks to buy out its lame duck inventory is not unusual or particularly unethical. What's surprising to me is that Nokia actually verbalized its expectations, subjecting itself to the wrath of geeks everywhere.

    • Sander van der Wal

      There are now lots of people interested in the goings and doings of the smartphone business. Three years ago I had to explain at length what I was doing, now I just say "Apps" and everybody understands. The infamous "Burning platform" was on Dutch prime time television news. There are now magazines targetted at the app buying public. What do you think these magazines going to say about Symbian being dead and gone in two years?

      Smartphones have crossed the gap, and are not nerd or geek territory anymore.