Author Topic: The Elop effect - 24 billion losses in 5 months  (Read 4418 times)

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Offline Mika

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The Elop effect - 24 billion losses in 5 months
I'm not sure how many of you have followed what's going on in Nokia, but here's one analysis that ends up with a conclusion that Nokia has lost about 24 billion dollars since the current CEO Elop made his statement that Symbian and Meego phones need to be out-phased. This effectively killed their demand in the markets and resulted in the company's still going on free fall in the stock market. The thing about this is that it is a new World Record in losses in such a short time! All this of course, assumes that the analysis in the above link is right, but for me it seems reasonable. This becomes scary in a way that Nokia is now predicted to become a text book case of how NOT to run your company.

Lumia phone itself doesn't seem to be very wanted. Nokia seems to have bet on the business side of the mobile phones so that the integration with Microsoft would provide excellent business phone for power users. However, as is pointed out, mobile phone markets are different from software markets in a way that the operators still have a lot of power to decide what phone they will run  - this is unlike in Finland, where there is relatively free competition between operators. Now, get this, Microsoft went and bought Skype, very much hated thing by the operators, which resulted in boycott of Windows Phones. It is very likely that Lumia will not be able to pull Nokia back due to this reason only.

What it comes to me, it is rather amazing to see the mobile phone manufacturers to start to offer things in mobile phones that Nokia had something like 10 years ago. I personally know, the company I work in did one thing that only now seems to appear in mobile phones - this trend was set by another company than Nokia! That's a staggering amount of technological lead lost - this is just unbelievable. Most of the people I know from Nokia were frustrated back in 2006, now most of them have already jumped from the company. All the engineering staff said the same: they had really cool stuff (touch screens were among those, a lot earlier than many of you think) back then, but they weren't allowed to put that on the phones due to middle management meddling since they saw it a risk for their position. I don't know, but for me this starts to sound a lot like the classic fall-up-the-ladder case.

What are your thoughts of this?
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Offline The E

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Re: The Elop effect - 24 billion losses in 5 months
TLDR: Company that make consistently bad decisions, like clinging to a smartphone OS that is not Android even after it became apparent that Android was the thing everyone wanted, or cooperating with Microsoft before they got Windows 8 off the ground, or announcing the death of their current platform way before a replacement is available makes losses.

This is news? Or actually bad?
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Offline Mika

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Re: The Elop effect - 24 billion losses in 5 months
Here is the Elop effect explained

What it comes to Android, I think the reason it is wanted is mainly cheap price.

The news is that Nokia will likely default in 2012, if they keep on going at the same direction. It was among the biggest companies and brands you could find still in the beginning of 2011. It is the rate at which all this is happening that is the news.

For Finns, the situation is sort of meh. Plenty of intellectual property of small companies was stolen by Nokia around 1999 and given freely to Asian companies that then drove Finnish companies out of business. Nokia was very important for Finland back then, but nowadays it isn't that much any more. They have constantly been threatening to get out of Finland, and that threat got old some years ago already.
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Offline The E

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Re: The Elop effect - 24 billion losses in 5 months
Android's appeal isn't low price. Sure, there are android phones that are cheaper than iPhones, but there are also ones that are more expensive. The appeal is the large app store.
If I'm just aching this can't go on
I came from chasing dreams to feel alone
There must be changes, miss to feel strong
I really need lifе to touch me
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Offline Mikes

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Re: The Elop effect - 24 billion losses in 5 months
Android's appeal isn't low price. Sure, there are android phones that are cheaper than iPhones, but there are also ones that are more expensive. The appeal is the large app store.

For me... it's simply the freedom to install any program I want. Such a basic feature...  I really don't get how people can be so accepting of Apples closed system and the arbitrary decisions and restrictions that come with it. (Those reports of Apple banning E-Mail and other apps for no other reason than the apps in question outperforming the "official" Apple app are frankly hilarious... ;) )
« Last Edit: December 30, 2011, 12:13:16 pm by Mikes »

 

Offline Bobboau

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Re: The Elop effect - 24 billion losses in 5 months
ok google, buy em! :D
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Offline stinkyFeet

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Re: The Elop effect - 24 billion losses in 5 months
A former guy in charge at Microsoft goes to a well established company, puts windows on all their products, and the company crashed. He even went out of his way to hinder Linux products that were performing great.

Personally, I think he saw android phones being made in china being better than what his company could make, and instead of people accepting this, they bet billions of dollars on what they thought could keep Nokia raking in big bucks. It was obviously a bad bet.

I think a problem that repeats itself is that when a large company is in a position where it won't be able to make the usual amount of money at what they've been doing, they start acting desperate. This means suing people, doing things at the cost of the well built up company image, and making risky bets. In this case the bad bet cost the people involved billions upon billions of dollars.

 

Offline Herra Tohtori

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Re: The Elop effect - 24 billion losses in 5 months
I'll just leave this here.


There are three things that last forever: Abort, Retry, Fail - and the greatest of these is Fail.

 

Offline Polpolion

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Re: The Elop effect - 24 billion losses in 5 months
As long as Qt doesn't vanish I will be happy. :nervous:

 

Offline Mika

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Re: The Elop effect - 24 billion losses in 5 months
Well, all I can think of is that this will probably be the last nail in the coffin of Windows Phone. Nobody will ever touch it again if the analysis becomes true. Too bad it likely takes one major player out of the business while at it.

Qt belongs to the intellectual property of Nokia. Whoever buys Nokia gets the Qt as well. Most of the new owners would likely sack the CEO and the leading board of the company - except Microsoft - so you can guess what company will get it in the end. There is one more thing that could stop it though, namely a class action suit from the investors - as this can only be seen as a company takeover? Finnish court is unfortunately not very likely able to prosecute the case should the push come to shove.
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Offline Ghostavo

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Re: The Elop effect - 24 billion losses in 5 months
It seems people fail to see why Android got a big market share. Ironically, it has nothing to do with the consumers but with the operators/hardware manufacturers, who got an OS they can modify and cram with their stuff to differentiate themselves from the competition.
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Offline Mars

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Re: The Elop effect - 24 billion losses in 5 months
I see you've done studies.

 

Offline NGTM-1R

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Re: The Elop effect - 24 billion losses in 5 months
My wife, who works for Qualcomm, is literally giggling.
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Offline Mika

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Re: The Elop effect - 24 billion losses in 5 months
All this could be funny, were it not for the fact that along goes Nokia's intellectual property. At the moment, even Apple is paying royalties to Nokia for violating several of their patents. Can anyone imagine what happens when that intellectual property belongs to the hands of Microsoft?
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Offline pecenipicek

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Re: The Elop effect - 24 billion losses in 5 months
All this could be funny, were it not for the fact that along goes Nokia's intellectual property. At the moment, even Apple is paying royalties to Nokia for violating several of their patents. Can anyone imagine what happens when that intellectual property belongs to the hands of Microsoft?
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Offline Aardwolf

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Re: The Elop effect - 24 billion losses in 5 months
Humbug. Another thing to hate about "intellectual property".

 

Offline Nuke

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Re: The Elop effect - 24 billion losses in 5 months
i rather liked arm devices. of course i stopped liking them so much when the pda went and got replaced with the smart phone, and things started getting locked down, and you needed to pay someone on a monthly basis just to use it. compounded with the fact that i hate phones. kinda killed arm for me. id love to see a whole slew of cell phone companies go into the gutter and liberate what was once an awesome technology.
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Offline NGTM-1R

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Re: The Elop effect - 24 billion losses in 5 months
At the moment, even Apple is paying royalties to Nokia for violating several of their patents.

Then the patent question is refought on equal terms as opposed to the blatant favoritism EU courts showed the first time. Sounds good!
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Offline The E

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Re: The Elop effect - 24 billion losses in 5 months
If I'm just aching this can't go on
I came from chasing dreams to feel alone
There must be changes, miss to feel strong
I really need lifе to touch me
--Evergrey, Where August Mourns

 

Offline Mika

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Re: The Elop effect - 24 billion losses in 5 months
Gotta love the picture!

The interesting thing here is that the technology people reviewing it tend to like Lumia phones - and at least some of the early user experiences are positive. This doesn't still matter in the end, because the operators will decide whether they want to run the phone or not - not actually the end user - i.e. you and me. This applies to all phones, by the way. Operators do not dictate this much in Finland (more competition between them), so I expect to see some amount sales for the phone here. Elsewhere, eh, probably not much.

I can see the value of Office suite integration - heck, I'm finally starting to think maybe I should start reading emails from the phone while I'm on a business trip since I can only connect my laptop to trusted networks (trusted meaning very trusted in this case). It took about 8 years to develop this sort of need, but I'm still not sure whether I want any sort of micro computer or just a basic phone with text messaging. So far I have been using SMSs and phone calls rather successfully, the only place where I can see the need for internet connection or email is actually abroad. Central Europe, to be exact.
Relaxed movement is always more effective than forced movement.