Hard talk: ”The Elop Effect”

The decision to move to Windows Phone platform from Symbian and MeeGo has caused a lot of discussion and disputes. One thing is for sure: This is not something the current CEO Stephen Elop decided on his own. Such a strategic decision was approved and maybe even prepared by the board of directors, lead by the Chairman Jorma Ollila.

However, there’s been a lot of criticism about how Stephen Elop made the announcement to ditch Symbian. Mobile consultant, who used to be considered a Nokia fan, Tomi T. Ahonen has analysed this and come to a conclusion Stephen Elop has pretty much fucked up this totally. He calls it the Elop Effect in his recent blog post.

Ahonen argues Elop made two big mistakes that combine the notorious Osborne effect and Ratner effect.  The links point to Wikipedia articles defining these terms. In short, the Osborne effect means announcing new products to replace the old ones before you have something real to sell. Then again the Ratner effect refers to calling your current products pieces of crap.

According to Ahonen, Stephen Elop combined these both in his famous Burning Platform Memo and went even further underestimating their own products and thus insulting the long work of thousands of Nokia’s software engineers. And then he said they still want to sell 150 million of these phones that are no good against competition.

In some Finnish forums and news discussions, many have written Ahonen is just a bitter former Nokia employee. I think that’s not the right explanation. Until now he has favoured Nokia a lot in his blog posts. Does he have something personal against Microsoft or Windows Phone? You have to judge yourself.

Some have disagreed about the signification of Elop’s announcement to Symbian’s fall. As ”Staska”, the editor-in-chief of UnWiredView.com blogged, Nokia’s smartphone market share already seemed to be on decline on Q4 2011, a long before the announcement to dump Symbian. I wrote about that earlier.

It’s too early to estimate how succesful Windows Phone can become. There’s so mixed information about what kind of a deal Microsoft and Nokia have made. The big question is can Nokia really differentiate in hardware and software from the other Windows Phone vendors, such as HTC, LG and Samsung? Soon Motorola may join them.

At least the first generation of Windows Phone 7 devices has very tight technical specifications and if you didn’t check the logo on current WP7 smartphones, it would be almost impossible to separate them of each other. I had six of them at the office for review in May and I don’t exxagarate by saying they looked and felt about the same. Only Dell Venue Pro differentiated with a physical keyboard.

According to research company Gartner, Microsoft had less than two per cent (1,6%) market share in smartphones during Q2 2011. Android had over 40 per cent, or close to 50 per cent according to Canalys and Strategy Analytics.

One thing still puzzles me too. Why did Stephen Elop have to make such a harsh announcement to dump Symbian and so early, in February? That made my Nokia N8 feel almost obsolete in an instant, and many developers I’ve talked to immediately lost interested in Symbian. It doesn’t help either the promised Symbian Anna update has taken very long to become available. Now it’s expected before the end of August, but I doubt it’s too late.

I would have expected Nokia to announce they’d bring Windows Phone smartphones in the U.S. and the largest markets in Europe, and when there would be clear evidence it’s a winning platform, it would have been easy to announce the end of Symbian.

Some analysts have predicted Windows Phone could get about a 20% market share in smartphones by 2013, and Nokia’s share of this could be around 90%. That would still mean only about 18% market share of total shipments.

3 thoughts on “Hard talk: ”The Elop Effect”

  1. Hasn’t Nokia’s product announcements in the past been pretty much always ”Osborne effect”? If I remember correctly, most of their new product have been announced with a delivery date somewhere in the future, one or two Q’s away (and almost always the last day of that Q).

    If you think an average Symbian phone buyer, does he really look so much into the future as mobile analysts and reporters think? I doubt they really want that much more than the very basic apps for Facebook, Twitter and a few others. I’ve got a 8 month old Android phone, it doesn’t have the latest Android version available and I don’t know if it will ever be available. Compared to iOS software, I haven’t really bought that much Android software and even less Symbian software. Even with iOS I know that the support will eventually fade away for a device in a few years.

    So perhaps it’s the news ”OMG, they killed Kenny, eh, sorry Symbian!” that has caused the sales to crash, not the phones itself or even Elop.

  2. You could be right. But didn’t they really understand what would happen? Did they really think announcing they’re killing Symbian wouldn’t become a big news topic? I doubt that.

  3. Nokia alienated me with the announcement of mcirosft windows mobile, all my experience with those phones/pads has been horrible and I can say I won’t be buying one of those phones, which means I have to look for another brand who can deliver something like the N900 (my last Nokia phone), which is the only phone I really have bought applications for.

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