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Technology Stocks : Smartphones: Symbian, Microsoft, RIM, Apple, and Others

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From: Eric L10/17/2014 4:10:46 PM
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'Operation Elop' -- New Book on Elop's Nokia ...

Two respected British technology journalists comment on The new book by Pekka Nykänen and Merina Salminen of Kauppalehti which has not yet been translated to English.

"One area where blaming Elop was unfair is how badly Microsoft let Nokia down." - Andrew Orlowski -

"However, those they [the authors spoke to were insistent that, despite the claims of many outside the company, Elop was not a 'Trojan horse' with an agenda to make Nokia’s handset business worthless so that Microsoft could buy it cheaply." ... Charles Arthur

>> Of COURSE Stephen Elop's to blame for Nokia woes, says author

'Google did have some unique propositions for Nokia'

Andrew Orlowski
The Register
13 Oct 2014

Interview Operation Elop, a new book on Nokia, got plenty of attention last week, with its suggestion that Nokia’s former CEO was the “worst CEO in history”. After I ridiculed the idea that Elop alone was solely responsible for Nokia’s crash, co-author Pekka Nykänen got in touch to say that isn’t quite fair. So we invited him to talk about what he had found.

“There’s a few things I’d like to tell you that are not mentioned in the international coverage of our book,” says Nykänen.

“We feel that Elop didn’t tell the truth about Nokia’s options at a time," Nykänen opined. "From the negotiations with Google – Elop said Google only offered the standard ‘Welcome to Android’ conditions. But actually, Google did have some unique propositions for Nokia. Google would have bought patents from NOK – and those would have benefited Android.”

Good for Google no doubt, perhaps less so for Nokia. What else?

“Nokia was good at developing new markets and Android was going down in price it would have been a perfect alliance,” says Nykänen. “Nokia would have been the best to deliver it.”

The authors got the idea that Google would have been ready to change its roadmaps to accommodate Nokia.

A corpse rots from the head down

One area where blaming Elop was unfair is how badly Microsoft let Nokia down. It wouldn’t allow Nokia much (if any) customisation; it wouldn’t change its roadmap; its roadmap caused problems with Nokia’s first phones (which couldn’t be updated to Windows Phone 8, which appeared a few months later); and it was out-developed by Google, which added features to Android far quicker. The result was that Nokia had hardly anything to sell for two years.

Nykänen doesn’t disagree. “Nokia could have done anything with Windows Phone,” he says. If it had been allowed to, “they had the best talent to do that. Microsoft was so inflexible to the interests of Nokia, it was totally the wrong match when Windows Phone was selling in the high price point”.

And he agrees the rot set in long before Elop arrived.

“Yes, the responsibility lies heavily there. The organisation got bloated, and the matrix organisation structure meant that everything was in committees, nobody made decisions, and nothing happened. The decision to put touch on top of Symbian was stupid because it kind of closed the gate to any really changes,” he told us.

“The CEO should have been changed earlier and Symbian should have been dismissed earlier.”

Nykänen also highlights the role of Elop’s McKinsey guru - Endre Holen.

“The Burning Platform memo is an old McKinsey thing. Elop invited Holen to sit in on all the management and leadership team meetings. Nokia had 200 people working in strategy but the results were not very good and McKinsey took some of the work, that department was then cut down heavily after Elop arrived.”
Humble pie

Anything positive to say for Elop?

“He had some very good qualities too – and he was a great motivator inside the company. He opened up the culture, which was paralysed after OPK [Olli-Pekka Kallasvuo]. Elop made the company act again – it started to move fast, and customers and operators were happy with the way he worked,” said Nykänen.

“He responded to emails all night. He worked like a maniac. This is also one of the reasons we are sure he was not a Trojan Horse. What was the motive to even have this Trojan Horse inside Nokia? A successful Windows Phone would have been better for Microsoft and better for Elop, it would have made his career.”

The staff interviewed by the authors also found the Canadian “fitted into the Finnish atmosphere well – he was quite humble.. and interested in ice hockey which we like,” but ultimately said he “made very poor decisions.”

As for the sale, Nykänen thinks it was a coup for Nokia:

“They were running out of money,” he notes.

And Microsoft didn’t really want to buy the phones division, but didn’t have a choice not to: it may have lost the OEM that generated over 90 per cent of platform sales. “It was not an easy decision but it was clever. Nokia’s share price has subsequently more than doubled.”

Kallasvuo, Elop’s self-deprecating predecessor, gave an interview earlier this year where he said the circumstances were unprecedented:

“Google and Apple were strong in industries outside mobile communications, who suddenly enter and in a couple of years become market leaders where they have never been before. That is unique in the business history of the world.

“The strategy was correct. The execution very often was difficult, some people, the skills were missing and you have to acquire them…Without good execution even a good strategy is worthless,” he told his interviewer.

The authors of Operation Elop tell us an English translation is on its way. ®

>> Elop was 'wrong man to lead Nokia' says new book on phone company's downfall

‘Operation Elop’ by Finnish journalists says ex-Microsoft executive was not a Trojan horse - but someone else might have been able to save the struggling business

Charles Arthur
The Guardian
8 October 2014

Stephen Elop wasn’t a Trojan horse brought in from Microsoft to undermine Nokia - but he was “one of the world’s worst” chief executives, according to a new book published in Finland this week.

The book, “Operation Elop”, by journalists from the Finnish daily paper Kauppalehti, makes its harsh assessment of the Canadian who was hired to try to lead the mobile phone, mapping and networks company out of trouble in September 2010 – after an executive hunt that is said to have approached Tim Cook, then chief operating officer at Apple.

Elop was hired instead, lured away from his position at the head of Microsoft’s Office division in Redmond, near Seattle, to run what was then the world’s biggest mobile phone company - but one that was facing serious problems.

“By many measures Elop is one of the world’s worst - if not the worst - chief executives,” declare Pekka Nykänen and Merina Salminen, the authors, who interviewed more than a hundred people to produce their book.

They say that “Elop was the wrong man to lead Nokia. Someone else could have saved Nokia’s phone business.”

However, those they spoke to were insistent that, despite the claims of many outside the company, Elop was not a “Trojan horse” with an agenda to make Nokia’s handset business worthless so that Microsoft could buy it cheaply.

They also accept that many of the problems cannot be laid only at Elop’s door. Nokia also suffered from an obsession with costs, unclear chains of responsibility and bad executive decisions. “Elop… failed in his attempts to save Nokia,” the writers say. “He made monumental mistakes - but all in good faith. He took massive risks by putting all his eggs in one basket.” That was the decision to go with Windows Phone rather than Google’s Android, or keeping the Symbian software Nokia already used on its smartphones.

To categorise Elop as “one of the worst” CEOs, the authors look at Nokia’s market value before and after Elop took over, when he replaced Olli-Pekka Kallasvuo, who in the summer had challenged Nokia’s board to “back him or sack him”. One day before Elop took over, the company was worth €29.5bn on the stock market; three years later, as the phone division was sold, its valuation was €11bn.

Nokia’s handset division was sold to Microsoft for €5.4bn in September 2013 after it had fallen into a pattern of lossmaking, and failed to make significant impact on the smartphone market.

The authors charge that Elop’s famous “burning platform” memo “has become a legendary example of how a CEO can destroy everything in just one stroke”. The memo emerged from a jointly-written speech that he gave to senior managers to describe the problems that Nokia’s Symbian software faced by the end of 2010, as Apple’s iPhone and Google’s Android software drove a new wave of touchscreen phones, to which Nokia had no effective answer.

The choice of Windows Phone was partly advised by the consultants McKinsey, the book claims. Elop is known to have spoken to Google about the possibility of going with Android - but did not, famously leading Google’s Vic Gundotra to tweet that “two turkeys don’t make an eagle” - a reference to a comment by one of Nokia’s executives in 2005 about the proposed merger of BenQ and Siemens’s phone handset divisions. (It flopped.)

They also say that Nokia’s staff did not examine Windows Phone closely enough before choosing it - and only realised after signing the agreement with Microsoft that they would not be able to install it on handsets then priced at €100 which used keypads rather than a touchscreen. Nor could it use a front camera - useful for video calls - and had patchy support for MMS, a carrier standard for sending picture messages. Foreign language support was also patchy - so much so, the authors say, that one engineer thought there were missing pages when he first saw the list of supported languages.

Microsoft is also blamed as being inflexible, even though Nokia was its biggest Windows Phone OEM. ###

- Eic L. -
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