Wednesday, April 11, 2012

Transition rap

What! Have you heard there's some transition going on at Nokia?

Due to the transition process, generally all current employees can stay on the payroll through the end of the year 2011, even those possibly impacted by the reductions. (21.4.2011)

As we move our primary smartphone platform to Windows Phone, this transition of skilled talent to Accenture shows our commitment to provide our Symbian employees with potential new career opportunities. (27.4.2011)

Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition. (31.5.2011)

During this time of transition, we expect competitive pressures to continue. (21.7.2011)

With each step, you will see us methodically implement our strategy, pursuing steady improvement through a period that has known transition risks, while also dealing with the various unexpected ups and downs that typify the dynamic nature of our industry. (20.10.2011)

And, while we progressed in the right direction in 2011, we still have a tremendous amount to accomplish in 2012, and thus, it is my assessment that we are in the heart of our transition. (26.1.2012)

We recognize the planned changes are difficult for our employees and we are committed to supporting our personnel and their local communities during the transition. (8.2.2012)

Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition. (11.4.2012)

We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. (19.4.2012)

This transition rap was compiled from Nokia's press releases and quarterly reports. Only transition seems to do fine at Nokia House.


Wednesday, December 21, 2011

Keep your mobile strategy clean

Today I had a lively discussion about the fundamentals of mobile strategy. This is one of my favorite topics, and I have written about it also earlier, made notes about mobile strategy and how mobility is not speciality, just to pick some of my old postings.

Today’s topic was mostly about how much mobile strategy should handle about technical issues, terminals, protocol versions and so on. My position is that in mobile strategy work you should handle these issues only little, to make strategy more general and goal oriented.

I have noticed - not strictly related to mobile issues - that many sales oriented people who don’t deeply understand technical components and their relations to each other, are excessively worried about these questions. Often their opinions nicely follow the opinions expressed in latest issues of popular newspapers or websites and equipped with this information they are ready to attack any discussion with strong opinions about XML5 [sic], for example. Because these new acronyms don’t land safely on their technical perspective, all of them seem to have a huge importance that will shake the world, day after day. New platform version coming, major news, rewrite strategy!

This leads to strange phenomenon: nontechnical people seem to be too excited about technical topics, whereas technical people take things calmly and explain why some new acronym is not necessarily that important.

What this has to do with strategy? Well, nothing if you do strategy work as intended - create a vision about your future analyzing strengths and weaknesses, creating for your company a roadmap to the future. Strategy paper is not something that will tell exactly what to do, but instead tells which directions to take. In mobile domain one could make plans about taking customer processes to mobile devices (to increase customer satisfaction results), improving mobile tools for traveling workforce (to save costs and speed processes), enriching marketing with a touch of mobile (to attract new customers). All this implemented in a managed, secure and cost-effective environment with measurable results.

Make a mobile website using HTML5 isn’t mobile strategy. Improve marketing reach with mobile solution is strategy.

Create some application for iPhone (because all others have done it) isn’t mobile strategy. Improve customer satisfaction with mobile solution is strategy.

These thoughts lead me to some simplified tests to assess if your mobile strategy is a collection of short term actions or does it have more value. Assume situation February 10, 2011, right after you have finished mobile strategy work and you were full of enthusiasm about Nokia’s Symbian plans and you were sure how it will seamlessly fit to your existing IT and partner ecosystems. Next day Symbian was slaughtered, what happened to your forward looking plans?

More quick tests: What happens to your strategy if application stores suddenly change their acceptance criteria? What if revenue share models change dramatically? What if tomorrow some fruit company from California launches new mobile device that is superior to anything we’ve seen so far? What if NFC readers keep on ” coming next year to mainstream”, just as they’ve been for more than five years already? What if iPhone isn’t cool anymore? If any of these events shake the foundation of your mobile strategy, consider changes.

Mobile strategy is the guide that shows you the direction where to go. To decide whether to create an application or mobile website is tactics, and that’s another story.


Sunday, November 13, 2011

Crackers active in Finland

Background for international readers:

November 5th a list of 16.000 names, street addresses, email addresses and id numbers was leaked and finnish yellow press was spreading panic. Later some organizations admitted that their systems were cracked.

November 12th a new list of half a million email addresses belonging to finnish users was leaked. Yellow press making big headers.

November 13th a partial list of passwords was leaked, list was claimed to belong to the leaked email addresses. CERT-FI confirmed that passwords are real and finnish news services are now full of discussions about the situation.

Any ideas where some of the email addresses and potentially also passwords are coming from? Yes.

List has 52535 addresses from domain and 86 of the users use the same trick that I do: append some additional text to the email address using address alias. I've done that myself to track how my email address potentially spreads, but this time we can read hints about the cracked sites cleanly from the address list. There are not many sites that can be discovered this way, but certainly something related to ice hockey, cars, calorie counting and personal finance management.


Wednesday, October 26, 2011

Nokia Lumia pricing comparison

As always Nokia today gave a price indication with launch of new devices, Lumia 800 and Lumia 710. The price is of course always "excluding taxes and subsidies" because local taxation and market situation will affect the price.

To estimate the real street price of phones, here is a small table to show how Nokia estimated prices for some of their latest smartphones so that you can compare the Nokia estimated price and real street price when phone finally became available. Is Lumia 800 expensive or not, you can judge yourself. Looks to me that Lumia 800 should retail much cheaper than N9 16GB, but comparison is somewhat difficult because Lumia 800 (France, Germany, Italy, Netherlands, Spain, UK) and N9 availability areas don't overlap.

Device Estimated price Estimate given
Lumia 800 420€ 26.10.2011
Lumia 710 270€ 26.10.2011
N9 16GB 480€ 27.9.2011
N9 64GB 560€ 27.9.2011
E7 495€ 14.9.2011
N8 370€ 27.4.2010


Thursday, September 22, 2011

Nokia's value is falling

It's been a while since latest post to this blog, I've more or less moved from blogging to Twitter as that medium is much more conversational. This time I just didn't manage to compress my thoughts to 140 chars.

Today, September 21st, Nokia's market capitalization is 15.7 billion euros and stock price has fallen 46% this year (Source: Nasdaq OMX).

Another fact is that Nokia's total cash and liquid assets were 3.9 billion euros at the end of second quarter this year (Source: Nokia's interim report).

It is also a fact that Google acquired Motorola Mobility in August, mostly for its patents, for 12.5 billion dollars (approx. 9 billion euros). According to reports, Nokia's patent portfolio is better than Motorola's both in terms of quantity and quality and for example every iPhone sold generates royalties to Nokia.

How Google actually evaluated Motorola's patents is not known, so we must make a wild assumption. Let's assume that over half of Motorola's value was coming from patent portfolio and because Nokia has more and better patents, we can round sum up a little bit. Let's say Nokia's patent portfolio is worth 7 billion euros, quite possible figure based on Google's Motorola deal. (In fact after Motorola deal J.P. Morgan valuated Nokia's patent portfolio to 5.4B€, but wildest evaluations were close to 20B€).

Now it's time for some math:

Nokia's market capitalization 15.7B€
- Nokia's cash assets 3.9B€
- Nokia's patent portfolio 7B€
= 4.8B€

This calculation shows that without cash assets and patents Nokia's core business is valuated below 5B€, or to put this in different words, only 1/3 of Nokia's value comes from what they do today.

However, Nokia owns 50% of NokiaSiemens Networks, Navteq maps (when Nokia bought Navteq price was 8.1B$), has factories all over the world, sold in last quarter over 100 million devices, more than 1.3 billion people use Nokia devices every day and Nokia is still one of the most recognized global brands. Despite reductions, Nokia has an army of talented people working every day to create new devices that their effective manufacturing and logistics can push through their global sales channel practically to every village in this planet. Yet, that doesn't seem to have much value.

Or maybe investors just don't believe that life as Microsoft's hardware department will be great business.