Comment by Nokinside
2 years ago
Nokia's made institutional mistakes that doomed Nokia phones before hiring Elop. (I was there).
In a sense Nokia was (organizationally) victim of its own success. During the dumb phone and feature phone era Nokia did everything better than others. Everything from the supply chain management, to the phone design and manufacturing worked so well. Why would you sideline leaders and organizations who build all that and wanted to build on that.
When Netflix made the decision to move from mail-based rental to streaming, they did not allow leaders involved in rental business to any meetings involving the company future planning. It's one of the best organizational decisions ever made.
Nokia had multiple choices to stay in game at the beginning. Adopt Android and be like Samsung. Create a new internal Linux based computing platform. Instead, Nokia allowed more senior leaders Symbian/Feature phone teams to interfere and sabotage in multiple big and small ways because their teams still made all the money. As a result, the response to Apple and Android was constant internal reorganization and failed American style compensation structure that caused talent to leave the company, not new stuff.
The teams that did Maemo stuff etc. weren't allowed to ship any features before the Symbian side (which had more political and monetary power) had achieved feature parity...
I never understood this memo. All they had to do was to switch to MeeGo. There was no burning platform.
Hardware was great and software was great, but needed a bit more polish. MeeGo was more advanced than iOS in many ways at the time of this memo, and Maemo had been released way before the iPhone. The 770 was released in late 2005 and it was totally futuristic.
However, Elop had no interest in going this route. When MeeGo was released they dumped the project publicly shortly afterwards and then N9 was sold with no advertising. Despite this, it had a phenomenal demand.
> I never understood this memo
I totally understood it as soon as it was leaked. MicroSoft exec joined a phone company as a CEO back when MS was trying to convince manufacturers to adopt Windows Phone. Double bonus: they could kill and incipient Linux competitor in one stroke.
If you've read the Halloween Documents or docs from the Comes case, it's quite clear: classic "love them to death."
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N9 was not "proper" MeeGo, internally it was still mostly Maemo Harmattan, followup to N900, though they had few canceled hardware projects between N9 and N900. MeeGo was suppposed to be co-developed with Intel, but it was never going to go anywhere, because neither Nokia or Intel had no idea what they were doing. Nokia wasn't built to be a software company and Intel has given up on x86 in phones.
Only reason why N9 ever was released is because they simply brutally cut down the scope of the project, e.g. dropping Qualcomm-based variant for US/CDMA markets (that one was repurposed to be their first Windows Phone).
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https://www.youtube.com/watch?v=x057oh0x5p8
Blast from the past!
Similarly it seemed obvious early on, to me, that RIM should switch blackberry to Android with some customization aand port some apps over. They could still be a major player if they had done so. Instead they doubled down and buried their heads in the sand.
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Maemo and MeeGo were sandbagged from the beginning because of Gnome and Gtk+, which were simply not fit for the job. IMHO what Nokia should have done was release Qtopia phones from day 1, as an alternative to Symbian, and prepare the migration from Symbian to Qtopia after that. But they did it in reverse: first Symbian, then Symbian to whatever will be new (Maemo, MeeGo, who cares: something new to be developed, so a disadvantage of years), etc. It was stupid.
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Aah that's awful.
I remember when Maemo first arrived wanting one, and they never made it mainstream.
Let's compare the Nokia N900 (Nov 2009) to the Motorola Droid (Oct 2009).
They arrived at about the same time. They used the same CPU. They both had (approximately) 800x480 screens, which at the time was flagship class. They both used slide-out keyboards, removable batteries, a 5MP camera, 256MB of RAM, and some on-board storage plus a microSD slot. They weighed within 20g of each other.
The N900 had a resistive touchscreen, the Droid was capacitative. Both had an official price of $600-650, but would actually be sold for $200-250 when bought with a 2 year carrier plan (that was the norm back then).
Maemo had a small developer community. Android had a medium-sized dev community. Android had marketing -- for about 2 years, people were calling all Android phones "Droids". Maemo had none.
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My company back then did some NDA'd research prototype work for Nokia about Linux and touchscreens. My personal conspiracy theory always was that they had tied the company so strongly to Symbian that they just couldn't announce anything else. I hypothesized that they only got some big companies on board Symbian by promising to be "exclusively Symbian for X years" -- and the X ended up being too long, the industry moved on before they could move off of Symbian. Or they were just too afraid of https://en.wikipedia.org/wiki/Osborne_effect
They had everything they needed to run Linux on (some of) their phones quite early on. Battery life might not have been great, but they had plenty of Linux-running mobile hardware around, kept in bags outside of the building.
> When Netflix made the decision to move from mail-based rental to streaming, they did not allow leaders involved in rental business to any meetings involving the company future planning.
I wonder, who was the “they” that successfully made such a decision? In most places, there wouldn’t be any senior leadership that isn’t “tainted”, so to speak, by the previous business model. Even a freshly appointed CEO is ineffective if not supported by the bulk of the organization. I wonder how Netflix managed to solve this.
A different example, from Amazon. The top down directive from Jeff was to build every new initiative in total secrecy completely cut off from rest of the organization. To an extent even the building would be cordoned off for other employees. Kindle reader, Eco line of devices, AWS and so on.
I guess the reason was to let them move fast and deliver 0-1 product without being shackled by existing strictures, including the leaders with vested interests. They would hire whole division worth of people within weeks. The downside was a whole bunch of duplicate systems, as everyone would build their own payment processor, order management, UI etc. The results are starting to show as AWS is struggling to piece everything together as coherent higher order offerings. Like there are some two dozen ways to control access, a dozen ways to deliver notifications and so on.
Really? Very interesting!
Where can I read more about this?
Reed Hastings was a founder and principal initial investor. He owned 70% of the company, so it was probably down to him.
There was a recent thread where Bezos was quoted as being against bet the company moves. I get where he’s coming from, ideally you’d avoid getting into that position, but faced with a fundamental technological shift like that, sometimes it’s just the right thing to do.
As an aside I’ve been at two companies that were sunk by mismanaged bet the company moves. In both cases they actually had plenty of time to change course, but management was so heavily invested in their pet project that by the time reality has punched them in the face hard enough to wake them up, it was too late.
Even many founders find it hard to turn around the ship that they built, the forces of institutional inertia work against them as well. I wonder if he simply ignored most of the existing organization and management, and more or less stealth-founded a new startup inside the old one. Even that is not easy.
I am Brazillian, and here this Nokia strategy was working just fine.
Android back then was crap, iPhone and Blackberry too expensive.
Symbian phones were spreading like wildfire in dry grass, people were switching from dumbphones to Symbian, and the community was having great growth, I saw children looking online for tutorials how to learn coding so they could make Symbian games, there was even a bootleg Counter-Strike for Symbian.
As soon the demo came out, Symbian sales tanked, and people switched instead to random cheap and crap Chinese phones, a popular one was "hiphone".
The effect in my view was devastating, all the hacking community that was starting, suddenly died, what proliferated now was poor quality phones or people doing crazy things (one waiter sold his kidneys to buy an iPhone, literally). Nokia had a very confortable first place in market share in Brazil, in a few months they had became irrelevant.
And now the effects are still felt, in Brazil it is hard to get a decent phone without going into debt, a lot of good phones with interesting features are not sold here, and you can't import them either, because the proliferation of chinese cheap phones that caused all sorts of trouble, the national regulator decided that they will ban from the cell towers any phone that they detect that doesn't have official permission to be sold in the country, this means there is no FairPhone in Brazil, no Shift phone, no Jolla, and so on.
And sadly, not even Nokia themselves are bothering with us anymore, they recently released some fairly interesting phones with WhatsAPP support using FireFox OS (KaiOS), and didn't bother asking permission to sell them here, so they can't be imported.
I agree, you can't just kill it. They clearly had to migrate to Megoo on the high end, but they should have continued both systems for some time to come.
I’d not heard that about Netflix before but it makes a lot of sense. The Apple case is an interesting counterpoint though. They seem to have a pretty solid culture of consensus and collaboration between teams at the top. But then they have an unusual functional organisation structure rather than being organised around product divisions. This means the functional teams have a stake in (basically) all the products, so don’t have as much of an incentive to play favourites. It’s just a different approach to addressing the same issue.
> The Apple case is an interesting counterpoint though
Isn't the story that iphone development was a secret project with competing teams, one of which proposed the touch-screen interface?
That’s true, but only for very early prototypes. Once the decision had been made which to go with, that was it. Yes the iPhone team was isolated, that’s not unusual for a stealth project at Apple, but the iPhone software team still reported to the head of the Software org who also ran the Mac software team for example, the iPhone hardware guys still reported to the head of the hardware org responsible for Mac hardware as well.
There was no real separate Mac product team from the iPhone team, the head of hardware was responsible for the hardware for both so he didn’t have a conflict of interest. Whichever succeeded, to whatever degree, he would succeed. He would have no incentive for either to fail or to spike one in favour of the other.
...and what about the whole story of Jobs' return to the company?
Ah yes I remember it being made a big thing of, like it was revolutionary or something, when I joined - however in the UK we'd understood functional vs product and indeed matrix management since forever. Welcome to the 1970s theme park that is the US I guess!
Sounds like classic Innovator's Dilemma: The money was in the old tech, the market was moving to new tech. They listened to where they money was instead of where it was going.
I had an early Nokia Linux tablet (770, I think?), and I really liked it. I was very sad when Elop turned over the keys to Microsoft. Not surprised, though.
> They listened to where they money was instead of where it was going.
You have to do both. A company pivoting to a new technology too quickly can run out of steam if there’s no adoption and no stable business to keep it afloat. The challenge is to make sure that your legacy team doesn’t stifle your innovation team yet remains profitable as long as it is strategically beneficial.
I am not sure Android could have saved Nokia. Samsung survived in smart phone business because of their display and memory. Chinese smart phone makers was able to compete because of the enormous support from CCP. I was on another oil platform call "HTC" when Nokia platform was "burning". Eventually HTC went down too.
> because of the enormous support from CCP.
People claim this about literally every single thing China was successful at. A government can't just magically make its companies successful in every single industry.
What did the CCP do exactly to make these phones better?
Edit:
Also, HTC didn't exactly have the market dominance of Nokia. So not sure the situations are comparable.
Android itself probably not, but their Maemo efforts were far ahead of Android already.
Nokia had made Maemo success then they might had a chance.
> In a sense Nokia was (organizationally) victim of its own success. During the dumb phone and feature phone era Nokia did everything better than others. Everything from the supply chain management, to the phone design and manufacturing worked so well.
They are still the best, Nokia "dumb" phones feel a bit like the f91 Casio watch... but just like those watches, they aren't as popular as they once were.
For people who want a no bullshit, inexpensive, bulletproof, practical phone that lasts and isn't horrible to use, Nokia is still the best. But without competing with smartphones Nokias only other option was to downsize, because as great as they are dumb phones are no longer popular enough - so as you say they were a victim of their own success, they reached a size that was unsustainable in the face of what was to come.
I think Nokia had a third choice: Explore new market segments.
Personally, I want a smartphone along the lines of traditional Nokia phones: Big and tough. I'm glad to have something double the thickness of a normal phone, but:
- The screen shouldn't crack if you squint at it funny (bezel is fine)
- The battery should last a week (double, or more, the thickness of modern smartphones is fine)
- The cell coverage should be spectacular. Again, thickness means more space for antennas.
- It should have good cameras, at least 1080 resolution
- Standard plugs and jacks (USB-C, headphone, SD, dual SIM, etc.)
- Ideally, software updates forever, as stock Android / open source as possible, as little tracking as possible, etc.
- Ideally, stylus (with built-in storage)
- Good security, app sandboxing, no data collection, no cloud sketchiness, reasonable ToS
I think there are a lot of corporate segments as well. Increasing size should also cut down on NREs and allow more modularity, making it easier to make niche devices. I think there are enough markets to have a diversity of devices if NREs can be brought in-line.
Such a device would be expensive to manufacture and appeal to only a niche market. Rugged Android phones are available but don't sell well. Most people just buy a regular Samsung and put a case on it.
That anecdote about Netflix is not correct according to a friend of mine who was a manager there at the time. Quote below.
“It wasn't until the streaming business was massively ahead of the DVD business before the execs on the DVD side weren't going to the overall strategy meetings. A lot of us had roles on both sides until like 2012ish when there was a clear split internally and a DVD-only executive team was officially set up.”
Perhaps, this a silly question but since you are an insider I would love to know why did Nokia not beat Apple to the smart phone punch?
They did, Nokia launched their first Symbian smartphone in 2001, the Nokia 7650. iPhone was launched in 2007. The Newton of 1997 is not exactly a phone, so I don't think it counts here, but if it does, so does the Nokia Communicator 9000 of 1996. Either way, Nokia was first to market.
Apple had the advantage of a nicer product, and was building products for the US first, rather than US maybe later. Tech news is mostly (but not completely) based in the US, so Nokia smartphones got little coverage as they were often unavailable or non functional in the US. Different GSM frequencies meant different builds, and CDMA was an even more different build. And Nokia had messed up relations with US carriers at a time when phones selling through carriers was the primary method of reaching customers.
Apple launched the iPhone in the USA as an AT&T exclusive device. They had good relations with the carrier (at least publicly) and were able to offer service plans including data and SMS to customers with attractive pricing.
Do you have a reference for that Netflix story?