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Grief and disbelief greet Elop's Nokia revolution

Google becomes the one they all fear

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There are other positives. With Meego mothballed, Nokia isn't dependent on Intel's Atom processors any more for tablets and other larger-than-a-phone devices. Huge relief at ARM, I imagine, and with many of Nokia's engineers. The ARM world is proven and offers far more choice.

Summary

  • Air turbulance warning: two years of pressure on Nokia's gross margins until 2013
  • Windows Phone 7 becomes Nokia's primary platform; "Clearly, it's a transition from Symbian to Windows Phone" says Elop
  • Symbian becomes a legacy "transition program"; Nokia expects to sell 150m more Symbian phones - it currently sells 100m a year; Meego sidelined; becomes an experiment, and a hedge against "future disruptions"; S40 to get fresh investment
  • Developers write to Microsoft APIs, Qt roadmap abandoned.
  • Deep cuts to R&D and staffing globally
  • Microsoft gets a Nokia Maps license; Nokia to use Microsoft AdCenter and Bing Search. More detailed technology sharing to follow

And Google may pause to wonder why it's in this game. Expenditures on developing and supporting Android are enormous, well over £1bn a year by some estimates, and it receives no royalties. Google funds Android because phones are another advertising billboard for its advertising business, and "platform" for future Google services. How long is it prepared to give Android away, when it doesn't have to? Android's success has also tended to obscure the reservations of Android OEMs, who have a hard time differentiating, just as Elop feared Nokia would.

A whole new Nokia

The Nokia that Elop envisages will look a lot more like the Samsung of today than the Nokia of today. ("There will be significant changes in the absolute makeup and levels of [R&D] expenditure; we expect to substantially reduce R&D expenditure while increasing R&D productivity," said Elop).

But old tensions will remain.

How does Nokia recreate the product-centric, almost skunkworks development culture of the 1990s, while retaining its global logistical strengths, such as its ability to customise for local markets? How does Nokia prevent Microsoft from stealing its ideas? How does it create services that don't brass off its biggest customers, the operators? Some of these are very old questions, and the Microsoft tie up does nothing to resolve them - it might even complicate them.

The impact on morale is probably the most immediate thing Elop has to address - it's a huge blow to Finnish national pride. Elop's brutal assessment in his "Burning Platforms" intranet post is that Nokia was hopeless at strategy, rubbish at marketing, and couldn't write software. He all but told Nokians that they should have stayed in the rubber boot business.

What a motivator! ®

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