Operation Elop Operation Elop The nal years of Nokia’s mobile phones The little green spy boat seen from the old Nokia House in the Keilalahti bay, Espoo, Finland. Photo by Jari Ijäs on December 8, 2010, with a Nokia C7. On October 8, 2017, Joe Belore of Microsoft casually announced the death of Windows Phone. In a series of tweets he explained that Microsoft will continue to support the Windows Phone (and Windows 10 Mobile) platform but “building new features/hw aren’t the focus”. That was the end of Microsoft’s smartphone endeavor. Fast rewind to 2010. On September 10, 2010, Nokia of Finland replaced its Chief Executive, Olli-Pekka Kallasvuo, who had been at Nokia for 30 years, with 1 Operation Elop Stephen Elop, a 46-year-old native of Ancaster, Ontario, and the head of Microsoft’s business software unit, in a bid to turn around the company’s struggling smartphone lineup and stop a decline in its market share in the U.S. On February 11, 2011, Nokia and Microsoft announced plans for a broad strategic partnership to build a new global mobile ecosystem with Windows Phone. [1] Under the proposed partnership Nokia would adopt Windows Phone as its principal smartphone strategy, and contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments, and geographies. On September 2, 2013, Microsoft announced that it would buy Nokia’s Devices and Services business and license its patents for $7.2 billion. Also as part of the deal, Nokia’s CEO Stephen Elop was announced to eventually go back to Microsoft and lead an expanded devices team. In November 2014, Microsoft announced the rst Microsoft (non-Nokia) branded Lumia smartphone, the Lumia 535. However, Lumia device sales decreased sharply after the introduction of Windows 10 in 2015. On June 17, 2015, the Microsoft CEO Satya Nadella announced that “now is the right time for him (Stephen Elop) to retire from Microsoft”. On October 7, 2014, two Finnish journalists Merina Salminen and Pekka Nykänen published their book Operaatio Elop in Finnish, probing into the events that took place in Nokia’s device business under the CEO Stephen Elop’s period in 2010–2013. The authors had interviewed over 100 people for the book, most of them being current or former Nokia employees. The book came out in Finnish and although there was interest in an English version, the authors’ publishing agent was never able to build a viable business case for the English version of the book. Some former Nokians suggested crowdsourcing the English translation for the book in 2015 but the publishing agent’s contractual agreement was holding back any publication of an English version until 2017. Some chapters were translated by volunteers in 2015 and the remaining chapters have now been translated into English. The full English translation is now published here the rst time, under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license. 2 Operation Elop We, the English translation team would like to express our warmest thanks towards journalists and authors Merina Salminen and Pekka Nykänen for their kind support and information dissemination spirit. Please support Merina and Pekka by buying the original book! And when you read the Finnish book or our English translation, please do remember that the story hails from the year 2014, and our mission was to translate the original Finnish manuscript in English, not to rewrite it to reect the context of year 2018 nor to reect our personal opinions. So, when the book says “currently”, please read it as “in October 2014”. We have streamlined the text a bit when Americanizing it, and to assist the global reader we decided to show the Euro gures mentioned in the book also in US dollars, using the exchange rate applicable at the time of the reference. When we were working on the English translation, a small piece of news about Stephen Elop and Finland caught our eye, even mentioning the original book. The Finnish daily Iltalehti wrote that Elop had been seen in the Nokia headquarters on the Espoo Karaportti campus on November 13, 2017. The article was speculating that the visit might have been linked to Elop’s current job with the network provider Telstra in Australia, where he started in April 2016, and further mentioned that in the book Operaatio Elop he had been described as “one of the worst, if not the worst CEO in the world”. This book translation is not endorsed by or associated with the publishing house Teos, Nokia corporation, or with any other company or organization. All product and company names and advertising slogans are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any aliation with or endorsement by them. For readers who prefer a Kindle or PDF version instead of this online version, we provide exports in PDF/EPUB/MOBI formats from Medium. Please consider the environment before printing the 300 pages. In the spirit of Connecting People, N. Asokan, Liisa Holma, Sirpa Ikonen, Timothy Jasionowski, Harri Kiljander, Jyrki Kimmel, Asko Komsi, Jason Madhosingh, Emma Oivio, Janne Parkkila, Kimmo Savolainen, William Smith, Katariina 3 Operation Elop Suvitaival, Petra Söderling, Mailiina Turanlahti, Kevin Wright and anonymous contributors. And now to the book. ... [1] The day was still February 10, 2011, in Redmond, Washington, when the announcement was published in Finland. ... Operation Elop The nal years of Nokia’s mobile phones Table of Contents Chapter 1. Foreword Chapter 2. Hope awakens Chapter 3. Mr. Vanjoki, last minute runner-up Chapter 4. The lame legacy of Mr. Kallasvuo Chapter 5. The wonderboy from Ancaster Chapter 6. Platforms and ecosystems Chapter 7. The euphoria of the initial weeks Chapter 8. The rumble begins Chapter 9. The consultant with a Microsoft connection Chapter 10. The platform choice Chapter 11. Reactions Chapter 12. The great blu Chapter 13. The catastrophe called Symbian Chapter 14. The MeeGo swansong Chapter 15. Secrets of Meltemi Chapter 16. Towards the rst Lumia Chapter 17. The Lumia journey Chapter 18. The long wait for the tablet Chapter 19. The next billion Chapter 20. Tough times for Nokia sites Chapter 21. Nokia spirit evaporates 4 Operation Elop Chapter 22. Why didn’t the Lumias y? Chapter 23. Tough choice for Mr. Siilasmaa Chapter 24. The bonus brouhaha boils over Chapter 25. The world’s worst CEO? Chapter 26. What if… Chapter 27. Epilogue Appendix 1: Where are they now? Appendix 2: Glossary Appendix 3: Graphs References People index The nal nal epilogue ... 1. Foreword Back to Table of contents The rise and fall of Nokia is a unique story. In just ten years, a small, multi-industry company transformed into one of the brightest stars in industrial history. Equally unique was its demise and collapse, from the pole position of the mobile phone market to its furthest margins. On September 3, 2013, Nokia announced its intention to sell its mobile phone business to Microsoft. That date has been branded on the hearts of the Finns, equal to the loss of Estonia [2] and the September 11 attacks. This book seeks answers to the questions left unanswered in the memoirs of the former Nokia chairman Jorma Ollila: Who was Stephen Elop and why was a Canadian outsider selected as the new CEO of Nokia? What was the logic of adopting a smartphone operating system conceived outside of Nokia? Why Microsoft’s Windows Phone and not Nokia’s own MeeGo or Google’s Android platform, an option once described by a former Nokia executive as “like peeing in your pants in the winter for warmth?” [3] Why did the company lose its top talent and where did they go? Why did the renowned Nokia spirit simply vanish? As Elop assumed his position in October 2010, Nokia’s market position was already under threat, but some believe it was his strategic decisions 5 Operation Elop that led its descent and the sale of Nokia’s mobile device division to Microsoft. Others believe he chose the best option from an increasingly short list of bad options, that Nokia’s decline was inevitable in the face of renewed competition and rooted in its slow acceptance of alternatives to Symbian and its vaunted S60 platform. Still today, some believe that Elop was Microsoft CEO Steve Ballmer’s “inside man,” sent from Redmond on a quest to deliver market success to Microsoft’s foundering mobile platform. In this vast landscape of conicting narratives, we seek to document the hard choices that led to the end of this small country’s unlikely domination of the mobile equipment market and assess whether there was a way to salvage “the Nokia Way” or if its end was truly inevitable. During the process of researching this book, we have interviewed over a 100 people with rst-hand knowledge about why Nokia ended up as it did. Combined, their stories weave a narrative, one which touched — directly or indirectly — the lives of most Finns, as almost everyone in this Nordic country of six million knows someone who has worked at Nokia. Many of the interviewees worked at Nokia between 2010 and 2013 while the company was in turmoil, when the old laws did not apply any more. When key people were replaced. When executive leadership went AWOL. When things which should not have happened happened. This book depicts how the top management decisions cascaded through the organization, what kind of consequences they had, and — most importantly — how they were seen among the company’s middle management and rank and le employees.