Would Nokia go the way of Eastman Kodak?

Stephen Elop took over as CEO of Nokia in September of 2010. In 21 months of Mr. Elop’s tenure, Nokia has seen its cash reserves, market share, and stock price shrink dramatically.

Nokia’s Stock Price under Mr. Elop

Under Mr. Elop’s watch, we have seen introduction of Windows based smart phone Lumia 900, which at best may be remembered as a flop.

1st, it was made available to the US market on Easter Sunday!

2nd, they chose “Chris Parnell”, as their advertising lead. Is that the best they could do??

3rd and worst of them all is Microsoft’s announcement that devices running Windows 7 mobile OS will not be upgradable to the new Windows 8 version. You would think Mr. Elop, having been at Microsoft, would have been able to plan for this. Who wants to pay good money for an already obsolete “new” phone?

Mr. Elop has not communicated his strategy (if he has any) as to how he is going to save Nokia. There is nothing in his background indicative of him having been a turnaround executive. He has no record of innovation. His latest claim to fame is that he was at Microsoft, which is not impressive either. Microsoft has not been recognized as an innovator in recent years, even though they have had a monopoly on the PC operating system. Which by the way, thanks to Google and other SaaS pioneers is coming to an end?

Nokia has a tremendous intellectual capital. Their patent portfolio is very valuable, and some of their products, such as their 41-megapixel 808 Purview, are fantastic. Lumia 900’s physical design is slick. All of which begs the question: "why Nokia has not capitalized on any of these?". Why would their commercials feature “Chris Parnell” instead of someone with a bit more personality?

We have seen many technology icons bite the dust, the latest, Eastman Kodak, another pioneering company with impressive patent portfolio and engineers. What was Kodak’s mistake? They hired an executive with no intention or ability to save the company. Nokia’s board should take a page out of IBM’s rise from the ashes. In 1992, IBM was losing ground on all fronts, with their stock down, and business in tatters. The board sacked Bill Ackers and started looking for someone who had done what IBM needed done in the computer industry. The luminaries short list was John Scully of Apple, George Fisher of Motorola, Eckhard Pfeiffer of Compaq, and Scott McNealy of Sun. IBM’s board decided to go with a true visionary, Lou Gerstner, and he was able to save IBM. Nokia needs a Gerstner.

In my opinion, Nokia could be saved only if the shareholders of Nokia ask for an end to Elop’s flops and show him the door.

Don't Listen to the Doom & Gloom of the Media

Response to New York Post Article: “Town Is Down on Its LUXE”
Appeared on 8/29/10

By James R. Marandi
Rumson Resident
jmarandi@e-cxo.com

We hear a lot about superficial news reporting, grabbing headlines meant to shock the readers, based on rumors and slanted facts (or factoids, or half truths).

The article in New York Post, about Rumson real estate market is one such example. In my view the article accentuates the negatives, based on misleading numbers, painting a picture of a town blighted by a glut of houses, yet fails to present the many positives of our town.

So here is a point by point response:

A few inaccuracies just in the 3rd paragraph of the article:

1) Article’s 3rd paragraph starts by asserting “The glut of luxury homes has lent a surreal quality to the town”. Well, there is no glut of homes in Rumson. According to the Borough Hall, there are around 2500 homes in Rumson. According to Monmouth County MLS data, there are a total of 99 homes for sale in Rumson, of which 32 houses are under one million dollars, while 67 are priced between one million and twenty million dollars. Therefore, less than 4% of homes in Rumson are up for sale.

2) The article further asserts that “…weekends find brokers sitting at open houses waiting for buyers that never come”. This does not necessarily apply to Rumson, since no one in the right mind would try to sell a luxury Rumson estates from an open house. Further, due to the expensive furnishings in most estates the showings are by appointment and upon prequalification of the buyers. If your realtor has been trying to convince you otherwise, you need a new Realtor!

3) The article further asserts that “Many of the properties have been on the market for more than a year”. Not true. According to MLS data. Currently, there are only 3 active listings in Rumson which have been on the market for more than a year.


The article quotes Mr. “Ric” Martel Jr., of Prudential Zack Shore, opining that the reason for lack of buyers is attributed to the downfall of companies like Lehman Brothers and Bear Stearns. I disagree with Mr. Martel’s viewpoint as it is a classic case of glass half empty. Let me remind him and the readers that while Lehman Brothers and Bear Sterns were closed down (though the good part of their businesses were picked up dirt cheap by the likes if JP Morgan Chase with Federal subsidies to boot) the other Wall Street firms continue to prosper with bonuses and compensations that even the Federal compensation czar could not touch.


Also, Mr. Martel’s analysis as why people are selling their houses (so they can cut their expenses!) is not accurate in all cases. Traditionally speaking, in Rumson, the owners of estates sell their property after the family has grown and moved on, therefore they move to a smaller piece of property (some times another multi million dollar property in the area). Given that most Rumson residents are in the entertainment business and/ or corporate leadership positions, they relocate due to job requirements and nothing else.

As to a few houses that were pictured, there is no denying that a house has to be priced according to the market conditions and comparables, so if a house is overpriced it is not going to sell quickly, and as such is statistically irrelevant. For example, a ranch that may be worth 1.2 million dollars shall not spark interest amongst buyers at 1.75 million dollars, no matter how long it has been on the market. Furthermore, incremental price reductions are not an effective strategy in such cases.

There is one point in the article that I agree with, and that is the role the banks are playing in today’s real estate market. The banks are not lending, and if they are, the qualification bar is set extremely high with excruciating documentation process. However, this is not a Rumson problem. It is just a matter of time that enterprising entrepreneurs figure out a way to lend by cutting the clutter and pain while capturing a very attractive market (don’t expect the banks to be innovative in this area).


There is also good news all around Rumson:

Our taxes are lower than many of the towns around us. I advise those living in high tax areas such as Westchester NY, or Greenwich CT, to consider moving to Rumson as it will save them a bundle in taxes.

Our Rumson-Fair Haven high school was just reported amongst the top 6% in the country.

We have the best river front scenery along Navesink and Shrewsbury Rivers, a stone throw away from the Atlantic Ocean and a short drive to Colts Neck and Millstone Equestrian centers. Antiquing in Red Bank, or dining at the best restaurants, or clubbing at a few fabulous clubs (Hey you may even get to see the Boss and get an autograph).

And, last, but not least, a house listed for $ 3,950,000 in Rumson, sold for $ 3,850,000 in 46 days.

So stop the doom and gloom and come on down to Rumson. Invest and live in our historic town. I myself am living in a historic estate attributed to one of the original settlers of Rumson, and will not change it for the world.

Emerging Technologies, Global Trends and Survival

Believe it or not, once you cut through the clutter of main stream media and pass through financial meltdowns, Berlusconi’s dating habits, and shenanigans of reach and shameless, science and technology is advancing at a rapid pace. Which in itself is a miracle given the state of our education system and quality of our students!

These advances are going to create new industry leaders while committing laggards to the dust bin of irrelevance. Those who can spot emerging trends and catch the wave will succeed. The key to success is not a company’s size though, but the agility to innovate, affect and respond to change.

Take a look at Sears. The company practically invented selling to the masses in 1888, yet it failed to spot and capitalize on e-retailing as Amazon has. Compare Amazon to EBay, while Amazon stayed focused on its strategy, core competencies, and customers, EBay stagnates while having gone through numerous not so stellar acquisitions with its leader dreaming/ pursuing other opportunities.

Examples are plentiful: Motorola vs. Nokia, GM vs. Toyota, Sony vs. Samsung, Nortel vs. Cisco.

I should also point out that the successful company of today may become a total failure if leadership fails to stay in the game and keep their eyes on the ball.

Yahoo invented search and monetizing of search into advertising revenue. They recently took the step of outsourcing their search engine (brilliant!) to Microsoft, whose “Bing” appears to be a bust. This makes you think if there was ever a strategy behind such a venture other than total surrender and management ineptness. It certainly will not affect (in any meaningful way) Google and its portfolio of products, some of which are direct threat to Microsoft (Google docs vs. Microsoft Office).

Don’t let the size of Microsoft fool you. There are lots of parallels between Microsoft of today and GM of yesterday. What Microsoft’s management is failing to see is that they have or are ceding leadership in all segments of their industry. Their core Windows (fancy DOS with a colorful wrapping and a sexy name like Vista) is replaceable by Linux at server level, and with cloud computing will be replaced by Google Docs at the desktop; Xbox is playing catch up with Wii; Window’s user interface never caught up to Apple’s, and Zune lives in the dust of iPOD. This is clearly a case of failure in leadership. Doesn’t this look similar to GM’s Roger Smith era (see Michael Moore’s Roger and Me)

The challenge here is if your business runs on Microsoft applications, how do you prepare to take advantage of new technologies and capabilities offered by others, while protecting yourself from unwarranted and ill conceived upgrades?

How would you take advantage of Social Nets, texting, twittering? Or making sure that you and your organization don’t get side tracked by fads?

It is not just the technology on your desktop and back office that you should worry about. It is responding to trends such as Green energy. Do you concentrate on Bio fuels and totally ignore nanotechnologies in making new batteries. Would you concentrate on investing in nuclear technology and totally ignore emerging ones such as Nantennas?

Would you put your investment dollars (Euros or Renminbi) in developing organ transplant techniques or would you go after growing organs in the lab? Would you try to develop new medicine by mixing and matching old drugs (Cocktails) or would you pursue development of bacteria capable of attacking specific diseased cells? Would you promote a culture of invention and innovation and create jobs and build lives, or would you create complicated financial instruments in hope of making a killing before people realize that they have swapped their life time savings with worthless junk?

The key to survival, under intensity of competitive pressures and rapidly changing environment, is clear vision, deliberate strategic planning, innovation, focused tactical execution, and a network of dedicated partners who can collaborate, produce, and respond to change. And please don’t run to your favorite big X consulting firm asking them for a strategy. If you do, first ask them how much have they grown over the past decade, and what innovations have they patented or claim to have been directly responsible for? If their cookie cutter developed methodologies, executed by masses of recent graduates with no business experience, was any good, they should have used it themselves to great results!

This post was also published on 45 MagazinOnline, Oct/Nov 09 Issue: http://www.45magazineonline.com/flash_book/oct_mag/index.html