Review: Operation Elop

To Microsoft’s biggest fans, there is no greater what-if than Windows Phone, the erstwhile smartphone platform that failed to counter Android and the iPhone, dooming Microsoft to also-ran status in personal computing. But Windows Phone was even more devastating to Nokia, the one-time global leader in phones.

Operation Elop, a book by Merina Salminen and Pekka Nykänen, attempts to make sense of this history, detailing how the proud but arrogant Nokia, having ceded its mobile domination to Apple, failed to advance various modern smartphone platforms and then hired out outsider for the first and only time to lead the company back to prominence. But that outsider, Stephen Elop, presided over the downfall of Nokia as it adopted Windows Phone but failed to gain any traction, forcing an acquisition by Microsoft. The end was horrible: Microsoft was forced to kill Windows Phone, lay off most of the Nokia employees it had hired, and write off the cost of the acquisition. The remains of Nokia, once a cornerstone of the Finnish economy, continued forward in name only, a tiny and inconsequential firm.

Nokia’s fall raised innumerable questions, some of which remain unanswered today. Was Stephen Elop a Microsoft plant, sent into Nokia to undermine platforms like Meego that might have led to a mobile resurgence? Was there some alternative strategy that might have reversed the skid, perhaps one in which Nokia embraced Android instead of the proprietary and immature Windows Phone?

These questions still trouble Microsoft fans even today. But for those in Finland, Nokia’s destruction was existential. Finland is a small, sparsely populated country, and Nokia’s influence, in personal technology and otherwise, was outsized: Where engineers in the United States can easily move to other tech giants, Nokia’s employee wasn’t so lucky. And so the Finnish journalists Salminen and Nykänen sought to answer those and other questions related to the end of Nokia, interviewing hundreds of former employees and industry insiders in the process.

The resulting book, Operation Elop, is fascinating and jarringly Finland-centric. But it was also written in Finnish for Finnish readers, and thus inaccessible. But they allowed an outside team to translate their work into English, and to make the resulting translation available for free. And while there are still many issues with that translation, it’s available now for anyone who wants to know what they discovered. You can find versions of this book in PDF, EPUB, and MOBI, and I added the EPUB version to my Kindle library, so I could read it normally.

Despite the issues, it’s worth reading.

Aside from a brief period of prominence at the end of the 20th century, Nokia’s dominance in mobile occurred exclusively outside the United States. And so the firm and its products always seemed mysterious and quirky to me and, I suspect, to many other Americans. I was familiar with Nokia mostly because of my many trips to Europe in the 2000s and 2010s, when I would see their advertising everywhere. The influence it wielded was obvious.

The basics of Nokia’s downfall are well understood. Like every other firm in the phone industry, it didn’t understand the threat posed by Apple’s iPhone–and, a few years later, Android–until it was far too late. But Nokia was uniquely hobbled by its size and scope, and competing smartphone projects within the company proceeded slowly, and isolated from each other. In time, its leaders finally came to understand that its culture–which, to me, seems almost Japanese–was holding it back. And it looked to the outside for new leadership, settling on former Microsoft executive Stephen Elop.

As an outside observer, I loved Stephen Elop: He was smart, funny, and a terrific speaker. And unlike some executives, he knew his company’s products inside and out and could speak about them enthusiastically and at great length. I will also argue that the mess he inherited was not his fault, and that inertia played as much a role in Nokia’s fall from grace as did his strategic decisions. In this way, he reminds me of Intel’s Pat Gelsinger, who is likewise doing all he can to reverse the downward spiral of a once-great tech giant.

But some of Elop’s decisions were curious and difficult to defend, and it is there that the Finnish authors of Operation Elop ask the most pointed questions.

Elop could have chosen the more established, mature, and customizable Android instead of Windows Phone, but didn’t. And when Nokia drifted away from Android, Google responded by acquiring phone maker Motorola, a key Nokia competitor.

Elop’s partnership with Microsoft was promoted as a team of equals pushing Windows Phone forward, but Nokia was always treated like an outsider, and couldn’t even view the platform’s source code, let alone get key advances into the system when required. Windows Phone was always a day late and a dollar short when it came to platform capabilities, and it couldn’t support the large, high-resolution screens and powerful camera systems that Nokia hoped would differentiate its first Lumia smartphones.

Nokia was also working on multiple smartphone projects internally, and some of them could have been viable paths forward. This was especially true of Meego, a collaboration with Intel that was cut off at the knees when Elop connected with Microsoft and Windows Phone. Meego still exists today as Jolla Sailfish OS, an Android compatible smartphone platform that serves as a major what-if for Nokia.

Elop also made some boneheaded decisions, like the infamous Burning Platform speech and memo that were purposefully leaked, essentially forcing the Nokia board of directors to accept his decision to not just back Windows Phone but drop anything that might in any way compete with Microsoft’s mobile platform. Indeed, when Elop announced Nokia’s adoption of Windows Phone, he also said that Nokia was dropping Symbian, a bombshell that he had never mentioned internally, and one that immediately destroyed the company’s bottom line as telecoms worldwide refused to sell remaining Symbian phones.

The authors of Operation Elop present alternative futures in which things might have gone better for Nokia. Elop’s biggest mistake, they say, was choosing only Windows Phone: Nokia needed a new, non-Symbian platform for the growing markets for so-called feature phones, devices that might have reached “the next billion” people worldwide, a tagline Microsoft later adopted. But Windows Phone was too expensive for this market, though Nokia and then Microsoft later went all-in on cheap Lumia phones after it was already too late. Nokia’s Asha platform, built on the aging S40 platform and bolstered by touch technology from Smarterphone, could possibly have succeeded where Lumia and Windows Phone failed.

As for Windows Phone and Android, Elop went with the Microsoft solution because it offered more money, and Nokia was desperate for a cash infusion. And that investment–billions of dollars–was contingent on Nokia using Windows Phone exclusively. It’s a shame: Nokia-branded Android handsets could have offered Nokia’s maps, music, and other solutions, would have been more sophisticated, and could have differentiated from Samsung and the rest of that market with unique hardware designs.

In my view, Nokia’s downfall originated with the company’s previous leadership, and it’s difficult to imagine Elop or anyone else could have righted that ship. But Elop certainly contributed to the fall, though rumors of him being a Microsoft plant are, and always were, absurd. And as was later revealed, Steve Ballmer’s decision to buy Nokia to save Windows Phone was hotly contested by Bill Gates and Microsoft’s board of directors.

The authors of Operation Elop, feeling the sting of this defeat even more than I do, aren’t as kind, however, not to Elop or Nokia. They note that Nokia lost 18 million euros–about $23.8 million–in value ever single day that Elop was CEO, based on its market values the days before and after his tenure. And Elop’s Burning Platforms speech and abandonment of Symbian before Windows Phone are compared to the Osborne Effect, which some now argue should be renamed the Elop Effect.

But in the end, the blame falls at the feet of Nokia’s previous leadership and not Elop.

“Nokia’s phones were not killed off by a murderer from Canada [Elop],” they note. “What killed them was the arrogance born in Nokia’s own country, concentrating on costs, unclear responsibilities, and bad decisions made by the company’s board. Elop failed in his attempt to save Nokia. He made gigantic mistakes — but in good faith.”