Worst of the Week: Microsoft’s tough love

Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
Well, it looks like Microsoft finally found out what has been ailing Nokia’s handset business over the past several years, and this week took some action.
While not naming names, Microsoft quietly announced plans to fire 18,000 employees – with about 12,500 job cuts coming from Nokia itself – that all had a hand in making bad decisions over the past several years that resulted in Nokia’s current position in the market. Finally.
(You have to love it when a company posts as “e-mail” written to employees on its website for all to read. Even better when they dress up that e-mail with a “from,” “to,” “date,” and “subject line” to make an obvious press release seem real.)
I mean, you can’t keep those people around since they were the ones that are responsible for Nokia’s improbable slide in market share and near irrelevance in terms of the smartphone market. You just can’t.
Now, some may want to point fingers at someone besides those 12,500 soon-to-be former employees for Nokia’s mess, but really, who has anymore fingers for such pointing?
I guess one finger could be reserved for Stephen Elop (not saying which finger) who back in 2010, was “forced” to take over an ailing Nokia that was struggling as the No. 1 handset vendor in the world with just 34% market share to work with. Coming over from a company in Microsoft that was a bastion for understanding the mobile device market, Elop did some remarkable things at Nokia, despite what we have found out were more than 12,000 people actually making the bad decisions.
Let’s see, according to the always reliable Wikipedia:
During Elop’s tenure, Nokia annual revenues fell 40% from 41.7 billion Euros per year to 25.3 billion Euros per year. Nokia profits fell 92% from 2.4 billion Euros per year to 188 million Euros per year. Nokia handset sales fell 40% from 456 million units per year to 274 million units per year. Nokia share price which was at 7.12 Euros on the day Elop was hired, had fallen to 81% to a bottom level of 1.44 Euros two years later, after which it began trading at 4.14 Euros, up 36% on the day.
While this would seem to indicate Elop as CEO was in fact responsible for this mess, thanks to Elop’s former employer acquiring Nokia – and I would assume launching a full investigation – we have since found out that it was in fact these 12,500 employees that really were to blame.
I would love to know how many of those 12,500 people decided that Nokia should stick with Symbian well beyond its relevancy. Or, that instead of merging Nokia’s device design leadership with rapid uptake of Google’s Android operating system thought that the real way to go was to dumb-down those designs and package them with Microsoft operating systems that seemed to change direction on a daily basis.
I can only guess Elop was the only voice calling out for Nokia to take on Apple’s growing influence in the smartphone space by offering up strong alternatives in terms of design and craftsmanship with an OS that was rapidly gathering developer support. I am sure Elop is still telling anyone that will listen that had he had his way, Nokia would be the Samsung of today, but even better due to higher quality materials.
You also have to hand it to Elop for sending out his own “e-mail” to Microsoft employees, spending paragraph after paragraph on what the company is going to do to be different, and waiting until near the bottom to then say that changing culture will not include 12,500 Nokia employees on the e-mail list. Why bother wrecking an inspirational speech with such mundane facts?
And, let’s not let those approximately 5,500 Microsoft employees off the hook. I am sure they were all responsible for Windows Mobile 6, 6.5 and 7, as well as the Kin and Zune. They obviously had to go.
Thankfully, recently installed Microsoft CEO Satya Nadella gets it and realizes that in order for Microsoft to succeed, it needs to remove those bad decision makers, and to kill off an obviously poisonous brand name in Nokia to support a brand in Microsoft that has a much better track record in the mobile space.
Not that I am a credited forecaster, but I think we can all agree that with these decisions, it will be smooth sailing in a less crowded boat for Microsoft.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I have been very open in my support of Sprint making a bid to purchase T-Mobile US, regardless of the price. You know who else has got to be pushing for such a move? Every other carrier.
News this week indicated that Sprint – and more specifically its wallet, Softbank – have asked that pending financing for an expected offer for T-Mobile US include longer-than-usual terms, which reports concluded meant that Sprint was expecting a potential regulatory review process to take some time. Those reports claimed that the companies involved expect reviews to take at least one year, and could take up to 18 months.
I think we can all agree that precedence for these sort of deals typically include the companies involved basically going into shutdown mode in terms of rolling out new or innovative services, lest they somehow run afoul of shareholders, regulators or Twitter. I do believe it was T-Mobile USA itself that lost a year of its life waiting through AT&T’s eventually unsuccessful attempt to acquire its operations, followed by another year of shaking out the cobwebs before emerging as the magenta T-Mobile US butterfly we know and love today.
I can only guess that if/when this marriage of convenience is eventually offered up, rivals AT&T Mobility and Verizon Wireless will be very measured in voicing their resistance to such a deal.
–Speaking of T-Mobile US, the carrier this week unveiled a low-level “un-carrier” initiative that will allow customers to add select mobile device accessories to T-Mobile US’ equipment installment payment offer. What this means is that beginning July 20, customers can sign up to make monthly, no-interest payments on accessories priced between $69 and $250.
This sounds like a very consumer-friendly idea in theory, but do I really want to be making monthly payments on an accessory that I am likely to lose in the first 30 days or will become outdated 10-times faster than the handset I am also making monthly payments on?
I know this option is not a requirement, but in a society where we can’t pass up on the notion of paying on Tuesday for a hamburger today, I am guessing this option could prove compelling … and eventually frustrating.

–Finally, I am sure everyone is by now familiar with the recent bad rap Comcast’s customer service has received, or for those that are indeed Comcast customers, have been quite familiar with such “quality.” Well, fear not, for as a new report found that Comcast is only No. 6 in terms of companies with the worst customer service.
Ranker found that five companies somehow managed to best Comcast in this high honor, including the likes of American Airlines, Walmart and Bank of America. However, the real icing on this list’s cake is that the No. 2 worst company was a small telecom startup by the name of AT&T, while the winner was the apple of Comcast’s eye Time Warner Cable. I guess Comcast can use this victory over Time Warner Cable as a rallying cry in front of regulators as to why it should be allowed to consolidate a monopolistic industry.
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
Bored? Why not follow me on Twitter