Nokia's Present & Future

[french toast]

Nokias cash reserves back in late 2010 was something like 9-10 billion US.
I think It was mize or tottentranz who put up some graphs a while back showing symbian getting more popular or something untill the fatefull burning platform memo.
Any peeps moving away from symbian at that point was due to the fact nokia ran symbian into the ground for many years whilst apple and android innovated on software, even blackberry was very solid at the time, higher competition = less sales anyway, that was inevitable.

BUT thats not including the new strategy of meego and a revamped symbian for the low end, both unified through QT for ease of porting, symbian had a massive following already and meego had a huge geek interest from maemo 5.
-if anything I thought nokia could have done something sooner with regards to maemo 6, before meego, n900 was a terrific phone, all it needed was a redesign, snapdragon processor, capacitive screen/software multitouch support, and the n8s camera module and it would have stamped its mark...took too long. (I was anticipating this phone).

Elop could having stuck with the same strategy, maybe making some US centric media focused phones with WP.
You also discounting the success of the award winning n9,..it was dead on arrival, wayyy over priced so not to sell, not advertised and only launched in limited non nokia strongholds, yet for a long time it outsold the entire WP ecosystem.e

Although I have been impressed with elops enthusiasm and savvy on stage performances, the leaked microsoft takeover talks proge that he came in with one eye on selling nokia to microsoft...thats the only way any of what he did makes sense...burning platform = "please dont buy our products we have got it all wong, come back in 6 months..chow"

Edit, also doesnt that 250 million just cancel/partly cancel out the WP tax? I was under the impression money was being exchanged each way with microsoft still earning something from it?

 

[Silent_Buddha]

Nokias cash reserves back in late 2010 was something like 9-10 billion US.
I think It was mize or tottentranz who put up some graphs a while back showing symbian getting more popular or something untill the fatefull burning platform memo.
Any peeps moving away from symbian at that point was due to the fact nokia ran symbian into the ground for many years whilst apple and android innovated on software, even blackberry was very solid at the time, higher competition = less sales anyway, that was inevitable.

BUT thats not including the new strategy of meego and a revamped symbian for the low end, both unified through QT for ease of porting, symbian had a massive following already and meego had a huge geek interest from maemo 5.
-if anything I thought nokia could have done something sooner with regards to maemo 6, before meego, n900 was a terrific phone, all it needed was a redesign, snapdragon processor, capacitive screen/software multitouch support, and the n8s camera module and it would have stamped its mark...took too long. (I was anticipating this phone).

Elop could having stuck with the same strategy, maybe making some US centric media focused phones with WP.
You also discounting the success of the award winning n9,..it was dead on arrival, wayyy over priced so not to sell, not advertised and only launched in limited non nokia strongholds, yet for a long time it outsold the entire WP ecosystem.e

Although I have been impressed with elops enthusiasm and savvy on stage performances, the leaked microsoft takeover talks proge that he came in with one eye on selling nokia to microsoft...thats the only way any of what he did makes sense...burning platform = "please dont buy our products we have got it all wong, come back in 6 months..chow"

Edit, also doesnt that 250 million just cancel/partly cancel out the WP tax? I was under the impression money was being exchanged each way with microsoft still earning something from it?

Just about all market analysts other than Toni Ahonen, who has an axe to grind with Nokia, saw Symbian as a sinking ship for years before Elop arrived. Ahonen became popular because he said a lot of things that the Symbian faithful and Microsoft haters wanted to hear.

Even now, Nokia is pushing ahead of ZTE and HTC (two prominent Android handset makers) and they are still doing badly? This despite their non-WP smartphone lines (their semi-smart feature phones won't be going WP) dropping like a stone with only WP keeping the company relevant.

Once they have divested themselves of Symbian at the high/mid/low smartphone segments they may have a chance at consistent profitability. That was something they couldn't do until recently due to the reliance on Symbian to service the mid/low end of the smartphone market until they could get out devices like the 620, 520, and other new low end smartphones and semi-smart feature phones (like the popular Nokia Asha 311, not a WP phone).

BTW - I have nothing against Symbian. I have a Symbian phone (Nokia N8). I actually liked it somewhat better before they tried to make the UI more like Android.

Regards,
SB

 

[Jubei]

I did look at past sales, and you obviously didn't. Sony did not "come out of nowhere". They were #3 in Android marketshare in early 2011, with 5% of the global smartphone market (up from 3% a year earlier). (Nokia's share was on a steep decline well before Elop arrived, so don't bring that up from the chart.) Sony then lost some share and came back a bit, but that is by no means an indication that Nokia could do better starting from 0% in 2011. Sony is still below where they were in 2011.

Instead of interjecting with that condescending tone, you could have asked me to clarify my stance before interpreting it as freely as you did just now. Sales = marketshare?

http://www.mobilemag.com/wp-content/uploads/2013/05/xperia-ship.jpg

Here is Sonys Xperia shipments from start to now. As you can see they have increased a lot since 2010-2011. They declined a bit in Q1 of this year wich Sony blamed on Xperia Z being too successfull and ruining the sales of their other phones. However their revenue was also higher since Z is a high end phone with good margins.

You say that, but there's little data that LG is in any better position than it's been in for years, and the same for HTC after its highly regarded One was released. A month of good Xperia Z sales really doesn't say much for Sony, either.

http://cdn.gsmarena.com/vv/newsimg/13/01/lg-q4/big.jpg

Their best quarter ever coincides with the launch of their Optimus G and Nexus 4 handsets. Of course all these companies are still beating Nokia in sales despite the doom and gloom of Samsung

Again, don't forget that Sony has a big chunk of Japanese sales, a market of 2-3M smartphones a month. Nokia doesn't have that loyal market.

So what? That would only explain why Sony has a larger global presence. But they have more marketshare than Nokia in most of Europe aswell

 

[Jubei]

Nobody is saying Nokia should not have gone with Windows Phone. The stupidity lies in going exclusively with them. There is nothing stopping Samsung from stepping into the WP ecosystem with a Galaxy flagship and then crushing Nokia with their billion dollar marketing machine and vertical integration

The only reason they havent done so is because they view the OS as a dead horse at this point. Microsoft wouldnt do anything to stop Samsung either because their goal is to make Windows Phone grow, not make Nokia grow, if they cared about that they would have bought them already. And other analysts have already pointed out that Nokia is going to end up paying Microsoft more than they are recieving in support, so the quarter million "sponsorship" money is a moot point

The only player that is truly benefiting from this is Microsoft, its basically a proxy war for them, if Nokia succeeds then its beneficial, if Nokia fails, they dont really lose anything and will simply ship their own hardware to compete

 

[Miksu]

There is nothing stopping Samsung from stepping into the WP ecosystem with a Galaxy flagship and then crushing Nokia with their billion dollar marketing machine and vertical integration

Doesn't Samsung already have a WP version of the Galaxy?

 

[Kaotik]

Doesn't Samsung already have a WP version of the Galaxy?

Yes, but they didn't roll out the billion dollar marketing machine out with it

 

[Deleted member 13524]

Just about all market analysts other than Toni Ahonen, who has an axe to grind with Nokia, saw Symbian as a sinking ship for years before Elop arrived. Ahonen became popular because he said a lot of things that the Symbian faithful and Microsoft haters wanted to hear.

Accusing Ahonen and "Symbian fans" of wishful thinking about a Symbian future is a common misconception presented by Elop followers.

Everyone - including Ahonen - knew that Symbian had to go.
Symbian's transition to MeeGo through a developer-friendly QT platform had been publicly announced in mid-2010, months before Elop joining as CEO.
The public response from that announcement was actually great, and very few people complained about Symbian being discontinued on the medium/long run.

That's a completely different matter than sending a memo to the whole world saying:
"OMG our products are crap! People, stop buying them unless you're stupid! Developers, stop programming unless you're stupid! Nokia employees, you're all stupid because our products are crap!
We're gonna change everything, see you in 8 months!
Derp.."

This was the worst mental diarrhea I've seen coming from anyone at any company.
If Nokia's board didn't fire the guy right after this came out, then they (and any Elop supporter) too deserve to have their company going down the toilet.

Even now, Nokia is pushing ahead of ZTE and HTC (two prominent Android handset makers) and they are still doing badly? This despite their non-WP smartphone lines (their semi-smart feature phones won't be going WP) dropping like a stone with only WP keeping the company relevant.

ZTE and HTC made a profit. Nokia didn't.

Actually.. Symbian - which was being discontinued and rightly so - can be considered a much more successful platform that WP on all fronts, since it actually made money for Nokia well into 2012.

BTW, HTC One saw its launch delayed by over 3 months and had supply issues until the end of May. I think HTC will only see most of the One's profits in Q3 and Q4 2013.

Once they have divested themselves of Symbian at the high/mid/low smartphone segments they may have a chance at consistent profitability.

Why?
Where did this "Symbian = losing money" idea come from?
Nokia was making money with Symbian, and now it's losing money with WP.

That was something they couldn't do until recently due to the reliance on Symbian to service the mid/low end of the smartphone market until they could get out devices like the 620, 520, and other new low end smartphones and semi-smart feature phones (like the popular Nokia Asha 311, not a WP phone).

The Asha line doesn't stand a chance against cheaper Android smartphones, which are starting to come with worlds of functionality, features and performance above Nokia's offering.

 

[Jubei]

Doesn't Samsung already have a WP version of the Galaxy?

Sure but did you see any advertisement for this phone anywhere? Do people even know it exists? It was delayed by months and then released quietly in limited markets. Thats basically Samsung throwing Microsoft a bone for the Android cross licensing money

I should have added IF Nokia makes WP grow to the point where Samsung actually cares, then there is nothing stopping them from taking over that market, Nokia doesnt have the money to compete in WP anymore than they could compete in Android. Its a flawed argument, if WP grows, all the major players from Android will jump ship and Nokia is still going to have to face them, if WP fails, the Android players continue to make money while Nokia is dead and Elop has to flee Finland

 

[wco81]

What exactly was the timeline for Nokia's multitouch efforts?

They saw the iPhone in 2007, were caught flatfooted. I don't think they dismissed touch like Blackberry did.

But they had to start from scratch. Not just in software but also developing hardware capable of running richer software.

If they didn't start on this effort until 2010, that is poor management. But it sounds like they started earlier and Elop killed the efforts in favor of WP.

 

[Deleted member 13524]

What exactly was the timeline for Nokia's multitouch efforts?

They saw the iPhone in 2007, were caught flatfooted. I don't think they dismissed touch like Blackberry did.

But they had to start from scratch. Not just in software but also developing hardware capable of running richer software.

If they didn't start on this effort until 2010, that is poor management. But it sounds like they started earlier and Elop killed the efforts in favor of WP.

The first multi-touch devices from Nokia came with Symbian^3, in Q3 2010.
So they probably started that effort in 2009, which was nonetheless way too late to avoid losing marketshare.

 

[tuna]

Microsofts distinct advantage coming into mobile was their xbox gaming brand and powerfull -do what you like- pc software/business expertise. ..
They decided to copy apple a few years after apple started by offering a stripped down locked in basic OS, and they hampered that further by equipping it with vastly out of date hardware and slow software feature updates.

There is no reason for HW manufacturers to invest their (probably very limited) resources writing drivers for WP8 when they can use their resources writing drivers for Android (and iOS in some cases).

 

[Silent_Buddha]

The Asha line doesn't stand a chance against cheaper Android smartphones, which are starting to come with worlds of functionality, features and performance above Nokia's offering.

Worldwide sales beg to differ as the earlier posted link (http://www.cellular-news.com/story/60845.php ) has it as the best selling "cheap" phone in the world at number 8. No other cheap Android phone comes even close. The total volume of cheap Android phones from various Android handset makers likely dwarfs their sales, but it remains the single best selling low end phone in the world currently.

Regards,
SB

 

[Deleted member 13524]

Worldwide sales beg to differ as the earlier posted link (http://www.cellular-news.com/story/60845.php ) has it as the best selling "cheap" phone in the world at number 8. No other cheap Android phone comes even close. The total volume of cheap Android phones from various Android handset makers likely dwarfs their sales, but it remains the single best selling low end phone in the world currently.

Regards,
SB

Granted, that model seems to sell very well.
However, the trend is to have smartphones rising and feature-phones going away.
As "smartish" as the Asha line can be, the similarly priced Huawei G300 will run almost all the 3rd party apps that run in a Galaxy S4.

 

[Mintmaster]

Sales = marketshare?

Marketshare is what matters, because you're supposed to sell more in a growing market.

Their best quarter ever coincides with the launch of their Optimus G and Nexus 4 handsets.

You mean the 1% YoY increase in a market that grew a lot faster than that?

Of course all these companies are still beating Nokia in sales despite the doom and gloom of Samsung

Yeah, by maintaining (or even declining) in their share of Android phone sales from the time that Elop took over. Nokia would be starting from 0% at that time, competing with companies in a cheaper manufacturing environment that are content with minimal profit (aside from Samsung).

Android would've been the safe choice, and even then maybe insufficient. Nokia is choosing WP for a chance at bigger long term gains. Their first objective - dominating WP by being in bed with MS - is done.

Now they just have to hope that MS can succeed, and that's a reasonable bet to make. They're still dominant in PCs, they took half of Sony's dominating marketshare for high-end consoles, and they're leading the charge with hybrid notebook/tablets (a full power OS in an ultra-compact form factor is almost unquestionably the future with Haswell and Silvermont).

So what? That would only explain why Sony has a larger global presence.

No, it also contributes to Sony having a bigger marketshare than Nokia, which is the fact you were emphasizing from the beginning. If you looked at Sony outside of Japan and Nokia outside of Finland, you'd probably have Nokia on top already, and Sony's rise would be a lot more muted.

 

[Deleted member 13524]

The only reason Nokia doesn't find competition in WP is because the other manufacturers consider the OS a failure and they won't invest any meaningful resources for it.

If WP miraculously gets a marketshare that actually matters, Nokia will find as much competition from Samsung, HTC, LG, Huawei, ZTE, etc. as it would with Android.

It's quite the euphemism to state that Nokia is in bed with Microsoft. As it stands, Nokia is little more than a sacrificial pawn for Microsoft to keep the brand alive, because the manufacturer is tied to the OS while the OS isn't tied to the manufacturer.


Moreover, as time goes by it doesn't look like people will be willing to switch from iOS/Android to anything else, since they've already spent money on apps/games for that platform.
Give it some more years and it'll be as difficult to drive people away from Android in their smartphones/tablets as it is to drive them away from Windows in their PCs.



BTW marketshare is what matters? I guess apple must be doing really poorly then, with its measly 17% of global marketshare.

 

[Silent_Buddha]

BTW marketshare is what matters? I guess apple must be doing really poorly then, with its measly 17% of global marketshare.

It's always good to point out the one single manufacturer that can get away with only selling premium phones. Every Android maker (except possibly for Samsung, but Samsung now and not Samsung when they entered the Android market) wouldn't be making even remotely as much money as Apple if they were to attempt the same thing as the only reasons those players below Apple even have as much share as they do is due to the fact that they all have extensive mid/low end phone lines.

Take away Apple's market leading gross margins due to their ability to sell only high-end (their mid-level phones are just previous generation high end phones which have already made profits on high margins) and yes, they wouldn't be raking in the piles of cash from that smaller market share as they currently are.

Regards,
SB

 

[Mintmaster]

Surely its #1 priority is maintaining dominance, period. Samsung has no great loyalty to Android - Bada, Tizen as well as their WP phones are testament to that.

Samsung is putting a token effort into those platforms. To 98% of the market, Samung smartphones run Android.

This is a company that will try anything at least once.

I agree, but Samsung has little interest in WP right now, and Nokia has the whole market for now. If WP8 grows and Samsung does become interested, it will be playing catchup. That's a scenario Nokia will gladly take over starting from zero in the Android space.

Nokia doesn't even have exclusivity, how does this insulate them from attack even if you think that WP is somehow on a different playing field than other ecosystems?

Insulation just slows down heat transfer. It doesn't outright stop it. I stand by my use of that word.

Nokia does have a cost advantage from the support payments MS is giving them and selling 4x as many WP8 phones as everyone else combined. It'll take a long time before Nokia faces competition there.

Another explanation after the fact by Elop that you seem to accept as gospel.

Why is it so hard to believe? Apple and Samsung have big gross margins by charging AT&T and other carriers far more than they need to. Sprint had to pay $20B to get the iPhone, and isn't expected to start making money on that deal until 2015.

Of course AT&T wants a third competitor.

What does that mean? Is building a third ecosystem outside of Android useful or not? Which one is it?

A big chunk of Microsoft's long term future depends on the success of the Windows Store, and they've always been well over 10x as big a company as Nokia. Their influence on software development is probably two orders of magnitude larger than Nokia's.

MS developing the third ecosystem from scratch has a good chance of succeeding. Nokia doing so does not.

Frankly, I can't tell you what Nokia may have been thinking. At least Sony has managed to secure its home market, and that's presented as some sort of doesn't-count-as-it-is-inevitable advantage. Nokia can't even claim that anymore though.

Nokia probably gets 98% of its sales outside it's home market (where it has largely recovered, but it's almost irrelevant either way).

Well Samsung, I guess? But what difference does it make? Nokia could've had all of the advantages of name recognition, quality hardware, camera functionality and what have you on Android (and they wouldn't have had to wait for the software to catch up with support for high res cameras, more than single core processors, or resolutions higher than 800x480, and now 1280x720). They might well have posed a stronger challenge to Samsung than others, and they wouldn't be stuck in an anemic app environment today.

Well, I don't think anything I say will convince you otherwise. Processors and resolution saved costs for Nokia, and there's no doubt in my mind that Nokia had a big say in those decisions. Quality and camera functionality didn't help HTC.

Nokia's bread and butter has always been the lower end, and there they'd just become a me-too Android product. WP lets them use cheap, slow processors and still get a very smooth experience (e.g. the hot selling Lumia 520/521).

 

[Deleted member 13524]

It's always good to point out the one single manufacturer that can get away with only selling premium phones. Every Android maker (except possibly for Samsung, but Samsung now and not Samsung when they entered the Android market) wouldn't be making even remotely as much money as Apple if they were to attempt the same thing as the only reasons those players below Apple even have as much share as they do is due to the fact that they all have extensive mid/low end phone lines.

Take away Apple's market leading gross margins due to their ability to sell only high-end (their mid-level phones are just previous generation high end phones which have already made profits on high margins) and yes, they wouldn't be raking in the piles of cash from that smaller market share as they currently are.

Regards,
SB

Yes, apple is the only company capable of selling one model per year and making as much money as all the others combined.
I was just pointing out that marketshare isn't the most important factor.
Average retail price, profit per unit and 3rd party developer presence are just as important..

Yet, in 2011 Elop was downright obsessed in turning Nokia into an apple. He even went to the extreme of criticizing Nokia's employees for owning anything other than an iphone, because that was "what they were up against".
Elop's goal in 2011 wasn't to pull a Samsung, it was to pull an apple. And of course he couldn't beat apple at their own game. That was just another of his horribly stupid management efforts.

 

[Mintmaster]

Nobody is saying Nokia should not have gone with Windows Phone. The stupidity lies in going exclusively with them. There is nothing stopping Samsung from stepping into the WP ecosystem with a Galaxy flagship and then crushing Nokia with their billion dollar marketing machine and vertical integration

A bifurcated product line just messes up the marketing message, and again, MS is not going to pay them if they do that.

Samsung isn't going to do that until WP gets really big because, again, it will mess with their advertising message along with the consistency of the Galaxy brand, and they'll be starting from a position of weakness. Nokia has 80% of the WP market, and the remaining 20% is shared by everyone else.

If that scenario plays out - where Samsung feels the need to compete seriously with Nokia - then we are in a situation where Nokia's decision to go WP8 has played out spectacularly well.

The only player that is truly benefiting from this is Microsoft, its basically a proxy war for them, if Nokia succeeds then its beneficial, if Nokia fails, they dont really lose anything and will simply ship their own hardware to compete

Nokia is not going to fail without WP failing, so yes, MS does have a lot to lose here. They needed a highly respected manufacturer to push the platform, and will remain dependent on it until it succeeds.

Everyone - including Ahonen - knew that Symbian had to go.
Symbian's transition to MeeGo through a developer-friendly QT platform had been publicly announced in mid-2010, months before Elop joining as CEO.

And yet Ahonen still uses the decline of Nokia's Symbian phone sales to tar Elop. He even admits to not having a problem with the WP choice.

No OS starting from scratch is more "developer friendly" than WP8, because MS is pumping far more money into it than Nokia could dream of doing, and they also have hundreds of millions of devices in the near future running the same Windows 8 kernel.

This was the worst mental diarrhea I've seen coming from anyone at any company.

That's another matter entirely, and I never defended that.

ZTE and HTC made a profit. Nokia didn't.

At the end of next quarter, Nokia will have made profit in the past year. Mark my words. It'll probably be more than ZTE and HTC, too.

Actually.. Symbian - which was being discontinued and rightly so - can be considered a much more successful platform that WP on all fronts, since it actually made money for Nokia well into 2012.

So what? Your observation is irrelevant to future results.

I think HTC will only see most of the One's profits in Q3 and Q4 2013.

I will hold you to that prediction, because it's not looking good.
http://gigaom.com/2013/06/07/analys...already-peaked-blames-next-iphone-and-delays/
http://focustaiwan.tw/news/aeco/201307190014.aspx

The Asha line doesn't stand a chance against cheaper Android smartphones, which are starting to come with worlds of functionality, features and performance above Nokia's offering.

Cheaper Android phones are also seen as not holding a candle to the Nokia 520/521.

BTW marketshare is what matters? I guess apple must be doing really poorly then, with its measly 17% of global marketshare.

Why do you think its stock dropped so much? It failed to retain the marketshare and margins that many people expected.

Nokia gaining revenue during the tail end of Symbian is meaningless when Nokia's marketshare (particularly among high ASP smartphones) is plummeting. There was huge growth in the smartphone market and Nokia got less and less of that for years before Elop's arrival.

 

[tuna]

No OS starting from scratch is more "developer friendly" than WP8, because MS is pumping far more money into it than Nokia could dream of doing, and they also have hundreds of millions of devices in the near future running the same Windows 8 kernel.
That's another matter entirely, and I never defended that.

Meego was based on SW that have been used and are developer friendly (like QT, Linux and other stuff). It would also be very easy to port Android drivers to it, so Nokia would have been able to choose which components it would like to buy, unlike the current situation with WP8.