Nokia's Present & Future

Discussion in 'Mobile Industry' started by Arun, Dec 22, 2010.

  1. Silent_Buddha

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    Sure, it'd be great if you were outpacing your competition. But considering that many android phone maker's are posting YoY losses for their Android lines, while Nokia contines to post YoY growth for their Lumia line, I'd say that's pretty good. Especially considering that the YoY growth is growing. I'm not sure if that's sustainable, but if they plateau at ~20% growth each year, that certainly would represent a healthy market presence.

    Regards,
    SB
     
  2. Jubei

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    Kind of misleading. You might want to compare the ASP of Lumias with Samsung and Apples

    214 million euro loss for the quarter and gross margins dropped from 21% to 16.5% QoQ indicating Nokia is sacrificing margins for volume

    They would have paid the price for this strategy eventually.
     
  3. ToTTenTranz

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    Android makers may be posting YoY marketshare losses, but almost all are posting profits due to market growth. Even HTC only posted losses this last quarter for the first time ever.

    Nokia has been posting losses for how long? They burned through their 10 billion € cash reserves like the fuel in a space rocket launch.
     
  4. Helmore

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    I think the main problem for Nokia is that only 8.8 million of the 55.8 million phones they sold were Lumias. That's still a lot of dumbphones.
     
  5. Xmas

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    Nothing wrong with selling a lot of dumbphones.
     
  6. cal_guy

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    The problem is that dumbphones are basically all low margin devices now, whereas 4-5 years ago they still occupied the mid-price range.
     
  7. Mintmaster

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  8. Jubei

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  9. dZeus

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    not contradicting anything in your post, just adding some background:

    After MS has finalized the acquisition of Nokia's mobile division, they can keep on subsidizing Windows Phone cellphones for a long time, regardless of margins. If MS reports the revenue and profit of ex-Nokia as part of a larger division, it will even be rather opaque to investors.

    Pressuring smaller Android manufacturers who don't have a large war-chest for legal action about licensing fees (using a large IP portfolio) might make selling Android less attractive than Windows Mobile (and not many alternatives, as IOS is not available for licensing). Apple seems only interested in the top-end of the market (look at how they refuse to sell the iPhone 5C for mid-range prices outside of China).

    As much as I despise MS tactics, they might have a reasonably successful long-term strategy here.
     
  10. Jubei

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    I agree that its what they should do. But looking at their current strategy i think that is unlikely, their current gross margins are almost 50% and every product they sell now is expected to make money. Xbox One will make money on day 1, Surface would have been just as logical to subsidize yet they refused even with the 2nd generation version

    Secondly the issue with branding remains. Alot of these sales are happening in loyal Nokia countries. What happens next year when it says Microsoft Lumia instead? And are these people really investing into the ecosystem or just looking for a cheap Nokia phone that they surf on sometimes? A person who spends 130 euros for a phone probably is not the type to spend another 100 on apps
     
  11. Silent_Buddha

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    I don't think you can call the US even remotely a loyal Nokia country and yet Lumia continues to have YoY growth in the US. I have no clue about 2 of the fastest growing Lumia markets, India and Africa, however. Where their growth is quite large.

    And considering most if not all of the growth for Android phones is in the lower price phones (Samsung actually lost unit volume YoY for their top models, IIRC), Lumia doesn't exactly stand out there either. At this point as a smartphone maker you either release cheap smartphones or you watch your market share decrease. Apple may be able to withstand this for a bit, but I'm not sure about that.

    Regards,
    SB
     
  12. Jubei

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    YoY growth huh? How many phones did they sell? And how much was this growth? Like always you dont paint the full picture because things dont look as rosy then.

    And yes there is no argument that the low end is the next billion market. However Samsung already has a large presence in the high end and will continue to compete there, the low end is just a way to expand their market. Nokia has almost no presence in the high end and like i said... how many of these people who buy 130 dollar phones will spend 130 dollars on investing into the ecosystem? Without that, they wont be very loyal to the OS but loyal to price/quality

    Apple is Apple, they do just fine in the PC market despite low marketshare. They will simply jump to a whole new market and expand there rather than do a race to the bottom
     
  13. zed

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    https://toshl.com/financial-infographics/
    saw this today, not going to be 100% accurate but prolly ballpoint figures

    average wage of phone owners
    IOS €2084
    Android €1705
    Symbian €1100
    windows €1080
     
  14. Miksu

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    If we talk about global sales numbers, in 2012/Q3 Nokia sold 2.9 million Lumias. 2013/Q3 they sold 8.8 million. That's over 200 percent increase. In US, they jumped from 300k to 1.4 million in that same time period.

    To put those numbers in perspective, Apple sold 33.8 million iPhones worldwide in 2013/Q3.

    In 2012 Q3, situation looked like this:
    * Lumia: 2.9 million
    * iPhone: 26 million

    In 2013 Q3:
    * Lumia: 8.8 million
    * iPhone: 33.8 million
    (Windows Phone: little over 10 million)

    So currently iPhones are outselling Windows Phones 3:1.
     
  15. AlphaWolf

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    Average wage of people using their app on each platform.
     
  16. Silent_Buddha

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    More good news for Nokia with regards to Windows Phone...

    http://www.gartner.com/newsroom/id/2623415

    YoY worldwide growth in both market share and units sold.

    Some interesting things to note.

    Both Android and Windows Phone showed YoY marketshare gains while iOS declined in marketshare. All of the big 3 saw unit sales increase, however. All other phone OSs saw YoY declines in both marketshare and unit sales.

    In other words, if you aren't making an Android, iOS or WP smartphone you are going down the toilet. And even if you make an Android smartphone, there's no guarantee's you won't be going downhill (see HTC).

    Also extremely interesting. While iOS devices saw YoY unit sales grow by ~5.7 million units, Windows phone was right on its heals with YoY unit sales growth of ~4.9 million units. Looking at the Nokia numbers from Miksu that appears to be almost purely driven by Nokia.

    With Nokia being by far the dominant WP phone maker that means they are also showing higher YoY growth in smartphone marketshare than Huawei and ZTE (losing unit sales and marketshare). As well as basically matching Lenovo and LG in YoY unit sales growth.

    So they either match or beat YoY growth of 4 of the top 5 Android headset makers. And going further down the list. Their growth is significantly higher than Sony. As well as being significantly better than upcoming TCL and Yulong.

    It'll be interesting to see if Nokia with Microsoft now in control can manage to maintain that momentum, or if it'll fall off in the coming years.

    Without Ballmer at the helm, I have serious doubts about whether Microsoft can continue to grow in both its core businesses as well as smartphones.

    Regards,
    SB
     
  17. wco81

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    Motorola just announced the G, a $179 off contract phone with 720p 4.5 inch screen and a SnapDragon 400 SOC.

    Pretty decent and could make it tougher for sales of the 520/620.
     
  18. ToTTenTranz

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    Except that calling Windows Phone as "one of the big three" is nothing short of pulling a lot from the imagination, since it's such a distant third place.

    The biggest smartphone vendor is Samsung. Top 3 is Samsung + Apple + Lenovo.
    Top 4 is Samsung + Apple + Lenovo + LG. Top 5 is Samsung + Apple + Lenovo + LG + Huawei.
    Huawei, the fifth place in smartphone vendors and 4th place in Android still sold a lot more smartphones than Nokia.
    According to Gartner, Nokia isn't even number 6 or 7. It's number 8.

    All top 4 Android makers made profits. HTC isn't "going downhill" because they posted losses for one quarter in their lifetime.
    If HTC is going downhill, how would one describe Nokia, which has been posting increasing losses for almost 2 consecutive years? A teleport to the bottom of the ocean?


    Regarding the marketshare increase, all I see is that Nokia finally managed to get some migration from Symbian to Windows Phone.
    Symbian is now officially out of the stores so I guess those old-schools looking for a Nokia will have to do with a Windows Phone - for better or worse.

    Android just proceeded to eat away all previous BlackBerry, Bada and possibly most of the newcomers.




    And just a quick question:
    Even if these were excellent results for Nokia (they're not, but let's imagine they are), how would it be good news for Nokia?
    AFAIR, Nokia is selling all of its handset division for peanuts to Microsoft, because of how well this windows phone exclusivity turned out.
     
  19. dZeus

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    On the other hand, Nokia saw an implosion in their total sales, going down almost 20 million units year over year (of which 4 million less Symbian smartphones sold).

    Assuming that 90% of the growth in Windows phone sales is attributed to Nokia phones, this means that their feature and dumb phones sales declined by 20.5 million units YoY. On a side note, the big YoY percentage increase in windows phone is not that significant yet, as the total amounts remain relatively small compared to iOS and Android.

    I wonder what the impact of this is on the profitability of Nokia's handset division. In MS wants to shed the non-Windows Phone business of the Nokia handset unit, the process seems to be well on its way.
     
  20. Silent_Buddha

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    It is almost 1/3 of iOS quarterly volume. I wouldn't say that is small relative to iOS. As well it is showing significantly higher growth as a percentage than iOS. And that growth isn't meaningless as the absolute unit sales growth is similar to iOS as well. iOS is actually in a worse position relative to Android (~14.7% of Androids sales) than Windows Phone is relative to Apple (~29.3% of iOS sales)

    Of course, that just highlights that both are dwarfed by Android device growth. But that is countered by the fact that everyone not named Samsung is growing either at the same speed as Nokia's Lumia devices (LG and Lenovo) or slower than Nokia's Lumia devices (all other Android makers) in terms of pure unit sales growth.

    And that is considering many of those have easy access to the huge Chinese market due to being based in China (Huawei, ZTE, TCL Communications, Yulong, etc.).

    And yes, they are losing unit sales in feature phones and dumb phones, but there isn't exactly much profit potential there with budget smartphones creeping down towards the 100 USD price point. And Symbian has been a basically dead OS for quite a few years now with Nokia just trying to move existing inventory at this point.

    Regards,
    SB
     
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