Nokia just posted its quarterly results – including shipped devices – and it’s not looking good. Massive losses, sales dropping, and no growth in Lumia sales in the US. The company is losing money hand-over-fist, and with Windows Phone 8 still months away, the company warns the next quarter will be just as bad.
The company posted total operating loss of €826 million, less than previous quarter’s €1.3 billion loss, but still a hell of a lot of money. The biggest problem is that Nokia’s Lumia sales simply can’t keep up with the drop in sales of other devices. The company shipped 83.7 million devices (feature phones and smartphones combined), which is up slightly from the previous quarter, but still lower than last year. Smartphones shipped dropped from 11.9 million in the previous quarter to 10.2 million this quarter – a 14% drop. In other words, Lumia sales can’t keep up with the drop in Symbian sales.
If you look specifically at Lumias shipped – the product line that matters for Nokia’s future – the company shipped 4 million Lumia devices worldwide, which, while double that of the previous quarter, is still just a drop in an ocean compared to what Nokia used to sell. To put this into perspective: Samsung supposedly shipped round and about 50 million smartphones this quarter quarter, while Apple shipped around 30 million iPhones.
Nokia’s performance in the US is even worse. The company shipped a measly 600000 devices in the US this quarter – that’s combined smartphones and feature phones, both Symbian and Windows Phone. Despite the massive marketing push for Lumia devices in the US, Nokia didn’t see its sales increase quarter-over-quarter. The company sold 600000 devices in the US in the previous quarter, and they sold the exact same amount this quarter, despite the hundreds of millions of marketing money, including free Xbox consoles.
The final bit of worrisome news for the Finnish phone maker comes in the form of average selling price. The average selling price for Lumia devices dropped from €220 to a mere €186. This means the company isn’t making a whole lot of money on the Lumias it does sell, which doesn’t bode well for the future. Remember: Nokia warns that the next quarter will be just as bad as, if not worse than, this one.
To put all this into perspective, Tomi Ahonen:
To understand the context, when Elop took over, in the first full quarter he was in charge, Nokia’s smartphone unit sold 28 million smartphones and had 29% market share. Nokia was twice as big as Apple and three times bigger than Samsung. Nokia’s smartphone unit was growing sales strongly – the year 2010 Nokia had seen bigger growth in units sold of its own smartphones than Apple had with the iPhone! And Nokia’s smarpthone unit was profitable, and again, the first quarter Elop was in charge, Nokia’s smartphone unit generated a Nokia-record jump in its profits.Now the unit sells 10.2 million smartphones, the market share is down to 6%. While the industry grows strongly, Nokia’s smartphone sales shrink.
Nokia is not doing well – no matter how you spin it, no matter which starting point you take. What was once the undisputed market leader of the mobile phone industry is showing absolutely no sign of recovering from the one-two punch from Apple and Android. It’s getting ever harder for Elop to maintain that Windows Phone was the right choice – especially now that they effectively have to start all over again when Windows Phone 8 ships.
Heck, the company probably would’ve done a hell of a lot better had it focused on Android instead, since it’s clearly not the hardware that’s holding them back.
I’m glad the MeeGo/Maemo team got out in time to form Jolls – maybe we’ll find some of that true Nokia spirit there later this year.
Somewhat to the contrary, the validity of WP strategy will only be shown once WP8 is in the shops. It’s not a “restart”, rather WP8 picks up where WP7 leaves off (scaling to modern hw, supporting native development, etc) and allows the platform overall compete head-to-head with high end Android.
“Old” WP7 apps will continue working on WP8.
Yes, but I meant that their current Lumia installed base will effectively be left out in the cold. So, they have to start all over again growing a new installed base for WP8.
Installed base is most relevant to developers, and developers can target both WP7 and WP8 by just making a WP7 app. So the installed base won’t start from zero.
Developers targeting WP8 exclusively in the beginning will probably be large game studios (because of DirectX and high end hw support), but for them WP7 was suboptimal anyway.
The problem is: can Nokia really afford this long time bleeding this way?
Then Nokia is totally, utterly dead. Because iOS and Android are growing too, and far, far, far faster. Nokia will own only a few % (maybe as low as 2%) of the market by Christmas.
You misunderstood. I meant that installed base is more important to developers than, say, Nokia or other consumers. Not that installed base is the most important thing in the world.
Developers obviously want enough people that spend time and money checking out apps, but it’s not necessary to be number #1 or #2.
You might want to ask the linux folks about that.
Edited 2012-07-19 21:23 UTC
You are correct in that market share, number.of sold devices is not the most important number for the ecosystem. For the ecosystem the profitability of the apps is more important. For example iphone has lesser market share then Android but yet is more acctractive for developers cause the revenue is higher.
But market share IS releated to that when you target the mass market like iphone, Android and WP do. WP7 has such a small market share that its just not of much value for most to target it. It maybe would if the cost, the work the investment to port your WP8 apps (assuming here WP8 is more relevant so companies and developers bring there apps to WP8 – what takes time in which WP7 shrinks futurr) is minimal. It is not. WP7 apps are upwards-compatible but WP8 apps are not downwards-compatible. You would need to target WP7 to get both and cannot use all the new APIs like native code, directX, payment, NFC, etc. That excludes most games. That provides barriers, limits and needs testing for 2 platforms rather then one. It slows down time to market, is an additional investment. For less then 2% market share for a platform that is not sold any longer and has a more acctractive successor in the market already?
Why only less then 2% while its 4% currently you ask? Cause when WP8 comes out, till companies/developers developed the product till its ine the market time is lost. Some WP7 customers WILL be switched to WP8 that time. New salles of now outdated WP7 devices will decrease. Who is going to buy an expensive WP7 device if WP8 devices are available already?
The issue is that both, iphone and Android, are very different in that. Newer iOs are available for older devices. Android 2.x still has >80% of the Android market, is a very large install base and hence interesting to target cause revenue is there. If iphone could not offer an upgrade-path, devices shipping the old version would sell more worse. If iphone would be downwards incompatible and previous iOs versions would have anuninteresting market share (and with it a possible revenue of investment) far less companies/developers would target it.
Now all that without even naming the differences in WP7 and WP8. Like native app, Metro, etc. WP7 is just very uninteresting to target under that conditions. What Microsoft or Nokia should or could have done to make WP7 more acctractive is backporting APIs. It would not be needed to provide the same functionality with the APIs but it would make targeting those 2 platforms rather then only WP8 way more cheap. That did not happen. I believe cause Microsoft has no interest in keeping WP7 alive. Users should switch to WP8 as soon as possible.
If companies/developers do not target WP7 then,it has a direct effect for customers, lesser apps, maintaining, support. No developers, no customers.
Edited 2012-07-20 07:38 UTC
Do you still work for Nokia?
As for this month, yes. August, no idea.
Good luck!
DirectX would have been a great value proposition half a decade ago.
However, it is now irrelevant given the market share of iOS and Android, which means that Microsoft can no longer use their main weapon for effect; their desktop monopoly. Especially given how Windows 8/Metro are a completely unknown quantity.
Nokia and RIM are pretty much dead in the water right now, they will most probably become either targets for acquisition or bankruptcy proceedings. Probably M$ is waiting for Nokia to go even deeper into trouble, so they can buy it for peanuts. Oh, well.
I think what you mean is so MS can buy their patents for peanuts… they will have little use for the rest of the company, aside, perhaps, from the brand recognition.
Edited 2012-07-20 09:35 UTC
I agree that Microsoft could be mostly interested in just looting Nokia patent portfolio, rather than buying it.
So far, it’s much more convenient for them *not* to have its own brand name stamped on a device line that has not yet proven completely successful, and let somebody else get the blame and later… remember of Sendo?
It would make more sense if they expand the Surface brand to phones. What Microsoft needs is partners. If the do themselfs they do not need a Nokia brand. The Microsoft brand is strong enough. Microsoft Surface tablet/phone like Google Nexus tablet/phone.
Edited 2012-07-20 17:30 UTC
Not only games. Also the slump of code ported from Android and IOS, the apps that everybody wants on WP.
In general there were reports of WP7 3rd party apps performance problems*. If WinRT allows to fix that easily, Silverlight based apis will be dropped quickly. The 1x mo audience that is diminishing quickly is just not worth additional maintenance effort.
This is only relevant if people buy WP handsets, which is not the case in many countries.
Here in Germany I only see WP handsets being available on the shops, but not on the street.
Developers could choose to develop for the old XNA/Silverlight API, or the new WinRT API. Question is, what makes more sense. The Advantage of XNA/Silverlight is that your app will work on WP7.
If you develop for WinRT however, that means you get (among other things) proper multitasking, native code support, and apps that work on the Windows RT tablets. And you will develop using the API that is en vogue at Microsoft, the importance of which should not be underestimated.
I expect that almost nobody will target WP8 exclusively. It’s either WP7+WP8 or WP8+Windows RT.
Silverlight is already legacy and will not be supported in the future. It would be silly to build up anything new on it. The success of Silverlight is, well, limited. There are just very less things using Silverlight. The Silverlight and Flash kind of browser plugin turned out to have no future with HTM5. WinRT at least has Microsofts support and works fine on all current Microsoft platforms.
http://www.neowin.net/news/former-microsoft-pm-silverlight-is-dead
http://www.i-programmer.info/news/83-mobliephone/3717-windows-phone…
http://www.zdnet.com/blog/microsoft/will-there-be-a-silverlight-6-a…
Edited 2012-07-23 09:52 UTC
I think with the dramatic cut in workforce (10,000 this year) combined with the dramatic financial losses, it’s fair to say that so far the WP strategy hasn’t been working.
I think it’s unlikely WP8 will make much of a difference for Nokia, especially since zero of Nokia’s phones right now will run it.
It’s released in late October, and Nokia better have a phone ready. Even then, they’ll be competing with the release of the next iPhone and dozens of hot Android phones. And in the meantime Nokia is bleeding cash.
My guess is Nokia will probably get picked up by MS in a fire sale (at least, that’s their best case scenario).
Microsoft could pull the ultimate dick move, and release their own WM phone, a la surface. OEMs haven’t exactly embraced WM, so they may decide to go it alone. Wounded Nokia wouldn’t likely be able to compete with that.
Edited 2012-07-20 04:01 UTC
They also (or foremost) compete against other WP8 resellers. Do we have numbers from Samsung and HTC meanwhile? Not yet I think. If we believe in comCast and Nielsens then both, every of them, sold more WP7 devices then Nokia. That was when most already dropped out of WP7 and only those 3 left. With WP8 there will be more competition and others may invest into there WP8 devices too (with more resources and money on hand). Nokia needs to hurry up to compete against the other WP8 resellers, against Android and against iphone. I think it becomes more difficult to get a decent share even if the WP8 share is bigger then the WP7 share was/is.
I think too that WP8 makes not much differences for Nokia. It will make for Microsoft but Nokia will have a hard time to ever get back where they stand at when Elop took over. When they reach more then 10% then its already very good. I doubt they will.
Edited 2012-07-20 07:52 UTC
If its only wp8 that competes with Android, why did they even bother with wp7?
It still seems like the whole windows phone ecosystem ( along with BlackBerry) is forever trying to catch up with where Android, IOS, and Meego/Maemo were years ago.
I’m sure you put “Meego/Maemo” there by mistake… there was hardly ever any ecosystem around this one.
It was well known that this quarterly report would be terrible, and in fact it came in above expectations. A lot of the losses are related to restructuring (cutting various divisions). Nokia still needs things to work out smoothly with WP8, but this is not as bad as the straight numbers make it look. At the time of writing Nokia is up 6.36% on NYSE. Still a ridiculously low valuation, but it should illustrate that the Q2 report wasn’t bad compared to the overall feel of the situation.
Edited 2012-07-19 19:03 UTC
Only the cash reserve is above expectations. That are indeed very good news (I think Microsoft’s money was a help there) cause it means they will have the time left to try WP8. Before a lot, including me, where assuming the cash problem would kill them off even before. That are good news but surviving a bit longer is not exactly the greatest news you could have come up with. Making profit and grow again (or at least shrink not any longer) would be. But there they are not above expectations. 6%,market share, tendency to continue downfall. Q3 to come and expectations where not upgraded (yet?). Q4 will be maybe a bit better depending if Microsoft can deliver in time and Nokia makes fast a good product. Earliest 2013Q1 but I doubt that they will be able to make profit again by that time. At least they have more time now to try.
Edited 2012-07-20 08:07 UTC
Yesterday it was more then 14% more. Within one day they lost more then 8% again. Tendency future down. The market reacted positive cause Nokia’s cash reserve was far above expectations and for a company in that situation (junk-state rating) the cash reserve is everything.
Nokia’s market cap is down to 6.3 billion $. Google payed more for Moto while Nokia has still one of the best patent portfolios worth billions, navteq, networks, brand and those 4 billions in cash. The market clearly believes Nokia is losing a lot more before it can stop the downfall either with selling products (unlikely taken the long timespan and competition into account) or itself (eitger as a whole, unlikely to happen, or in parts, brings more cash in). When Elop is fired today you would see the same day a huge jump up at the end of the curve displayed at:
http://www.marketwatch.com/investing/stock/nok
Edited 2012-07-20 18:01 UTC
In Nasdaq ( http://finance.yahoo.com/q/bc?s=NOK&t=2y&l=on&z=l&q=l&c= ) yesterday Nokia was 1.85 and now is 1.70
What equals a lose of 8.1% compared to yesterday.
Meanwhile we get confirmation for the markets pesimistic view in Nokias feature. Fitch just downgraded Nokia from junk-state 2 more states down. Not 1, no, 2 more to toxic-state: http://online.wsj.com/article/SB10000872396390444330904577538622058…
Thats the next disaster news for Nokia. But it becomes even better. Read the link, with negative outlook! “it might cut the rating further.”
“Nokia doesn’t seem to have the products in its portfolio to stem the recent losses, Fitch said, adding that tough competition in the industry will probably make it hard for the Finnish company to re-establish a significant presence in the smartphone market.”
Edited 2012-07-20 19:56 UTC
Thanks! I found that the Wall Street Journal has that article:
Nokia’s Red Ink Worsens
http://online.wsj.com/article/SB10000872396390444464304577536440351…
An image from the article:
http://si.wsj.net/public/resources/images/MK-BV835_NOKIA_NS_2012071…
And some words from the article:
“Nokia remains in a downward spiral”
What a great opportunity to go short I missed here!
I should have gone short the moment they announced Elop.
http://allthingsd.com/20120719/nokias-bad-news-not-completely-horri…
“1.Nokia is working aggressively to cut costs, and cash conservation appears good.
2.Sales of Nokia smartphones rose 45 percent in North America, to 128 million. That’s the first such increase in longer than anyone would care to remember.
3.Nokia sold four million Lumias during the quarter, and that’s about a million more than some analysts had expected.
4.Discussing the company’s performance during today’s earnings call, CEO Stephen Elop hinted that Nokia may be the first handset maker to release a device running Microsoft’s forthcoming Windows Phone 8 mobile operating system. “Note that on the number of occasions when Windows Phone 8 has been demonstrated, it has been on a Nokia device,†Elop replied while dodging a question on this topic. “We have a close relationship that is unlike what anyone else has with Microsoft.â€
Edited 2012-07-19 19:42 UTC
So Nokia’s quarter results are not that bad, because they may or may not be the 1st manufacturer to offer a new iteration of an OS which just achieved single digits market share currently. Is that it?
Edited 2012-07-19 20:30 UTC
If you can read, then you know that wasn’t the only point. There were three other points you chose to ignore, just so you could make your disingenuous comment. And I bet you felt real clever about it too, that’s the sad part.
Edited 2012-07-20 03:36 UTC
Your fact filled counter point was obviously much more smarterer and stuff…
No, they’re definitely not dead yet. They have a pulse of 20, an Oxygen saturation of 40% and no brain-wave activity. But they’re not dead.
1. I do not see how this are good news? Its a prove that they failed and do not expect to come back to where they where before.
2. 45% sounds impressive. But that means what? 600k sold devices with AT&T and T-Online as partners and a huge marketing push and lot of cash burned for that? In Microsofts home market? With,close to no,WP7 competition? More a failure, far below expectations, no comeback in US yet.
3. Some predicted -1 million sold Lumia. Hey, we are 5 million above expectations! Remember Gartners expectations? 🙂
4. “may the first” … “demonstrated on Nokia device”
That changes everything! Microsoft demonstrates WP8 on Nokia phones and maybe the will be ahead of competition to bring a WP8 device to market by some days! Customers cannot say no to such clear reasons why Nokia is better then competition! They just did not know when (not) buying Lumia before! That dump customers, just ignoring our billion marketing offensive but with those 2 simple arguments they cannot any longer! They NEED to buy us now!
If this are the only points made then I have no doubt, Nokia is going to make it! Make it into the next failure. But maybe they expect that already and so are above expectations already no matter what?
Edited 2012-07-20 08:39 UTC
This just in: Nokia shot themselves in the foot, and it really fucking hurts.
Just a suggestion… you’d better get that foot cauterized if you plan on being around to see the release of Windows Phone 8 and take advantage of it.
Thanks Mr Elop, for destroying Nokia.
</irony>
http://communities-dominate.blogs.com/brands/2012/07/the-sun-tzu-of…
And the important graphic of the article:
http://www.telekom-presse.at/bilder/Ahonen-Nokia-2.jpg
Moody’s downgrades Nokia to junk status
http://www.businessweek.com/ap/2012-06-15/moodys-downgrades-nokia-t…
Nokia’s value, approaching zero. What a destruction, someone should be in jail
http://finance.yahoo.com/q/bc?s=NOK&t=2y&l=on&z=l&q=l&c=
Hilarious. For a company that’s “junk”, the stock is up 15 percent today.
Yes, junk stock prices typically jump when a buyout is looming.
Who is the rumored buyer?
»It costs $450 in marketing to make someone buy a $49 Nokia Lumia«
http://www.theregister.co.uk/2012/07/16/nokia_lumia_sales_guesstima…
A very lucrative market.
and who’s paying that marketing cost? Hint: Starts with “M”.
[Citation Needed]
Hey, strange coincidence: “Microsoft posts net loss of $492 million for Q4 2012 despite record revenue”.
http://www.theverge.com/2012/7/19/3170390/microsoft-posts-net-incom…
Yet that is not what I asked.
ci·ta·tion /sīˈtÄSHÉ™n/ Noun:
A quotation from or reference to a book, paper, or author, esp. in a scholarly work.
co·in·ci·dence /kÅˈinsÉ™dÉ™ns/ Noun:
A remarkable concurrence of events or circumstances without apparent causal connection.
(in case the difference wasn’t obvious)
You must have missed the part of the initial announcement of the Nokia-MS deal which said that MS will pay Nokia billions of $ over the next few years for development and marketing. Just search the internet for the Nokia-MS deal and you will have plenty of citations.
Not exactly Elop announced that the deal with Microsoft is WORTH billions not that Microsoft gave them billions. There is a huge difference. Worth billions means Nokia had to contribute to that too while in the other case Nokia would get something rather then only giving.
Looking at the Nokia stock and Q1 and Q2 numbers Elop was correct. That deal was worth billions. Nokia lost billions (he never wrote that they would get them).
Edited 2012-07-23 09:57 UTC
It ultimately depends how you calculate profit. It is not simply money made – money lost.
Microkia? Microsoft and Nokia are both burning cash on that. Elop himself admitted that Nokia was allocating 3x the money for there previous biggest marketing push. Plus the price-drops, the $100 discount for Lumia900, the free phones for AT&T sales, etc. So, its not Microsoft alone but also not Nokia alone.
Edited 2012-07-20 08:51 UTC
…that’s what happens when you try to force something down people’s throat that NOBODY wants.
Nokia + Android = win. This is such a simple formula, IF they executed it in the beginning, they’d be the biggest smartphone maker by far. Everyone said this is the path to success, but no, Nokia decided to blindly follow Elop’s path to failure. Now look at what’s happening!
If Nokia continues down the titanic path with MS, they’ll just be an interesting footnote in the history of cellphones, nothing more. And that would be a damn shame for all of those who worked so hard to get this once-great company on top. 🙁
Edited 2012-07-19 20:15 UTC
Um, Nokia sold 125M smartphones — and of those, 4M were Lumias. Clearly, you need to recalibrate your definition of NOBODY.
When it’s a fraction of a percentage of what Android sells daily, I’m pretty confident that you have a serious problem on your hands. Unless of course you think the vast amounts of cash will help Nokia through these turbulent times.
In that case, I hope they’ll survive, but most of the time it doesn’t matter how much money you have, once the cash flow dies, the company goes down with it. Sooner or later all the cash WILL dry up, period.
They did not sell 125M smartphones in Q2. They sold 150M phones, 10m where smartphones, and most of those were old Symbian and MeeGo phones (which don’t compete with Androids and iPhones directly).
4M Lumia’s worldwide, though I wonder if they count sold to stores or in the hands of customers. And that’s in a quarter. Apple sold around 38 million iPhones in Q1. Google said in Q2 they activated around 60 million Android devices.
Compared to Apple and Google, 4M is relatively small. Anecdotally, I travel all over North America on a regular basis, and I’ve yet to see anyone with a Lumia in the wild. See Androids and iPhones all the time.
Edited 2012-07-20 03:49 UTC
They count delivered/shipped phones. So, not sales to customers or even activations like comCast/Nielsen do what explains the difference in there numbers.
Edited 2012-07-20 08:57 UTC
Not MeeGo, there were few made (something like at most ~200k total, IIRC; Nokia never revealed exactly, but then they didn’t ever reveal exact individual handset numbers), they most likely didn’t even recoup the costs sunk into Maemo/Meego project over more than half a decade (think about it for a second, about its rate of progress).
And those Symbians have very low average selling price, they are essentially in the segment of “feature phone” LG Cookie, Samsung Star, or the likes.
I don’t know that Nokia + Android = success.
Android ain’t working out for HTC (compare this year’s HTC earnings to last year’s). In fact, Android is only working out for Samsung.
HTC != Nokia. Nokia is known for hardware quality, ie reliability and longevity of a Nokia phone. Nokia is better at designing and producing quality smart phone(look at N9) and their feature phones are known to be of top quality. So going to Android route is guaranteed a success, since Nokia is very well-known brand and the Android name is everywhere. The reason why people buying phones here(at least in my country), is because a phone’s OS is Android, regardless of the manufacturer, the evidence is that we now have LG, and a lot of less known brands and local brands that are in the hands of the user because of Android, and Nokia wasn’t ONE among them. So Nokia made itself irrelevant in the smartphone era. While they do produce Smartphones with Symbian, but those are VERY expensive, and people now starting to look to cheaper smartphones. I think Nokia did not do their market research.
Android + Nokia would have been a runaway success in one of its biggest market India.
Unless wp8 sells in low $100-$200 Nokia is done in India.
As you write yourself past year Android worked well out for HTC. They lost huge but its not related to Android vs other platform cause they where rather successful with Android before. Its just that competition, Samsung, took over.
It can happen anytime soon, and as we saw with HTC very fast, that Samsung loses and somebody else takes over the Android lead. All have the same Android, so its the final product, execution and the sales-process which make the difference, not the platform.
In contrast to WP7. There its ALSO the platform. WP7 just failed and so even if you do 100% correct and have 100% of the WP7 sales ruling out all other WP7 competition, you lost. There is nothing Nokia can do but lose. Its not there platform. They cannot change that.
With,Android it would all depend on Nokia. They would have the possibility to be better then competition. Be Android number #1 and win unlike be WP7 number #1 and lose. That is the difference between success and failure, between being able to win and doomed to fail, between shaping your future yourself or depend on somebody else to do it for you. Nokia cannot modiy WP7, they cannot make the upgrade-path from WP7 to WP8 Lumia work, they cannot do anything. With Android they could. Such kind of one-way dependencies where you build up the health of your company on the good will of somebody else are never a good idea. We see why.
Nokia is fighting the wrong war. They fight for ecosystem market share rather then for Nokia market share. They cannot win that war but only lose cause even when WP wins Samsung and HTC are still there but on WP rather then Android (in fact Samsung and HTC sell WP7 devices cause they are not so stupid to fight the wrong war).
Edited 2012-07-20 09:24 UTC
That’s an astute observation, but it also means that Nokia could have only escaped the relegation to mere handset maker by staying on a self-owned platform. If Nokia went with Android they would be an Android one-trick-pony instead of a WP one and fight for the Android platform. To escape this lockdown they would have to offer both, Android and WP handsets. This would mean that Nokia becomes something like another Samsung. Now, that doesn’t look too bad at first glance, but 1. that’s not what Nokia thinks it is and 2. that’s not what Nokia can be.
I don’t think that Nokia would have been forced to do that.
At the time when Elop took over, Nokia was bigger than Samsung. And Samsung offers Android, Bada, WP7 and soon Tizen smartphones.
So there is no reason why Nokia couldn’t offer Android, MeeGo, Symbian and WP7. The addition of their navigation and cloud services would have been enough to distinguish them from the crowd. They could even offer MeeGo and Android on the same hardware thanks to the Linux kernel.
Exactly. Also the investment into MeeGo was done. The product was finished and ready to be shipped.
Looking at nitdroid, Android at N9, it also did not take much resources to bring Android to the N9/Lumia hardware.
All they would have to do is to ship the phones and take the money customers where willing to pay.
As some carriers wrote: Lumia would have sold better when running Android rather then WP. Amen.
Edited 2012-07-23 10:01 UTC
Even at Nokia’s best times Samsung was many times larger than Nokia. Granted, Nokia was bigger in the mobile phone space, but Nokia is essentially a mobile phone company only. Samsung on the other hand is a multinational conglomerate with strong horizontal and vertical diversification, which also explains why Nokia can’t be another Samsung.
There are many reasons why Nokia can’t and shouldn’t do that but the most important one is that Nokia, compared to Samsung, has very limited resources. Thus, unlike Samsung Nokia cannot afford to scatter their resources over several platforms, especially if you intend to become the leader/owner of one of them, and hope that one of the many attempts sticks. They had to choose where to concentrate their effort. The question is, why did they chose WP?
From the outside this is hard to judge. I can think of a few good reasons why, but from the outside there seem to be equally good reasons to stick with the “Qt GUI on Meego/Symbian” strategy. For one, a jump to “Qt on Android” would have been much easier. But I’m not privy to that kind of information, so probably there is more to it.
Nokia sold more phone units than Samsung, yes, but at the time Elop took over Nokia was already on a few-year-long downward spiral …plus it wasn’t strictly bigger, in any sense that really matters. The returns from R&D were among the worst, as were profits per handset (and NVM that Nokia didn’t make its components – it was specifically Samsung often doing it for them).
Symbian was a horrendous sink of funds (R&D costs of Symbian alone were larger, 2-3 years ago or so, than the entire Apple R&D budget, with quite mediocre results), only small part of what Nokia sold and with very unimpressive, relative to other industry players, profits per handset. MeeGo similar, only worse… (the project ran for much longer than iPhone is around; and still wasn’t quite in a fully finished state) Nokia “cloud services” – hardly anybody used them, most eventually closed down. And their navigation, while fine, is hardly unique now.
Maybe Nokia just wasn’t so good at doing software… (whether WP exclusivity was a good choice over Android is another issue of course)
Edited 2012-07-27 00:17 UTC
MS is eating other Android OEMs margins with their extortion campaign while Samsung is pushing aggressively on the HW price level. All while Apple trolls HTC out of their most important market (is HTC able to sell One on US already). No doubt they have problems.
Nokia on the other hand would have been mostly immune to all that.
I don’t have a “smart phone”, but if I *were* wanting to buy one, Nokia wouldn’t even be on my list. Why?
Because Google, Samsung and Apple have all of the “buzz” and mindshare.
Where is Nokia’s “wow factor”? Why should I buy a Nokia phone instead of an Android one or an iPhone?
What can a Nokia phone do that the others can’t?
What is the Nokia “must have” feature? Do they even *have* one? ( I doubt it.)
*Those* are the questions that the Nokia execs should be asking themselves. Personally, I think Nokia is a goner and that Windows 8 will not save it.
For me it’s the poor quality of the microusb on the n900…and of course the getting into bed with MS.
As I pointed out earlier in this thread, Nokia sold 125M smartphones (and of those 4M were Lumias). Nokia doesn’t need to be #1 to be a viable competitor in the smartphone market. What they need to do is scale their costs down to meet their market share; then, they’ll see positive growth in revenue.
These numbers speak very clearly about how well their strategy is working out. It is a complete disaster and anyone trying to deny its gravity is out of his mind.
I could understand and be supportive of a bold strategy if it hadn’t thrown away all that was good in Nokia and basically outsourced all software development to others (read: MS – I’m not even talking about Accenture taking care of the last days of Symbian). It was a crime – I’m repeating myself, but I can’t believe this is happening before our eyes, and above all before the eyes of Nokia’s BOD and the Finnish government.
A software and hardware company (with a promising new OS on two promising new high-end smartphones among the other things – along with the good location-based services we all know and Elop will always blabber about) – has been downgraded to OEM status in an era when pure manufacturers are struggling more and more. Insane. If I were a Finn, I’d be mourning over a company that still is an European pride and over the loss of workplaces.
I still hope things will turn around and I’d like to see what a change in this clueless top management would bring.
Read for comprehension, and try to pretend that you’re not a Google or Apple fanboy for a minute. Again, Nokia sold 125M smartphones. That’s not a “complete disaster”, unless you only define success as being #1 or #2 in the smartphone market; which Nokia doesn’t need to do, at this stage of the game.
Edited 2012-07-20 04:06 UTC
They didn’t sell 125M smartphones in Q2, it sold around 10 million, and most where older Symbian.
AND they aborted everything to focus 100% on the 4 million sold Lumia. Symbian, which STILL,sold better, killed. S40, which sold far better but needs a refresh to keep that position, stay competative against Bada and Android, killed with the Meltimi-refresh. They put all there eggs, all cash on the product that sold most worse AND killed off all other products.
As far as S40 is concerned Elop is still investing in it, in fact it has recently been upgraded to touch as an efect of their Smarterphone company purchase.
Still they axed QT for phone strategy entirely.
Edited 2012-07-20 23:06 UTC
They alao still invest into Symbian^3 like with the Pureview. But its by far not enough. Symbian^3 and S40 need a refresh to be abpe to compete against Android which is going to the low-end segment and becomes serious competition. More worse Elop made clear all there platforms are under fire. Including S40 and Symbian^3. He works against the last two big ppatforms left that being money in for Nokia. Its so sad.
I can’t name the sources but i heard they are heavily withdrawing from any further Symbian developement. 808 is the final Symbian device and Carla and Donna updates in the works have been canned. From now on they are only investing in pushing WP7 down (what’s the point given its obsolete status one could ask) to eventually reach S40 price points and get out of dumb phone business.
S40 is mostly relegated to the price points lower than the cheapest usable Android phone (currently Galaxy Pocket S5300 for ~85€).
I expect that by the end of this year, the price range between 60-80€ will be occupied by Android devices from Huawei and ZTE. As the cheapest Asha sells for 60€, that will leave S40 with nothing.
Funny fact: Nokia’s most SW engineering now goes into developing WP7 apps which will work on other WP devices in a couple of months.
I this is not working in competitor best interests I don’t know what is.
Lolz – you keep saying that!
Nokia sold 10.2 million smartphones – not 125 million! :-O
The company’s sales revenue increased 45% to $123 million for the quarter – I think that’s where you keep getting mixed up.
125 million smartphones would be more than Apple and Samsung combined ;-D
The weepy fact is that Nokia used to sell more than Apple and Samsung combined ~ just 2 years ago.
That was when Nokia was Nokia… Nokia was its boss and was not a Microsoft OEM 🙁
You are right.
Edited 2012-07-20 13:38 UTC
Yes, your are absolutely right! Is as if Nokia took a nosedive from a cliff without parachute.
Good point, Nokia have been getting no love from US tech press for years and that’s one of most important factors in building mind-share. Failure to their massive marketing campaign shows you can’t really buy it.
Those 4 million sold devices are world wide sales. They failed world wide and not only in the US. Outside of the US Nokia used to be huge. Not any,longer since they switched. You cannot bring a bad product to market and expect everybody will buy it cause your marketing says its good. It does not work that way. It never did.
Hot on the heels and all that…
http://marketday.msnbc.msn.com/_news/2012/07/19/12837611-microsoft-…
But with record earnings (as is Microsoft’s habit).
The loss is due to Balmer’s foolish 6 billion dollar purchase of aQuantive 5 years ago, which resulted in zero. lol
But the loss doesn’t reflect Microsoft’s current state at all. I read Microsoft stock rose in after hours trading, because of the record earnings. The aQuantive write-off had already been announced, so nobody was surprised by it.
Well what do you expect when a company (Nokia) partners with the Dr. Kevorkian (microsoft) of smart phones?
It wasn’t a partnership, it was assisted suicide and Nokia is just waiting for the final injection.
Free Xbox was it provided for the highest model or all models?
Maybe they could have sold more if they had the offer in India.
It was a strategic present to win the us-market. Nokia was before not present in US and winning there would have given Elop at least one success-story. He failed even there, even with that present, even with a Microsoft product at Microsofts homeland, with the mobile gigant #1 in a mobile business and with a unique marketing offensive, partners like AT&T and T-Online and a product sold far below cost.
Elop once suceeded on something at least. He became CEO of the ex-mobile gigant #1. Its just that this one time everybody[1] would have been happy if he failed like he did afterwards all of the time. What an iron.
[1] Except Microsoft, Apple and Samsung which all profit from Elop mastering Nokia.
Edited 2012-07-20 20:45 UTC
I would really like to see some real N9 sales numbers, in fact, I would like to see all other sales of Nokia smart phones w.r.t. Lumia. I have a feeling Nokia execs would still have a real hard time defending their all-in bet on Microsoft.
I heard they stopped shipping N9 in april so that wouldn’t be relevant anyway.
In Finnland they stopped selling the N9. In most relevant countries the N9 never ever was for sale. And yet it sold better then Lumia. I agree with the OP and think too that N9 still sold better or at least equaly “good” then Lumia what is, under that conditions, impressive. If not Elop would have published the N9 sales numbers to make his point that WP was the corret move.
Edited 2012-07-22 05:55 UTC
They’ve got 15% jump on the announcement so everyone was expecting even worse.
It’s interesting what effect W7 deprecation will have on their sales in Q3 though.
On absolute measure they are definitely drowning and W8 devices sales most be nothing like this to make them survive.
Elop suggested this time MS is in charge of advertising, I wonder it they will emphasize pureview enough (that one really demands dedicated targeting) or will try balance Nokia and HTC.
Besides (for smart devices) Nokia is a Windows only company now, no way back. They’ve chopped of everything they could in engineering already. The focus on “most important markets” means, they are now cutting sales organization.
Edited 2012-07-20 06:56 UTC
The cut could mean the abort all markets that refused Lumia like China or where Lumia sold most worse like Russia. Those are the markets Symbian was and still is rather strong. Those are the most relevant markets. Elop is going to cut more Nokia market share to push Microsoft Lumia. T minus 4 months till Q3.
Edited 2012-07-22 06:04 UTC
Nokia still has cash on the bank and they are burning it to keep running, waiting for Windows 8 to be released. The current line of lumia phones wont be able to save Nokia due to dissapointing sales.
Their only hope now is for the next generation of Windows 8 based lumias to change things. But this is a risky gamble because Windows 8 hasn’t exaclty recieved great reviews. And if it becomes impopular quickly after its’ launch, similar to Vista, chnances are that this will spill over on WP8 phone sales.
I still hope they’ll fire Elop and withdraw from the Microsoft deal. Perhaps they can even buy Jolla to get the competence back to develop and maintain their own OS. They can still have a line of Windows 8 based lumias but they really should have an alternative if they don’t sell!
A smart strategy (before the Feb 11 debacle) would have been:
* “Symbian Forever” at the low end to keep milking that cash cow
* A wide range of quality Android phones in the middle, with Qt baked in to run newer Symbian apps and keep those loyal Nokia customers when they move up
* A modest number of MeeGo phones led by the lavishly praised N9 at the high end – since it already had Qt, toss in Dalvik for Android apps aka RIM’s Playbook for across-the-product-line software compatibility.
That was the winning play.
Instead, Olap trashed Symbian on-stage with Ballmer and promised underwhelming me-too Winphones in just under a year.
What to do now? Well, try to influence whether Google or Microsoft buys you. That’s about the only option left AFAICT.
I weep in memory of a once great company.
S40 is what brought and brings most money. Symbian was hardly a cash cow, just a minor part of what Nokia sold, with quite bad return of investment (seriously, R&D costs for Symbian alone were larger, 2-3 years ago or so, than the entire Apple R&D budget; all for mediocre results) and constantly dwindling unit costs. It was hardly viable already back then.
And “Qt everywhere” sounds nice, but Nokia tried to push people to make Qt apps for Symbian for two years or so, also with a then-solid promise of being able of smoothly move to Maemo/Meego. Hardly any apps resulted, nobody cared.
Things similar to “Qt layer” on top of main OS greatly delay Android upgrades; and here it wouldn’t even be in Android-native APIs.
Also Windows Phone 8 is the very first iteration of the NT Kernel on ARM and mobile with the very first iteration of Metro and the RT API.
I would not expect that this is going anywhere antime soon. Microsoft products tend to need a certain time to become usable. Windows Destop was special in that the foundation was build up over years and just got improved (building a decade up on top to keep backwards compatible) but even ther SP1 was a must. More so when the foundation was improved like with Vista happened to a certain degree. The foundation is just very hard to maintain, fragile, to make changes in and they had to do a lot of changes for RT (probably most,ever done). SP1 for WP7, that is 7.5, still leaves many things unsolved.
With all the changes done and with the rush to bring out the product as soon as possible and with the try to target everything at once plus become with Surface a hardware+software vendor I have no doubt that Windows Phone 8 will be buggy as hell. It may take some quarters more till SP1, that is WP 8.5, is available and so the product becomes usable.
Edited 2012-07-22 06:40 UTC
What to say? Just “what a shame!”. I had mostly Nokia phones in my life, including the N8. But when I bought the Galaxy S2 I had to admit that it was another world.