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March 20, 2012

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Tomifan

"No evidence in any market that Lumia sales would be like success?" "No support from retail?" Tomi, please explain this:
https://mrwpf.wordpress.com/2012/03/01/hat-trick-nokia-lumia-800-windows-phone-is-the-best-selling-phone-in-all-finnish-networks-in-february/

Titanium

I hope Nokia is able to survive on just one leg (mobile phones) until Meltemi is ready to grow to a smartphone platform and replace WP. But propedeutic to this is to fire Elop, otherwise it will kill even it.

IMHO Nokia Meltemi organization should internally promote it to a smartphone OS but keep it on the lab till Elop is out. Nokia BoD must understand it and fire Elop before it's too late.

karlim

Tomi, aren't you ignoring one key data point in those Kantar reports.

As you say - in September 2010 Symbian market share was 23.1%. In February 2011 it was only 12.4%. Nokia/Symbian lost 46% of its market share between September 2010 and February 2011. Are you saying that this happened because of Elop effect?

How could it? Windows Phone strategy was announced on Friday Feb. 11th. Kantar surveys do not include the whole last month. This year's survey lasted 12 weeks and ended on Feb 19th. There is absolutely no way Elop effect/announcement/memo could have had any significant impact on last year's Kantar February survey. Not in 1-2 weeks before survey was completed. So isn't it way more logical - that last years' Nokia/Symbian September-February 46% drop in U.K market share happened because Symbian sales were crashing there anyway? Without any help of Elop effect.

Btw - between September and February, in 4 months, Nokia lost 46% of its market share.Without Elop Effect. In the next 7 months February-September 2011, with Elop effect in full swing - Nokia also lost ~46% of its previous market share. Seems that the rate of Nokia market share losses decreased during those 7 months after Feb 11th. Hardly an evidence of disastrous Elop effect.

And before you get to Q4 2010 Nokia Symbian sales numbers as an evidence of a big turnaround. There is absolutely no evidence of such turnaround in Kantar numbers, who measure actual end customers buyers.

You never mention that Q4 2010 5 million Symbian 3 devices shipped, are official Nokia numbers of smartphone shipments to wholesalers/carriers. And that there is absolutely no evidence Nokia N8/Symbian 3 sales to end customers/users were anywhere near as good. I did check - and there wasn't a single big analyst house (Gartner, Strattegy Analytics, IDC, others) or other reputable independent source, telling anything good about Nokia N8 or S3 end user sales in Q4 2010. At least in publicly released reports. For all intents and purposes, most of those 5 million S3 smartphones shipped could have been sitting on carrier shelves in January 2011 and were a big reason why Elop and Nokia Board decided to make such a radical change. We have no way to know yet, one way or the other.

The Kantar numbers from Feb 2011 are certainly no proof of anything - but they are another datapoint supporting my hypothesis, that Nokia’s Q4 2010 turnaround was based more on channel stuffing then the real end user sales, customer acceptance and demand for Symbian 3 smartphones. And it fizzled itself in Q1 2011, before Elop effect could cause any real damage.

Tomi T Ahonen

Hi Tomifan, Titanium and karlim

Tomifan - haha, ok. But you know AFTER those numbers were reported, MTV3 of Finland tested Finnish stores and found them reluctant to sell Lumia - EVEN to customers asking for it. That is clear evidence the sales have totally quit on Lumia between your numbers and MTV3's testing. And a top seller in Finland is not going to move the European market share one bit, far less the global share.

Titanium - haha, yes, on Twitter there is the 'FakeSelop' character who says that Elop's biggest delight is any platforms on fire. Meltemi is kindling waiting for the flame..

karlim - First on February. Yes. It is EXACTLY what I am saying. It was verified in many sources immediately that effective Feb 12, the sales collapsed. And we see it in the Q1 numbers, which were bad - but as you should remember, when I analyzed them here on this blog, when we remove China Q1 numbers (their gift-giving season ended before Feb 11) - the real Nokia Q1 was pure murder.

As to declining rate, that is also 100% consistent with the facts. The first to go are those not extremely loyal to Nokia, the early drop is rapid. The last falls will be more mild as the fiercely loyal are more hard to annoy. Still, even with that, Nokia lost another almost third in the past quarter or so.

As to the Symbian S^3 devices? That has nothing to do with this data. The S^3 sales reported by Nokia itself was global sales, not UK sales. We have never heard how many were in the UK and Kantar does not distinguish that way. So it had nothing to do with this analysis.

Thank you all for writing,

Tomi Ahonen :-)

karlim

I am sorry, I am not familiar with Kantar methodology. But from bits and pieces I was able to gather it includes "Using the same loyal respondents over long periods of time means we can identify what trends are affecting the market and forecast their future evolution." (From Kantar Website). And they claim that their sample size is higher then others usually use.

In today's press release Kantar says that this year's February panel survey lasted 12 weeks. This year the survey ended on February 19th. And it probably included all the smartphones their panel members recorded they bought over the period of those 12 weeks.

If we assume the same methods were used last year. And we assume survey ended at about the same time - around February 19th, there is only one week of recorded panel member purchases that could have been affected by Feb 11th. I can not see how a single week could have accounted for 46% drop in market share.

In the worst case scenario, if not a single panel member bought a Nokia smart phone after Feb. 11th and before the survey ended - it is still impossible to account for 46% drop. Let's assume a sample size of 1000. At 23.4% market share that will mean a total of 234 Nokia smartphones bought in 12 weeks, or 19 panel members buying Nokia smartphone a week. In 11 weeks before Feb 11th - they would have bought 209 Nokia smartphones. If not a single one of them bought Nokia phone after Feb. 11th - that will still leave Nokia with 209 recorded smartphones and 21% market share in Kantar survey. If we assume that last year 12 week Kantar survey ended on Feb. 28th - that still leaves Nokia with 19% market share in the end. Not 12.4% Kantar actually recorded.

Looking at how Kantar measures things, even if Nokia sales completely stalled after Feb 11th - that would have affected Nokia market share in total by no more then 20%. The rest of 26% of market must had come from before Feb. 11th. And that’s in the worst case - if Nokia sales completely stalled and Kantar survey ended much later then it did this year.

And the math does not change much whether we use a sample of 100 or 10000.

karlim

PS. Found the dates for last year's Kanatar February report. Panel survey ended on Feb. 20th - 9 days after Feb. 11th. And lasted for 12 weeks too. Or 84 days: http://www.3g.co.uk/PR/March2011/android-dominates-the-uk-smartphone-market.html

And Kantar panel actually includes 30 000 households. Which would mean that at a steady 23.4% market share - there should have been 7020 recorded Nokia smartphone purchases in 12 weeks. Or 83 Nokia smartphones bought a day. Subtracting the 9 days after Feb 11th, will leave Nokia with 6273 smartphones recorded, or - again - 21% market share.

Sovatar

My take is that Nokia had big troubles before 2/11/2011:
- Very bad execution with products coming to market 6 months or more late, and buggy as hell.

Elop & the board had to change something, and I then believed that concentrating on execution but maintaining Qt strategy would do the trick (Qt as unifier for Maemo/Meego (high end) and S3 ff (middle and low end smartphones)).

Instead Nokia changed strategy, abandoned Maemo/Meego and Symbian replacing it with Qt incompatible WP7.

The fallout becomes clearer day by day:
- Symbian is dying fast, with aging designs and no Nokia push (808 not offered in US).
- maemo/Meego is abandoned and the beautiful N9 is a dead end device without future (not offered in major markets)
- WP7 is in no way able to stem the downfall of the other platforms.

I do not see Nokia's execution improving, Lumia 900 is still not available and not really a phone to wait for anyway.

Elop and the board have failed, there is no way of sugarcoating. The longer the same figures are in command, the more damage will be done to Nokia. Nokia is not a thriving company anymore, Nokia needs a real turnaround fast if they hope to survive in any meaningful manner. This isn't even about WP anymore, WP won't get successful with or without Nokia. But Nokia won't get anywhere near to become successful with a single minded WP stratgy.

Elop and the board have to go.

Peter

Sovatar ,

well said. That's why I voted against the whole board inclduing Steven Elop days ago.

if I can do it, why you cannot ? ask your broker how to do it over internet.

Regards,
Peter

Matthew Artero

Did Elop Lie when he said success depends on the ecosystem? Couldn't the money used advetising Lumia have been used to create the required ecosystem? Now Nokia has neither the comparable ecosystem or comparable phone.

Tomifan

@Tomi:
You are now mixing things. You said that there was no evidence on any market. I show evidence of ONE market (surprisingly, the only where N9 and Lumia 800 are sold side-by-side). So "no evidence on any market anywhere" (your words) just don't make it. Especially since there IS evidence and it happens to be Lumia 800 outselling N9.
Next you try to negate my point of sales figures from Finland by using MTV3 article about sales problems in... Shops in UK!?! Come again?

Tomifan

Oh, just noticed that throughout the whole article you use figures from UK and then make statements about sales worldwide. Makes sense, especially since Nokia has provenly had issues with uneducated retail channel in UK.
But I'm just having contradicting articles against your exaggerated statements. Please don't spend too much time on me, karlim there provided numbers that eat the whole foundation off from your article. Please respond to him first.

poifan

The brutal truth is is that any new platform had little chance at succeeding. Apple and Google struck at the right time and claimed the market. WebOS, Meego, and yes WP7 are all good platforms, but they face an uphill battle against the juggernauts. Why would someone choose one of these upstarts unless it did something extraordinary beyond iOS or Android? At least with MS there is a chance to take advantage of androids tablet misteps and step in with windows 8 tablets and maybe cross sell into the phone space. Though even that seems a stretch.

Kenny

Lumia will certainly tank in emerging markets including India and China. The price of Lumia itself is high including the 610. You need a PC capable of running Zune and capable of going online. You need a Windows Live account and hotmail account. Non-user replaceable battery and no micro-SD card are obstacles in emerging markets. Free cloud services doesn't impress in countries where data charges are high.

For existing Symbian users (which is the main platform in emerging markets) WP7.5 is not an upgrade, it is a downgrade. In Symbian you can customize to your heart's content, in WP7.5 you can customize almost nothing. No widgets, no homescreens, no themes, no mass storage mode, no bluetooth file transfer, no 3rd party apps, no Java apps, no wifi hotspot, no internet tethering, no video calls, no call recording, etc. You even have to buy ringtones from Microsoft while for Symbian you can use any MP3 file as ringtone.

So I agree with Tomi, Nokia trying to force WP down the throats of its existing customers will not work. If it doesn't work in a developed country like UK it's not going to work in developing countries.

poifan

The 610 has a User replacable battery,and supports tethering. There are things it is missing, but there are strengths over symbian as well such as a usable touch screen keyboard, multiple exchange account support (why I left symbian), and excellent office integration.

cycnus

@Kenny

"So I agree with Tomi, Nokia trying to force WP down the throats of its existing customers will not work. If it doesn't work in a developed country like UK it's not going to work in developing countries."

This is a very bold statement. :)

Actually it won't work in developing market mainly because of the extensive need of the computer and partial bluetooth capability and no micro SD.

In developing country, people still exchange photo and also video (vacation video, pretty_girl/cool_guy you saw on street) with traditional method. which is infra red, bluetooth, and swamping memory card.

and we also have thousands of AUTOMATIC (or non automatic) PHOTO PRINTING booth (or store) that need infra red, bluettooth, or just plain USB to transfer the photo to the machine.

WP7 would fail (miss 80% of it's target market) on developing country because it need zune... period.

cycnus

and.. yes...
the ringtone problem...

it would be the BIGGEST decision factor AGAINST WP7.5 in a country like india, indonesia, china, vietnam, philipine, thailand.

xizzhu

@Tomifan Please Google "lumia best selling uk", etc. So many good news already, but what's the number now? You should never trust any such reports as long as they don't provide a number.

Sander van der Wal

I am seconding Karlim. It it impossible for Nokia's share in newly sold phones to collapse in a week or so. It is much more likely that people stopped buying Nokia phones over the period at the same rate as the next period, or even the period before, which is not shown.

This doesn't mean that sales collapsed after the announcement, but that was the channel not buying anymore, not the consumer households being interviewed in this research.

For a hypothesis, people with Nokia's saw the iPhone delivering everything Nokia was promising about the smartphone as the new computer but not delivering with the N95 and N97. So they waited for their contract to end and immediately went or an iPhone, or an Android. One way to test this hypothesis is to compare iPhone and Android adoption rates with Symbian adoption rates two years (the contract duration) earlier.

Michael

With Jokers like these, you don't really need Elop. They are literally lost in translation.

- Marko Ahtisaari (and his team) is working on their next breakthrough that will revolutionize your phone’s user experience

- When the new phone is ready, the user does not need to bend down and push their finger on the screen. (Remember Nokia and their Augmentet reality glasses concept?)

- Apple’s iPhone, Ahtisaari characterized as five years old innovation. The iPhone and iPad are, in his opinion, like a poorly designed home. The road from the kitchen into the dining room is always going through the front door

- Android and Symbian, he says, are like dollhouses. You can pick your own favourite furniture, and use only them.

- He says Windows Phone’s user experience is more natural

JRBrown

There is one more yet not considered factor: security of all Lumias as well as all the others WP mobiles.

Lumia is exposed with Windows Phone bug, which allows to disable any software on any WP device, Lumia 800 in this number and all the others. The particular string of characters, when displayed, causes Windows Phone to restart, and after restart the application which has processed this secret string stops running, even after several attempts to reboot. Hence a hard reset by an authorized service center is the only solution. The proper character combination triggers the problem when it is displayed in any application which includes a danger of receiving (and subsequently processing) it via SMS, MMS, Facebook, Messenger, www site content in browser or typed it in any application by user. If a user has pinned a friend as a live tile on their device and the friend posts a particular message on Facebook then the live tile will update and inadvertently cause the device to lock up.
SMS with that string sent to a Windows Phone device will reboot it and the messaging hub will not open despite repeated attempts. If a user sends a Facebook chat message or Windows Live Messenger message to a recipient effect is visible. See how it works here: http://www.youtube.com/watch?v=vnhzuKcDo6A .
Problem exists on any Lumia and it is not device specific but appears to be an issue with Windows Phone kernel, and it can be used to a denial-of-service attack that allows attackers to disable a functionality on a device or even the whole device. There are unconfirmed rumors that the bug in fact is a tool for ACTA and SOPA execution. They have not confirmed this? How extra ordinary! The bug has been reported to Microsoft. And report was not answered even! At this stage, it appears that the only way to fix it is by hard resetting and wiping the whole device, resulting in permanent loss of all user data. As the string that triggers the bug is kept in secret, there is no way for a user to check on his own if problem persists on his own device. It is unknown how many such strings exist which trigger the bug.
The problem was confirmed on devices running the 7740 version of Windows Phone 7.5 while others were on Mango RTM build 7720 devices eg.: http://www.windowsfordevices.com/c/a/News/Killer-text-crashes-Windows-Phone-other-Microsoft-apps/ (Killer text crashes Windows Phone, other Microsoft apps), http://www.infosecisland.com/blogview/18710-Windows-Phone-Denial-of-Service-Attack-Vulnerability.html (Windows Phone Denial of Service Attack Vulnerability), http://mobile.eweek.com/c/a/Security/Windows-Phone-Vulnerable-to-Malicious-SMS-Messages-Facebook-Chats-777208/ (Windows Phone Vulnerable to Malicious SMS Messages, Facebook Chats), According to the bug discoverer, in spite of upgrades, it is still effective on build 8107.

Still suppose customers will love Lumia with WP? It is good phone. Only with some surprises. I need phone security and safety, and also community and devs supporting my needs. My needs, not only 3rd party company marketing and incomes, or treating me like an addition to marketing plan. And for this reason I have chosen Linux MeeGo and definitely Nokia N9 for business in my company. And now we are safe: from surprises and from malware/viruses thanks to MeeGo Linux built-in mechanisms and behavior and Symbian good practices included by Symbian developers working over MeeGo – yes, users note and cares for such things.

For me as a user WP can exist in Nokia mobiles or not – we just ignore it by default. I have seen during marketing events Lumia 800 and the second one (I don't remember number), have played with this for longer time and my opinion is even more certain in this subject: no WP in any of my mobiles, neither work nor priv, and it will not be allowed to professional use by any employee, and they will obey or will be fired. I was under “marketing process” have seen adverts, read comments, seen optimistic videos, and all I can say: this is very professional marketing, but still this does not make Lumia better phone, nor a bit of friction better even.

This is a pity Nokia N9 had not even a friction of this support – from my point of view having hot product like N9 and not use it to make money it is a kind of cancer for business in common sense and meaning of this word. Nokia can play this strange WP game, but meanwhile can also sell what people want to buy, so MeeGo an N9 and successors, IMHO. For sure customers will not buy what they don't want to buy, and normally customers like to have possibility to choose, by themselves, all we know this. Hmmm, really all? Also all consultants I hire from time to time would say the same, as they are repeating this to me again and again. And again. And again. And all of them. So perhaps there is a bit of truth and experience behind?

Without evaluating opinions or number interpretations etc etc – I don't have enough time to go through them deeply enough – I'd like to know what Board will answer shareholders on following questions like: “There is visible and known market and demand for Nokia N9 and MeeGo products and software, so why we do not earn money from this? How our interests and business are in this area? How much money we have from this? What money we will have when users demand more products like Nokia N9? How about demanded and asked tablet with MeeGo? Who is taking care of this and who is responsible for?” Could you provide me some simple answers on above questions?

There is community developing software for "unloved" or "incorrect" N9. Seems they are making money on this - just like with Android and iOS. So business model seems to be working, as customers pays money. Business is business.

WP is used by many mobile manufacturers. None of them and nowhere has reached significant success. All they care about their own mobile systems in parallel activities. Why Nokia do not learn from those examples? I hope they don't think they make business in somehow different world? Who ignores customers and markets must suffer, by own request. This is how this is working.

One more aspect. I've read that Elop's next idea is the Nokia to produce computers and tablets with Windows. I am wonder if he is aware there are plenty computers, laptops and tablets manufacturers including such as Lenovo. Asus, Dell and perhaps few more hundreds of others. And all they now sell those products, have established services network, some shape of servicing customers. So Nokia from superior mobile producer is going to become one among many other computers supporting companies? Why? What can be marketing core making me to buy one of this future Nokia computers? Does Nokia remember why does not sale “made by Nokia” TV sets already? And when I have quite well working computer/software suppliers who sell to me mentioned Lenovos or Assus laptops and tablets – then why I would to decide to change? I think I will not have any good will to such big amount of time as I have devoted to my Nokia mobile, even to consider Nokia's computers offer. And Nokia is not a brand I recognize in area of any computer staff, but expected MeeGo tablet to work fluently with already used N9s mobiles. This could be an opportunity to present new offer. But I suppose I will take much cheaper windows tablets/computers from diffident then Nokia supplier/manufacturer – they have fluent working chain of supply, services and IT services. Nokia can beat it, because Elop has told so? I really doubt that. First they ought to solve their internal problems with identifying what customers says and what request sends to Nokia, good example of this is Nokia N9 but also PureView 808 or MeeGo and Meltemi together with requests to upgrade and to renew Symbian to actual standards. And only then we could talk about computers I think. From even three turkey will not be one eagle indeed, even innovative genetically modified one, and frankly speaking: I personally prefer natural eagles then any artificial hybrids.

I even don't try to ask about social safety of Nokia employee, now and in near future. Oncoming next phase of Elop effect? Just in every case I will buy a few more Nokia N9 to have them for own and company use as well as for spare parts. Just in every case.

anobserver

The single most important information I take from this post simultaneously confirms and disproves earlier statements in this forum: 87% of the WP market in the UK belongs to Nokia.

Hence

a) It is Microsoft which really depends upon Nokia for its success, not vice-versa.

b) If WP succeeds and reaches that future 30% smartphone market share often talked about, then Nokia has a good chance to climb back to 25% market share, not necessarily remain in the dumps.

vladkr

vladkr

@Tomifan:
Where did you see that Finland is the only country where Lumis and N9 are sold side by side?
I know for sure that both devices are sold side by side also in Russia, in Australia, New-Zealand, Switzerland and certainly other places I don't know about.

I also can tell for sure that even now, Symbian devices (500,600 and 700 series) outsell WP ones in Russia.

Then, there is something I don't understand about Meego. Nokia spent a lot of money on N9(50) and Meego. A lot of development is made on this platform (dual-boot, Android-porting, Mozilla apps, etc.) for FREE... The OS is maintained alive by developers for free and Nokia don't sell it widely ? What's the point? Maybe the same point as putting a FM transmitter - without an antenna - and a front-facing camera that are unusable (except for the 2nd camera that can be used with Gtalk)

JRBrown

@vladkr
Good point. Customers and developers trust is something that can't be bought. Nokia used to treat a normal situation when customers trust Nokia. But it is really uncertain when WP devices are on the table, as in fact inside 3rd party is hidding. I trust opensource developers cause I have years of positive experiences from Symbian, hence I have good feelings for MeeGo both Harmattan and Meltemi. But it does not mean I will appreciate Microsoft practices from Windows in my mobile phone - this is entirely different matter!!

JRBrown

@ anobserver

Ehh, still those 87% are 87% of 0,4% of whole share in market! This is very very far from 30% share in market IMHO. Count on yourself exact numbers! And compare them to eg. to Symbina numbers and share in market, even decreasing.
To many "ifs". This is like to say: if I will have sex with this girl we will have baby, but now she don't want even to speak with me. Dreams don't bring us closer to what we are dreaming about. Lets focus on reality not on fantasy.

Chris D

The interesting part about these numbers is how positively they are portrayed in much of the media - e.g., the Verge with "Windows Phone outpaces Symbian". Yes.... but at a VERY low level. It's like being the fastest snail in a race with other animals! And let's keep in mind - this is with MS trying to push sales by giving away xboxes for free with sold Lumias! You can now buy those Lumias for GBP 200 from ebay, basically brand new.

I agree with some of the other commenters that Nokia was in trouble before the Elop announcement in the UK... but keep in mind that overall smartphone market was (and still is) exploding, growing at 60-70% per year. Thus even stagnation or slight growth would lead to significant loss in market share. At this point, I have to also criticize the numbers a bit... if smartphone market is growing, and 1/3 of market share in sales is lost, it probably means losing more than 1 out of every 3 customers.

A note about the Finland sales numbers... as noted in the other article, the Lumia being top of the charts in a country where 9 out of 10 people owned Nokia means nothing. Even if they lost 2/3 of their customers, they would still end up top of the charts!

And a final thing... it is often being portrayed as a good thing that Nokia (after one quarter!) has the majority share of Windows Phone sales. Given the lackluster performance of that OS in terms of sales, that only means that the remaining vendors share a sliver of the tiny pie. I would not be surprised if one or more of them decide to abandon this sinking ship. Selling a few thousand phones worldwide would just not be worth the investment of producing those phones.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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