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« Apple December Quarter: Surprisingly Tame Results. Market share for year is flat or maybe slightly down | Main | Prelim Samsung Q4 number is 63.5M via the major analyst houses »

January 24, 2013

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ej victor

Tomi we <3 your blog, all bazllion words :)

I know some folks look at this as kicking a guy while he is down. But you and I, like many who valued the Nokia brand understand that it is like looking a child that is wasting its talents by hanging around the wrong group of kids. We criticize Nokia management not for being stupid, but for being lazy - windows was the easy way out!

Back to #'s so North America Massive marketing push - ~700,000 smartphones in USA * that includes the 808 pureview I bought my GF in Q4...and the huge liquidation of older symbians on Amazon. What was the net loss on that exercise?

Winter

A word of support. Indeed, when I want to know what is happening in Smartphones, I come here.
This is exactly the stuff I want to know: what real handsets end up in the hands of real customers.

What I am dying to find out now is how many Android phones were sold in Q4. Google used to publish daily activation numbers at irregular intervals. However, after the September 1.3M/day number, nothing was published anymore. I would expect daily activations in the 1.4-1.6M/day range. Maybe this is the curse of the rounding. Just ticking up one decimal just might not be cool enough to broadcast.

Anyone knows?

ej victor

Oh... Tomi, can you focus your crystal ball on 2013 as the year of the gesture based UX and an analysis of the current crop of contender OS's - Sailfish, Ubuntu, Firefox OS... RIM is the first major player to move in that direction (plus the support for QT) but is not bold (no pun intended)enough to move the bar to be a major disruption.

Alex Kerr

Having followed Nokia smartphones for years, and the sorry tale of woe since they went with Microsoft (and having followed Microsoft in depth for maybe 20 or even 25 years), I can currently only see one way out for Nokia that doesn't end in the total failure of their smartphone unit (noting that smartphones are the whole future of the entire mobile handset industry, so Nokia's failure in this would be rather significant).

Answer: Buy Jolla. (and yes, change Elop, the board, whoever else is necessary).

This is such an obvious solution, I can't understand why it is not being discussed more widely. It is also a FAR better solution than Nokia just making an Android handset, which would make them even more of a stack 'em high, sell 'em cheap plain old box shifter, than they are already for Windows phone.

Buying Jolla means:

* You get the best bit of Android - i.e. the ecosystem, because Sailfish runs Android apps as is, and most won't require any change.
* Android fans are kept happy because they get their Android apps, AND Sailfish is a more efficient OS that runs better on lower end hardware than Android itself does!
* Linux fans are happy because Sailfish is Linux
* Open source fans are happy because Sailfish is even more open than Android
* MeeGo fans are happy because Sailfish is next-generation MeeGo and the original and much better succession plan for Symbian to turn into MeeGo via Qt, is fully back on track
* Nokia fans are happy for the same reason, and because they get the best OS on the excellent (Nokia) hardware.
* Symbian fans are happy because they can move to Sailfish (MeeGo) as was originally planned, via Qt
* Qt/Symbian developers are happy because Sailfish has Qt as the SDK, and native code base, so they can just continue as before

Nokia buying Jolla and having Sailfish is a win/win/win/win/win/win/win (etc) situation. And of course the MeeGo staff who left Nokia are now working for Jolla, on Sailfish, so come back on board.

Seriously, how is this not the best possible all round solution for Nokia smartphones?

nenopi

Nokia is hooked on Windows Phone, now has to pay to use it.
http://allthingsd.com/20130124/after-getting-hundreds-of-millions-of-dollars-from-microsoft-nokia-to-start-paying-redmond/

Alex Kerr

And to add to my above comment, Nokia also have a wonderful Qt-app filled ecosystem and store already up and functioning and with the greatest reach in the world, so it's all ready to go hosting Sailfish Qt based apps. And they have all the good Qt based software already running on latest Symbian like Maps, Drive, Music etc...

It's all good to go, just buy Jolla...

ej victor

@Alex

Jolla's model is like Android - OS open for anyone to license. So If Sammy see's Tizen too much of a drain, they can license Jolla, same goes for Nokia. Frankly I do not believe that a single Jolla staffer would return to Nokia after the taste of "freedom".

vladkr

I know I already posted this link, but it shows Elop's psychology :

http://m.theglobeandmail.com/report-on-business/rob-magazine/look-out-apple-nokias-stephen-elop-is-out-to-get-you/article4251494/?service=mobile

TimoT

Nokia board is typical prestige board, consisting outsider from other industries, most of which are totally unrelated (oil, paper, cosmetics). That model is failing badly. We should follow the German AG model with workers having voting members in the governing boards in companies over 500 workers.

I know it sounds socialistic but this American stockholder model is not working in the long term. So easy to turn it to an elitist country club with no clue how to actually run the company.

Workers represent the FUTURE capital while owners the CURRENT capital. So why not give it a try. It would provide real expertise to the board. Mr. Elop in Germany would have been kicked out long ago.

t brogtrop

I read Tomi's blog to satisy my latent masochistic tendencies, because I have 'skin in the game' when it comes to Nokia's performance. So yes, Tomi's bitter comments on Nokia's performance often make me uncomfortable and defensive. Normally I just ponder the content quietly and move on.

Two things stated here made me crawl behind my keyboard, looking for clarification/nuance.

- Asha is not allowed to be considered a Smart Phone in the context of this blog. But what is the 'accepted industry definition' that Tomi mentions? Just imagine that Asha would be considered a Smart Phone - how would that change the picture? Probably a too sophisticated issue but still an interesting one if you are a Nokia stakeholder hoping to extract as much value out of the mobile market as possible.

- Tomi reports that each smartphone is sold at a 22% loss (in Q4 '12). After the Q3 '12 results this blog mentioned that each smartphone is sold at a 49% loss. At face value this seems horrendous! But these two numbers (22% and 49%) are actually net loss numbers for the whole smart phone business, and not gross 'profit' per phone. That makes a world of difference from a shareholder's point of view.. (it should be noted though that in Q3 there indeed was a negative gross profit of 3.5% in the smart phones division - but that has been turned around now to 18% gross profit. Still unacceptably low by any standard but still 'on-the-up')

geektech

costumer dont hate Nokia, they simple hate the way the management left them out, they hate Elop because he is Nokia front face, and until Nokia change that mistake the can go to the hell and nothing going to change.
I'm really surprise that Nokia did not change course seeing
how bad things were turning; Elop may be very religious man,
he keep faith on adversity unfortunately reality has his toll.

vladkr

@TimoT:

Workers are not only their company's future, they are the one who "build" its wealth. That's something Nokia didn't understand. Directors cost a lot and don't produce anything. That problem existed already before Elop, but Elop made the problem worse firing engineers, factory workers and hiring more directors.

By the way, firing people is never nice, but the way Nokia did it is worse than ugly :

- Romanian workers were offered the smartphones Osbourned by the guy who fired them (that was actually the reason why they were fired, they paid for their CEO's mistake) ; what a humiliation !

- Business units "sold" to partners (Accenture, Tata, etc.) = new work contracts for engineers = work experience reset to 0 = no compensation to be paid when they're finally fired less than one year after.

Someone in Espoo forgot the meaning of the word "respect"

Alex

Tomi,
a little support text and a thank you for your blog: I am not in mobile business, just a very interested user, but love to read your blog mainly for this reasons: razor sharp analysis based on numbers and not wishful thinking or marketing bullsxxt talk, which one can find pretty much copied and pasted in many newspapers. You analyze the mobile industry, but me being also in the consulting business (but a different industry) you are a role model for the approach and structure of your analyses.
And last but not least, I like your emotion and humor in this blog. (Who is your daddy? :)
Best,

Alex

CN

Whose my Daddy? Not you, Tomi. My Daddy lives in Tampere, not HongKong. ;-)

Your forecast of 7.4 M was made in 2012, not 2011.

Had you made it in May 2011, I'd be very impressed. Now, I can only say you've done reasonably well. Probably better than most, even though your ratio between Lumia and Symbian was once again quite far off.

Lasko

It actually wasn't - at least until Kantar released their way-off numbers which led to the reversal of the ratio (was spot on before).

CN

Lasko, you refer to the latest revisions Tomi made in November and December. But he doesn't use that now, he is using May 2012 forecast.

As Tomi always says, read the posts. It's all here, just click his link and you find 7.4 M of which 7 M was supposed to be Lumias. Far off, I say.

I can understand you like Tomi to be your Daddy, but I don't. Please respect my opinion, I respect yours. ;-)

Tester

@CN:

>> It's all here, just click his link and you find 7.4 M of which 7 M was supposed to be Lumias. Far off, I say.

So? That already was a rather pessimistic projection. And where is Nokia now? Right, even deeper in shit.

Winter

Tomi wrote this on February 15, 2011

When Things Get Even Worse Than You Thought - 1st Preview of Potential for Nokia Microsoft Partnership, short term 2011 and 2012

http://communities-dominate.blogs.com/brands/2011/02/when-things-get-even-worse-than-you-thought-1st-preview-of-potential-for-nokia-microsoft-partnership.html

"Next year, 2012, we will see Microkia Nokisoft return to the battle, starting - if things go very well - with something like 12% market share on Nokia's remaining Symbian side, and perhaps 4% or 5% at Microsoft's side (assuming no delays caused by Microsoft). That they will then try to migrate into something close to 10% by the end of 2012, but by then, hopefully Nokia is back to profitability. If that company still exists at that time. This will be a troubling year for Nokia. And mostly, we all will learn to think of Nokia as a discount brand of phones. What a shame.."

Note the phrases "try to migrate into something close to 10% by the end of 2012" and "If [Nokia] still exists at that time"

It is clear that Tomi was too optimistic about MS WinPhone :-)

Winter

@CN
"1. claim that this forecast was made in 2011 is not true."

Typo?
He linked to the correct blog, but made a typing error in the text. I have heard such things happen once in a while.

@CN
"2. 7 M is far off from 4.4 M."

We all know that Tomi is too optimistic with regard to Nokia. Old times and that.

Spawn

@t brogtrop

> Asha is not allowed to be considered a Smart Phone in the context of this blog.

Because it is not. Even Nokia itself says so. http://www.developer.nokia.com/Develop/Series_40/Platform/

"smartphone-like features" != Smartphone

See also http://en.wikipedia.org/wiki/Series_40

"Series 40 is a software platform and application user interface (UI) software on Nokia's broad range of mid-tier feature phones, as well as on some of the Vertu line of luxury phones. It is one of the world's most widely used mobile phone platforms and found in hundreds of millions of devices.[1] Nokia announced on 25 January 2012 that the company has sold over 1.5 billion S40 devices.[2] S40 has more features than the Series 30, which is a very basic OS. They are not used for smartphones, in which Nokia primarily uses Symbian and more recently, Windows Phone."

That Elop labeled them Smartphones to increase the Smartphone-sells numbers is a marketing trick. Not more.

> Just imagine that Asha would be considered a Smart Phone - how would that change the picture?

Asha's selling point is priecing and not an imaginary category-label. Once the priecing point is gone, cause competition offers Smartphones in the low budget segment, Asha is gone.

> but still an interesting one if you are a Nokia stakeholder hoping to extract as much value out of the mobile market as possible.

And how does re-labeling Asha as Smartphone increase shareholder value? It doesn't. Its a PR-trick to look better in the mass-media not more.

> That makes a world of difference from a shareholder's point of view

If you bought in into Q3 and sold Q4 you indeed did profit. Great for you, Still doesn't change anything for Nokia or shareholders who where in before Elop burned there values.

CN

Yep, Winter, only typo. If I didn't make it clear, that's what I tried to say and I know from the past that if you tell Tomi that there has been a mistake, he does fix it. Well, not always, but in this case he will.

On the other hand, if you don't know what Tomi has been saying and when, you might think that he indeed forecasted something spot on 20 months ago. And as I said, that would be really something in this dynamic business.

My hidden agenda here is of course that now you can see that there has been loads of figures he's given. Now he just needs to pick the one that has been closest. ;-)

This message to be deleted? Yes, I guess so.

Alex Kerr

@ej victor
> "Jolla's model is like Android - OS open for anyone to license"

That is either very similar to, or exactly like, the previous Symbian model.

Nokia owned Symbian -> multiple Symbian licensees (NTT DoCoMo, Sony etc)
Symbian Foundation -> anyone could license Symbian

So I would suggest Nokia need to buy Jolla, regardless of anything else. They can then license or not license as they see fit.

Nokia buying Jolla (and changing CEO, other management, board) etc. is the best way forward for Nokia now, and it gives all the benefits I've listed.

Jolla's ex-Meego staff left Nokia because of the CEO and his policies of killing MeeGo (etc). So with a change of policy and leadership, they would love to come back, I think.

Winter

@CN
I posted Tomi's initial analysis from 15 February 2011. Tomi then was predicting near death experiences for Nokia.

He has been very consistently predicted the collapse of Nokia. But I have to admit, he was consistently too optimistic. Reality proved to be worse every single time.

Indeed, Tomi has many predictions to select from. His predictions were indeed the worst of the crop, and still too optimistic.

Cristian Radu

Why not use Ubuntu instead of Jolla if we are at it? It's free and it should please those large numbers of Linux fans.

Everyone here seems to be entrenched in this "new OS proposal" discussion for Nokia. Nokia doesn't need a new OS, we already have tenths of OSes on the market. It needs services for that OS and it needs to get their phones on the market faster. Over here (eastern Europe), the new Lumias haven't even officially launched.

Let's see if this comment is deleted as well, like the last one (which was pretty pertinent by the way).

Tomi T Ahonen

Thanks guys!

About May 2011 vs May 2012. Obviously I linked to the right page, somehow my vacation-oriented brain had me mixing 2012 as 'this year' and 2011 as 'last year'... Corrected it now. I was rushing it as you probably can tell from the writing, as they were getting ready to call my flight, so now will take a considered look and edit and clean up the blog article some more..

Tomi Ahonen :-)

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