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January 10, 2013

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Listed below are links to weblogs that reference Nokia Surprises Us by Releasing Q4 Smartphone Results Early. So 3% for Q4 and 5% for full year 2012? And they think this is 'good' ???:

Comments

John Waclawsky

Good work Tomi. The key problem for Nokia is truly brain dead easy to understand: NO ONE WANTS A WINDOWS PHONE! The reasons behind that statement are not changing so any WINDOWS PHONE WILL BE A FAILURE because of, let me count the ways:

1 - because of all the ill-will towards Microsoft NO WANTS A WINDOWS PHONE.
2 - because of the past and present business practices of Microsoft NO ONE WANTS A WINDOWS PHONE.
3 - Because of all the partner screwing by Microsoft NO ONE WANTS A WINDOWS PHONE.
4 - Because of attempts to jam SKYPE down the throats of the carriers NO ONE WANTS A WINDOWS PHONE
5 - etc. feel free to add more to the list.

The FAILURE OF WINDOWS PHONE is a Microsoft failure not a Nokia failure. Nokia just decided to go along for the ride. Why the chose this path is a great lesson on what not to do

Interested to know

I'm glad you brought up the estimates of the people criticizing you. They have consistently been off by tens of millions.

More importantly, the spin from Nokia and Microsoft continues. Every quarter they claim that the turnaround is almost here. Yet it never arrives.

And now that WP8 is out and the few early adopters have already gotten theirs, sales will stagnate and decline.

Jbs

So as long as there are four Christmases next year, Nokia should be back to quarterly profits!

jo

well it looks like nokia PR was fast trying to spin the mediocre numbers they posted
4.4m is a utter failure.

Tomi T Ahonen

Hi John, Interested, Jbs and jo

First to all - I deleted a few trolls who clearly didn't read this blog were I state categorically that I was wrong with the Kantar split but still was right on the overall Nokia smarpthone sales projection for Q4.

Now to comments

John - thanks and yes we agree. Note, the independent surveys also say the same, Yankee's survey of Lumia satisfaction is disasterous (4 out of 10 rating it the worst phone they've ever seen) and the Bernstein survey of US and European smartphone owners finding only 37% of Windows Phone owners willing to return to the brand on their next purchase behind Blackberry 57%, Android 75% and iPhone 95%. No wonder Lumia prices instantly fall and the line has zero resale value. If I was a retailer, I wouldn't let my staff sell Lumias either to my customers...

Interested - thanks, yeah, I'm kinda used to it. Almost every 'discovery' I make in this industry will rub some people the wrong way, who then attack me as a heretic, from real camera supporters to iPod fans to the laptop users to now yes, Microsoft trolls haha..

Jbs - great plan. Now how can we achieve that?

jo - totally agree. Nokia sold 4M Lumias in Q2 of 2012, and that was sad performance in the third quarter of Windows Phone on Nokia. Now 6 months later they only manage 10% bette? Pathetic

Thank you all for the comments, keep the discussion going

Tomi Ahonen :-)

effex

The astrosurfers are celebrating today, Tomi missed to predict the smartphone sales for Q4. Too bad for you that WP is still a failure, and its marketshare is shrinking for every quarter that passes. But dont feel bad, at least you can feel unique owning a WP smartphone, when every person walks around with an iOS or Android device. You are as special as the people that own Zune or a Surface RT tablet.

geektech

So what is those people claim? The cup half empty or half full? Even if Tomi fail he was closer than those who claim sales around. 8-10 m.
The problem is Nokia is going nowhere and people dont understand.
And sorry no WP for me even i like Nokia and always i used Nokias.

CN

@Tomi

Sure, everyone needs to admit that you've forecasted things well, better than others. Congratulations on that!

I guess why people now may get mad is that they are not necessarily able to follow your revised forecasts. Not a lot you can do about it, I guess.

Keep it up, I'd say that it's going to be tougher in the next few quarters. Wish you best of luck in finding the correct figures in your crystal ball.

You may want to fix one mistake in your blog. Your last but one forecast was not made in November, but it was made on December 7.

Other thing you might want to keep in mind. In August you said WP will be 1-2% in 2013. In November you said it will never pass 2%. Now you say 2-3%. Not a huge issue, but I just want you to know you are being followed. Just like you follow other analysts and let them know if they make mistakes.

JJ

Great that Nokia is doing better but Lumia numbers look bad. New WP8 models finally released, crazy discounts for old Lumias, still christmas sales only 4.4M. Nokia really needs new smartphone strategy.

winter

Could we please keep in mind the millions of poor souls who contracted a Lumia phone? There are less victems than was feared, but every sufferer is one too many.

JJ

@P. Bokkelman

Yes, Nokia is still doomed with Windows Phone. It just doesn't sell. I'm finn and like NSN and Asha models are doing fine but can't accept dropping market shares in smartphones due to WP.

vladkr

That would be interesting to know how much Nokia earned from these 4.4M Windows Phones (including 0$ Lumia 900/800/710 - with a plan) ?

Why I ask this question is because I foresee a messy Q4 report :

- Sale of HQ, patent trolls, employees jettison all around the world (including China), sales of patents and of business units will raise Nokia's income.

- They sold more Lumia than expected

So it should be all good : better sales, better income

But, many financial analysts are not fooled : they also look at the assets, at the debt, and there, the picture is not necessarily bright.

So the illusion is good, but not perfect. Anyway, I'm quite sure they'll repeat their trick on jan. 25th, hiding bad figures with good ones...

Nokia is kind of Potemkin's village I think

m

@S: Elop and Nokia continue to pat themselves over the back for mediocre results. Having a goal of breaking even, and touting "underlying profitability" (which suggests no net profitability) is sad. It seems it will take a major shock (Elop fired, Nokia turning to Android, sale or bankruptcy, something like that) to convince some people of the ongoing problems. When it happens, people like that will say "What happened?! I thought they were doing so well!"

On the other hand, if Nokia achieves actual profitability, and it becomes sustainable (which it is not; the pre-earnings warn of expected losses for Q1), then people like me will say "What happened?! I thought they were doomed!"

The estimates say: Expect continued low WP sales, continued struggles for Nokia, no known great hope that will save them quickly and easily.

vladkr

PS. 1 : Well done Eldar Murtazin and Jonathan MacDonald for the prediction; they were even closer than Tomi (you were quite optimistic last year Tomi ;) )

PS.2 : Am I the only one who faces Cabalistic, Greek or Hebraic characters that don't even exist on my keyboard when I have to enter the captcha ?

Bart

Here in Europe, the biggest discounter Aldi (the European version of Walmart) is dumping the old Lumia 800/900 phones at extremely low prices (150 EUR).

Tomi: this might partially explain the higher numbers of sold Lumia's...

vladkr

@P.Bokkelman:

Read Nokia's press release again ; they're not as positive as you are :

Seasonality and competitive environment are expected to have a negative impact on the first quarter 2013 underlying profitability for Devices & Services, compared to the fourth quarter 2012.

Source:
http://press.nokia.com/2013/01/10/nokia-exceeds-previous-q4-2012-outlook-for-devices-services-and-nokia-siemens-networks/

Tester

I somehow can't shake off the feeling while reading the report that it can be summarized as, 'Yes, we made some profit, but it looks more like a fluke, not some fundamental turnaround.'

Not good signs if you ask me.

Tomi T Ahonen

Hi effex, geektech, CN, JJ and winter

effex - actually I didn't miss the forecast, I got two out of 3 parts of the Nokia Q4 forecast essentially spot-on, the most important being the big number, total smartphone sales, I said 6.8M, Nokia delivered 6.6M. I also said 3% market share, which is exactly what Nokia has. Where I went wrong was the split, I thought 2/3 Symbian vs Lumia, based on the Kantar finding, but it was the other way around. Two out of three elements of the Nokia Q4 forecast is not that bad, try to find me any published forecast from December that was more accurate haha ie had all 3 correct. I doubt you'll find anyone.

geektech - totally correct and yes, Nokia promised 1 to 1 conversion from Symbian to Windows Phone, in February 2011 when the Microsoft strategy was announced. So far out of 26.6 million attempted Symbian conversions per quarter, only 4.4 million have succeeded so Nokia has bled 22.2 million loyal Nokia smarpthone users to rival brands. Elop's strategy failure rate runs at 85%. And he is still allowed to remain as CEO? Why?

CN - thanks, I really appreciate that. This is not easy, prognosticating about such a highly volatile industry and still remaining the most accurate forecaster in mobile haha.. About the 2% or 3% - that may be difference between Nokia Lumia forecast ie Nokia Windows Phone (smaller), vs Total Windows Phone share with all manufacturers (bigger), as my gut feeling suggests, but yeah, I would need to go take a look. At that level, 2% or 3%, it really doesn't matter if Apple has 22% and Android 70%..

JJ - totally agree. And note, the 4.4 million now in Q4 is only 10% up from Nokia's next best quarter of Lumia sales ever, which was Q2. so in 6 months of massive hype and marketing, while the industry grew 60%, Nokia only managed to inch up a lousy 10%.. Pathetic really.

winter - LOL, yes, soon we need to help set up a charity to assist those with Lumianus-Windowsia the crippling condition of having contracted a Windows Phone based smartphone made by Nokia.

Keep the comments coming and don't even bother to respond to the trolls, I'm policing them out.

Anyone who wants to pick on my supposed inaccuracy in Nokia forecasting - I was the most accurate Nokia forecaster again for this quarter - find me anyone who is published in May 2011 or June 2012 or December 2012 with a better number than what I published. Else don't bother to try to claim I was wrong. I was still the most accurate while I generally am too optimistic still, about Nokia (I love Nokia)

Tomi Ahonen :-)

elm70

Congratulation Tomi

Last year you predicted the incredible decline of Nokia smartphone, and what was looking impossible, was at the end even a bit too optimistic

You did predict 5m Lumia for Q4 2012 ... down from a previous prediction of 7m ... and you have been super precise.

Now, I'm curious to se if you can forecast 2013 Nokia Lumia ... my feeling is that Q4 2013 could be no more then 5m Lumia ... possibly less then Q4 2012 ... but ... you are the expert ... so ..looking forward for a new forecast for full year 2013 and maybe above 2013

Thanks

E_lm_70

EmmanuelM

Good post, even excellent post ! Thank you Mister Ahonen.

While you talk about Eldar.. His site is dead since end of July.. Anybody knows where he is ?

foo

Here's another image based on Tomi's figures:

http://oi49.tinypic.com/aylqpk.jpg

Firecracker

Hi Tomi did you know that the infamous droid is now also in your fridge? http://business.financialpost.com/2013/01/08/google-android-expands-to-rice-cookers-fridges-in-move-beyond-mobile-phones/
So even if Nokia did beat its greatest competitor in smart phones (Which is highly unbelievable atm) Google would still win!
@ John I have another one to add to the list!
Windows 8. Because that is the ultimate example of Microsoft fascism with the crappy metro UI that nobody wants I mean had Microdicksoft Just stuck with XP then I'm almost certain that the lumia would be an impressive success. However the problem is that nobody likes Vista,7,8 which also cripples smart phone sales.

foo

@CN "Other thing you might want to keep in mind. In August you said WP will be 1-2% in 2013. In November you said it will never pass 2%. Now you say 2-3%. Not a huge issue, but I just want you to know you are being followed."

You point correctly it is not a huge issue.

Considering that Windows Phone market share is so near the end of scale (zero), an error of 2% is acceptable.

I bet nobody in Nokia -- not even Elop -- would be as precise as Tomi. And let's not forget other "analysts" that predicted that Windows Phone would reach 20% of market share.

Tomi was spot on.

Cyan

@ E_lm_70
I guess it will be difficult to guess the outcome for end of 2013.
Up to now, the sales of Nokia were following a trend. Tomi had a model to predict that trend, and used the most pessimistic one (and was right to do so).

But sometimes, it's no longer possible to only model "trend" : a single event can change everything, abruptly.

This is typically the case when 2 parties go to war : the outcome of each one will largely depend on a short-lived heated effort, with dramatic consequences. No trend here.

Nokia doesn't "go to war", but may face a similar "shake-up" situation next year : will it remain "Nokia" ?
Could it be broken in several parts ? Will it go bankrupt ? May the current CEO face investigatation on charge of double-agenda ?

I'm curious to know Tomi point of view on this.

foo

@m "Elop and Nokia continue to pat themselves over the back for mediocre results. Having a goal of breaking even, and touting "underlying profitability" (which suggests no net profitability) is sad."

Let me see...

Nokia sold their headquarters for $222 million.

So, if you discount that (because selling your home is not the same as selling phones), it is possible that Nokia was $222 million negative?

And how are they going to repeat this trick next quarter? Perhaps selling family jewels?

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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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