So here we go.. Nokia surprised a lot of Nokia-watchers by releasing its official smartphone shipments numbers today, well before the final Q4 results are due. So we can do the Nokia part of Q4 Bloodbath analysis and also the full year for Nokia. As Nokia is the last vendor left providing Symbian, we can do Symbian for Q4 and full year, and as Nokia does the vast majority of Windows Phone, we can also do preliminary estimate for Q4 and Full Year 2012 results for Microsoft's Windows Phone ecosystem. Is it the promised 'third ecosystem'...
NOKIA Q4 SMARTPHONES
Nokia smartphones shipped 6.6 million units in Q4, up only 5% from Q3 when it sold 6.2 million smartphones. This is down from 19.6 million one year ago when Lumia first launched and 28.8 million when Nokia sold only Symbian based smartphones.
Nokia preliminary market share for Q4 is 2.8% (on my target market total unit sales number Q4 of 240 million smartphones). This is down from 3.6% in Q3 and 12.4% one year ago. More ironically, as Nokia's market share was 28.8% in Q4 the last quarter before the Elop Effect and Nokia's new strategy, Elop has managed to scare away literally 9 out of every 10 customers in just 24 months. This is a world record in market failure - not just in mobile phones, in any industry ever, by a global market leader of a Fortune 500 sized company. Literally a world record failure!
For the full year 2012 Nokia has shipped 35.0 million smartphones and end the year with 5% market share. That is a collapse from 2011 when it sold 77.3 million smartphones and held 16% market share, which itself was a collapse from 2010 when Nokia still saw massive growth in its smartphone unit and sold 103.6 million smartphones and had 35% market share.
So currently Nokia's smartphone unit holds 3% market share with essentially flat unit sales and declining market share. Its current ranking for Q4 in the Top 10 is definite to be worse than Samsung, Apple, Huawei, Sony, ZTE, LG, Lenovo, HTC and RIM. Yes. Nokia's best possible finish in the Top 10 is ranked 10th. Nokia was on top of the Top 10 when Elop took over two years ago. But Nokia may have tumbled out of the Top 10 smartphone makers altogether like Motorola did last Quarter. The company chasing Nokia into the Top 10 is Chinese Yulong who sell smartphones under the Coolpad brand and they are expected to sell between 6 and 7 million smartphones this quarter, so it will be very close whether Nokia falls out of the Top 10.
Meanwhile for the full year its not quite as bad for Nokia, as they had early 2012 quarters with healthier sales to help boost their rankings. Nokia's 35 million smartphones sold for the year 2012 puts them ahead of Lenovo, RIM, LG and HTC. Nokia cannot finish lower for the full year than 6th biggest smartphone maker, but also, we know it can't catch Samsung, Apple or Huawei, so Nokia cannot be better than 4th. The race is now between Sony and ZTE for whether Nokia finishes 4th, 5th or 6th. Nokia was twice as big as its nearest rivals when Elop took over.
LUMIA, WINDOWS PHONE, SYMBIAN
So Nokia also announced it had sold 4.4 million Lumia smartphones (they didn't give a split of how many of the new Lumia 920 running Windows Phone 8, and how many of the older obsolete Lumia series, hopefully we will have that split in the official Q4 results). But we can obviously calculate the Symbian/MeeGo split out of that, at 2.2 Million non Lumia Nokia smartphone sales.
So Symbian sales are down 37% from Q3, to 2.2 million. Lumia sales now with the new Windows Phone 8 finally launched, are up 52% from Q3 ie up from 2.9 million to 4.4 million. The 'boost' from Windows Phone 8 is a measerly 1.5 million Lumia units - a true catastrophic disaster when we compare for example to 2010 when Nokia launched a new version of Symbian, S^3 and a new flagship, the N8 (like the Lumia 920 now) and Nokia in the Q4 quarter sold 5 million new Symbian S^3 devices including 4 million N8 devices. And the smarphone market has more than doubled since then. If Elop knew what he was doing, he should have sold at least 8 million Lumia 920 units now - yeah, if the consumers were willing to buy Lumia and the carriers/operators and distribution were willing to sell it haha. The news we had earlier this week via Fortune was that a consumer survey of smartphone owners in the USA and Europe by Bernstein found that the Windows Phone customer loyalty is in the toilet, only 37% of Windows Phone owners are willing to buy another Windows Phone smartphone (compared to 95% for the iPhone or 75% for Android smartphones. No wonder Nokia is now suddenly willing to consider shifting to Android).
So for the first time in five quarters of sales side-by-side, Lumia series finally outsells the remaining Symbian smartphones. And now Symbian does tumble to 6th in the ranking of smartphone operating system sales in Q4 behind Android, iOS, Blackberry, bada and Windows Phone. The end is truly in sight now, Symbian Q4 market share is under 1%.
What of Windows Phone? Nokia has been shipping about 75% of all Windows Phone smartphones recently and there is no reason to think this would have changed for Q4. If we use the same ratio, the preliminary estimate for Q4 Windows Phone total shipments would be 5.9 million smartphones and a market share of 2.4% for the quarter. Yes, bigger than Symbian but nowhere near Blackberry, and very close to losing to bada as well. Windows Phone may be currently either 4th or 5th biggest smartphone OS in Q4. For the full year 2012 it isn't that pretty.
For the full year Symbian sold 18.5 million smartphones and Windows Phone will be somewhere between 15 million and 17 million. bada is going to be bigger than Windows Phone but will chase Symbian. Blackberry is nearly twice as big as Symbian at 33.5 million smartphones and Android obvously won the year and iOS is second. So the rankings of the full-year 2012 look like this: 1 Android, 2 iOS, 3 Blackberry. 4th is race between Symbian and bada. 6th is definitely Windows Phone at 2% market share. So much for your promised 'Third Ecosystem' that was supposed to have 20% market share or better by now haha by so many 'experts'.
MY FORECAST? HALF RIGHT, HALF WRONG
Some Tomi-haters are jeering me for that Kantar numbers analysis I gave. I gave the numbers as Kantar reported, and projected from those what it would mean for Nokia and Windows Phone and Symbian. I said the finding was surprising and I flipped my balance of Windows vs Symbian from what I said in November (two thirds Lumia, one third Symbian) to the other way around. Still, I predicted 6.8 million total smartphones for Nokia, it delivered 6.6 million. Thats almost spot on. I did originally have the mix almost perfectly for Lumia/Windows in November but now did alter it to the wrong mix. Yes. That was a bad call. Still, on the big picture I was very close.
As to Nokia actual performance we have the full story now: Nokia sold smartphones in the following pattern since Elop took over:
NOKIA SMARTPHONE SALES COLLAPSE UNDER ELOP
Quarter. . . . Smartphones . . Market share
Q4 2010 . . . 28.8 million . . . 29%
Q1 2011 . . . 24.2 million . . . 24% (Elop Effect)
Q2 2011 . . . 16.7 million . . . 15%
Q3 2011 . . . 16.8 million . . . 14% (N9 MeeGo launch)
Q4 2011 . . . 19.6 million . . . 12% (Lumia Windows Phone 7 launch)
Q1 2012 . . . 11.9 million . . . . 8%
Q2 2012 . . . 10.2 million . . . . 7%
Q3 2012 . . . 6.3 million . . . . 4%
Q4 2012 . . . 6.6 million . . . . 3% (Lumia Windows Phone 8 launch)
Source: Nokia quarterly data and TomiAhonen Consulting Analysis
This table may be freely shared
Do you really WANT to go back to all those rosy promises of the Third Ecosystem back in February, March and April of 2011, when so many experts promised Nokia and Microsoft would make magical success together becoming the third ecosystem and have over 20% market share? If you remember, my first official forecast in May of 2011 for the year 2012 smartphone sales suggested Nokia would end the year 2012 at 7.4 million smartphones sold and 3% market share. I did expect Nokia to have migrated 7.0 million Windows Phone sales by Q4 and Nokia only was able to do 4.4 million.
Still, from Spring 2011, I was by far the most pessimistic of any analysts making Nokia or Windows Phone forecasts at the time. Now look at the results? I was TOO OPTIMISTIC. Nokia did even worse than I was able to forecast and NOBODY had published a forecast worse than mine. Do I prove value on this blog?
Then when I had seen how much Elop had mismanaged the Nokia Lumia launch and first Lumia handsets, I did offer a revised forecast for year 2012 sales in June of 2012, where I downgraded my forecast to 5.3 million total smartphones (ok, that was too pessimistic, it was 6.6 million, but the average of these two forecasts was almost spot-on) and my forecast for Lumia sales in Q4 - with the stated clarification, that two Windows Phone 8 based Lumia phones would be launched by November 2012 - said Q4 Lumia sales would be 5.0 million units (was 4.4 million). For the full year 2012 I predicted 19.0 million Lumia shipments (the most pessimistic view in the industry) and Nokia only managed 13.9 million. Again, from June 2012, that was THE most pessimistic Lumia forecast by any forecaster or expert in the industry, and AGAIN I was too optimistic on Lumia.
No forecaster gets it 100% right, that is not possible. But the professional forecasters amongst us try to offer better insights and also - very importantly - to revise forecasts when facts change - AND to EXPLAIN WHY their forecasts have changed. I have done so diligently on this blog, and if you trusted what I said, you were closer to the truth than any other published expert at the time. During the summer of 2012, looking into Windows Phone 8, many of my peers were promising 8 million to 10 million Windows Phone Lumia sales levels. I said 5.0 million, was crucified here for being too pessimistic - and yet, I was the closest to the truth and even I was too optimistic on how incredibly poorly Nokia would perform in Q4.
With that, open for discussions and debates. But people commenting - if you come here to gloat that I was 'wrong' - I will delete your comment without a moment's thought unless you can provide any analyst whose forecast at the time - by May of 2011 or by June of 2012 - had a better number than mine. That Kantar projection was a warning on a usually-reliable early number, and I clearly state now, my revised mix, based on the Kantar numbers, was wrong; but my earlier mix of Lumia/Symbian was spot-on (I should have stayed with the November forecast haha).
PS what will Nokia and Windows Phone look like in smartphones for 2013? The market share will linger in the 2% to 3% range, it will not somehow magically now bounce up to 12% or 16% or 20%. That will not happen. I trust I have enough of a track history of being the most accurate Nokia smartphone sales forecaster that you can trust that prediction. If I'm off, I'm more likely to be too optimistic on Nokia than too pessimistic, but even if I'm off by 100% then Windows will be no bigger than 6% this year. And it won't be that big. And even 6% won't make Windows Phone anything like the, ahem, 'third ecosystem' haha.
For those interested in our crowd-sourced forecast competition from one year ago, those who were guessing Windows Phone to be around 2% or 3% are now the front-runners such as Eldar Murtazin and Jonathan MacDonald. See all contestants in the Twitter-based guessing game here.
Also don't forget my new series of blogs, telling each Nokia management mistake on this journey to the world record of management failure by Elop, in simple, one problem per blog postings (short ones, honestly) each illustrated with one picture
Part 1 - the Nokia smartphone unit sales collapse following Elop Effect
Part 2 - The competition during Elop's tenure - Nokia vs Samsung vs Apple iPhone
Part 3 - the Nokia smartphone sales collapse compared to biggest failures in handset history (Palm, Motorola, Siemens etc)
And to those who might suggest this disaster was not foreseeable, actually Nokia itself acknowledged all these problems we see now, in its SEC Form 20-F filing to the New York Stock Exchange in March of 2011. All the problems they said might happen - actually did come true. This is the worst disaster in any industry, ever. And if every risk that Nokia anticipated with its high-risk Windows strategy DID come true already, then don't expect any kind of speedy - or even slow - recovery. Nokia is doomed. Or at least, is doomed if Nokia's own risk assessment was this accurate. You judge for yourself, read the updated analysis of Nokia Form 20-F and the truth (with statistics).