There is an alternate fantasy world, that Nokia CEO Stephen Elop and Microsoft CEO Steve Ballmer push to unsuspecting reporters. It is bolstered by fabricated numbers, bizarre anomalies and continuously unsubstantiated claims of big surges and market recoveries 'just around the corner'.
...And then there is reality.
The strongest reality of how Microsoft's Windows Phone OS, including WP8, and the related Nokia Lumia series of smartphones can do in the future - is consumer 'intent to buy' surveys reflecting both loyalty and interest. Here the story is brutal and consistent. We heard from intent-to-buy surveys in Europe in late 2011 that Lumia was not going to sell more than 2% in early European launches - almost exactly what it ended up doing. Then we heard from Chinese surveys of intent-to-buy that Nokia share was collapsing in 2011 and it did. And so forth. That was early. What about after the consumers got to play with the Lumia and new Windows Phone 7.5? Then we had the Yankee Group survey of Lumia owners in the USA, and the Bernstein survey of US and UK smartphone owners. Again. Brutal. Four out of ten Lumia owners rated it the worst phone possible. Two out of three Windows Phone current owners will never buy another again! This is absolute concrete evidence that this Microsoft-based system cannot thrive. If actual independent surveys of consumer opinions who own the devices are this dismal.
And on those 'but they get the best ratings on Amazon' bullshit peddled by Microsoft and Nokia defenders. Haha, no. We KNOW now how that was done, it was the Dirty Tricks department of Microsoft, now also used by Nokia, and their trolls, who rushed to spam all review sites with masses of unsubstantiated glowing reviews by supposed new owners - at ridiculous review rates at the launch of new phones - and by reviewers with no history of other reviews. They were plants, they were paid for, they were Microsoft smoke-and-mirrors squad who were behind those fake news. No, the independent reviews of actual Windows Phone users overall, and of actual Lumia users at the Nokia side - have been consistently horrid. Consumers hate the smartphone at unprecedented levels. Yes, there is the occasional customer who loves it, but most hate it, which is why retail sales pricing collapses weeks after new launches, and why resale values of Lumia series are in the toilet, and Nokia Lumia return rates are the highest recorded in Nokia history.
The Windows propaganda machine says 'but the newest release will fix all that'. We've heard it time and again. So once again, Nokia Lumia first edition, on Windows Phone 7.5 (and its dead-end migration path to WP 7.8) was a failure, yes. But this will 'all be forgotten' and 'all will be well' on Windows Phone 8, that just launched. Look at all the glowing reviews and how great it is. Fool me once, shame on you. Fool me twice, shame on me. We've heard this story so many times, we have to have learned by now. So, Tomi, do you have 'proof' that Windows Phone - version 8 - is a market failure then?
LATEST MKM CONSUMER SURVEY
Yes we do. MKM has JUST released a consumer survey that discusses very specifically Windows Phone version 8. The survey was part of their consumer survey of mobile phone brands in the USA, covering 1,500 US consumers (and before you bitch about the number - that is a large consumer survey, statistically relevant, usually consumer surveys of more than 1,000 respondents is considered very reliable - if you don't know why, go take a basics 101 course in marketing research and statistics).
MKM found that US consumers love their iPhones and Androids, and intend to buy more Samsungs, Apples - predictable stuff. But lets drill down and see what MKM found out about Windows Phone and Nokia. Remember the movie Glengarry Glenn Ross? The one with Al Pacino as the ace salesman who sells worthless land in Florida, the movie with Jack Lemmon, Alan Arkin and Ed Harris among the other sales guys, and Alec Baldwin delivers one of the most memorable monologues in cinema history - "You see this watch? this watch costs more than your car." and "This month's sales contest first prize is a Cadillac. Wanna see second prize? A set of stake knives. Third prize is you're fired." (there were four salesguys so two would be fired by the end of the month) And the classic "ABC, Always Be Closing. Always. Be closing..." (perhaps the greatest movie about sales ever, written by Mamet)
Anyway, Alec Baldwin discusses the two golden rules of sales, ABC and AIDA. ABC we saw, AIDA is Attention, Interest, Decision and Action. As Alec says "Attention. Do I have your attention, I know I do, because its fuck or walk. You close or you hit the bricks." (translation: you sell or you are fired). And so forth, I love that movie. Anyway, do American consumers pay attention to Windows Phone and Nokia? The survey said that 6.4% of smartphone owners ie 3.2% of all respondents had a Windows based smartphone, and 1.6% of all phone owners (3.2% of smartphone owners) had a Nokia branded handset. You would therefore expect that the awareness of Nokia's newest version of its OS would be known at something like those levels, and same is true overall of Microsoft and Windows. Attention. Do I have your intention? The survey found that 19% of respondents (ie 38% of smartphone owners) knew that Nokia has its new OS now as Windows Phone version 8.
Bearing in mind that half of respondents do not own smartphones, and of those who do, the loyalty with iPhone and Android is very strong, this 19% of all US consumers, 38% of smartphone owners is a VERY strong number for Attention. It is incredibly strong, considering how poorly Nokia is used by US phone owners - only 1.6% of all respondents actually own a Nokia phone. Attention? Do I have your attention? Yes, Nokia launched Lumia - as CEO Elop promised - with the world's largest phone launch budget of all time, by a wide margin - over 3 times more money thrown at Lumia than the previous biggest launch ever. And that was then added to, by Microsoft's biggest-ever marketing support of its smartphone marketing, and that, added to by the carriers often doing their biggest launches ever. In the USA specifically, AT&T said its Lumia launch support was also its biggest phone marketing push of all time.
So 1.7% of US consumers own a Nokia phone, and only 3.2% of US consumers had any Windows Phone branded smartphone by any manufacturer, but a massive 19% know now - only months from launch - that Nokia has Windows Phone 8 available. This is what over-saturated marketing can achieve. There is nothing more to give. Marketing has done its job. Those who don't know either are utterly not in the smartphone market at all, or are already fully committed to some other brand and fiercely loyal to it (think iPhone owners standing in line overnight for their next iToy).
Understand what this means. It means, that no matter how many more Billions of money is thrown after Lumia marketing now, the attention of any conceivable addressable market has already been reached. There is nothing more that can be done by more 'marketing'. So lets move to Glengarry Glen Ross and Alec Baldwin's part 2 in AIDA. After Attention: Interest. Are you interested? And we have MKM asking that explicit question about Windows Phone. While only 3.2% currently have Windows Phone on their smartphone, but 36% said yes, they ware interested in Windows Phone. Again, the over-saturation of marketing and media has done its job.
Now, one in three Americans are intersted in Windows Phone devices, one in five Americans knows Nokia's Lumia series runs the latest Windows Phone 8 software. Currently 3.2% of Americans have any Windows Phone and 1.6% have a Nokia branded phone. How well is this interest and attention being tranlsated into sales. Third in the AIDA formula is Decision. As Alec Baldwin asks the salesmen being threatened to be fired - have your made your decision, for Christ? (meaning to go out and sell tonight, to try to keep their jobs). The numbers are low, this huge level of interest and attention, the future purchase intention HAS to be better. They know about Windows Phone 8, they have experience with past Windows, they HAVE to want the newer better system? Right?
MKM survey of what phone US consumers intend to buy next, finds that while 1.6% own a Nokia, 19% know Nokia has Windows Phone 8 now available, only 0.7% are willing to buy one. Yes. That is right. Less than one percent of US consumers have found the propaganda-brainwashing machine by Microsoft, AT&T and Nokia to be compelling enough, that they would be willing to actually buy a Lumia running Windows Phone 8.
ZERO POINT SEVEN PERCENT
Yes, 0.7% only. So lets start with Nokia US loyalty. Windows Phone was supposed to resurrect Nokia in the USA. This idiotic idea was pushed by Elop, when he abandoned the far bigger and faster-growing Chinese market - where Nokia held over 60% market share in smartphones and the highest loyalty of all smartphones - to pursue the far smaller US market where both Nokia and Microsoft were weak players at the time. Today China's market for Nokia has collapsed, is under 5%. Nokia before this silly Eloppian micromadness held 4% of the US market, it is now yes, 2%. After a year of selling Lumia, Nokia is still selling LESS in North America than it did before this idiotic plan was hatched by the Twin Evil Stevies and their microbrains.
But will Windows Phone 8 save Nokia and Microsoft now? No. Of EXISTING Nokia smartphone owners, those last suffering and most loyal fanatics that are left, when they see Windows Phone 8, they are running away at the rate of 55%. Yes more than HALF of all who still own a Nokia smartphone, after seeing Windows Phone 8, and based on their current Nokia (mostly Lumia but also some Symbian) experiences, looking at Windows Phone 8 - 55% of current Nokia smartphone owners say - never again.
THIS IS FAILURE
What part of No can you not understand, Nokia? What part of No, can you not understand, Microsoft? Oh, wanna see misery? Microsoft Windows home market is the USA. MKM asked US consumers are you interested in Windows on your smarpthone - this is Microsoft's home - and 64% said No! This is, and I quote Alec Baldwin from Glengarry Glen Ross, so I apologize for the foul language, but this is so clearly the point: "You can't close the leads you're given, you can't close shit, you are shit, hit the bricks pal and beat it 'cause you are going out."
All Americans know Microsoft and Windows. Two thirds of Americans have such a poisoned view out of personal experience with the Evil Empire, two thirds of Americans say to Microsoft, stay away from my phones! This is such enormous hostility that Windows can never become the third ecosystem, if your best market hates you this passionately. But yes, lets move on to the cruncher.
96% WHO UNDERSTAND IT, HATE IT
This is the key finding for anyone in any way interested in Microsoft, Windows, Windows Phone, Windows smarpthones, Nokia, Lumia, Nokia smartphones and the Nokia-Microsoft 'partnership'. 19% of Americans are not just interested in Windows Phone, but know that Nokia's latest Lumia series has Windows Phone 8 on it - yet only 0.7% are willing to buy one. It means, of those who know of this actual Nokia-Microsoft offering, 96% of US consumers who truly do understand it and know it - reject it! This percentage is now lower even than the horrid Symbian-to-Windows consumer loss that I reported here from previous consumer surveys last year. You remember this graph?
This graphic may be freely shared (note, this graphic is on previous consumer surveys, does not include this, even worse MKM survey now reported)
Yes, based on PREVIOUS stats, Nokia lost 93% of its loyal customers attempting the transition. Now, the future with Windows Phone 8 says that 96% reject Nokia. This is NOT a company that is 'improving' - this is a company going in the wrong direction, the customers are still abandoning the proposition.
When Bill Gates was in charge of Microsoft, the Windows smartphone market share was second best in the world (behind Nokia's Symbian obviously) and reached a peak of 12% market share about five years ago.. With Steve Ballmer in charge, bullying the ecosystem and scaring Microsoft carrier-partners, Windows smartphone market share had fallen to 5% by 2010. That is when Ballmer convinced his Nokia-pal and ex employee Stephen Elop to abandon the world's largest smartphone OS - when Nokia had GROWN smartphone sales in year 2010 by 52% in just that year, and grown more than Apple or RIM or Samsung - yes its true please check the numbers, Nokia grew more in 2010 than famed Apple, Samsung or RIM - and Nokia did this with Symbian, and did it highly profitably, with the smartphone unit profits increasing towards the end of the year, not diminishing. Nokia towered so far bigger than its nearest rivals, more than twice as big as number two - that Toyota, General Motors have never had such market lead in cars, IBM, HP or Dell (or Apple) have never had such dominance in PCs, etc. This all Elop threw away, to hop in bed with Ballmer and the Microsoftian Misadventure. What happened?
We heard the story. Sony said there is no demand by carriers for Windows Phone and abandoned the platform to focus on Android where all the demand is. Dell said there is no demand for Windows Phone and actually quit smartphones altogether. Motorola said there is no demand for Windows Phone and quit the platform only doing Android. Now again, we heard this February from LG that there is no demand for Windows Phone, and they are not bothering to launch Windows Phone smartphones doing Android instead. Samsung said the same, they now are launching Tizen for which there is big demand by carriers, and continuing with Android, but not doing Windows for there is no demand.
So yes. What happened? Major analyst companies like Gartner, IDC, MIC, Strategy Analytics promised us Windows Phone would have magically recovered to 15% or so by 2012, and clueless Pyramid talked of 25% or better market share for Windows supposedly passing even the iPhone by now. We know the story. Before this Nokia partnership, Nokia had 34% market share and Microsoft had 5% in 2010. In 2011, a year when Nokia mostly sold its suddenly 'Osborned' Symbian phones, its market share collapsed at a world-record speed falling to 16%. Yes, this was literally the worst collapse in handset history, including famed market collapses of the past such as Motorola, Palm and Siemens. How did Microsoft do as it waited for the first Nokia Lumia phones to be launched? Windows smartphone market share fell to 2% in 2011.
Ok, that was 'to be expected' as we awaited the saviour-phones, the superphones, the Lumias running the promised super OS by Microsoft, the brand new awesome Windows Phone 7.5 that Microsoft finally launched in late 2011. How did this partnership do in 2012? Nokia took its world-record-setting collapse of 2011, and managed to out-do it, by an even worse year, setting the newest worst-ever year in handset market collapse, falling from 16% market share to 5%. Yes. Stephen Elop created the world-record collapse of a market leader (by the way, this is not just in phones, it is actually the world record for ANY industry, cars, airplanes, TV sets, PCs, soft drinks, whatever industry you want, THE world record collapse in one year, actually) - and he then managed to follow up with an even worse world-record once again. And is there a silver lining to this? Did this 'sacrifice' and massacre of Nokia's market share result in corresponding gains to Windows? What was Microsoft's Windows smartphone market share last year? 2%
TWO PERCENT !!!
Before this partnership was announced, their separate market shares totalled 39% (34% Nokia, 5% Microsoft). Now after the Nokia Symbian migration is essentially complete, as we heard from Nokia at the last Quarterly results - what was this partnership's combined market share for year 2012? 5.4% (Nokia 5% and Microsoft 2% but 80% of the Microsoft sales were by Nokia). Microsoft before being poisoned by Nokia, had 5% market share, it now in 2012 had 2%. Microsoft before Windows Phone on Lumia launched, had 2% market share in 2011, after Nokia joined in, Microsoft's market share in 2012 was unchanged at 2%. This is total comprehensive failure by Microsoft.
For Nokia it is worse. Before Microsoft Nokia towered over its rivals, grew 52% in one year in smartphones, made huge profits in smartphones and had the highest consumer loyalty in the biggest markets such as China where it commanded 60% market share!!!! By 2012 after all the bad-will of the Microsoft misadventure - remember even Americans hate Windows so much, two out of three hate the idea of Windows on a smarpthone - Nokia's market share went into the toilet and was 5% for the year - and get this - its down to 3% by Q4 of 2012, so it kept crashing even as Windows Phone 8 was being launched at the time.
This is total comprehensive failure of the Windows experiment. I could have told you so, in fact I did tell you so. I was the most accurate forecaster of Nokia (by a massive margin over the next-most-accurate forecaster) and I was the most accurate forecaster of Windows (again, by a massive margin over number 2) for this silly journey. And I have reported here faitfully all major consumer surveys of this platform. And they keep promising us, that the next Windows version will cure all the problems. Oh? Windows Phone 8 was supposed to finally fix all the problems and finally be the answer to all that was troubling this partnership. Well, now we know.
MKM survey of US consumers finds that two in five smartphone owners knows that Nokia Lumia has this new Windows Phone 8 as its system. Yet of all who know it, 96% say they will not buy Nokia Lumia with the new WP8. Even of those last remaining vestiges of loyal Nokia owners, their experiences with Windows Phone have been so bad, that 55% of current Nokia smartphone owners in America refuse to buy another Lumia again, even as they have seen Windows Phone 8. Windows Phone 8 will not save Nokia. No, this platform is dead.
ACTING IN NOKIA'S BEST INTEREST
So, Nokia? All other Windows smartphone manufacturers have said that there is no demand for Windows Phone, or the demand is so weak, they don't bother to release new Windows Phone products. Even Nokia's CEO Stephen Elop has said that many carriers hate Lumia not because its a bad phone, but because they hate it that Microsoft owns Skype, that there is a reseller boycott that is against all Windows Phone manufacturers. Elop explained this at the Annual Shareholder's Meeting for Nokia last year. And departed Nokia Lumia execs have said so, and departed Microsoft Windows Phone execs have said so, that there is no demand - or that there is actually an active carrier/reseller boycott even, against Nokia and against Windows Phone. Elop has complained bitterly many times, that Lumia does not get resale support, that the phones are in the stores but the sales staff are not selling them (and remember, the Lumia series has a Nokia-record rejection rate/return rate and thus the sales staff obviously hate selling it). This retail 'reluctance' (if you don't like my word 'boycott') against Nokia has been verified in countless checks in countries from USA to UK, from Finland to France, from Canada to China. Again, its not that silly Tomi Ahonen has invented this problem - Nokia's CEO Stephen Elop has said countless times that the problem is at the carries and retail sales.
The REASON why Nokia's sterling credit rating when Elop took over - yes, Nokia was rated by S&P, by Moody's and by Fitch all as one notch below PERFECT, this at the time of global economic crisis when most Nokia rivals were reporting losses - the reason why those credit ratings downgraded Nokia, was not because the Lumia or Windows phones were bad, it was because there was no carrier support, the retail support was lacking. The ratings agencies listed this problem as the reason at EVERY downgrade, often as their only reason or the biggest reason. And you know the story, Nokia was downgraded so many times, today all three ratings agencies list Nokia as junk!!! Not because Windows Phone or Lumia are bad phones, its because the retail and carriers refuse to sell it.
So your retail refuses to sell your product. The consumers who have tried your new product hate it, refuse to buy more, and are returning it at record levels. The newest version is rejected by 96% of those who see it. What part of No do you not understand, Nokia?
Samsung is the world's largest smartphone maker. They also sell Windows Phone based smartphones. They are not foolish to make the world's most undesirable smartphone their only platform. They of course sell on Android and bada and are about to launch on Tizen. Huawei is the world's third largest smartphone maker. They also sell Windows Phone based smartphones. They are not foolish enoguh to make the world's most undesirable smartphone their only platform. Huawei sells most of its smarpthones on Androi and will launch smarpthones on Firefox and on Tizen. ZTE is the world's fourth largest smartphone maker. They also sell on Windows Phone. They are not foolish enough to make the world's most undesirable smartphone OS their only platform. ZTE sell on Android and will launch on Firefox too. Lenovo is the world's fifth largest smartphone maker. They do not bother with the world's most undesirable smartphone platform, they only do Android. Sony is the world's sixth largest smartphone maker, they used to sell Windows based smartphones too, but after they noticed its the most undesirable platform out there, Sony quit it and now only sell on Android. LG is the world's seventh largest smartphone maker. They also are part of the Windows partnership but found that there is no demand for Windows so they only do Android and will also expand to offer Firefox based smartphones. LG recently bought Palm WebOS as another more viable OS than Windows. HTC is the world's eighth-largest smartphone maker, and the launch partner for Microsoft's smartphones a decade ago. HTC has noticed the demand for Windows based smartphones is weak and thus has shifted most of its production away from Windows to Android.
Every rational, sensible smartphone maker, who is in the Windows camp, has concluded that because Windows has no strong demand, they need another platform - and EVERY smartphone maker who is in the Windows camp, actually DOES sell more ON THE OTHER PLATFORM.
Nokia was the biggest smartphone maker, it is now in tenth place. Of all smarpthone makers in the Windows partnership, Nokia is the only one that insists on putting all its eggs in this one broken basket. Nokia is the only one that refuses to sell phones on any other platform. Even as it sees, clearly, that its consumers are rejecting the offering. Even when compared to clearly obsolescent Symbian - come on, you'd think ANYTHING is better than Symbian - even when offered the chance to migrate away from Symbian, to take Windows Phone, Nokia lost 93% of those it tried to migrate over the past year or so. And of those who remain, two out of three hate Lumia so much, they will never buy another. Nokia would have a plethora of options, the totally license-free Android, the world's most popular smartphone platform - and Google was begging Nokia to join its platform two years ago. They'd love to have Nokia come onboard now. Or if not Google, there is Mozilla's Firefox, there is Intel's and Samsung's Tizen. There is the African Ubuntu project and there is the Sailfish OS, an evolution of Nokia's own projects in the past. Blackberry had said it is open to licence the BB10 OS, which is getting better response than Windows Phone by that same MKM survey now.
And thats before we think of Nokia's OWN smartphone operating systems. (Nokia has to pay a royalty to Microsoft, but Nokia's own OS platforms are of course royalty-free to Nokia!!!) Yes, Symbian is old, but even the old OS managed to provide magnificent award-winning tech, like that on the 808 Pureview that won all cameraphone awards last year. Yes, running on Symbian! I am not suggesting going back to Symbian, obviously but there is MeeGo and Maemo, two Linux based operating systems that Nokia developed, Maemo totally in-house and MeeGo with Intel. MeeGo is the only OS up to now, that in side-by-side user tests, across the planet (in those miniscule markets where Elop dared to release the N9 phone) was rated BETTER than the iPhone !!! Who makes a smartphone and an operating system BETTER than the iPhone? And what moron CEO refuses to release phones on that system?
And before you have time to say 'but but but' - used - 2 year old used - USED smartphones on an 'obsolete' OS, MeeGo, the rare QWERTY slider-variant to the N9, the N950 (the ultimate QWERTY keyboard smartphone of all time) - are now selling for obscene amounts. One N950 just sold for 2,000 US dollars on Ebay (1,499 Euros) - oh, and thats not the peak they've paid. Think about that for a moment, all you iPhone-fanatics. You want your 650 dollar iPhone 5 on a contract so you can get it for 179 dollars? And some weirdo takes a similarly valued (at the time estimated retail price range for N950 in 2011 wasa about 600 Euros) and pays 2,000 dollars for a two-year-old touch-screen/QWERTY-slider Nokia on that MeeGo operating system? Yeah. MeeGo the OS that was regularly rated better than the iPhone. Not Tomi's silly words here, some phone fanatics will go buy them at astronomical prices even when used - yet Elop refuses to let Nokia sell it anywhere??? And while the world would love more MeeGo phones that would sell at huge profit margins, Elop insists instead to push Lumia. By the Nokia smartphone unit that currently generates a 20% loss per Lumia phone sold? What is wrong with this picture?
Especially, if your current system is rejected by existing customers at the rate of 93% and new potential customers at the rate of 96%. There is no management logic to Stephen Elop. He is a Microsoft mole. He is so desperate now, he is embarrassing himself and Nokia by for example throwing a TV interviewer's personal iPhone across the room in a TV interview. He is pathetic for suggesting that owning an iPhone is somehow 'embarrassing' - it being the world's most beloved and highest-loyalty (and most expensive) smartphone.
If Elop was acting in Nokia's best interest, he would understand that Nokia loyal customers are now abandoning Nokia not because Nokia's hardware tech is suddenly bad, its because Windows Phone is comprehensively failing in the market. An authority no less than Microsoft Chairman Bill Gates has said that the original launch of Windows on smartphones was working fine, but then Ballmer messed it up so badly that the current Windows strategy cannot succeed. It has no chance of succeeding. Not my words, that is how Microsoft's Chairman described Windows smartphones currently. When this platform is not working, the smart thing is to offer customers some choice on some other platform. That is what EVERY one of the other Windows manufacturers is now doing, after they saw that Windows Phone had no support and didn't produce loyal customers. The only clueless f*ck CEO who refuses this very basic MBA 101 course logic, is Stephen Elop, who rather, when he HAD four smartphone OS platforms, killed all three that were popular and loved by Nokia users, and now insists on continuing with the platform that is most hated of all smartphone OS platforms out there. Yes. Windows Phone is the least loved, most hated, smartphone platform in production. No other Windows partner is foolish enough to put all their eggs in this broken basket. But Elop is. This is yet more proof that Elop is not acting in Nokia's best interest and must be fired immediately. And the Board for not firing him sooner, is clearly incompetent and must have its purge as well.
(Note - this article had a mistaken reference to a Kantar market survey in its first version, where I accidentially compared UK statistics to US statistics. I apologize. The mistaken reference has been removed)