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« Sherlock Holmes and the Hounds of the Basket Case: Clues on the trail of Elop, Ballmer and Nokia's Board | Main | Nokia Q2 Topline Numbers »

June 29, 2013

Comments

AndThisWillBeToo

@Tester
"Blackberry gradually eroded. It didn't crash immediately"
Que Pasa?
RIM (like Nokia) increased its sales throughout 2010 and had its all time sales high Q1 2011.
From there it went down, then back up to Q4 2010 figures by Q4 2011. Is that gradual eroding?

Please keep in mind that RIM was (according to Tomi's own numbers) SECOND LARGEST SMARTPHONE MANUFACTURER IN 2010! Back to same sales at end of 2011 and now behind Nokia.

So Blackberry did not crash? Riiiiiiiight...

Tester

>> Of course the award tells N9 is a cool device

As I understood it the N9 was also praised for its great user interface (a.k.a. software.) Lumia was always those ugly tiles nobody likes.

>>So Blackberry did not crash? Riiiiiiiight...

No, that wasn't a crash. A crash would mean sudden and abrupt change of market share. Blackberry had one last boost with BB7, but after that disappointed they gradually lost share each quarter.

Blackberry's performance is characteristic for a company having to depend on an outdated product for too long because they can't get the successor ready. Remember, Nokia started from roughly 2-3x the market share BB had and now they are on almost equal ground.

Louis

@Sander: "RIM did the opposite from what Nokia has been doing. RIM not in good shape either."

I am not so sure. The only kind of successful transitions of this type I can think of are by Apple, which went from 68k to PPC to Intel and also from OS9 to OSX to iOS.

Somehow the main thing Apple is good at is pitching the new thing as: (a) a seamless upgrade; (b) keeping something uniquely Apple about it.

I don't really think BB10 qualifies, and neither did Meego. Instead of building, in a timely way, off of the existing user base, they are basically late copies of the iPhone concept. Since there is no real continuity with them (or WP for Nokia), there is also no reason for the existing user base to migrate instead of switching.

Spawn

@AndThisWillBeToo

http://stats.areppim.com/stats/stats_mobiosxtime.htm

Compare Symbian with RIM. Open questions left?

> So Nokia was not over twice the size of its nearest rival, even though Tomi says that.

Look agan wt the link above. Feb 2011, RIM 14.52, Nokia 30.66, more then twice as much. Open questions left?

> But in brief, Nokia used twice the time to lose twice the sales.

Wrong, see link above again. Please give your sources in future.

tm

@Spawn, Your link gives Symbian 31.48% share in March 2012. Are you sure it's very reliable information? Or maybe it's collected from web usage, meaning that it's not the sales stats?

Collected from Tomi's blogs:
Q4 2010: Nokia 29% RIM 14%
Q1 2011: Nokia 24% RIM 14%
Q2 2011: Nokia 15% RIM 12%
Q3 2011: Nokia 14% RIM 9%

tm

Q4 2011: Nokia 12.6% RIM 9.1%
Q1 2012: Nokia 8.2% RIM 7.6%
Q2 2012: Nokia 6.7% RIM 5.1%
Q3 2012: Nokia 3.7% RIM 4.3%
Q4 2012: Nokia 3.0% RIM 3.2%
Q1 2013: Nokia 2.9% RIM 2.8%

So Nokia's decline started about from twice the RIM in Q4 2010. Deep dive in Q1 and Q2, but after that both has been sinking (or crashing? :) ) pretty much hand in hand.

Stoli89

Nokia's recent acquisition of 49% NSN is excellent news at the announced price (0.2 x sales). Ericson is valued at 0.9 x sales, so NSN was purchased at a tremendous discount, giving good value to Nokia shareholders.

Of course, this will deplete Nokia cash reserves in the quarter the transaction is booked, though fully consolidated cashflow from NSN remains accretive.

It does beg the question, is Nokia management confident enough in its cash flow going forward to have made this acquisition possible? Seems so.

AndThisWillBeToo

@spawn&tm
"gives Symbian 31.48% share in March 2012. Are you sure it's very reliable information?"

It's probably NTT DoCoMo selling over 23% of global smartphone sales, LOL!
That is why I took my unit sales numbers from this very same blog (Tomi's quarterly results).

n9user

@Luis: I cannot agree 100% with you that MeeGo is a late copy of iOS concept. Maybe in some areas because both are touchscreen oriented and in this respect some feature are similar. But the whole MeeGO UI experience is unique. Use MeeGo for a week and then you will find difficult to use Android. Even iOS. I used and I'm still using both iOS and MeeGo and also Android. From these 3 OSs and based only in OS user experience, in this moment I will choose MeeGo. If Symbian was assumed to be not very user frendly, MeeGo is the opposite. You have everything in just 3 screens. It is easy to wake up the screen, to switch on/off internet, see what's running, what's happening and so on. MeeGo indeed is something unpolished and now outdated but better than anything else in the market regarding the user experience. Some OSs are still copying features of MeeGo user experience - Windows Phone, iOS 7, BB 10, Sailfish. Please take all these as my opinion.

Louis

@n9user: The point isn't whether Meego had unique strengths. Let's just stipulate that it did. I am sure BB10 does too.

The point is that the dreamed-of unification of Symbian and Meego development was never really done, and how it was going to work doesn't seem to have been clearly explained. So, even if we assume that the failed Intel partnership was going to work out, the Meego strategy had a built-in problem: it was a radical departure from Symbian with no smooth path for users. Meego might be really nice, but it was requiring you to ditch all the stuff you had and liked on Symbian, and it didn't even have WhatsApp (which I think you can't really sell a smartphone without in Europe, and Symbian did have). Every single Nokia user was going to try Android or iPhone before going to Meego, and a bunch would leave. This is what's happening to BB10. It's not really that much closer to existing BB than iPhone or Android, so that is where the users are ending up.

Contrast this to the OS9 -> OSX or PPC -> Intel transitions from Apple. On the very first day, nearly all the old stuff users had would work. There were migration tools for users and developers, etc. Without this, the platform probably would have tanked instead of grown. Why? There was already a radical departure from OS9 or PPC with a hard upgrade path: Windows. Steve Jobs was basically smarter than to ask all his (few remaining, at the time for OSX) users to go try out Windows before deciding on OSX.

In too many of these discussions, it quickly turns to questions about whether the sub-scale ecosystems are "better" or not, in some arbitrary metric. But what they aren't is "different" enough to win against the similar but much better supported iOS and Android on their own. The way to grow one would have been like OSX: as an extension that moved a bunch of already happy users from one platform to another.

Neither Nokia or BB seems to have been able to do that, and without their user bases, don't seem to have a good position going forward.

KPOM

If Nokia had switched to Android in 2011 instead of Windows Phone, perhaps there would be an actual race. Instead Samsung has Android pretty much to itself and Apple has the most profitable part of the rest of the market.

Winter

"Nokia's recent acquisition of 49% NSN is excellent news at the announced price (0.2 x sales). "

Then the question is: Why did Siemens sell NSN at such a discount?

vladkr

Someone who bought Nokia shares just after Q1-2013 results could make a 30% benefit if sold right now, maybe even 40% just before the Lumia 1020 presentation... not bad in 4 months !

Nokia is really a cash-machine for traders.

AndThisWillBeToo

> Nokia is really a cash-machine for traders.

and poison pill to long time investors.

foo

> I have only met one person who thought his Lumia is cool. I simply downloaded Launcher8 for Android, started it and showed him that I can also have those tiles.
> Only then he realized that a good OS lets you chose the launcher you want and does not force these ugly tiles on its users.

...and Elop tried to convince the world that Windows Phone was the best option because Android wouldn't allow differentiation.

The *only* differentiation Nokia has now is the hardware, because the software was commoditized by Microsoft.

foo

@Sander van der Wal

>> The problem is not that Elop made mistakes, the problem is Tomi's theory that everything wrong with Nokia now is Elops fault, and Elop's fault only.

Nobody is saying that "everything wrong with Nokia now is Elops fault, and Elop's fault only".

Nokia had problems before Elop joined the company.

The problem is that instead of fixing the problems Elop made terrible decisions, starting with the infamous Burning Platform memo and followed by the alliance with Microsoft.

Picking Windows Phone as the only platform was fatal. Windows Phone wasn't a popular OS, wasn't ready at the time, and didn't allow any kind of differentiation!

The minimum we could expect from a sane person is to have a plan B. Not Elop whose plan B was that plan A must work.

It didn't work, and that killed Nokia.

vladkr

@Sander van der Wal :

When a patient goes to the hospital to treat a broken arm, and the doc gives accidentally or not a poison, that in the end kills the patient, would you still say that the doc carries only a little part of responsibility, that the patient could have died of a broken arm ?

Elop isn't the one who broke Nokia's arm, but he's the doc who treated it with poison and killed the patient.

foo

Tomi, any comments on this?

=== Wall Street is now convinced that Nokia will sell its handset business ===

Here is a puzzle: Nokia’s cash position has suddenly shrunk from 4 billion euros to 2-2.5 billion euros… but the company’s share price is higher than it was before Nokia announced it will spend 1.7 billion euros to buy full control in Nokia Siemens Networks. Wall Street is feeling perfectly calm even though it now looks like Nokia’s cash burn during the second quarter may have been as high as 850 million euros. Why aren’t investors freaking out about A) the cost of the Nokia Siemens Network acquisition and B) the confession about the handset division cash burn level during spring? At this rate, Nokia may run out of cash during the summer of 2014.

The most plausible answer is that Wall Street is now convinced that Nokia is going to sell its handset unit.

There is no reason to worry about the cash burn rate or current cash reserves if the phone division will be gone by Christmas. Spending nearly half of its cash reserves on the NSN acquisition was such a bold gambit that few people believe that Nokia would have made it without having a clear plan for exiting the phone business.

Is it really this easy? Can Nokia find a buyer for its phone unit even if the most motivated suitor, Microsoft, turned it down as recently as June?

http://bgr.com/2013/07/03/nokia-handset-unit-sale-analysis/

AndThisWillBeToo

To all in thread:
It is nice for once see actual debate (mostly healthy) going on in here. I cannot express how sad it makes me when Tomi gets back from traveling (I assume very soon as he is tweeting already) and starts deleting all the comments against him, no matter how many counter comments there are.
Sad, really.

Henrik

@foo
"The *only* differentiation Nokia has now is the hardware, because the software was commoditized by Microsoft."

Well you mean the only differentiation Nokia have is the Design. Microsoft is in control of the hardware specs

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