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April 24, 2014

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RottenApple

@Henrik Nergard:

Whether these companies produce Windows Phones is completely irrelevant unless they actually SELL them!

And so far only the Nokia brand has been able to move some volume - and I seriously doubt that this will change in the future.

On the other hand, there may be benefits for these manufacturers to play nice with Microsoft and at least pretend to support the platform. And if it fails, hey, is it our fault if the customer doesn't want these things?

AtTheBottomOfTheHilton

Well, I'm happy it is all over. We all knew this from the day Stephen Elop uncovered the news that Nokia would start using Windows Phone as their only OS, and he got his new name "The Trojan horse Elop". We got that one right from the very beginning.

Now, Microsoft has no interest of sustaining a site in Finland. The plan was to destroy Nokia and their phone business. They succeeded and they no longer need the company. Microsoft will gradually move positions to the US and eventually close down the site in Finland and a sales/support office will only remain. Some Finns will find a new home in the US but the majority will remain, looking for a new job. Many of these will find new jobs in international companies that have setup offices in Finland in order to take advantage of the availability of IT workers. Maybe some of them will setup new companies with new ideas. Death also means renewal.

To honest, I'm a bit dissapointed of the destructive abilities of Microsoft. They could have completely buried QT, they could have bought up their Navteq business, they could have bought up all the patents. Who owns Symbian now, Nokia or Microsoft? The loose ends will come back and haunt them.

Now Microsoft is back where they started with one competitor less but alone at the rudder doing the same mistakes all over again. As we have already witnessed, this industry can change very rapidly and Microsoft is not one of these companies that can adapt to new environments quickly so I suspect Microsoft will never ever really get a strong market share in mobile devices.

kakimati motatius

Nokia has a tablet before iPAD!!
http://www.digitoday.fi/vimpaimet/2014/04/16/nokias-dirty-secret-the-untold-story-of-a-production-ready-tablet-from-2001/20145483/66

@Tomi,

You were partially right about apple...
Quote (1): "But the peak is long past and as iPhones are premium luxury items at the top end of the smartphone scale and the growth is at the bottom end of the pyramid"

Apple is NOT premium luxury item anymore. Right now it's fall under HYPED product. This is the reason of apple current decline in market share. Lot's of people that were hypnotize into thinking iphone is the best realize that Android is better, and they MOVE ON. (http://www.gadgetcluster.com/2014/04/38-apple-iphone-users-upgraded-to-samsungs-galaxy-s5/)

Quote (2): "First, the Apple App Store was there before Android. It has a first-mover advantage that Android has been gradually creeping up on and will of course pass."

Apple has a few trick with big apps (game) developer. If they do apple way before android, they got free promotion. This is the reason that avid gamer choose apple despite of small screen for gaming. But Google has up the ante. (http://appleinsider.com/articles/14/04/21/apple-and-google-bring-fight-for-exclusive-games-to-mobile & http://www.macuser.co.uk/8931-google-and-apple-fight-to-woo-developers-for-app-exclusivity)


And about android
Quote (3): " I think its fair to say that carriers are concerned about Google's uprecedentedly large reach with Android"
Unlike Apple & Microsoft, Google let operator make their own app store. So I think the need about 3rd ecosystem is not really urgent.

kakimati motatius

@AtTheBottom

From what I read in this blog, I think Tomi think Elop is not a trojan horse, but simply a stupid CEO

kakimati motatius

@Henrik

Android is free, but google making money
WP is free, but microsoft is loosing money

and if WP is free, I think microsoft SHOULD NOT / CAN NOT ask android for a license fee. This could be called DUMPING.

Gozalo

Well, I see that distortion of FACTS are still rampant around here, specially when talking ECOSYSTEM

Coming from Tomi is shocking, he either wants to make his point valid or he wants us to read it so many times until we believe it to be true

Almost half of Android is already obsolete, you can not defend this point in Android's favor, and you keep talking as if handset sales equals ecosystem, this is false and far from truth, many android handsets are just SMS/call machines that are not part of an ecosystem.

Let's see Honeycomb backward almost 20% ( Useless junk)

41. until Honeycomb 45% ( junk with limited use)

4.2 to kit kat 33% ( kit kat just 5% vs 80 iOS 7)

You fail to mention that iOS will leap forward 2 versions ( from 6 to 8) while MOST of android stays behind, adoption of kit kat is so slow that when and IF 50% adoption rate happens iOS will probably be on iOS 9 or 10, several versions ahead... which means far more advanced and innovative in many ways.

And don't come up now with funny explanations, adoption rate are key for an operating system to move forward, develop and inspire innovation, if not ask Microsoft, to this date XP is a hot topic.

And then there are "KEY" markets, like Japan (over 50% iOS), USA (iOS leads in usage and market share) and now China that according to several sources 80% of all above 500$ handsets sold are Apple, which means that the strategy is working in apple's favor. Be a market leader in key places and in the segment that has money to spend, avoid al all cost the fate of those who gain market share in a bloodbath of price cuts... oops no mention " ever" of Sami sam sam as it can not do wrong.

Seriously you should focus on real market share, Kit Kat vs iOS 7 and going forward, no one is interested in yesterday’s tech


Mobile/Tablet Market share
http://netmarketshare.com/operating-system-market-share.aspx?qprid=8&qpcustomd=1


RottenApple

@Gozalo:

You are posting nonsense. The market doesn't just consist of the premuium segment. For people who are not interested in which company is ripping off its customers most efficiently there's other things that are important

Let's go through the points:

Even though Android's uptake of version upgrades doesn't mean that all those older phones are obsolete.

There's one major difference you fail to mention: iPhones which drop off the support list are truly and utterly obsolete. They have no real value anymore. That's why old versions disappear so quickly.

But I know many casual smartphone users which simply see no reason to replace their 3 or 4 year old phone. And what do those phones run? Yes, right: Android 2.3! That's why Gingerbread is not disappearing. These old phones stick around. Of course this user group doesn't really mean much to developers.

As for 'key markets' where Apple dominates, there's precisely 2 markets in the entire world and both are clear exceptions from the rule:

USA (Apple's home market with a very unique marketing situation that has been explained sufficiently in the past) and Japan (strong anti-Korean sentiments)

As for China, they may sell 80% of those overpriced stuff, but 80% of how much?

As for

"Seriously you should focus on real market share, Kit Kat vs iOS 7 and going forward, no one is interested in yesterday’s tech "

That's truly brilliant! Refefine the market to contain 95% of Apple's current market share and 5% of Android's current market share and declare that 'current'.

People are interested in the market as a whole, not a cherry picked subset that makes one particular company stand out.

Really, on what planet do you live? If the economy acted this retardedly there's be a disaster of catastrophic proportions.


As for the link you post, time spent surfing the web with a phone does not equal market share because it necessarily excludes 80% of what a phone is being used for (like actually making phone calls, listen to music, makin photos/movies and showing them to friends, etc. Again, typical Apple strategy: cherry pick one metric that's in your favor and declare it definitive.

Nobody denies that the typical iPhone user is using their phone differently than the typical Android user. But that has nothing to do with market power.

Besides, if you post a statistic, do not use one that clearly shows Android gaining and Apple losing! :D


John Alatalo

If you look for marketshare (Kantar Worldpanel) for Windows Phone in UK, France, Germany, Italy and some other markets it not so bad.
And I think the updated version 8,1 will have some impact at sales also. It bring a lot of features that have been missing at the platform, like a notification center and other stuff.
The app selection is much improved the latest months to.

Even pro Android/iPhone sites like The Verge and Engadget was positive in their Reviews.
So it will be very interesting to see the upcoming Q3 and Q4 results.

In my personal opinion it probably will surpass iOS in marketshare at a global perspective. Especially the low budget models like Nokia Lumia 520 and 521 are selling fine. And I suppose the new Nokia Lumia 630 and 635 will have a similar result.

Earendil Star

That MS decided to give WP for free is no surprise.

Anybody with some memory will recall what happened during the war of the browsers. As usual, MS was taken totally aghast by the surge of the Internet (at the time they were trying to set up a parallel and proprietary network). Netscape was the driving force behind this revolution and thriving. What did MS do? After copying Netscape (the original Mosaic code was available), it started giving IE for free, bundling it with Windows. Leveraging on its PC monopoly, it did not take long before Netscape was totally annihilated.

Never underestimate MS. They are not monopolists in the mobile space, so it's harder for them this time, but never never underestimate them. MS' strength lies:
- in its dominance over the corporate world ("convincing" a head of IT on what he should be buying is much easier and cheaper than doing the same for retail customers)
- in its patent trove (that now includes Nokia's). Android is free but many blackmailed OEMs are paying fees to the MS bully to avoid litigation, which makes Android more expensive (now) than WP
- in it's pile of cash and money (apart from mobile, its other monopolistic businesses are very profitable), which could enable it to endure years of losses in mobile
- in its ability to manage and eventually catch up with software that is barely acceptable and functional, even if it comes some decades too late, and only because of being pushed by the competition it will eventually try to stifle to achieve stagnation and poor UX again
- in many wrongly believing that MS no longer poses a threat to free competition given their current position in mobile

It will be a tough fight. During which MS will again resort to its unfair and possibly outright illegal techniques. Not that any authority will seriously bother, anyway. But: how will OEMs react? [If you remember when Google's Moto acquisition took place, much noise was made by the press about it and how that could have upset the OEMs. In comparison, that same press -possibly because it's not being actively paid to say so?- is rather silent about MS and Nokia, although this other deal constitutes a far much higher threat to OEMs...]. Will carriers be willing to transition from the frying pan of Apple to the fire of MS? These are the defining elements that will decide if MS' attempts will become failure or success.

But from the Nokia saga perspective, one apparently small fact is telling: why did MS decide to provide WP for free more or less on the day Nokia became MS mobile, and not much earlier?

No, it's not a coincidence. MS knew it would have to yield fees to build its user base. But it needed to close its Nokia acquisition at bargain price first. And the way the MS Nokia contract was built, it was based on an ingenious hidden imbalance between what Nokia was giving to MS (everything), and what MS was giving to Nokia (nothing, apart from peanuts to promote WP), especially if WP fees are taken into consideration. If WP fees had been taken out of the equation too soon, MS would have been forced to spend more on Nokia. Not something they really wanted to do.

We now know, that Nokia heavily paid for something (WP POS) that wasn't worth a dime, and which is now being given for free. Again, another proof of the clever undercover operation MS carried out, and total mismanagement operated by the Nokia board in 2010. Once again, it is much easier to get a company for free by "convincing" its board, than by fair competition on the market. MS knows it only too well.

Still, Jorma is silent. I bet you. What would come out if he were to admit any wrongdoing, would certainly not contribute to his popularity.

Peter

I guess many underestimate Microsoft. But I agree on the previous post.

And I also think the Nokia X (Android) line probably was know by MS before it was released.
If you look how much effort they have put in to get Android apps in that platform, but removing the Google stuff from them.
I have read at alredy at day one they had ported over 2000 apps to it.

http://developer.nokia.com/nokia-x


It will hurt Google if Nokia X will get a foothold in emerging markets with a Android phone with Microsoft services.
Then you are hooked in to a eco system.
I suppose Google/Android will continue to be nr.1 but I am sure Windows Phone will be growing the coming months. Especially when they rolling out Windows Phone 8.1

AndThisWillBeToo

Why is nobody here saying that it does not matter whether WP8.1 is good or not since carriers won't sell a single unit as it has in-built switch-to-Skype-call-on-the-fly functionality? (And carriers hate Skype.)

jj

@Tomi: "Motorola sold a surprisingly stong 6.5 million smartphones in Q1."

I bet most of those were Moto G models. So, Moto G sells almost the same than Nokia's entire Windows Phone portfolio?

John Fischer

@gonzalo and rottenapple

As for China, they may sell 80% of those overpriced stuff, but 80% of how much?

Well, this is interesting, i read a few days ago that the chinese market for premium phones will hit levels of over 20%. That's huge in terms of volume for apple.

Funny, some people love to call iphone overpriced but fail to mention that a plastic phone , the S5 goes for 650 $

The trend seems to favor Apple, keeping the 15% of the world population that will pay for premium services while the others fight on prices for the leftovers. Ultimatelly a fight that no one wants to win.

Those who just insists on market share should analize it by segments and specific markets. Porsche has Zero market share in africa but is making a ton of money in the markets that matter and deliver dream cars ( yes i know some one will say they are happy with their tata or a cheap plastic ford)

Where in the world is Tomy Ahonen

@John Fischer & @Gozalo

Your number is WRONG!!!

If 80% premium market in China is iphone, and 20% of smartphone market is premium. That means Apple rule 16% of smartphone market in China!!!!

Some known facts about apple market in China and other part of the world is the cheap iphone (NOT 5s/5c/5) make 70%+ of the sales number. You really are a dream on apple marketing dept!!

In short, apple only has less than 5% smartphone market in China, and the premium 5s/5c/5 is not even 50% out of that 5%. If you went to china you will see LOTS OF SAMSUNG GALAXY NOTE & S-series.

ExNokian

@jj
Regards to Moto G:
Well, Nokia's one single Symbian model 5230 (+ its sister models 5231, 5232, etc.) sold ~18M units in one quarter Q4 2010. That's 2M more than ALL iPhone models TOGETHER sold during that same quarter.

One. Model.

Of course we need to have context here:
iPhone costs $700.
Nokia 5230 had price tag of ~$100.
For full year 2010 over 80% of Nokia's sales came from Nokia 5230.
iPhone has margins that are multiple of the entire sales price of Nokia 5230.
Nokia 5230 profit margins are negligible at best.

Now let's bring in the Motorola:
Moto G is not low-end model, it is actually having good margins. (Not iPhone-level margins but still good margins.)
All three companies have sales that are dominated by a single model.
Two of these three companies have a solid business case.

RottenApple

@John Fischer:

Interesting. Numbers clearly tell that Apple is slowly losing market share in every market where they have been present for some time and 'the trend favors Apple'. That's really some strange math.

Let's be clear about one thing: Without the DoCoMo and China Mobile deals - two formerly untapped markets, the numbers would have been a lot worse. What we are seeing in these market is quick flooding of the empty reservoir of customers. Such events will inevitably skew the numbers a bit. And we have to be aware of one other thing: There's not much premium market left in the world.

Gonzo

@John Fischer, Tomi, Rotten Apple

Well, a quick look at numbers in china indicates that market share is no longer 5% but 7%, so… if that is not considered "growth" tell me please what is.

I do not "own or create" numbers, they are public information. So John seems to be more on the accurate side than Tomi and Rottenapple as apple seem to be growing in China. From 5 to 7 in % is HUGE. Specially if you sell just one category of phones.

But .. Apple con do no good, even when the numbers blow all predictions of doom and Samsung can do no wrong even when they keep on missing their targets

RottenApple

@LeeBase:

"without Docomo, China Mobile" -- oookay. So "without the two largest successes last year, Apple would not have has much success this year'. Yep. Brilliant analysis.


Ha, ha, ha.

What you, as the person my post was directed at, conveniently forget is that the iPhone is quite new for these carriers, meaning there is a massive spike in sales caused by a large number of people who had been waiting for this day. Of course this spike resulted in inflated growth. It doesn't matter how large these carriers are, their numbers for the last few quarters were most certainly way above what they'll be able to seel on a constant basis.

I clear English this means we have to wait for the spike to pass and things to return to normal until we see how things will really develop.

But why bother with such details if you can hail the power of the crApple, right?

Also, what Apple did in the past doesn't really matter anymore. They obliterated the old structures (thankfully so), but they are hardly the only player in town anymore playing by the new rules.

jcamdr

I checked today on the Nokia Swiss site and there is no Nokia-X anymore in the phone list.

I was in Thailand the last 3 weeks visiting a lot of cities from the north to the south. Nokia seem to run a large ads campaign for there Asha products. I have see a few shop with the Nokia-X in display, but you really have to search them.

What I have see is that a vast majority of young Thai peoples uses Android smartphone, and that the rest is essentially iPhone. The Line social network seem to be the number one out there. Some people still use there old pre-smart Nokia phone, but I suspect that there will buy a Android one when there will replace them.

I don't remember having see any Windows phone is the hand of a Thai.

WonTheLottery

@Leebase
"China Mobile is SLOWLY rolling out 4G and thus the iPhone isn't even available to everyone on China Mobile yet."

How much of Apple's increase in sales in China is actually really down to them punting out the 4S at a reduced price? You'll note Apple's ASP is reducing as well as their global market share.

Earendil Star

AndThisWillBeToo

"And in two years (max three), after a short-term profitability surge, he [elop] will tout his performance in revamping Nokia's fortunes, and then quickly decamp to his next position"

What you depicted is what normally would happen. Yet Elop's case is unique and contradicts your prognosis:

1) he arrived at a company that was profitable
2) there was no short term profitability surge after what he did, in fact he caused a long term induced plummeting in results (from profitability to loss making), leading to a fire sale of his company to MS
3) he is practically staying in his previous position, the only change being that his boss is now formally MS, which was also his boss before
4) despite apparently failing, he derived a huge windfall from this operation. Paying the bulk of which is his former and now present employer: MS

If you want to really understand what's going on, follow the money... don't be deceived by propaganda...

darkborn

@ 3rd ecosystem, Tizen and WP:
Idea, and consequently, support of Tizen was born at a time when threat of Apple/Google duopoly appeared (and WP show up).
"3rd ecosystem" as a buzzword appeared, as you know, from Elop, exclusively for WP. It indicated at very well known MS-specific "proprietary business rules", which, combined with similar Apple "proprietary business rules" (and mentioned duopoly threat), could become nightmare scenario for carriers etc.
Tizen was a way out of possible business trouble situation (declared with WP ecosystem & Skype).
Declining interest for Tizen is closely related to decline of "WP ecosystem" as a threat.
Google revealed that they wouldn't / couldn't hold Android exclusively as their proprietary puppy (so it is not real threat anymore).
So (for carriers): instead of Google, Samsung appeared as a last possible threat, because of dramatic rise (and part of market) it took. Samsung holding significant/major share of all "ecosystems" (excluding Apple) is something which should carriers worry about.

@ "low" numbers (market share) for 3rd ecosystem:
Just remember how Ballmer laugh at iPhone, at first. Then how Nokia understate Android & Google. Or how Blackberry messed up. Soon it became clear that smart-phone market is extremely volatile and unpredictable (at that time). And after dramatic rise of Android, it became clear if you miss starting moves of some big player (as MS is), you will soon depend of them - and maybe just one year after (from carrier point of view).
From Samsung point of view:
When MS & WP entered at Nokia, and after acquisition of Skype and after Google took over Motorola, Samsung (just one of many Android players at a time) felt that their position at a smart-phone business is under threat. So they bet on both sides (Apple ecosystem is out of the game - closed for other players): WP, and brand new system that will be outside of Apple-MS-Google control. It means Tizen.
But, when Samsung became major player at market, Tizen is not needed anymore as way out of possible business trouble.

John Fischer


@rotteapple
"Let's be clear about one thing: Without the DoCoMo and China Mobile deals - two formerly untapped markets, the numbers would have been a lot worse"

Funny, let me compete in the funny statement category

Lots of water between asia and america gives Samsung an edge, shipping companies took advantage of it and send many boat loads of phones to carriers in the USA...

Firestone, Michelin and continental are key to Samsung success, many truck were able to deliver phones to carriers in Europe, how could this be done without tires companies?

Now.....
Samsumg bases its marketing campaign, mega launch event and puts its reputation on the S5 , it all is about a 650 $ phone subsidized by carriers ... What? Wait.... Ummmm

Interesting, overpriced, subsidized, luxury crap .. Etc are not part of rottenapple' vocabulary, of course, it applies to Samsung, how could it be?

@ where in the world is Tomi
Read well please, i wrote " Chinese market for premium phones WILL hit levels of over 20% ". Not "ARE"

That WILLl happen, and that will bring Apple to levels of 15% market share in China.
TODAY everyone celebrates how successful Samsung is in china with around 20% marketshare of low end plastic phones, we know for a fact that the premium market belongs to apple. Given the choice of a 650 US plastic phone or an iphone, people have spoken, the high end segment is an iphone exclusive.

virgil

@Leebase, you're ignoring reality -there's blatant contradiction in your statements. E.g.:
- The moment the iPhone is available, no phone anywhere near it's price succeeds anywhere in the world above the iPhone. (You do know the Galaxy phones cost more than the iPhone right?).

I have one word: Korea. (and I don't care for justification, "but it's Samsung's home market" or whatnot, fact is that it's a counter-example). But there are others - e.g. Android utterly dominates EU5 (UK, Germany, France, Spain, Italy). In Spain in particular, Apple is virtually non-existent.

Yes, having the "luxury" end of the market is very profitable. It's also very dangerous - and if Apple market share decreases below 10%, I suspect that it'll become very quickly visible to all Apple fans, too.
You know why? Because the top-end of the market is made by definition of affluent people. They can afford the price of the switch if another thing becomes fashionable... the whole "trapped in Apple's ecosystem" argument is only valid for make-pretends, the affluent people would switch in a heartbeat even if it costs them 500$ to replace the apps.

If Apple clings on to the very top of the market, they may make a lot of money... but they're doomed to always have the best (most desirable/ most fashionable) smartphone.
One misstep, and they may never go back... because they have no "support base". Andoid/Google is technologically so far ahead in services, that it's not even funny. If the high-end ever switches to an Android phone (and likes it), they're very unlikely to go back to iOS.
That's the reverse of the medal to Apple's strategy: imposing limits and hard design decisions allowed them to move quickly, but they quashed diversity. They had the initial advantage.... but if Google/Android catches up (and they kinda' did already), it's virtually impossible for Apple to regain the upper hand, because they'd have to rethink their entire ecosystem from scratch.

One example: Apple fans have long derided the "android fragmentation". But where you see fragmentation, I see diversity. The Android dev is used to working with diverse devices, and Google has only gotten better to support the diversity in the ecosystem. With Apple.... not so much.
Now Apple is faced with the choice of supporting large-screens phones, or loosing that market to competitors. Same thing with the tablets - they have 2 form factors, will they add the third? Will it make sense to ever do a wide-screen (16:9) tablet? Or a 12-inch tablet? Will they eventually give up on the 4s, and leave the small-screen form factor to Android? Decisions, decisions.... their hardware can no longer be driven by what customer wants, but also by what their software can support.

RottenApple

@Leebase:

Sorry, but since there doesn't seem to be much sense in your reasoning, I doubt it needs to be followed. As I said before, what you conveniently ignored, Apple only grew because it still had some formerly untapped markets to flood.

Now that this is done, what next? Once they reach a saturation point there's not much left to do for them.

Sure, they can try and sell a new device to their users every two years, but as smartphones mature and their feature set will level out - just like with PCs - there'll be a decreasing need to upgrade phones at the same pace as in recent years.
The only way to even this out would be to enter new markets. But here lies the problem: Apple already has tapped all markets that have a viable premium segment!
And these developments are clearly visible in the numbers. While the entire smartphone industry grew by 35%, Apple 'just' grew by 20%. But you have to factor out DoCoMo and China Mobile to get meaningful numbers for their actual growth in existing markets. What can be said with certainty is that it's significantly below 20%.

One wonders how long the stock market will take to perceive this as a problem...

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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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