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« Obituary for OPK: Wall Street is a Cruel Mistress - Nokia searching for CEO | Main | The Potential for Smartphone Platforms if All Phones Become Smartphones »

July 22, 2010


Tomi T Ahonen

(I had posted some replies yesterday which got lost due to my slow connection. So having to try to repost the comments now.. its frustrating haha)

Am on comments from July 22

Hi Mark, kevin, Timo and wansai

Mark - thanks for the directed comments. We agree

kevin - good points but there are 2 other reasons. First is the 'employee phone' which is majority of Blackberries and Nokia E-series and many Windows Mobile smartphones - they usually have limitation on use of open internet sites and consumer apps. That doesn't mean they would 'not' be used like 'proper' smartphones - they have almost universally enterprise apps, and these are installed by the IT department. But they are not 'consumer apps' ie they don't show up in 'app store' stats. Same for corporate intranets, often behind VPNs and firewalls, which are just as valid internet use as someone who goes to the Weather Channel or Amazon or Google or Playboy. Its the same internet use, but these are business phones used for business internet uses.

The other thing is all-you-can-eat price plans which tend to be features in the most expensive mobile phone markets and only slowly spreading elsewhere. So the usage is at least partially related to what data prices are in effect, not just what type of phone you have.

Timo - fair points. Note first my reply to kevin in the above, and the Nokia installed base is currently about 300 million not 400. But yes, valid point. Now, note that the Ovi store is only ramping up and already doing over half a billion downloads per year. It is growing and as the gap between the Apple App Store and Nokia Ovi store diminishes - over time this is most likely, as most who have any kind of successful app will then seek variants to the other App Stores and the big platforms will get there faster than the small stores - soon most app stores will be 'cookie-cutter' copies of each other. Like a real store sells both Pepsi and Coca Cola. As the difference diminishes, the Ovi store gets ever more similar usage to the Apple App Store (and Android too). This big difference today is a factor of who launched first, not a sustainable qualitative difference.

wansai - thank you!!!

Thank you all for writing, I will return with more comments

Tomi Ahonen :-)

Timo Koola

Thanks Tomi for comments.

I agree on your basic assumption about appstores: eventually there will be perhaps 5 or 6 of Wal-marts (and perhaps couple of smaller more specialized boutiques), but all of them will carry Pepsi and Coke. And there will be no major differentiating factors among the Wal-mart. I find it hard to imagine that appstores will be major source of income to anyone, but any dollar they produce is good money, because it is from a device that is already out there.

I slightly disagree on Ovi's ramp-up. Nokia has had an appstore ever since 2002 (or was it 2001), couple of rebrandings and resets don't really hide that that Nokia's been pushing apps to consumers far longer than anyone with pretty poor results so far.


- Good point about employer-constrained phones, and slow spread of all-you-can-eat data plans. Didn't think of those 2 so thanks!
- Disagree that all app stores will be copies. The store linked to the phone that is innovating with easy-to-use experiences, will get new innovative apps first. Six to 18 months later, the remaining stores will likely add those apps when the phones catch up, but the first store and phone will be moving on to the next innovation. It's not static; it's as rapidly changing as the smartphones themselves are changing.

Tomi T Ahonen

(am on July 23)

Hi Less, Travis, Arief, John, kevin, Matthew

Less - I am sure there are many who think like that, and why not? The user has personal experience using that technology, and in this case has tried a 'rival' product or service and loved it. Of course its easy to then think the old brand is rubbish and has bad management etc. I'd think so too haha.. I would suggest this is happening even more with Apple than Samsung..

Travis - the annual cycle worked in slower moving industries like the PC business. But in mobile there are two further problems making it far worse - the second phone phenomenon - so if the world average replacement cycle is 18 months, for those with two phones - more than half of Europeans now have 2 phones already - the effective replacement cycle is 9 months. And the other factor, even worse, is that with most other tech, it is the older people who have the best tech (up to a point). But in mobile the best tech is with the youth, down to teenagers. Global stats, totally consistent stats, the best and most expensive phones are used by the youngest users and the older you get (on average) the lesser phones you are satisfied with. So if Apple does one phone per year, it is abandoning the whole second phone market and much of the youth, who go by 'whose birthday is next, what is the coolest phone we can next ask for, from our parents..'

Arief - thanks, very good info from the Indonesian market. And that obviously spells big trouble for Nokia who used to be the big market leader in Indonesia.

John - thanks haha, yeah, I totally agree..

kevin - thanks for that personal and detailed comment. And I appreciate getting to know you better as you are often here on the blog. Hey, about market share and financial performance. I have been editing down a big blog article about what the battle is all about. I hope in that blog to explain clearly to all, why there is a short term battle and a long term war, and that is the 'mother of all wars' haha. That is what I am tracking, but to understand who is gaining and losing, I do have to look at individual members.. So I hope to post that later today or tomorrow, please take a look at that and I think we'll have a different way to discuss this matter (and hopefully more of my readers will understand why I obsess about the market shares for this battle but not other tech haha)

Matthew - THANKS ! That is exactly what I mean. I have written a blog I hope to post today or tomorrow that talks about those issues in detail. You and I see the big picture exactly in the same way. There are little battles or 'skirmishes' for a given brand in a given quarter for some profit (or not). But they are part of the big war, the 'world war' if you will and that is for all the marbles... That is the really big game where Nokia is playing it more-or-less right, as is Google Android as the dangerous rival and Samsung woke up to it and is a late but strong challenger. That is the big battle. I think you'll enjoy that blog..

Ok, I will continue with more replies soon.

Tomi Ahonen :-)


Is Nokia losing marketshare?

@wansai A balanced view of a companies performance should include both marketshare and financial data. As Nokia so painfully demonstrates, marketshare dominance does not automatically translate into financial success.

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It seems high as an estimate for q2, as Google said in may they were activating 100k devices a day - that is roughly the same as i phone, which had 14% in q2... the 160k number came some time in June, towards the end of the quarter.

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