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December 23, 2011

Comments

karlim

Mostly agree about how Lumia will fare in Q4 2011. The sales will be very small, especially if we compare them to how N8 did last year in Q4.

Where I do disagree is what it will mean in measuring the success in overall Nokia WP strategy. Doing 1:1 comparison between N8 sales (4 million in Q4 2010) to Lumia is not really fair.

Mainly Nokia sold N8 during the whole 3 months of Q4 2010, while it only started shipping Lumia 800 on November 16th. So the sales period we are comparing for Lumia is only half of what N8 had last year. Now - one can argue that sales in Q4 are heavily tilted towards the second part of the quarter, when Christmas shopping really lifts things up. But I think that pent up demand Nokia N8 had last year, and the huge preorders for it in Q3 2010 at least balance this out.

Just to equalize for the number of days in a quarter that both devices were sold - we have to do 2:1 comparison to be fair. Which will mean that if Nokia manages to sell 2 million Lumias, the comparative sales will be at least on par with how Nokia did with N8 launch last year.

Then we have the problem that Lumia is available in much lower number of markets than N8 was available in. Part of it is the lack of Windows Phone OS localization - you can't, or at least you don't want to sell a phone in the market where it is not localized. Part of it might be production capacity - to be able to ship Lumia this year Nokia wasn't able yet to retool its factories and went to Compal. Part of it is some skepticism from carriers about new Nokia device. Maybe something else too. But the fact is that the availability footprint for Lumia is several times smaller then that of N8 last year. And given that - even 1 million new WP devices shipped should be a pretty good number for Nokia.

Also Elop and Nokia management were always very clear with its promises about Nokia WP volumes for this year. They never promised big volumes and time and time again said that they do not plan for them this year. They always insisted that this will be an introductory, and limited availability launch, with real volume shipments starting next year. And if Digitimes reports are correct - they have only ordered 2 million or even less Lumias from Compal for this year.

Btw, Nokia Lumia 800 is not 25% cheaper then N8. N8 recommended retail price at launch was 370EUR, while Lumia's RRP is 420 Euro. (Both before taxes and subsidies). So Lumia is actually 50EUR more expensive then N8 at launch.

Bob Shaw

I think it is far premature to judge Stephen Elop or for that matter any CEO before they have a chance to implement a major part of their strategy. Mr. Elop as well as other Nokia spokespersons have repeatedly said that they plan for volume shipments of Nokia Windows Phone in 2012. In February, 2011 when this new strategy was announced, they were not even promising the launch of Nokia Windows Phone in 2011. We have to give them credit that they were able to launch Nokia Windows Phone in 2011, a remarkable fast execution by Nokia standards. I think one can only judge whether the strategy of Mr. Elop to go with Windows Phone has been the right one, a year from now.

Jo

lumia 800 also had more marketing that n8.

anything below 4m is utter failure. but i think it may barely do 1m. which is a huge failure.


considering how nokia n9 doing 250k just in Finland alone

Earendil Star

I believe astroturfing is not going on only on moneylife.in ...
Quite a lot of it seems going on in this blog as well...
Tomi should start checking IP addresses...

Although I do not know how MS's Lumia will fare in the end, I totally support Tomi's view on the issue.

Clearly THT Elop is pursuing the agenda of his own former employer: MS, not Nokia.

Furthermore, it is no way that Nokia can expect to be as profitable as it was in the past, being now reduced to be a mere MS OEM for a commoditized WP.

Many trolls complain about Tomi and the different commenters criticizing THT Elop: but noone replies on the facts being discussed, which are indisputable.

So far I have read of NO convincing evidence that the WP strategy was best for Nokia. In fact, only confirmation that this strategy is of no benefit to Nokia, and carries potential positives only for MS.

Yes, THE REAL BURNING PLATFORM WAS IN FACT WP, not Nokia's one.

Stating that Nokia had to go WP because it had no other option is ridiculous, but more importantly, mere value judgement, not a fact. Actual numbers tell a different story.

AtTheBottomOfTheHilton

This is what I think will happen when it comes to Lumia 800. Right now both Microsoft and Nokia is spending a lot of money on advertising the Lumia 800 and I it will initially pay off. Some people will buy Lumia 800 and other WP7 phones.

After a few months from now the novelty of Nokia WP7 will wear off and it will fail to sell in any significant numbers. If you look at the attraction of WP7, it is very low. I've tested WP7 and every time I've done so I have become bored or irritated and moved on. WP7 has in reality very little to offer compared to Android or iPhone. The market will default back to Android, iPhone and the rest after the eager attempt by Microsoft. Basically WP7 has no content and is uncomfortable to use. Every time I have to wait for those transition animations, I get irritated and beyond that eye candy there is not much to offer. MS has positioned WP7 too close to iPhone where MS has no chance to penetrate. Geeks will get Androids because that's where all the cool and powerful HW is. People who used Symbian will go to Android because with WP7 they would feel limited. Even Windows Mobile was more fun because you could do lots of hacks and there was a lot of available SW. Where is WP7 in all this? It's another Zune.

I think Lumia 800 will initially sell well because of the novelty and because it was released during christmas. After that the sales will decline quickly because people will realize which utter crap WP7 really is. In total after a year or so I think they were able to sell about 2 million units.

cycnus

Hi Tomi,

I think you should start writing a book about Elop and the fall of nokia. If the situation got worse and elop got kicked, or nokia in big trouble, your book could be one of the textbook for future MBA class. and could also be enlightenment guide for those who don't know what really happened inside nokia.

incognito

On to the second point, which you briefly mentioned in the comments, about the Qt and that Elop should've insisted for it to be integral part of the WP7. That wouldn't happen, no matter of the stakes, that's why it was never brought up in the negotiations. Microsoft would be crazy to allow that, and Ballmer is a lot of things but certainly not crazy. Qt is a direct and most serious competitor to Microsoft's own .NET, and where it particularly shines in comparison to the latter is - on hardware limited and/or battery operated devices. .NET is essentially a 'Javaesque' approach - do a fast bytecode compiling and then have an interpreter on the targeted platform(s) to run it. From the app-stack structural point of view, Android and .NET have plenty things in common and the biggest problem with Android is also the biggest problem with .NET-only WP - no native code execution (except in very special cases). This is also the reason why WP cannot really scale down to the more limited hardware (and thus lower device cost) while keeping its fluidity, and that is why Microsoft is so strict when it comes to hardware requirements.

Qt, on the other hand, has a totally opposite approach - it makes you recompile everything for the targeted platform in order to achieve as-close-to-native-as-possible execution thus being able to run rather complex apps on anything - from supercomputers to $50 set-top boxes. That's why Nokia's strategy with Qt was probably one of their smartest decisions in their recent history, and even more remarkable - they made the final decision in the period where they were practically making an error after an error. But that's inherently incompatible with the Microsoft way. There really isn't a viable way to reconcile the WP approach with Qt, without heavily cannibalizing the former that is. If Nokia insisted on it, Microsoft would go seek somebody else, plain and simple. They just cannot afford having a competitive development stack, which they don't own and/or control, flourishing and being promoted on their own, heavily controlled platform. If Qt was given the 1st class citizen place in the WP arena, one would have to be crazy to develop for WP in .NET - the former would grant you far better performance, much more wiggle room and cross-platform compatibility, which would be disastrous to Microsoft's own 'ecosystem'. It's far more serious problem than Apple allowing Adobe Flash on their platform, and we know how Apple went guns blazing against it.

If I am to put my tin-foil hat and contemplate that Elop is indeed Microsoft's trojan, I'd find it far more plausable that Elop was sent to destroy the Qt strategy than to destroy Symbian and Maemo/MeeGo. Qt is much bigger of a treat to Microsoft than some operating system.

incognito

And the third point, the one we completely disagree on - and I think I've already mentioned it in some of your earlier posts - the Skype vs carriers problem, or rather the hate of it by the carriers. I really don't think it's that much of a problem, and while carriers might hate it, they are destined to become pure data providers sooner or later, just as their older brothers from the landline telco business became essentially ISPs, so I don't think they would make their business decisions on hate towards Skype. They still charge a hefty amount of money for data plans, and with data caps and so on in many cases it is much cheaper to use the plain ol' voice plan than to use Skype for your calls (and in most cases you don't even have reliable enough network to have Skype replace your voice calls anyway).

Even if that was true then you often contradict yourself by saying that Nokia should've went with Maemo/MeeGo instead of the WP - both, the Maemo 5 of the N900, and MeeGo Harmattan of the N9/N950 have the best Skype integration out of all the OSes out there - they literally treat Skype calls the same way they treat regular GSM voice calls - if it wasn't for the icon showing up on the call screen you would not be able to distinguish Skype calls from voice calls. Actually, even Skype-dedicated phones themselves out there don't achieve that level of integration. So, if carriers would hate WP because of Microsoft and their recent Skype purchase, they ought to loath the N9. And let's not forget that the WP, unlike iOS, Android, BBOS, Symbian and Maemo/MeeGo, doesn't even have Skype support yet.

Long story short - I highly doubt that carriers hate WP because of the Microsoft ties with Skype.

Sander van der Wal

Ballmer would never sign a deal in which WP was commoditized by having Qt on top of it. It would have meant the end of Microsoft's Mobile strategy. And probably the end of Ballmer as Microsoft's CEO.

Elop's problems were bigger than Ballmer's so Elop caved in.

And the notion that Qt supports Android properly is a bit preposterous. A couple of hobbyists getting the code to compile on Android is very different from having a fully supported API that is as good as the native one. Nokia with all its resources did not manage to get Qt working properly on Symbian in three years. A bunch of random people get Qt ready on android ready in a couple of weeks? Yeah, right.

n900lover

I would also add that Qt is free source, and in the bad (for ms) "viral" way. I think hell freezes over before ms allows central library of their platform to be under gpl license.

cycnus

@n900lover

I agree that MS hates free/open source, and won't support/embrace it in any way. Thus QT is a virus for MS.

Earendil Star

@ Karlim, let's be frank, you are trying to bias judgements on Lumia' success vs the N8. This is why:
- launch was earlier for the N8, but in many markets it was not by much, e.g. the UK three weeks
- why preorders count for the N8 and should be disregarded for the Lumia? Do you fear that no-one preordered the Lumia?
- you are forgetting that the market is hugely larger now than it was in 2010. A proper comparison should consider this (as Tomi said) and adjust for the growth (+60%)
- the marketing arm behind Lumias by MS and its Nokia division is huge compared to what happened to the N8
- regarding the fact that the N8 could be sold in a much higher number of markets, that was a distinctive plus of the Symbian ecosystem: worldwide availability and localisation. It is a known WP weakness that it is only available and localised in a few markets. Just a further proof of how useless for Nokia (being strong worldwide but weak in the States) this WP move was. Lower Lumia sales would just be a fair reflection of this weakness, but do not worry: MS is working to reduce this handicap in the future by scavenging Nokia's know how and expand WP's locales.
- yes, you are right. The bulk of sales in Q4 normally come in the second half of the period, therefore much smaller advantage for the N8...
- MS and its Nokia arm were very clear on volumes... yeah, but the real winners like Google and Apple tend to surprise on the upside...
Summarising: stating that a fair comparison would be for Lumia to reach half of the sales of the N8 is ludicrous.
The correct comparison is the one Tomi indicated: 7 million Lumias is the number to be reached for it to be considered as successful as the N8.

But then, why all the fuss about Lumias and WPs? Everybody knows it will be quickly ditched by MS as soon as Windows 8 becomes available, possibly with no migration path from WP, as happened with WM.

@ Bob Shaw, in the current ITC environment things develop pretty fast... HP got rid of it's former CEO in a couple of months... they did not need to wait years to draw their own conclusions. Markets and success may turn in a matter of months, as Nokia is a living example of, and there is no time to waste.
Well, I know, for THT Elop things are different: you cannot go against what your parent company orders, especially when you are so successful in delivering what was requested: a couple of WPs on Compal, er, I meant Nokia hardware for the 2011 holiday season... THT Elop must be proud of his success and thus must be very relaxed: he achieved his goal and his bonus will be paid.

To all: when taking sides with THT Elop and the current Nokia strategy, or complaining about "rants" against THT Elop, do not just say: "it was the only move", "Symbian was doomed", "we should wait and see", and all this nonsense. These are personal beliefs, not explanations.
Rather, answer this question: do you think Nokia will ever be significantly profitable, as it used to be, by becoming a monopsonist OEM?
If the answer is no, then you have already understood why the current course of action by Nokia only makes sense to MS.

Patrick

- Fact 1 : The teachers of secondary schools that I spoke to recently in Belgium are saying exactly the same thing as the NOKIA executives : teenagers are starting to consider iPhones as "old dad" phones, thus "not cool".
- Fact 2 : As far as I know, only in the UK, the iPhone gained marketshare, in the rest of Europe, it lost marketshare. Why only take the examples that show how badly Nokia (read Elop) is doing ?

Patrick

@Earendill Star

"Everybody knows WP will be quickly ditched by MS as soon as Windows 8 becomes available"
LOL, then I'm probably the only person on earth who does not know this or does not believe this. Moreover, it makes completely no sense.

"Rather, answer this question: do you think Nokia will ever be significantly profitable, as it used to be"
For your information, the world changed A LOT since the iPhone and Android came on the market.
Yet, yes I believe that Nokia can become highly profitable again by continuing the path they started, if they use their wits and intelligence.
As big as before ? Probably not, since there is REAL competition now in the (smart)phone market, in contrary to the 10 years before the iPhone.

Pökö

Jo, your don't have any clue whats going on. N9 isn't "doing" any 250k in Finland. Where have you received such a false information.

And secondly, N8 sales is not comparable to Lumia sales. Lumia was launched in middle of November as N8 was on sale whole Q4. And N8 launch was worldwide as Lumia only in six countries. I would say one million Lumias for Q4 would be success.

Also Lumia800 has been out of stock in many stores so Nokia might even have some problems getting phones from Compal.

laowaijoha

Tomi, I think you need to give lumia some more time to show what it's capable of. The sources you quoted are in my opinion overly pessimistic, and a bit unbalanced, as there are plenty of reports suggesting the contrary about the initial success of lumia 800 in some european countries. I agree with karlim earlier that the comparison is unfair, and needs to be considered a bit more level-headedly.
You quote some dubious bloggings, for example about MS and Nokia employees astroturfing in India. That blogger has zero credibility and is extremely unproffessional in his methods and claims. What happens on some Indian no-name websites is of no consequence to either company, other than they should emphasize the following of their corporate code of conduct. Of course it makes a juicy story for technoblog vultures.
Tomi you have always had a provocative way of forming arguments but here you need to balance your sources out a bit and not rush your conclusions.

ノースフェイス

グランビルアイランドのゴールドフロアに韓国の民主主義人民共和国に北朝鮮最高人民会議の常任委員会はさらに、伝統的な朝鮮·中国友好と友好関係を強化し、さらなる対外経済関係の発展を拡大するために経済特区 "判決"を指定するグランビルアイランド(Granville Island)経済特区開発計画の承認、金床の決断を下した "と経済を開発するために外国投資を誘致するため、他のポートや産業分野で積極的になるようにこの機会を利用。

グッチ

亘理町によると、荒浜地区の堤防沿いは町の集団移転の対象となる「移転促進区域」に含まれていない地域も多く、建築制限もかかっていない。このため流失を免れた自宅の修復を終えた住民もいる。

Thomas

This is my first view to the Nokia Lumia launch and preliminary glances into its market share performance. And you know what? We have a mixed bag. Some good news, some bad news. Spoken like a true consultant,

petco printable online

Your complete financial picture must be looked at when you decide to make these decisions petco printable online if your senior high school grade point average is great, you may start looking at scholarships when you start college, perhaps with your junior year.

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