How Bad Will Nokia Q4 Be in Smartphones? Worse Than You Thought

Lets start today with Nokia and smartphone market shares for Q4 now that the first Microsoft Lumia phones are selling in some countries. I was one of the first to offer quarterly forecasts for Nokia smartphone market share performance this year, right after new CEO Stephen Elop announced his Microsoft strategy on February 11, 2011. This blog article will give you a preview of roughly what to expect out of Nokia smartphone performance in Q4 of this year, the Christmas period.

When I wrote that long blog where I forecasted catastrophic crash of Nokia market share this year - and many experts said that I was being too harsh on Nokia - I also wrote that it was my 'best case' ie most optimistic scenario. I was proven wrong - the reality did turn significantly worse than even I was able to forecast at the time. As that February forecast was my 'optimistic' scenario, and we had disasterous Nokia results out of Q2, I did an update of my numbers which we can now call my 'pessimistic' scenario. What turns out - is that actual Nokia Q3 performance was almost perfectly the mathematical average of those two forecasts. See how it went for Q3.

Original (Optimistic) Forecast:

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 16% . . . . . . . . . 21.0M . . . . . 126 . . . . . Euro 2.6B Euro

Revised (Pessimistic) Forecast:

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 11% . . . . . . . . . 13.0M . . . . . 138 . . . . . Euro 1.8B Euro

Actual Nokia Performance

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 14% . . . . . . . . . 16.8M . . . . . 131 . . . . . Euro 2.2B Euro

Mathematical average of my optimistic and pessimistic forecast:

Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q3 . . . . . . . 13.5% .  . . . . . . 17.0M . . . . . 132 . . . . . Euro 2.2B Euro

Wow. That is not bad haha.. The average is so near, it could be used for actual management of the company haha, in terms of paying sales bonuses, approving budgets to hire staff, etc...  (and well, I tend to know this industry pretty well haha)

So. We don't need to make any corrections now for Q4. We can see that if we use the two forecasts, my pessimistic and my optimistic views, and calculate their mathematical average, we get a reasonably good short-term forecast one quarter ahead. So what do we get for Nokia smartphones in Q4?

My Optimistic (original February) forecast
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . . 12% . . . . . . . . . 17.0M . . . . . 116 . . . . . Euro 2.0B Euro

My Pessimistic (updated) forecast:
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . . 7% . . . . . . . . . . 11.0M . . . . . 134 . . . . . Euro 1.5B Euro

Mathematical Average and thus likely Nokia Q4 actual performance forecast:
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . . 10% . . . . . . . . . 14.0M . . . . . 125 . . . . . Euro 1.8B Euro

That is what the Elop Effect caused for Nokia in just over ten months. Nokia took a 29% market share and voluntarily destroyed it, and will end this year with 10% market share (all Symbian smartphones plus all Windows Phone 7 based smartphones plus even all MeeGo based N9 smartphones - combined!). This is by a wide margin the biggest destruction of a world-leading market share not just in mobile phones or telecoms or tech - in any industry ever! The unit sales have been literally halved in a year when the industry grew by far more than half. To hold onto what little it can, the Nokia average sales price (ASP) has fallen dramatically and Nokia's smartphone unit sales revenues per quarter have crashed to less than half they were at the start of the year. Obviously as I predicted, not just Nokia's smartphone unit went from making huge profits to making losses, but even all of Nokia was plunged into loss-making and as I predicted, the dumbphone unit would be the only (slightly) bright spot left for Nokia. It is, as I wrote on February 15:

Nokia will change to become only be a low-cost, low-brand provider, somewhat like the K-Mart of handsets. Nokia, the Easyjet of smartphones. Yes, Nokia will probably still be the world's biggest handset maker at the end of this year, but its quite possible Nokia will no longer even be the biggest smartphone maker.

I AM A NOKIA FAN (while not fan of new CEO Elop and his management style)

I love Nokia. I come from Finland, I have always had at least one Nokia branded phone in one of my pockets, often both of my phones have carried the Nokia brand. I am an ex Nokia executive and Nokia was so good to me, they made my first book an 'official' Nokia book, sold on the Nokia website. They have also kindly been a reference customer of mine as I became an independent consultant, what was now ten years ago. (PS for that nonsense going somewhere on the web that I was 'disgruntled' or 'fired' haha, in that case Nokia would never have used me in public to represent them or do events for them etc as they have for almost a decade).

I weep inside when I read that above prediction from February, and find it all came true. As we know, not just Apple has overtaken Nokia as the world's biggest smartphone maker in Q2, now in Q3, Samsung leapfrogged both and became the biggest smartphone maker and relegated Nokia to third place. Just before Elop announced his Microsoft strategy still in February of this year, Nokia was bigger than Apple and Samsung combined in smartphones. We have witnessed the world record in self-destruction of a global and market-leading brand. As I said from the start, this will be the standard case-study for MBAs of the future to study on how NOT to run a company.

Lets be clear, there are many who will say 'but Tomi, Nokia was in trouble before this.' Yes. Nokia was so much in trouble that yes, in the biggest economic crisis of our lifetimes, where all other full-portfolio mobile phone manufacturs like Motorola, Samsung, LG and SonyEricsson (by full-portfolio I mean obviously those handset makers who make both premium smartphones and lower-cost 'dumbphones' ie its not appropriate to compare a full-portfolio maker like Nokia to a pure smartphone maker like Apple or HTC or RIM, just as it would not be the right comparison of Toyota vs Ferrari or Porsche. Toyota's primary rivals are Ford and Volkswagen etc, and Nokia's primary competitors are Samsung, LG etc).

But yes, among full-portfolio handset manufacturers - all of the rest of them reported losses in their handset units at some point - only Nokia reported solid profits in its handset unit in every single quarter up to when Elop took over. Nokia which invented the smartphone and thus started at 100% was of course seeing a decline in its market share, that is inevitable in any competive situation as Apple now is witnessing with tablet PCs for example. But yes, Nokia did not perform perfectly through the troubled times of the economic downturn - when many companies went bankrupt (Shearson-Lehman) or needed government bail-outs (General Motors), Nokia corporation reported profits in every quarter bar one, when its networks unit pushed Nokia briefly into losses - even then the handsets unit was very healthy. Yes. Nokia's then-CEO Olli-Pekka Kallasvuo (OPK) did witness a dramatic loss of Nokia share price, roughly losing half of its value, over a 3 year period. And he was fired, and replaced by new CEO Stephen Elop who came from Microsoft.

WHEN YOU EXCHANGE SUCCESS FOR FAILURE, JUST CALL IT ELOP

In his first five months, executing Nokia's old strategy, Elop witnessed a growth in smartphone sales (yes, growth!) and an increase in its ASP (so the growth was not phony achieved by price cuts) and an increase in Nokia smartphone unit profitability (which means the increase in sales was not achieved by marketing gimmicks either). Elop had a hit phone in the N8 - a phone voted for example as the best phone in its class for the year 2010 in Britain - and the best touch-screen version of Symbian ever made. He saw his flagship business unit - the future of phones is smartphones - grow unit sales by 7% (yes, this is true! check the facts!) in just one quarter, and increase his average sales price by a Nokia-record of.. 14% ! (wow!) and increase the profit contribution of his smartphone unit by a staggering Nokia record of ... 64% !!!!

This was the proverbial goose that lays the golden eggs. He had growth in sales, increase in average prices and most importantly a record-setting jump in that unit's profitability. Where the smartphones accounted for a quarter of Nokia's handset unit sales, and a third of Nokia Corporation total revenues (remembering that the networks unit delivers also a third of Nokia revenues), the smartphones unit alone delivered half of Nokia's total profits. This was the goose that lays the golden eggs.

The Nokia owners rewarded Elop's early stewardship of Nokia by increasing Nokia share price by 11% since he took over, up to February 10, 2011. By any measures, Mr Elop was proving to be a success at the helm of Nokia.

Then he imploded. He initiated the Elop Effect (both announcing the obsolescence of his existing products like the Osborne Effect, and compounded his mistake by calling his own products rubbish like the Ratner Effect).

This is what Elop achieved. He took 7% unit sales growth per quarter (compounded it would be 23% over three quarters) - and instead he gives us a loss of 52% in unit sales. He took a growth in ASP of 14% per quarter (compounded would be 48% over three quarters) and instead gives us a decline of 14%. He took quarterly sales revenues of 4.3 Billion Euros (6 Billion US dollars) and instead he now gives us sales revenues of 1.8 Billion Euros for Q4 (2.5 Billion US dollars) so he has already cost Nokia 3.5 Billion dollars of revenues per quarter! (yeah, Mr Most-Incompetent-CEO-Ever is costing Nokia now 28 Billion dollars of revenues per year!) How big is that? In the current Fortune 500 Global issue, those abandoned revenues alone would have produced a company ranked as.. number 343 among the biggest global giants! Thats the size of Ericsson (globally) what Elop has destroyed already! Thats more than Time-Warner or Oracle or Lenovo or Alcatel-Lucent. For its 2010 revenues, 28 Billion dollars is slightly less than Google! Imagine your CEO destroying so much of your company, it wiped out the equivalent of Google!

And the biggest crime is profits. He exchanged a growing reliable profits unit which earned 548 million Euros (767 million US dollars) of profits per quarter ie 2.2 Billion Euros of profits per year (3.1 Billion US dollars of profits) and replaces it with ... a LOSS of 130 million Euro (182 million US dollars). That is of course an annual level of a loss of 520 million Euros or 730 million US dollars. The total transition means he's personally caused damage to Nokia shareowners worth 2.9 Billion dollars bottom-line profit already! (just in smartphones, I am not even talking of the other damage in other units).

How is this CEO allowed to remain in office? The share price? When the Nokia share price lost half in a three-year period, previous CEO, OPK, was fired. Now from its peak in February, right after Elop announced his mad Microsoft strategy, the Nokia share price has been in free-fall. It is now under 4 Euros and has lost half of its value in ten months! HP's CEO Apotheker was ruining his company and the Board promptly fired him. Why is Elop still standing? Is Nokia's Board asleep at the wheel?

NO SILVER LINING FROM MICROSOFT PHONES..

If there was some silver lining in this, then perhaps he should be allowed to remain in charge. But there isn't. Nokia has a legitimate hit phone, called the N9, running on Nokia's own new OS called MeeGo, which is highly desired and receiving global praise. The CEO refuses to sell it in most of Nokia's major markets.

What he instead is pushing is - due to his Microsoft legacy no doubt - the flawed Nokia Lumia 800 phone that runs the severely incomplete Microsoft Windows Phone 7 OS. The Lumia 800 is the only Nokia smartphone that they will sell this year. It is only available in a few countries and not on all networks there. The sales reception has been mixed, the pundit reviews mixed and the Lumia 800 is far from the saviour that Nokia hoped for. Most of all, because it is not sold in all Nokia markets and by all Nokia carriers/networks, it cannot hope to match the previous Nokia record for a new phone launch, the N8 from a year ago. (Please please do not be deluded about the mad Microsoft strategy. It will NOT rescue Nokia. A year from now, Nokia and Microsoft based smartphones will have something like 8% market share. Read this to understand why that is what we now face)

So be prepared for these numbers when Nokia reports in late January. Expect total Nokia smartphone unit sales to be very close to these:

Mathematical Average and thus likely Nokia Q4 actual performance forecast:
Quarter . . . Market Share . . Unit Sales . . ASP . . . . Total Revenues
Q4 . . . . . . 10% . . . . . . . . . 14.0M . . . . . 125 . . . . . Euro 1.8B Euro

Note also - if Nokia market share is this low, Nokia will fall further, definitely below HTC to fourth place, and might even fall below RIM/Blackberry to fifth ranking in smartphones. A year ago Nokia towered over all others. As RIM itself is also struggling, I cannot be sure if that happens, but you heard it here first, that Nokia will now during Q4 fall further from third place to fourth place at least, among world's biggest smartphone makers.

Elop has mismanaged his company in every turn he has had, not just in the mad Microsoft strategy but in refusing to sell his legitimate hit product, the N9, and even more criminally, refusing even to sell - while he is manufacturing it in small numbers - the sister product, the N950 also running MeeGo. I have calculated that if only those two phones were sold globally and only on normal Nokia channels - if Nokia was run by any sane CEO - Nokia would now be reporting a modest profit in its smartphones unit, not a huge loss. This is incompetence in management and sheer pig-headedness. Since the N9 and N950 are true flagship phones sold at far higher price points than the Lumia800, they would not even cut into Lumia sales, but because of the outwardly family resemblance of the N9 and the Lumia800, at least Nokia would gain a flagship product effect to have the N9 help Lumia800 sales. He is incompetent! The Microsoft Muppet.

Please understand what I say, and what I am not saying. I am not claiming Nokia was not in need of true changes, I wrote how to fix Nokia on this blog (the problems were in execution, not on the platform). I am not claiming that Nokia should have stayed with Symbian - I was writing long before there was a guy named Elop at Nokia, that Nokia was indeed on the right path to shift away from Symbian, to its own new OS called MeeGo - which we now can see is indeed the best OS out there, this side of the iOS on the iPhone (and some have even called the N9 running MeeGo a better phone than the iPhone! That is rare praise indeed).

So when Q4 results come in, we will hear that Nokia smartphone market share crashed further to about 10%, and Nokia's ranking has fallen to fourth place in the best case, or as bad as fifth place. The Nokia unit sales are literally down to half they were only a year ago - this while the industry had its best year of hypergrowth ever - and Nokia average sales prices hit a record low. The total revenues of the smartphone unit will be down to 1.8 Billion Euros generating only about a fifth of Nokia's total sales. And profits? The smartphone unit will continue to be in the red and all of Nokia will struggle to achieve zero profitability for the end of the year Christmas quarter.

That is what Nokia smartphone market share looks like for this current quarter. I will return with other thoughts about how the Nokia strategy is imploding in other ways, from sales management to brand to loyalty to ecosystem. But lets post this blog first.

Comments

[KPOM]

Two thoughts. First, why not Android? Samsung has done a decent job keeping up margins and driving volumes with Android, ranking second only to Apple in terms of profits, and ranking first in market share. Couldn't Nokia have done the same? Second, if they wanted more flexibility than what Android offered, then might a Windows Phone in the US strategy have worked, keeping MeeGo/QT in the rest of the world, and possibly eventually merging them by porting QT to WP7.5? It isn't as if they had much to lose in the US, anyway, plus it would have been a way to avoid the Osborne Effect (or as you call it, the "Elop Effect")?

[karlim]

Tomi, During earnings call HTC has forecasted that they will ship only 13 million smartphones in Q4. A month later they have issued a profit warning that their Q4 sales will come in 25% below expectations. Which probably means that they will ship only 10-11 million smartphones in Q4.

So even with your current estimate of 14M smartphones, there's no way Nokia will drop behind HTC this quarter

[roberto mulazzi]

in my opinion mr. Elop has an agreement to sell nokia to microsoft
That's all

who cares about shareholders...not him. Sure

[ej victor]

May not be that bad... as a nokia loyalist in the USA (yes I'm odd :o) I have replaced my N8/C7 combo with a N9 and E7-for work. Firesale prices and well I just had to have the N9-64gb may keep the shipments up.

[Tomi T Ahonen]

Hi KPOM, karlim, roberto and ej

KPOM - yeah, Android would have been better than Microsoft on very many levels. But a FAR more clever strategy would have been to keep MeeGo and what we now know is their Meltemi (Linux based low-cost OS to rival bada) - and using Qt tools, achieve partial compatibility with Android family. Any developer of Nokia/Meego/Meltemi (and Symbian and S40) would have automatically been able to create to Android too. Thus Nokia/Qt would have become the preferred authoring platform - gathering all developers to the Nokia side of the 'Android-MeeGo-Meltemi' ecosystem. Duh? The only OS Nokia has ever supported that is incompatible with that - is WP7.

karlim - thanks! I didn't notice that. Very good info. That changes things yes.

roberto - Yeah, that the Nokia Board is doing nothing - and none of the big corporate shareholders is critical of this, suggests there might be some level of collusion, but then the intended merger would risk being voided by US and European courts.. I can't imagine Jorma Ollila and Steve Ballmer being that stupid.

ej - fair points. But you do know that Lumia800 is a SEVERE step DOWN from N8 and N9, and there is no projected E7 equivalent in Lumia line (at least not yet). So then the question becomes - if you'd have to now downgrade to lesser phones by Nokia, would you still continue?

Thank you all for the comments.

Tomi Ahonen :-)

[guest]

> The Microsoft Muppet.

Hey! The muppets were fun. Elop is not.

[Jonathan]

Lee makes a very good point noticing that Apple changed the rules of the game with iPhone. The market is nowadays much more about software and apps than hardware.

Before the direct manipulation touch revolution initiated by Apple the biggest mobile operating systems were Symbian, PalmOS, BlackberryOS and Windows Mobile. All of those made an attempt to go to touch, but results were less than perfect. First Palm noticed that their old OS is not going to make it, and started from scratch (new kernel, completely new UI, new app frameworks, no backwards compatibility) and created WebOS. Microsoft did basically the same with Windows Mobile -> Windows Phone 7. RIM is in process of doing the same with BlackberryOS -> BBX (QNX based). Also Nokia came to the same conclusion after years of fighting with sub-par Symbian touch. They tried to make the transition with Maemo/Meego, but unfortunately the Linux project failed catastrophically last year. At that point their choices were really few, basically just Android and WP7.

It very interesting *none* of the old operating systems, designed for keyboard use, made it to the new age, perhaps with the exception of Android. It started life as a blackberry clone, but was very quickly adapted for touch use after iOS launch. Google had a good talent and *much* less baggage in terms of backwards compatibility, because first Android phones shipped much later.

[dr_zorg]

@LeeBase

"But...we can't convince each other. There is no way to know "what would have" happened."

That's not true.

If your casserole is smoking, yes, theoretically your house can catch fire and burn down.

But if you take a canister of gasoline and pour it all over the stove, then the result is pre-defined.

Elop's incompetence was that canister of gasoline.

So yes, we can say with absolute surety, than if it hadn't been for his criminal actions, Nokia would not have been in the mess it is in.

[Gijsbertjan]

I'v always read your blogs with interest and pleasure. I still do actually!
However, I think that you're wrong on this one. Nokia might have made it with MeeGo, but I don't think they'll go down now they're using WP.
In my country (Holland) Nokia has not been a "contender" for over two years. The normal consumer and the youth wouldn't even consider buying Nokia. Instead, they all went for Samsung Android devices, Apple iPhones or Blackberries.
Now with Nokia Luma's is the first time since the N95 that ordinary people are talking about how cool and beautifil the "new Nokia"is. Those people don't care that Nokia threw away a potentially superior OS, they don't care that Nokia lost big market shares (they were losing it anyway here, big time!).
All they care about is that the new Nokias are pretty, cool to be seen with (VERY important), and are able to do anything that the iPhone of their friend does, and often prettier.
Those people don't use Exchange servers, seldomly tether their devices and don't want a thousand options, they just want simplicity and status with theit phones.
Those are the peoples that build marketshare and spread mindshare. It;s happening here, I see it around me.
I ahve been contemplating between an N9 and a Lumia 800 and went for the latter. I've ahd it for two weeks and have been loving it ever since, and I'm halfway between a normal consumer and a power user.
I actually ahve faith it's al going to work......

[klma]

Good and interesting analysis but remove those "haha"-words and sentences, please.

[bungle]

While apps are great, apps do not change the markets. Apple didn't win the markets with apps or ecosystems, or portfolio of well connected devices. They did win it with hardware, or with the best touchscreen for that matter, and the OS that made it work smoothly. I do not believe that apps are the future. Software come and go, but new hardware is what makes the product. More, and different types of sensors, and other peripherals, better optics, better screens, faster internet, faster processors (can we replace computers with phone and a docking station?), better battery life, more and faster memory, more ways to connect etc. If you can be best in any of these, you can surely grab some markets. If you can be best in many. You will surely be the leader. These are in my opinion the killer features - the hardware. Well, the implementation has to be good too, and the APIs. The point is that ecosystems and software will always form around good products. And in mobile phones, good products mean hardware.

Nokia was on a right track with Meego (open software on a great hardware is always a good combination). Sadly they decided to throw the ax into pit. They raised the hands, and said: "we are losers, we cannot make this work. let the microsoft try it on our behalf". Needlessly to say what happens to these kind of companies. Yes, at first they lose their identity. Then they lose their mindshare. And then it's over.

[n900lover]

Gijsbertjan:

"All they care about is that the new Nokias are pretty, cool to be seen with (VERY important), and are able to do anything that the iPhone of their friend does, and often prettier.
Those people don't use Exchange servers, seldomly tether their devices and don't want a thousand options, they just want simplicity and status with theit phones."

And this is the reason why nokia with ms WILL go down. Ms primary and only goal with smartphones is extension of exchange & office & windows monopoly, that's why you have office app absurdly put on main screen of phone for general public. They aren't going to do anything that would harm their main business, luckily for them Elop is in fully on board and actually windows "ecosystem" for him is reason to go with wp7. LOL.

[n900lover]

http://news.cnet.com/8301-10805_3-20128013-75/the-inside-story-of-how-microsoft-killed-its-courier-tablet/

Nothing that isn't fully supporting windows & office monopoly is allowed to exist, no matter how successful or innovative it could be. Good luck with that, nokia.

[karlim]

Hmm, Tomi I looked at your predictions of Nokia sales since Feb. 11th, and it seems you have been wrong on every single one of them. First on the high side (Q1 and partly Q2). Then on the low side. To recap:

Q1 2011 - Actual- 24 million units. Prediction 29M (wrong by 5M units).
Q2 2011 - Actual 17M. Pre-profit warning prediction prediction 25M (wrong by 8M), post profit warning prediction (June 14th, Who's On First Post) 12-15M smartphones (wrong by 2-5M)
Q3 2011 - Actual 17M. Pre-profit warning prediction 21M (wrong by 4M), post-profit warning prediction 13M (wrong by 4M)
(I'm using your own rounded numbers)

Now you have a happy coincidence that the actual one quarter (Q3) Nokia numbers fall right in the middle between your optimistic and pessimistic forecasts. And on the basis of this simple coincidence you decide pat yourself on the back, claiming that it was a great forecast all along?! And then decide to use just this one coincidence, mathematical average, as the basis of your next forecast? Without any updates to your forecasting model and assumptions?

I'm 99% sure you will be proven wrong again.If only because your both previous models (optimistic and pessimistic) were based on the assumption/trend of continuous quarter by quarter decline of Nokia Symbian smartphone sales. The trend Nokia has decidedly broken in Q3.

Also, assuming 1M Lumia phones sold,you predict another 4M (23-24%) drop in Symbian unit shipments. A drop, that would result in huge revenue and profit losses for Nokia. And if there would have been such a loss in smartphone sales - Nokia would have known it already and would have been obligated to issue profit warning. Just like they did on 31st of May. One month before the end of quarter, a date we are well past now in Q4.

My prediction for Q4 sales - 18 million. 17 million Symbian and 1 million Lumia phones. Modest ASP increase, offset by a huge jump in marketing expenses

[eduardo]

It looks like we may get to find out exactly what Microsoft and Nokia agree to, and why

http://www.groklaw.net/article.php?story=20111208101818692

[karlim]

@Lee

For some reason I think this hardware/software thing is like a pendulum. There are times when hardware rules - pre 2007, then it gets good enough. Software takes over 2007-20??. Then it gets good enough too (Android 4/ICS is getting close). Then it's back to hardware, or something else, cloud?

@Baron95 - great observation about capital destruction :)

@Eduardo - That would be hugely interesting. Always wanted to know what Nokia/Microsoft contract says. But don't get your hopes up too much. I doubt full Elop testimony will be made public, and big part of documents produced will be blacked out when they are released to the public. And court has no interest to release them to the public, if they believe there are trade secrets involved. They just want to look at them to make up their own minds, and black out a lot. Still, might be better then nothing :)

[tango]

I just say that I love my Lumia 800.

Since Whatsapp is not available for Harmattan (it was an OS with lack of useful softwares and a dead ecosystem anyway) so I returned back the N9 and get the Lumia 800.

I must admit that it was a damn right decision.

[Patrick]

WebOS and Meego : both very good OSses, but both dead in the water.
WP7 was the only viable way for Nokia to survive.
I don't always agree with Elop's style of execution, but at least, his dicision to go to WP7 was a sound one.
Like Gijsbertjan said what's happening in the Netherlands, in Belgium it's exactly the same : since a long time, Nokia is becoming cool again amonst youngsters and selling very well because of the playfully WP7 user interface and the nice design of the hardware.

[E.Casais]

The remarks that what entices people to buy the Lumia phones is basically the look and

feel, not the intrinsic functionality and hardware capabilities, and the fact that

"tango" acquired an N9 without even investigating the availability of his preferred

software for it, makes me think that what we call "smartphones" must cater for a new

market segment that is primarily interested in good-looking, simple phones with

pre-defined (mainly social-networking) functions -- feature phones indeed.

WP addresses this market (looks, simple UI, focus on social-networking and

inter-personal communication).

Symbian has its roots in the PDA and business-oriented phones -- where rich

functionality, diversity of connectivity, advanced software features are a must, but not

necessarily ease of use (including the necessity to spend time configuring the device).

This is why previous Symbian fans are disappointed by the the turn of events; they are

more likely to switch to Android.

[cycnus]

Hi Tomi,

I was wondering what is your opinion on Nokia bundling their phone with XBox?

A couple of month/year back, Microsoft also have a great deal in Indonesia bundling their Windows phone with some microsoft product that make it a must have. But after a while, the user don't like the phone and sell it at less than 1/2 of the market price.... because no one don't want to buy it at even at 1/2 the price. Thus making it a bad image because real potential buyer were afraid that the devices is really bad.

I know that Microsoft said this time is different, Mango is magical. But I wanna hear your analysis on this effect on the market.

Thank you