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« After short break, am back to blogging, many stories coming | Main | Smartphone Penetration Rates by Country! We Have Good Data (finally) »

December 08, 2011



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")?


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 :-)


> The Microsoft Muppet.

Hey! The muppets were fun. Elop is not.


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.



"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.


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......


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


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.



"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.


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.


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


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



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 :)


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.


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.


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.


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

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