Are We Ready for the Numbers? Nokia Smartphone Market Share Projection 2012 ends year at 3% (updated)

Have you braced yourself for the shock? Lets do updated (downgraded) forecast for Nokia smartphone market share, average price and revenues for 2012. The quick version? Nokia's current 8% market share in smartphones, that was 29% just over a year ago, will fall to 3% by year-end. Nokia's smartphone unit will not return to profits and while the industry grows by over 50% this year, Nokia's smartphone unit revenues will be cut almost in half. But here is the how and the why.

(Note - there is update to this story at end, after Nokia shareholder meeting on May 3)

I called the Nokia market share collapse last year almost to the dot. In February 15, four days after the fateful Elop Effect of 11 February, when the existing data for Nokia suggested still growing smartphone numbers and many predicted foolish Nokia+Microsoft partnership performance of over 20% (one went as high as promising the partnership would produce 28%).

To understand how drastic my doom-and-gloom forecast was, please remember, at the time I made this forecast in mid-February 2011, the latest Quarter that Nokia had reported, had Nokia smarthphone market share at 29%, unit sales had grown by nearly 2 million from just the previous Quarter, to reach 28.3 million units sold in the Quarter. The Nokia smartphone Average Sales Price (ASP) had grown by nearly 20 Euros to 155 Euros. Nokia's smartphone unit revenues were 4.4 Billion Euros for the Quarter, profits jumping massively to 548 million Euros with a 12.5% profit margin. All the Nokia numbers were going up at the time I made this forecast. Yet I said on February 15, that Nokia's smartphone unit would end the year 2011 with:

TOMI FORECAST ON FEB 15, 2011 FOR Q4 NOKIA RESULTS

Q4 2011. .  12% . . . . . . . . . .  17 M . . . . . . . . 116 Euro . . 2.0B Euro . . . (loss-making)

ACTUAL NOKIA Q4 PERFORMANCE

Q4 2011. .  13% . . . . . . . . . .  19.6 M . . . . . . 131 Euro* . . 2.6B Euro* . .  (loss-making)

* without Microsoft bonus payment of $250M which is not paid by end-users and is not actual handset business income

Note, Nokia has established a world-record collapse of a global industry, Fortune 500 sized giant who led its market, in a one-year crash of its market share. This projection was made when there was no analogy in any industry ever, to learn from and use as a model. Never before has a global industry leader towering over its rivals, fallen so massively in a period of less than 12 months. Yet I essentially nailed the numbers. Nobody else projected the fall to be that bad, and on this blog you can go see how many people left comments saying I was being too hard on Nokia and too much the pessimist.

Now, how did I project this Q1 that just was reported? My forecast for Nokia 2012 numbers came on July 26, 2011, after we had seen one full Quarter of the damage of the Elop Effect and I forecasted this outcome of Elop's management to Nokia smartphone business unit. Note this was my 'Ultra Positive Optimistic Scenario' where I hoped Nokia Lumia would be well-received and Nokia smartphones unit would recover to profit-making by this Q1 quarter:


TOMI FORECAST IN JULY 26, 2011 FOR Q1 NOKIA RESULTS ('Ultra Positive Optimistic Scenario')

Q1 2012 . .   7% . . 11 M units . . $172* . . . . $1.9B . . . .  2.3% . . . $  43M profit

ACTUAL NOKIA Q1 PERFORMANCE

Q1 2012 . .  8%** . 11.9 M units . $165***. . . $1.95B*** . . -32%*** .  $ -638M loss*** 

* original forecast split it out at $164 for Symbian, $180 for Windows Phone, their weighted average = $172
** preliminary market share estimate
*** without Microsoft bonus payment of $250M which is not paid by end-users and is not actual handset business income

Again, nobody else has published a forecast from the summer of 2011, of Nokia's smartphone unit sales falling to this low, market share to this low and ASP to this low (and revenues this low). But even I got it wrong, expecting better Lumia sales - I forecasted Nokia to sell 4 million Lumia in Q1, not the 2M it did, and in my optimistic scenario, I projected a modest profit. Yet out of any published forecast last summer, this was by far the most accurate for Nokia smartphones to Q1.

NOW HOW 2012

Now we have the first insights into Lumia sales and we can make a reasonable forecast for 2012 Nokia smartphone unit performance. This is my official forecast for Nokia smartphone unit sales and market share (and I will include for context, the 2011 numbers)

2010 Q4 . . . 28.3 M units . . . 29% market share

2011 Q1 . . . 24.2 M units . . . 24%
2011 Q2 . . . 16.7 M units . . . 15%
2011 Q3 . . . 16.8 M units . . . 14%
2011 Q4 . . . 19.6 M units . . . 13% . . . Lumia 600,000 

2012 Q1 . . . 11.9 M units . . . 8% . . . . Lumia 2 M
2012 Q2 . . .   9.2 M units . . . 6% . . . . Lumia 4 M
2012 Q3 . . .   6.8 M units . . . 4% . . . . Lumia 6 M
2012 Q4 . . .   7.4 M units . . . 3% . . . . Lumia 7 M

Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting May 1, 2012
The above may be freely shared

Note, by the end of 2012, essentially all Nokia smartphone production will have shifted to Lumia ie Windows Phone based smartphones. Thus the 'comeback' for Nokia (and Windows Phone) can start in year 2013. That comeback starts not from Nokia's powerful position it had when Elop took over in 2010 of 33%, it starts from literally only one tenth that, at 3% of the smartphone market. No handset maker has ever survived this type of comprehensive collapse and it would be foolish to think Nokia could achieve that miracle.

The damage will continue to be brutal. In terms of full-year shipments, this is what it looks like:

Full year 2010 . . 100.3 M . . . 34%
Full year 2011 . .   77.3 M . . . 16%
Full year 2012 . . . 35.3 M . . .   5% . . Lumia 19 M total 2012 shipments

Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting May 1, 2012
The above may be freely shared

Now, what will happen to Nokia ASP and smartphone revenues and profits? Here is my forecast of the ASP (again with historical data)

Nokia corrected ASP (when Microsoft subsidy is removed)

Q4 2010 - 155 Euros (202 US Dollars)

Q1 2011 - 146 Euros (189 US Dollars)
Q2 2011 - 141 Euros (183 US Dollars)
Q3 2011 - 131 Euros (170 US Dollars)
Q4 2011 - 131 Euros (170 US Dollars) *

Q1 2012 - 127 Euros (166 US Dollars) *
Q2 2012 - 136 Euros (177 US Dollars) *
Q3 2012 - 140 Euros (182 US Dollars) *
Q4 2012 - 140 Euros (182 US Dollars) *

* Above ASP calculated with Microsoft $250 million US dollar marketing support payment has been removed, the above reflects actual market price that Nokia branded smartphones actually acheived per quarter

Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting May 1, 2012
The above may be freely shared

So for Q4 2012 the Nokia smartphone unit would have this kind of business:

Q4 2012 . . 7.4 M units . . 3% share . . $182 ASP . . $1.3B revenues . . -2% margin . . $26M loss

Thats my forecast. Oh, and Nokia's smartphone ranking will be no better than 7th biggest smartphone maker where it is 3rd now and was the world's biggest smartphone maker still 15 months ago. The most rapid collapse of a global market leader in recorded history of human economic activity. Quite literally, CEO Stephen Elop has been in charge of setting the World Record in destruction of a global brand. Or to put it another way, his management has set the world record in scaring away loyal customers. He set the world record in business failure. Now every day Elop is allowed to remain in charge of Nokia, he makes that despicable world record even worse. He took charge of Nokia when it was twice as big as Apple in smartphones, three times as big as Samsung. Already today, Nokia is half the size of Apple and a quarter the size of Samsung. By the end of this year, in smartphones, the future of Nokia and the whole handset industry, Nokia will have abandoned 9 out of every 10 customers it had. Going from 29% to 3% in two years. That is pathetic.

WHAT OF MICROSOFT

If you want to consider Windows Phone as the so-called 3rd ecosystem (in reality no better than 5th or 6th), then as we just heard, LG is now not continuing Windows Phone production either, following Sony's earlier pull-out of Windows Phone commitments, this 'Third Ecosystem' is proving a bigger farce every day. What can you add from the Samsung and HTC partners to the above Lumia numbers. Maybe half a million per quarter if we're lucky, more likely half that number. So your Windows Phone new sales are pretty close to what you see here. Microsoft will end 2012 selling perhaps 19 million Nokia branded smartphones, if you toss in 2 or 3 million more by all other Windows Phone partners, even 22 million will not get you more than 3% global market share of new sales and Windows Phone 'Third Ecosystem' would end the year with under 2% of the installed base of all smartphones. Does this smell dead to you?

UPDATE 3 May - After the Nokia Annual Shareholders Meeting - we heard Elop answer an investor question specific to carriers refusing Nokia sales due to Skype. Elop's reply was that some carriers will not buy Lumia but Nokia will offer other arguments to try to convince them. This puts to rest the silliness some have tried to argue, that there is no rejection of Microsoft Windows Phone, and Nokia Lumia series, specifically due to Skype. Nokia CEO has openly admitted to the Nokia Shareholders Meeting, that there is carrier refusal to sell Lumia which is due explicitly to Microsoft's acquisition of Skype. I told you so (back in last June!!). Case closed. And now, please re-consider all that idiotic speculation that Windows 8 might be better - it won't be. It will be worse, because already now, where Nokia Lumia series did not have Skype pre-installed, the carriers hate it for Skype. When Windows 8 has Skype - this carrier 'boycott' will get worse, not better for Nokia. Now. If you don't understand how big and bad this issue is for Nokia, Lumia and Microsoft Windows Phone (And Windows 8), please read this blog from last autumn, and now please accept, Nokia CEO himself has admitted this problem is real, not a figment of Tomi's imagination. Read Why Carriers Hate Skype.

Comments

[Eurofan]

@Rob-o-bob: Your cited analysis is out of date. It's from January 2012. Here's the most recent assessment posted by iHS Suppli on April 17, 2012:

http://www.isuppli.com/Mobile-and-Wireless-Communications/MarketWatch/Pages/Nokia's-Windows-Phone-Strategy-is-on-the-Brink-of-Failure.aspx

Two pithy paragraphs:

"Nokia's poor results with Windows Phone are not due to Nokia's failures. The Lumia devices have attractive and differentiated industrial design, in a smartphone market where every handset maker is struggling to stand out. Nokia shipped the launch devices on time and at attractive prices. Nokia's problem is that Microsoft appears to have stood still. A year and a half after Windows Phone 7's debut, it has changed little. In effect, the gap in features between Windows Phone and Android or the iPhone has widened and not shrunk as Nokia needed it to."

and

"When CEO Stephen Elop made the brave move to embrace Windows Phone, he said there was no plan B. Given the results to date, IHS Screen Digest believes that now is the time for Nokia to create a back up strategy to the current Windows Phone endeavor."

I think we can fairly consider this latest iHS Suppli statement a retraction of its earlier January optimism for Windows Phone.

[Earendil Star]

It's amazing how entrenched in some people the MS propaganda is.

Despite all facts indicating how bad the situation is.

And the iSuppli comment from April is interesting.

The responsibility, as Eurofan highlights, is clearly placed upon WP, still lagging the competition, and the lack of a Plan B from THT Elop.
Not on Nokia, who's hardware, albeit underwhelming, is nicely designed.

The huge lie, i.e. that MS was good at phone software and this was the only solution for Nokia, is finally being revealed.

Nokia is dead because it chose the wrong strategy (WP, the smallest OS in the wild), and put all its eggs in the wrong basket.

Bravo, THT Elop. Mission accomplished. Time to wrap things up and make Nokia officially the MS captive OEM it was supposed to become since inception.

Good night and good luck.

[Jagdish Chandra]

Hei Tomi,

Join Nokia....save the company!! for Finland's sake!

[Tomi T Ahonen]

More replies

Hi Poifan, Karlim, Red, cygnus, Earlie and PlatformWarrior

Poifan - good point, but I haven't seen you here on the blog a lot recently so you probably didn't know my full thinking. The Windows Phone platform is being rejected wholesale by the carriers worldwide (least obvious to see in US market). Microsoft itself is under comprehensive carrier rejection most markets because MS bought Skype and carriers hate Skype (see recent Telia news for example). MS own senior staff admit to carrier relations having been bad, and gotten worse. Meanwhile, on Nokia's side, the past strong carrier relationships by Nokia were poisoned by Elop. He's since fired most of his top sales guys and brought in inexperienced, mostly ex-Microsoft people to sales jobs, further angering the carrier community. You know from past discussions here on the blog that in the handset space, it doesn't matter how great a phone you make (unless you're Apple and have that fanatical Apple customer base) if the carriers refuse to sell your phone, you are going nowhere in mobile. So that is why I see no change coming to Nokia sales and marketing chances with Lumia, even when Windows 8 arrives. In fact, I have said in other blogs, the carriers will punish Windows 8 even more than Windows Phone 7, because of its closer integration with Skype.

I did model an improvement in unit sales for Nokia into Q4 but as the migration to Lumia will be about complete, there is no more Symbian user base to pillage and thus the overall Lumia growth will stall into Q4.

Karlim - very good points, please see what I just wrote Poifan here in the above. The carrier revolt against both Nokia and Microsoft will become even more hostile with Windows 8, because of Skype. Thus the new phones will not help Nokia. And that is, assuming, the new phones are given back to the old design crew at Nokia, not these silly Elop amateur designers from America who did the early Lumia series and are total global market failures. I am again optimistic and hoping Nokia learns fast and brings competitive Lumia phones to the market by year-end

Red - You have no idea how wrong you are. I am nothing if not loyal. I am a Finn, an ex-Nokia executive. Nokia is a reference customer of mine and has supported me for most of my ten-year career as an independent consultant since I left the Nokia HQ. I have literally wept when the worst news has broken about Elop's mismanagement. I would love nothing more than be able to say, I was wrong about Nokia and the company I love is back on the mend. I think you and I agree, that won't happen under Elop or with Microsoft. But if Nokia is to get rid of Elop, the sooner they do it, the better and healthier for Nokia.

cygnus - thank you for the kind words, my friend!

Earlie - haha, again, I have a hard time determining if you are being sarcastic (reading through all your comments here in the thread) but again, if you were serious, no, it would not be the right move anyway for Nokia, as I have written, to save Nokia they need to hire a CEO instantly trusted by the carrier community, meaning the new CEO needs to be a current CEO from one of the carriers/operators and ideally from here in Asia where the industry's strongest growth and biggest innovations are happening.

PlatformWarrior - That strategy for MS makes sense, and it is not mutually exclusive with the smartphone strategy, so MS should pursue both. But the scale of the markets will show you why that strategy is sub-optimal. The total new sales PC market, including tablet PCs, is about 350 million per year. Smartphones sell 745 million this year. The non-PC other format 'embedded' devices as you mentioned, when all are added together, internet-connected TVs, cars, videogaming units like Playstation Portables, etc - all added together are less than 100 million, being a far smaller segment than the PC sector. And even both added together is only half the size of smartphones. Next year, smartphones will be three times as big, as smartphone sales will hit 1 Billion per year.

Thank you all for writing, keep the comments coming

Tomi Ahonen :-)

[jiipee]

@Baron

Where have you seen Meego UI on N9? It has nothing to do with Vanilla Meego, instead it is Nokia's own design (well, part of it from Palm) created from scratch in 8 months. Nokia would have had a blockbuster in their hands, had they kept releasing Maemo devices alongside WP.

I dont have time to check the personne figures thorougly. However, Im quite sure you need to check your facts and conceptions. I'd say that majority of the personnel is working for NSN (~75.000).
Ericsson: 105.000 employees
Motorola Mobility 20.500
Huawei: 140.000
Apple Inc: 60.400
Sources: morningstar.com / Wikipedia

The easiest wayt to decrease personnel would be to outsource manufacturing, but would it be wise?

And dont get me wrong, I believe they have excess personnel and they should streamline the operations. But throwing figures in the air without any critical thinking is not fruitful.

[So Vatar]

@tg
you really are a strong Microsoft believer. But you seem to be unable to see the disaster Windows Phone is for Nokia. A year ago it was said when Nokia just starts to deliver WP, then many many WP phones will be sold, and everything will be gravy for MS and Nokia. Didn't work out that way, did it?

Now we hear that we just have to wait for W8, and everything will be gravy for MS and Nokia. Unless it will not.

I also hear very often that MS has the stamina and is therefore able to make WP successful. Like their gaming console. Also it is mentioned that MS understands Software and online services and such.

Well, here are some news for you: According to CNN Money MS's Bing service has been losing $1B per quarter. No change in sight. MS's online division lost $9B from 2007 to 2011.
And did not MS release these ill fated Kin phones just to take them off the market after a few days?

Yes, MS is able to subsidize their poor phone and online services performance with profits coming from desktop software. But there is just no guarantee, not even the likelihood, that MS will be a major player in mobile. Windows 8, 9 or 10, they are stuck on the desktop, you will see.

Now Nokia does not have a business subsidizing their money losing phone operations. They will be out of business faster than you think, Nokia won't last 7 to 8 quarters given their current trajectory.

And there is no plan b in sight. WP7 failed already. WP8 will be the savior. Fine, believe it. It still won't happen. It will be Kin all over again. MS will live. Nokia will be gone.

[tg]

@So Vatar Happy to see at least you read my comment. Somehow I can't see it myself and already thought Tomi had not allowed it.

You are very correct to question everything. I myself do the same. You are also right about Bing, I even read they might want to get rid of it.

However I remember Nokia saying that 'it will be a long a painful road' and heard nobody say 'it will all be gravy'. The gravy was in Symbian in the past and it sadly failed to hold it's own position. Once you realise that as a company you have to face the facts. And you can't put all your eggs in one basket which is why Nokia started Maemo. Maemo wasn't getting the industry support it needed, and so Nokia teamed up with Intel and it became MeeGo. That too was such a long shot way before the N9 was launched something had to be done. Until the time of the decision, the N900 was the last Maemo device and there was no MeeGo Device at all. Let alone that either Symbian or MeeGo could have done proper mobile/PC convergence.

So Nokia needed a good software strategy, one that was future proof. Android clearly was not it. Maybe earlier it could have been, but how could it go along with Android. For years we have seen tireless bashing of Symbian. Clearly to stay with symbian would have meant having to throw ever more money onto a sinking ship. So, something had to be done.

Would Nokia in 2011 opted for android, it would have presented it's customers with yet again another forked OS. This is something I believe will be a huge issue in the future, if not already.

So, then, an OS that is future resistant, has a predictable cost, is not riddled with IPR issues (android), and working with a strong partner, MS WP is actually a rational decision to make all things considered.

Save for all the anti-MS retoric that was popular 10 years ago. It's time to get over that and look at what future potential nokia has in differentiating itself. Skype may very well be an example of such an innovation, the one that Tomi say the operators hate the most. This may or may not be the case. Fact is that conusmers love it and use it often to meet their telephony needs from a computer. This is a fact.

But then lets look at the role of the operator, past present and future. Their role is diminishing and their services are more and more moving over the internet, and they look at their operators for fixed rates. Meanwhile they use Whatsapp instead of SMS :D

Let me put it shortly, if Nokia and Microsoft can't have a compelling story for the operators going forward, certainly android and iOS will continue to diminish the operator role anyways as their customers are using VoIP, whatsapp and whatnot. MS and Nokia have a rock solid patent portfolio and product portfolio together and it is, in fact, future fool proof, at least from a technical perspective. That perspective promises convergence between phone and PC and living room (TV, Xbox) like no other player can offer.

Also, to make money, you have to spend money. Both companies have pledged to so and are doing so andwill be able to continue to do so for at least several quarters, possibly even a year or two. So it is simply too early to tell how many of these Lumia's will get sold. Like with the iPhone, once AT&T decides it wants to make it a success it will snowball all around the world. Andearly signals are that Nokia WP is better received than any other Windows Mobile phone, ever. Even Steve Wozniak, co-founder of Apple is reportedly really really fond of it. Go figure.

So sales, market shares, it's all historical information already. What matters is what happens going forward. And since technology development moves at such high speed, I actually believe it's a very positive thing that Nokia developers and MS developers, combined millions of people, would start to learn how to work together for the greater good in this upcoming technology convergence.

So yes, in any ecosystem developers are in essence the enablers. Symbian had a huge community, but it lacked younger, new developers. MeeGo had a promising start, but this did not have a ripple effect and it remained small. Now, developing for Nokia smartphones can all be done through MS. The same software most of us have used for years, save for apple and linux users, who represent the minority.

I am in fact not a believer in MS, but I have learned about their profits, operating margins and balance sheet, and that makes 2 healthy balance sheets (war chests) going boldly after the market leaders.

Surely that is a preferable position to be in for Nokia going forward looking at the future, than to wither away slowly as it's fate was too closely aligned with Symbian.

Then about ecosystems. Look at the google ecosystem that is android. CTR's are declining every year and mobile CTR's are even lower and declining even faster. Targeted ads income is threatened by the success of facebook. How long can google afford to pour it's billions into the not-so-profitable development of Android? What if the ad revenue dries up? What about the many, many privacy advocates fiercely protesting the activities of the company? This does not bode well for an integrated converged consumer experience. In fact, it's damning for your ecosystem if yor customers don't even trust you as the provider of a service. No wonder so much of what the company tried to do with social has failed flat on it's face. ultimately, Google is not a technology company but a marketing company. And that flies straight in the face of the average Joe,who has already learned to ignore Google ads like a second nature.

Meanwhile, 70% + of the developed world is using windows/Office applications on a daily basis. Kids can not get through highschool without at some point having used MS software. hundreds of millions of people have hotmail accounts. I have had one myself since 1997, so for about the past 15 (1) years. What better ecosystem could you have for me? Apple you say? Allright, fine I give you that. But it requires a financial commitment from my side of thousands and thousands more than what it would cost to invest in my own computing needs to simply use windows. Google for that matter is not even an option, as the android OS does not run on your desktop computer, which is what the majority of the people use at work on an everyday basis.

So believer no. If anything I believe people are pretty much slaves of their habits, and they will go with what's easiest for them. It explains the success of samsung with android, because it was in a way simpler than symbian at the time, even when symbian was superior in its features. But Windows Phone is much more sophisticated user centric UI design than android these days, and if you think otherwise, I would love to hear your arguments.

[RobDK]

I think Tomi's estimates are pretty good.

Nokia and MS have been caught with their pants down by the speed that the mobile commuting space is moving, mainly driven by Apple and Google.

One needs to look at adoption curves for new technology. Horace Deidu at asymco.com has done some good analysis of this issue.

http://www.asymco.com/2011/12/07/will-windows-phone-compete-with-non-consumption/

Basically, by the end of 2012, when MS *finally* has a complete product (WP8) for the market, it is going to be too late. Between 60-75% of the addressable market will have chosen a solution in the wealthy, developed markets of Europe and North America, choosing either iOS or Android. The laggards left, although 25% of the market will be the most difficult to convert, and the poorest. Not a good target group.

Since MS does NOT have a good name with consumers (MS=Vista, bloatware, viruses, stodgy software at work), there is basically no one left who is going to look at their products.

MS and Nokia have been caught out by the speed of developments in the mobile space. Whilst their roadmap looked good in the middle of 2010, when their plans were hatched, things have gone too fast for them. Both MS and Nokia are slow and bloated.

I would also add that I believe Apple has totally wrong footed MS with the iPad, and that within a couple of years MS's dominance as a OS-supplier will be greatly reduced in the movement to mobile computing. Again, asymco have cove covered these issues:

http://www.asymco.com/2012/03/02/when-will-the-tablet-market-be-larger-than-the-pc-market/

[RobDK]

I meant to write 'mobile computing space' in the first sentence of the previous post!

[Rune]

Last year in May I had a chance for a 1-on-1 with Carolina Milanesi, who effectively is leading Gartner's global consumer devices research (the one doing their reports, forecasts etc http://www.gartner.com/AnalystBiography?authorId=16051). I worked in a corporate function at a global corporation, and when you do that, you get the chance to meet people like her.

Gartner had just published an updated 2011-2016 forecast, predicting Nokia smartphone share of 20% after end migrating to WP. I questioned her forecast, knowing I knew no one who used WP phones (they had been out for a while in my country), and in my 100K+ corporation the mobile strategy was all iPhone/iPad with Android and BB as backup. While I am no mobile expert, but knowing that in my world, no one considers Nokia to be competitive, and I see practically no one using new Nokia phones, I thought the numbers were optimistic.

My sceptism on the 20% forecast lead me to ask her, why she believed Nokia could achieve a 1-1 migration ratio. Her response was, that Nokia customers would buy Nokia because of the name (the brand), not the software. I guess, either she was wrong or Nokia has destroyed most of their brand value in the past 1-2 years?

While I personally believe Nokia is near dead in water in the global smartphone war, I think the 3% is too pessimistic. I can't say why, but it feels like total, utter destruction, and I really have a hard time believing that...

Btw when Lumia 800 launched here we saw a massive marketing blitz. After a few weeks the marketing ended, and it's done through carriers now, but nothing more than iPhone/Android is being marketed. I see very few people with Lumia's. I have friends working for large retailers. They say that Nokia Lumias are selling, but nowhere near the level of iPhone and Android (Samsung/HTC). Perhaps 1/10th is their guestimate with iPhone at more than 50% total share.

[BetterWorld]

Hi Tomi,

While it is true that now it's the operators that make or break handset businesses, operators will have lesser impact in the future. When all things &-everything can be commodotized in due course, they will no more than the one selling dumb pipes and related service. Internet technologies, availability of hot-spots, wiifi everywhere will affect operators businesses too.

Case: Free Mobile in France already causing headache to operators.

The question is how long can they (operators) continue to subsidize phones? When you find it difficult to make money with text, sms, and data services, would you then subsidize the handsets?

With the change in customers business model, the handset makers too have to think about adapting to a change in their own business model.

Game is wide open for handset makers (even for new players).

[Earlie]

Tomi is such a rockstar! He is my hero :D

[KPOM]

Nokia should have hedged their bets by going with Android and Windows Phone. I'm sure the $1 billion from Microsoft was tempting, but in retrospect it wasn't enough to offset the risks of going with a brand new platform.

Mind you, Tomi's insistence that Nokia would still be #1 if they had stuck with Symbian is mistaken. Instead of 8% share, they might have had 10% share, tops. Samsung's meteoric rise was fueled by the fact that they aggressively built up their Android portfolio and aimed at the high end where the real money is, and not just at the low end, where Nokia channel-stuffed their way to market share towards the end of the OPK era. The N9 stood no chance against the Galaxy S2, and whatever MeeGo phone might have been ready likely would pale in comparison to tomorrow's Galaxy S3. Meanwhile, Apple's juggernaut would still have continued almost unabated, particularly in markets like the US. Really, it's become a 2 player game now, and I don't see how sticking with Symbian would have prevented it. Going with Android might have (and only might, since look at HTC, Motorola Mobility, LG, and Sony).

[DS]

If operators are to be commoditized and selling just an internet access who will pump money into infrastructure?
- There are only 2 outcomes possible: the level of investment will break down due to missing revenues, meaning the evolution of mobile internet accessibility will halt
- The cost of data packages will skyrocket, given that consumers are not willing to pay that much for data (as opposed to voice and sms), the market will quickly saturate and stagnate at higher levels. The evolution of mobile internet accessibility will halt
Current projections of smartphone migration rates and siginificance of ecosystems is wholly based on assumptions that free lunch (LTE rollup witout paying carriers more) exists.

[KPOM]

My previous comments aside, I do think 3% is underestimating Nokia's share. The Lumia 900 is actually selling decently in the US. A WP for North America strategy might have been a decent "test" for Nokia last year, given that they had nothing to lose in North America in the first place. It would have let them experiment with Android and/or Qt while avoiding the Osbourne effect in the rest of the world (i.e. they could have given a public face that they would continue to support Symbian (which would have likely continued the gradual decline of Symbian) until such time that they were ready with new devices.

[sonytv]

I think Nokia could well do without North America. The population is just 200 million so its not worth selling your soul like Nokia has now done.

Its tough market with hidden operator interests and behind-the-curtains actions coupled with capricious consumer behaviour.

1 Bn Microsoft money is like a fart in Sahara, i.e. it disappers veeery quickly. Why Nokia is slaughtering the whole company for peanuts ?!?

Microsoft is not hip. Android is. iPhone even more is.

I DON'T GET IT WHY NOKIA ACTS SO STUPIDLY.

[vladkr]

7N Lumia on Q4 2012? That's optimistic, but why not...

it will cost a lot, but as Nokia is selling everything it can (Vertu, which by the way will switch to Android), there will be some fresh money for indecent marketing... that + the help of Elop's "Nokia Army" ;) (what a ridiculous concept)

There still will be problems:
- Samsung isn't really a sleeping giant, it's a very active one, and they will release several devices, including WP8 if it's available on time. And Samsung is not the only competitor in the game.

- The silly WP8 development will cost a lot, for only few revenue; let's face it, iPad and Kindle are popular thanks to the amazing and unbeatable amount of media available for it, WP7/8 just can't beat it.

- MS reputation is bad

- Nokia reputation is bad too now; it's like a car that was involved in a crash; one can repair it, repaint it, make it look brand new, it will always have this accident in its history, then potential buyers will always be suspicious (and then the value will always be low)

Elop is just making Nokia's death slower.

P.S. Sellers are not very motivated in selling WP: The most important Rogers store in Quebec doesn't even have fake lumia demos to show they have in stock.

When I asked the seller if they sell the 900, the seller told me they have few in stock, but they haven't received yet the fake plastic one to put on store's display (almost one month after its release!)

[A former Android owner]

@ Jagdish Chandra
I've never heard about Tomi before he was quoted on Finnish TV as a leading mobile analyst. Now after reading his past and present ideas, I don't think Tomi is much into constructive criticism or objectivity regarding Nokia. It rather seems like tabloid tactics; smell blood, and kick those already on the ground.

[vladkr]

@Former Android owner:

Can you please explain us on what Tomi (and not only Tomi actually) was wrong in his predictions?

It's not about kicking someone on the ground... that's about someone (head of Nokia) who doesn't listen to common sense and keeps on repeating same mistakes again and again; there is no need in kicking Nokia as it harms by itself.

[vladkr]

Skype may be disliked by mobile providers, it still has a good influence (from customer's point of view) on them:

In France, two operators Free and B&you (Bouygues Telecom) offer unlimited calls to over 40 destinations plans and Russian Bee-line and Megafon reduced significantly prices for roaming.