Postcards from the Digital Jamboree - Whats Happenin' in Smartphones Bloodbath?

Lets do an update of stories bubbling in the Digital Jamboree, Year Three of the Smartphones Bloodbath. I just gave the final grades for each rival in the Q1 results but there have been many developments with many brands. Lets look at some significant stories

SAMSUNG - 9 MILLION GALAXY S3 PREORDERS

So lets start with the king of the hill. Samsung announced its Galaxy S3 and it generally had very strong early reception. Now we heard last week, that Samsung has already taken 9 million pre-orders. That is massive. That is huge. That is beyond anything anyone else has said except - yes - it is now in iPhone territory. Expect the S3 to be a massive global hit smartphone. And there are rumors that Samsung's Galaxy production capacity cannot meet that immediately, it means that there would be considerable waiting periods for early buyers of the Galaxy S3 - which sets up Samsung very well for next year's Galaxy S4 launch haha. 

What more in a Galaxy near, near to us, right, right now? Samsung seems to be taking every step where Nokia has made an error moving away from the winning strategy, to something foolish, and rapidly doing the smart thing. Take naming. Both Nokia and Samsung used to have numbered phones some five years ago. Then in came Nokia's new Chief Marketing Officer, Keith Pardy, who came from Coca Cola - so he knew a bit about marketing. And one of his first decisions was that Nokia would abandon the purely numbers-based naming, and would introduce real names. That is the trend in all major tech by the way. And then came idiot-Elop who of course made his silly announcement that no, Nokia will not have any names, it will do pure numbers only. That didn't last long, now we have Lumias and Ashas and PureViews. Nokia reversed that idiotic Elop decision in I think 4 months. But Samsung once again took a case of Nokia mistakes and capitalized. We already had Samsung Galaxies and Waves etc. Now comes news, that Samsung has been registering new names for separate individual Galaxy models (like we already have for example the Galaxy Note and Galaxy Beam etc). Coming to a pocket near you soon: Galaxy Lunge, Galaxy Forge, Galaxy Victory, Galaxy Mission, Galaxy Wield and Galaxy Rivet. I think someone in Seoul has read my book (3G Marketing, back in 2004, my third book) which was all about mobile telecoms segmentation haha.. Good move Samsung! This is what Nokia should have been doing - and what Coca Cola's ex Keith Pardy advocated before Elop came along. 

And in other Samsung news, we saw the Tizen prototype for developers and the expectation is, that the first Tizen smartphones from Samsung would start to ship before the end of the year. As Tizen is a further evolution of Intel's Moblin, and its partnership with Nokia that gave the magnificent N9 smartphone that ran MeeGo - if we now take all that power, and add Samsung's insights and Tizen - and knowing Samsung wants to show it can now deliver as the top dog of our industry, expect the first Tizen smartphones to be fantabulous.

APPLE RUMORS

And from Samsung lets mention the patents disputes with Apple. The two companies that have a competitive yet symbiotic relationship, are stuck in intellectual property litigation in 9 countries. They are now meeting with some US mediation judge, to try to resolve the issues. Expect both sides to walk in with an army of attorneys. A lot of money earned by the lawyers, don't hold your breath that all disputes between Samsung and Apple would be resolved.

In Apple iPhone news, no news. Lots and lots of rumors about what will the next iPhone look like, when will it be released, and even what will it be called. I would be pretty sure, if there is a significant form factor update - the most commonly expected upgrade is the screen size to at least 4 inches, maybe more. And if so, expect Apple to name this new iPhone, as it will be very obviously visibly different, to be called the iPhone 5. But yeah, who knows. I keep joking that by iPhone 8 Apple will have introduced mind reading, iPhone 9 will have teleportation and iPhone 10 will give us time travel haha.. As to iPhone 5? I'd say in addition to a bigger screen, a good move would be a 12 mp camera and NFC wireless tech. Wireless charging would be typical 'Apple magic' but as Samsung already has it on the Galaxy S3 (and it seems to be delayed too), this might wait for a year with Apple where they could then add some really clever Apple-ish gimmicks to the tech. But yeah, its all rumors. We don't even know when the iPhone 5 would launch, and as I've been saying, sooner or later, Apple will need to introduce a Nano low-cost, lower spec variant for the Emerging World markets as the intro model to bring new users to the Apple experience.

NOKIA - MY MY MY, ITS ALL BAD

So we have Nokia news. I don't know where to start, what all to mention. There is so much doom and gloom now. Those promises of US sales success are now not supported by US latest statistics. Windows Phone does not see further decline in sales, so maybe the sales levels have stabilized (finally) but the early evidence suggests, there is no massive uptick in Nokia sales in the USA. Meanwhile Eldar Murtazin gave a very interesting analysis of what he thought of the launch fiasco of the Lumia 900 (when AT&T stores were closed). He said it was probably planned as a marketing spin to create positive hype, the mistake is too big to have gone unnoticed by both Nokia's USA sales and marketing, as well as Microsoft's USA sales and marketing (not to mention AT&T's own sales and marketing). Eldar suggests this was a manufactured 'problem' so consumers who were eager to get the Lumia 900, and who saw the AT&T stores were closed, would next go to online stores, and buy lots of Lumia 900 at Amazon (on an AT&T contract). This partly would explain, why the Amazon sales had the peculiar number 1 peak, but four weeks later Lumia 900 had fallen from the top 10. Then Nokia cut the Lumia 900 price in half, and it briefly climbed into the top 3 again, but now is down at the bottom of the 20th bestselling smartphone. Don't think the Lumia 900 will turn into an iPhone type success for Nokia and Microsoft. But remember all that press buzz we had two months ago, about how suddenly Lumia was America's bestselling smartphone? Bullsh*t. Obviously even using that very unreliable metric of Amazon, the news is bad. But Nokia and MIcrosoft very likely manufactured this 'mistake' to create that sudden sales spike - so they can spin the story. Good catch, Eldar! As I've reported here, the handset and its OS are plagued with problems, including that 101 list of what all is lost compared to normal rivals, even older Symbian smartphones.

Talking about Symbian and USA. Almost a year ago, Elop made that moronic decision to discontinue Symbian sales in the USA, even though Nokia was still selling - according to Kantar stats - 1.2% of smartphones AFTER the Elop Effect - running Symbian, in the USA. And Nokia did not abandon its dumbphone sales, so Nokia had to continue its full sales organization. But by stopping Symbian sales, Elop abandoned 1.25 million handset sales in the past 12 months and gave up 250 million dollars in smartphone revenues - yes he tossed away one quarter of a Billion dollars just on a bizarre whim. How stupid was that? He is now back. Nokia reversed its Symbian commitment, and officially confirms, Nokia is bringing the 808 PureView to the USA. How useful was that silly side-track? How much less will the 808 PureView now sell, after it is the 'resurrected from the death' smartphone? The 'Burning Platforms' Symbian that Elop himself now admits to Nokia shareholders what we all knew, of course his silly memo did hurt Symbian sales. Yeah, Elop knows best..

Why is this happening? We hear more about what carriers think of Windows Phone and Symbian. We heard that European carriers were so upset with Windows Phone, they were pressuring Nokia Board to force CEO Elop to extend the life of Symbian such as the Symbian Belle version that now powers the 808 PureView. As I reported on this site, Nokia's CEO admitted that carriers do not like Windows Phone, and he admitted at the Nokia Shareholders' meeting some carriers have decided not to carry smartphones running Windows Phone (whether by Nokia or other Windows Phone makers). That this admission spread into the public domain - thanks to Finland's biggest newspaper Helsingin Sanomat - and my translation of its story into English - has so spooked Nokia marketing communications, they now are waging a war against me and this blog, where Nokia's Director of Communications, John S Pope (also in charge of Nokia's Social Media Strategy) - an ex Dell guy, who also featured centrally in Dell's catastrophic social media disaster, Dell Hell - who has been accusing me on Twitter for fabricating quotes about Nokia CEO Stephen Elop - even thought I quoted a news story about Stephen Elop statements to the shareholders in Finland's biggest newspaper.

Now the latest development is, that John S Pope had shifted from his original accusation, on Friday, when called out by many other technologists who said this is a silly war and not in Nokia's interest to make these baseless accusations on me. Now John S Pope doesn't accuse me of "fabrication" but now he accuses me of "twisted indirect attributions" and "omit facts" and "stretching of the word 'admits'". This blog posting won't be about the bizarre war John S Pope, Nokia Director of Communications has launched on me. I have already posted the first reactions to it in 'Electronic Echoes Part 1' and I will of course return with 'Electronic Echoes Part 2' and likely many more. The point I need to make here is - John Pope has now shifted from accusing me of "fabcrication" to "twisted indirect attributions". "omissions" and "stretching the meaning" of one word. That is not the same as fabrication. I expect a full apology from John S Pope the Director of Communications at Nokia, who accused me in public - on Twitter - of fabrications. And I will not honor John S Pope's latest accusations until he first addresses his first one, that of fabrication. He either shows me where on my blog I fabricated quotes about Elop, or else he apologizes. And this story has already been a stain on his reputation, on that of Elop and Ballmer, and of Nokia and of Microsoft, and cannot be in their best interest. The sooner John S Pope Nokia Director of Communications apologizes, the sooner we can move on, on this point.

But the relevant point, why I said all that, is now we know why! Nokia is engaging in a new, organized, planned war it wages in the media space. We heard about it from several sources. We have seen early evidence, such as Nokia and Microsoft employees being caught, going to blogsites under alias to post hostile comments against legitimate stories by writers who post bad reviews of Lumia series, as reported by the Guardian. How was this organized action possible? Now we know. Nokia has, yes, an official, organized war in the media space. And they use war metaphors. This is the quote, it is a: "Nokia Tool for Nokia Army Team members to use when visiting and supporting retail in North America." There is for example a 'Nokia Army' for which only actual Nokia employees can take part, which is intended to influence the in-store sales in the USA. What is this? Nokia (and Microsoft) is so much in an antagonistic position with US carrires, they have to wage a 'war' where Nokia partners like T-Mobile and AT&T staff cannot even see the tools or data, it is only intended, not to win customers for Nokia, but to wage a war against Nokia carriers/resellers !!! No wonder Ballmer was angry to find this story leaked, that the carriers hate Windows Phone. Nokia is waging a war against its own reseller channel !!! 

How is this done? We hear evidence from the court case Comes vs Microsoft where Exhibit 3096 includes this passage of how Microsoft creates illusion of independent experts to support their view - and that they deliberately will attack those with an opposing view (such as me now, and the previous examples such as discovered by The Guardian). This is Microsoft's social media strategy, something Elop was indoctrinated in. This is why John S Pope is attacking me now in public with those ridiculous charges. Read. This is Microsoft's strategy as in evidence from the court case as reported at Groklaw:

"Our mission is to establish Microsoft's platforms as the de facto standards throughout the computer industry.... Working behind the scenes to orchestrate "independent" praise of our technology, and damnation of the enemy's, is a key evangelism function during the Slog. "Independent" analyst's report should be issued, praising your technology and damning the competitors (or ignoring them). "Independent" consultants should write columns and articles, give conference presentations and moderate stacked panels, all on our behalf (and setting them up as experts in the new technology, available for just $200/hour). "Independent" academic sources should be cultivated and quoted (and research money granted). "Independent" courseware providers should start profiting from their early involvement in our technology. Every possible source of leverage should be sought and turned to our advantage."

Now it makes sense! Now we understand why John S Pope has suddenly been attacking me, for ludicrous charges, and then why he won't stand by his accusations, but rather invents more. (Thank you to our reader "togga" for discovering that passage in the court case files!). Now all of that makes so much more sense, how Nokia has shifted, as I have been calling it, with Microsoft (and Skype) as being the Axis of Evil. Yes, Microsoft is clearly the Evil Empire, as it continues with these nasty tactics. Now we see Nokia follows the same pattern, like with the Nokia Army - to actually wage war against Nokia retail channel! And also, all that now makes sense again, why all the utter nonsense stories we had when Lumia launched in Europe for example - remember the bizarre stories from the UK that supposedly iPhone sales were declining? And now we have this US generated bogus Amazon sales surge (and the Chinese sales is now also supposedly so good Windows has passed iPhone, haha, totallly bogus, but I'll deal with that when we get to Microsoft news). Now we know. It is planned mis-information in Nokia's war against the truth, while running exactly the playbook from Microsoft. This is Microsoft's standard way of fighting the info war - and it has clearly now also become Nokia's standard way of communications. Shame on you, Nokia!

And how? We already heard that Nokia is losing the dedicated Nokia-only retail channel of 400 stores in Russia (and losing it to.. Samsung!). Now comes news from India, that Redington Gulf, a technology distribution agent for Africa, has been terminated by Nokia. ????? What? Nokia sales are collapsing globally, in every market, and in this environment, Nokia would - itself - end a long-term distribution partnership that delivered sales to Nokia's most successful continent? What is going on? But yes, Nokia is belligerent again, arrogant. They were trying to bully Redington to go single-vendor distribution (???) while Redington has provided Nokia handset sales to Africa for a long time, but also sells other tech brands like HP, Acer, Cisco, Western Digital etc in the IT tech side. Nokia was the only telecoms brand they distributed to Africa. And inspite of this, where Nokia essentially had a monopoly, Nokia has discontinued this relationship very suddenly. What did Redington do? Like any smart company, if Nokia pulls out, who do you want in? Samsung! Redington will now switch to distributing Samsung phones in Africa. Will this result in Nokia losing even more sales in Africa? Yes. Will it come at a gain to Samsung? Yes. Is this yet another case of evideince of how Nokia tries to bully its sales channel? Obviously. And remember, in Africa 95% of phone sales are basic dumbphones, so this will hit Nokia's basic featurephone sales.

I've talked about the retail boycotts, one that started targeting Nokia, right after the Elop Effect last February, and the second one, that started exactly one year ago, when Microsoft bought Skype, that is targeted against all Windows based smartphone makers. That general sales reluctance (that I call a 'boycott') has been mentioned many times by Nokia and Stephen Elop, including Elop once again admitting its existence to the Nokia Shareholders' Meeting now in early May. We learn more about the retail problems from Eldar Murtazin who first quotes Greg Sullivan, Microsoft's Windows Phone product manager, who explains about the troubles with carriers. Greg Sullivan admitted problems last year, but his position was - according to Eldar's long article chronicling Windows Phone problems in its retail channel - that "as soon as Nokia begins shipping WP7 phones it would improve Microsoft's retail situation." (quote is of Eldar, not actual verbatim of Mr Sullivan). Eldar then explains why this is a myth, and how Nokia management is now assigning false blame to its own sales. Eldar writes: 

"Is about the myth that since Nokia is onboard with MS it will solve all the retail problems MS have been experiencing. It is also not true as Nokia is forced to work just as any other manufacturer MS has worked with. MS did not give Nokia any exclusive rights. And as far as the US market is concerned Nokia simply does not stand a chance against Samsung, the number one in sales. Unfortunately, these misconceptions seem to have rooted deep inside the company and are not associated with any particular manager. Stephen Elop, Nokia's CEO, even blamed sales associates for poor WP7 sales and I quote his words (January 2012): “want their commission and tend to only show phones they think might sell”."

I've been reporting many times about the increasingly poisoned carrier relationships and retail problems that Nokia has (which hurts all Nokia handset sales, not just Nokia branded smartphones) and also about ruined carrier relationships and retail problems that Microsoft has (which hurts all Windows based smartphone makers, including in that intersection of the two, obviously Nokia's Lumia sales). Here we have yet another instance of that problem identified and explained. It is exactly like Steve Ballmer said last September when he said Windows Phone sales were "below expectation" before Nokia's Lumia would launch. Ballmer and Elop hoped to change that with Lumia. And after Lumia? We heard all those super-positive early promises of being better than expected haha in every market (see below latest lies from China), but what did Stephen Elop just say now, six months after first Lumia sales started? Elop said yesterday to CRN in Australia that Lumia sales levels currently of 2 million were .. "below expectations" !!!!  

When will Nokia ditch Windows Phone? The carriers globally are rejecting Windows Phone and say in ever more loud voice they don't want it. This is in addition to sales failures, of product failures and design errors, of 101 consumer faults that make consumers disappointed with living with Windows Phone, and Nokia witnessing record-level returns of Lumia smartphones, meaning the retail sales staff now consider the Lumia series unsellable. So what next? Carriers already demand Symbian instead. And we have Deutsche Bank reporting that Nokia is being pressured to shift away from Windows Phone to Android (as reported by Swedish newspaper Svenska Dagbladet). And we hear from four more major carriers, as reported by OTR Global, and quoted in the IT Portal, that carriers feel that even Nokia's latest Windows Phone offering, the Lumia 900 is not competitive and they - the carriers - feel that Nokia will go bankrupt in a year. The story says the four carriers "no longer believe Nokia will remain a viable competitor in the global mobile marketplace." I would add, that as this consensus is growing, it means they all will shift, of course, away from offering soon-to-be-extinct Nokia phones to their customers. Who gains? Samsung of course!

Meanwhile Finnish IT magazine Tekniikka ja Talous has as its cover story (in its print edition) the story about the 'Riddle named Meltemi' - the paper says Nokia has to soon introduce this new Linux-based open source smartphone OS, if Nokia has any chance of keeping its share in low-cost handsets. I should note, Meltemi is Linux based like MeeGo and Maemo but not Windows Phone. Meltemi is open source like Symbian, MeeGo, Maemo, but not Windows Phone. Meltemi is compatible with Nokia's developer tools Qt like Symbian, S40, Meego, Maemo (and Android and Blackberry) either already are, or are supposed to become compatible soon, but specifically, Windows Phone is not compatible with Qt. If Nokia's future is Meltemi, and the carriers hate Windows Phone, why is Nokia still continuing with the failed experiment called Windows Phone?

BTW we also learned a little bit about the previous transition of power at Nokia HQ. Past Nokia CEO and just retired Chairman Jorma Ollila gave an interview to Helsingin Sanomat, Finland's largest newspaper, where he revealed some details about the original transition as CEO. Ollila announced in 2005 that he would step aside as CEO. His preference as successor was Pekka Ala-Pietila who refused the post. Then the Board interviewed six members of Nokia's Board, to find the new CEO - they considered Olli-Pekka Kallasvuo, Pertti Korhonen, Mary McDowell, Tero Ojanpera, Anssi Vanjoki and Kai Oistamo. They obviously selected Kallasvuo, who was named as CEO in 2006 and who proved a failure and was ousted three years later.

Incidentially what happened to these guys? Pertti Korhonen was Nokia's CTO. He left immediately after it was clear he didn't get the job, he joined Electrobit as CEO, then went to Ahlstrom as Vice Chairman and today is CEO of Outotec. Mary McDowell is still with Nokia as Executive VP of Mobile Phones. Tero Ojanpera left Nokia when Elop was selected in 2011 and is now running the Vision+ fund and is the Chairman of the TTY Foundation in Finland. Anssi Vanjoki left right after Elop was selected (as Vanjoki was also in that selection process, as a finalist) and is now the Chairman of Amer Sports and also on the Board of Sonova Holding. He is an investor with Valkee. Kai Oistamo is still with Nokia as Executive VP and the Chief Development Officer of Nokia. And Pekka Ala-Pietila of course left Nokia long ago, and is among other things, Chairman of Blyk (and kindly wrote the foreword to my sixth book, Mobile as 7th of the Mass Media).

So this was once Jorma Ollila's 'dream team' of top mobile industry executive talent. Now of that dream team that brought Nokia to 40% global handset market share, and a highly profitable smartphone unit, where Nokia's migration rate from dumbphones to smartphones was the best in the industry (among legacy handset makers, obviously, not counting pure smartphone rivals like Apple, RIM and HTC) and the unit that managed to be profitable every single quarter of the most difficult economic downturn in our lifetimes. And of that superstar team, only two remain. Perhaps here is one key to why Elop is able to mismanage his company so enormously, he has no safety net at all, there is nobody left to guide him with the knowhow that Nokia once had. No wonder he makes amateur mistakes and does his flipflops regularly, like now he did with Symbian and USA.

MOTOROLA NOW CLEAR FOR GOOGLE

The last obstacles to Google acquiring Motorola have been passed. Now the acquisition can be completed. So soon its Motogoogle or Googlerola..

HTC - FIRST TIZEN SMARTPHONE OUT IN 2012

Here we see more of that shift from Windows Phone to Tizen. HTC has released first info of their intentions to release their first Tizen smarpthone before the end of the year. Slashgear reports on a story from Taiwanese Digitimes about the first HTC smartphone to run Tizen. Tizen could be the hottest story at the end of the year, not Windows 8. Remember, Samsung's bada was launched at the same time as Windows Phone, and in the past 21 months has outsold all smartphones by all manufacturers of Windows Phone by.. 2 to 1.

DELL QUITS WINDOWS PHONE, ONLY DOES ANDROID (this is old news, but reported for the record)

I want to mention this item, while it is old news, because I missed it in December. It is a very significant development, as we've already seen Motorola, Sony and LG all cut Windows Phone development totally and Samsung shifting away from Windows Phone (they are not even bringing Windows Phone handsets to Europe where Samsung is very strong). The biggest PC maker in the original Windows Phone alliance, Dell, announced in December they are discontinuing Windows Phone based smartphones, and will only do Android. Yes. The wheels are falling off the Windows Phone bandwagon. And why is this? The article by Netxt.com based on Sohu IT story, says Dell quits because of retail problems, and Microsoft underperforming in sales and marketing (again? this is the same story time and again!). Eldar listed the ever-shrinking product portfolio of the Windows Phone family, and pointed out that many partners make big promises like LG talking of 50 handset models, while not fulfilling those promises.

MICROSOFT - MORE SHEER BULLSH*T

And then lets go to the Evil Empire. What do we know about Microsoft? (You may want to read my article from last week, How Microsoft Lost the Future). We heard this phenomenal story from China, that Windows Phone is supposedly outselling the iPhone. Wow. That would be astonishing, considering that Apple just reported its best-ever quarter out of China, and that was achieved with only one week of iPhone 4S sales in Q1 (January-March) quarter. So now, in Q2, which is the first quarter that Windows Phone handsets are sold in China, if Windows Phone makers have jumped ahead of Apple's iPhone, in the world's biggest smartphone market - that would be huge news. Apple's growth was achieved in over 3 years. And Microsoft has passed them in three months? Yeah, sure. And monkeys might fly out of my butt, as Madonna said on Wayne's World.

That astonishing claim came from.. a Microsoft exec Michel van der Bel, (as reported at Engadget), the Microsoft Greater China COO. And Mr van der Bel says it is powered by the Nokia Lumia 800c. Where have we heard this before? Ah, yes, when Lumia launched in Britain, remember those weird stories that were all over the press that British people are tired of iPhones and taking Lumias. Haha. This is that total mis-information war that Microsoft is an expert at waging (see above under Nokia). 

I call bullshit on this absurd claim. First - NONE, and I mean NONE of any reported stories by independent sources suggest any kind of massive surge of Windows Phone sales in China. None whatsoever. Secondly, if this was happening, it would be the biggest smartphone success ever seen in any market and it would be reported everywhere with huge rush to stores selling Windows Phone. Thirdly, Apple is having a huge time in China. Fourtly, all evidence is to the contrary - Canalys has reported in May that current China market share of Apple iPhone is 19% in smartphones, Samsung is at 22% and Nokia has fallen to third place. Even if all Nokia smartphone sales were Lumia 800c models - it would not be more than the iPhone.

Fifthly, the Lumia 800c, which is supposedly the engine of this growth in China, is not sold by China Mobile the carrier who has 72% of the Chinese market. The Lumia 800c is also not sold by China Unicom the second biggest Chinese carrier who has 22% of the market. Yes. The Nokia Lumia 800c is only sold by the tiny China Telecom, the smallest of the three Chinese carriers who has 6% of the Chinese market. And this should now have somehow exceeded all iPhone sales in China? Dream on Chester.

But wait there's more! Sixthly, Samsung is China's bestselling smartphone. And Samsung is diminishing Windows Phone sales and models. Seventhly, HTC is the other big Windows Phone maker? They are expressly witnessing a declining market share in China right now, this Spring. Eightly, Windows Phone does not have any meaningful portfolio of apps in the Chinese language (there are a few) whereas Symbian, Android and iPhone have tons. Nightly, Microsoft is a weak brand in China, for example the Xbox 360 one of Microsoft's best brands, is illegal in China. Tenthly, Nokia? So if Nokia Lumia 800c is powering the China surge (on a carrier who has 6% of the mobile subscriber market, remember China Telecom is a fixed line operator, most of their subscribers are fixed landline telephone users). What of China Mobile who has 72% of the market? Nokia introduced the 801T for China Mobile (running - yes - Symbian). These are roughly in the same price range and for consumers have a similar number (801 vs 800) but the 801 is 'one better' and runs on the network that is far bigger.. I wonder which sells more. I mean, China Mobile is.. ELEVEN times bigger than China Telecom! And on Symbian there are tens of thousands of apps that are in Chinese, and have carrier-billing. This against a couple of hundred Windows Phone Chinese language apps, most which are very poorly ported weak versions (remember, even Rovio refused to bother to make a Windows Phone version of Angry Birds, because the installed base is too tiny, and only agreed to make an Angry Birds version after Microsoft dumped tons of cash into Rovio to pay for the version).

And lastly, eleventhly, there is actual independent reporting on whether Lumia is selling hotly in China. Finland's commercial TV broadcaster MTV3 reports explicitly on Chinese sales of Lumia as being 'tame' (in Finnish: 'Laimeasti' is translated by Google Translate as 'tamely'). They contrast the Lumia launch with that of the iPhone 4S which caused stampedes at Apple stores so severe that some stores had to be closed. MTV3 point out that there is nothing similar at big Beijing handset stores for Nokia Lumia. When asked by MTV3, Nokia Communications Director Anna Shipley says "I can tell you that we are very satisfied with the feedback of both consumers and the carriers" but she refuses to release any numbers. (translation is mine, from MTV3 explicit quotation of Anna Shipley's response). Note how similar that was to how Nokia marketing spin doctors were reporting from Germany and the UK when Lumia originally launched - then months later, Elop was accusing resale channel of not selling Lumia properly. This is exactly the same marketing spin that for example Nokia China spokesperson Wang Jingqiu said last month that supposedly "sales had been brisk in all sales channels." Oh? If that is brisk, why is Statcounter for example finding 0.4% of smartphone use in China from all Windows Phone currently. That is yes, less than one percent. Nothing. Zero. Nada. While Symbian generates.. 17% (yes only 42x bigger). And iPhone 15% (only 37x bigger than all Windows Phone). By what metric is Windows Phone outselling iPhone? Perhaps Microsoft uses imaginary numbers to report on its performance. Hello? (That is by the way, 12th piece of evidence that Microsoft is plainly lying). And lets return to MTV3 and its story. Here is thirteenth and last item: MTV3 reports that Nokia current market share in China is under 15% - again, even if all Nokia sales were only Lumia smarthphones - and they are not, as there is lots of Symbian and MeeGo based N9 sales also in China, but even if all of Nokia currently was just the Lumia 800c, it would be nowhere near the 19% that Apple iPhone is selling in China right now.

How many hundreds of stories reported that utter bullshit claim, by a Microsoft exec, without a shred of evidence, that goes against all reported news and facts, that supposedly Windows Phone is outselling the iPhone in China? This is total BS. This is Microsoft's war of lies and deception. This is the mobile industry equivalent of Dick Cheney and Donald Rumsfeld. We are being lied to, palefaced blatant lies. And will the media correct their stories? No. Most took that story and believed it - luckily not all, there were plenty who were also skeptical. Check out chassit, at WPSauce, a Windows Phone friendly site from someone living in Beijing and using a Windows Phone handset. chassit reports:

 

"Now how many Windows Phone 7 OEMs are actually selling their products in China now? The answer is TWO: Nokia and HTC. How many devices are they offering? THREE: Lumia 800, Lumia 710, HTC Titan (rebranded as Triumph). How many Chinese carriers have they been working closely with in that time frame? ONE: China Telecom, the smallest of China’s three carriers. Now with the above facts, anybody still want to believe 7 million Windows Phone 7 devices have somehow been sold in 2 months, in China alone? That’s pretty crazy." 

 

He is a Windows Phone fan, he lives in China, he uses Windows Phone and he reports in Chinese smartphone matters and he concludes his blog article: "Here in the circle we all love Windows Phone 7. But fanboyism and unrealistically wishful thinking are not something we should dwell in."

So some do 'get it' and report how oulandish and simply impossible that news story is. But still, the vast majority of the major tech and business press stories about Microsoft Windows in China last week were the amazing story that supposedly Windows Phone has outsold the iPhone. Bullshit! Sheer lies. Microsoft, you will be called on this kind of blatant misrepresentation. You know better. You know there is no shred of evidence to stand by that claim.

So thats whats been happenin' in the past few weeks in the smartphones bloodbath, year 3, Digital Jamboree. Oh, and Nokia troubles are so bad, some are speculating Microsoft has to extend a lifeline and toss Billions into the sinking ship that is Nokia. Some financial analysts say Nokia will run out of cash in less than a year, and is then bankrupt. The analysis of Nokia's balance sheet shows that the share price today is already below the value of the company's assets, meaning any corporate raider could come in, split Nokia into its parts, sell the parts, and end up picking up a profit. Meanwhile, some of those who analyzed the value of the Motorola patent portfolio and what Google paid for it, now note that Nokia's total price is less than Motorola and Nokia's patent portfolio is far bigger, so just for anyone interested in the biggest catch of mobile patents - remember, Apple is paying Nokia not the other way around haha - the patents alone would be worth the company. But yes, Microsoft cannot let this last gasp in mobile fall between its fingers, after Nokia there is nobody else left to sell any Windows on smartphones, so for Microsoft they cannot let Nokia die. 

Comments

[The Frenchy]

Very interesting news!
Thanks!

[JJ]

"Microsoft way" makes me sick and now that Nokia is part of it makes me sad.

[Gerii]

Qt is not compatible with S40!
But besides Android there is also a community port for iOS and there are already first signs of it running on Tizen. http://www.youtube.com/watch?v=b07uXAiChaw&hd=1

[Tomi T Ahonen]

Hi Tomifan, The, JJ and Gerii

Tomifan - haha. Not 5 million, it was 4 million, and if you want to believe Mr Credible Elop that it was somehow channel stuffing, feel free Tomifan. I see through Elop's claims now and don't believe anything he says that is potentially biased to support his views. The most blatant lie was when he tried to defend his Burning Platforms memo to the Nokia Shareholders claiming Symbian was in decline, when Q4 2010 Nokia quarterly report finds Symbian sales grew, average prices grew - meaning it could not be by price dumping, the revenues grew (obviously) and the profits grew, meaning it could not be through other marketing gimmicks like sales channel incentives. If Elop then says Nokia Symbian sales were declining - which is why he supposedly did his memo, he is simply lying to try to find cover for the most costly and stupid management memo ever released. But yeah, Tomifan, if you want to believe Elop, feel free. I am sure then you also believe in the tooth fairy and Easter bunny haha.

The - thanks

JJ - yes, makes me sick too. I was pretty gutted reading that court document, but suddenly this all makes sense. I couldn't understand why after all the years, suddenly a Nokia Director of Communciations starts to make absurd accusations and won't give any evidence. Initially I thought he was sincere, and all I wanted, was for him to show where did I misquote Elop, if there was a misquote, I would of course want to correct it. But that was not the case, this is simply the Microsoft Way now standard policy at Nokia - to lie, distort and discredit. Nice. And now the worst part is, that Nokia is reverting to waging war against the retail channel.. How mad are they? Its a war they can never win. Never.

Gerii - thanks, I forgot S40 isn't ready yet, I corrected the blog already. Thanks.

Thank you all for the comments,

Tomi Ahonen :-)

[vladkr]

Tomi,

Nokia bought Norwegian Smarterphone company earlier this year; what happened to this deal ? What was it for ?

[Spawn]

Somebody could have bet last year on Nokia being bankrupt in 2013 and made lots of money.

Maybe we are doing Elop a wrong and he is brilliant in executing a plan? It becomes more and more the last remaining logical conclusion for me.

Otherwise I wonder. Is there really noone left that could keep him away from the biggest mines?

[ExTechOp]

For those that do not know, Valkee (where Anssi Vanjoki is an investor) is a company making quite expensive LED-light earbuds that are supposed to help with Seasonal Affective Disorder. There is some speculation of brain cells actually being light-sensitive, and that bright light piped into the ear ostensibly could travel through skin, bone and meninges. They have no double-blind research to actually show their product works, but they have been promising some for quite some time now. The company may or may not be the next Europositron.

[Spawn]

Nokia on war. It must be horrible to still be an employee in that company. Seeing and feeling the fall from hero to zero. More higher up the hierachy, more panic. Its those down there doing the work who get the blame, who see what is going wrong and yet cannot do anything for there company. Knowing thart they are next who will be gone once management needs save more money.

I am sure the very less talent that is left will leave too under such conditions. There is no way Nokia could go back to Symbian, could bring Meltimi to market, could turn around to something else.

Nokia is not able to change direction. Even taking Android and bringing with heavy modifications will take to long. RIP Nokia.

[Vinicius]

I see this as the end.

I just hope to grab a 808 preview before they collapse onto itself.

I think they will be bought out in less than a quarter by someone.

I know that if I were Apple, Samsung, HTC, LG, Sony or anyone else in this industry I would buy then and strip then bare of minds, assets and patents and throw the rest to the dogs. And make a healthy profit on top of that.

The only things, that I think makes this impractical are:

- Anti-thrust/monopoly government agencies;
- Fear of being outbid by Microsoft and accidentally make Nokia worth more and give then a ton of publicity.

[elm70]

Tomi, clearly Elop and Ballmer don't read your blog ;-)

Communities dominate brands

Not the other way around as the Nokia and Microsoft army wish to do

I think average customer is smart enough to see this Nokia/Microsoft army trying to manipulate the net showing a fake view of Windows Phone, the outcome is going to go from bad to worst, WP has around 2% market, and is hard to predict it will grow from here

Thanks to Elop Nokia is dead now, I wish Microsoft can die short after Nokia ch.11

Tchuss

E_lm_70

[android]

Motorola should buy Nokia in about a years time.

Then there could be a Nokia Nexus superdevice :-)

[Illogical Al]

That most of the first level captain crew left Nokia or did decide to leave lated when Elop joined tells us something. A clever captain leaves the ship only when the sink cant be stopped. Not so clever captains wait to long, sink with the ship and die.

All those captains, that make Nokia a success before, left there beloved Nokia knowing it will unstopable sink when Elop joins. They where no able to stopp Elop from joining? What forces where able to hinder them to save Nokia from the Elop?

[Tomi T Ahonen]

Hi vladkr, Spawn, Ex, Vinicius, elm and android

vladkr - am not sure, but my feeling was at the time that it would be incorporated into the Meltemi project. I wish Nokia was a bit more like in the past haha, and tell us things (and be truthful about it too)..

Spawn - well, there were a couple of blatant moves Elop did that would definitely cause the share price to crash, like Burning Platforms memo etc. If he has a secret investment fund somewhere in the Caymans, if he was smart, he had his investment fund short the Nokia share and collect tons of profits haha... If anything like that was ever caught, he'd go to prison, not just lose his job and be banned from corporate governance..

Ex - thanks! Yeah, I've mentioned Valkee a couple of times on Twitter, its a very exciting technology and we'll need to monitor how the company does. Am not surprised Anssi ends up with a very advanced clever company focused 100% in the future haha... PS my best to the Valkee team, I hope to come visit you in person some day when am in your neck of the woods..

Spawn (2nd comment) - yeah. Being an employee currently at Nokia must be the most demoralizing place in mobile. To look at the clown in charge (Elop), seeing that over coffee and drinks after work, everyone laughs at how idiotic his announcements (who remembers 150 million for example) are and all those totally pointless - and severely counterproductive - decisions like the naming/numbering or the USA Symbian decision, not to mention truly strategic blunders like N9, N950 and MeeGo etc... And to be stuck there, hoping you're not fired, and hoping that by the time Elop is fired, there is still some kind of career left with a Nokia job..

Vinicius - yeah, the writing really seems to be on the wall. I do expect every day when I open my browser and go to Google News, to find a story 'Nokia being bought by' or 'takeover bid for Nokia' - same whenever I turn on TV and look at CNN or Bloomberg etc.. We heard already last summer that the initial feelers were out there, Google ended up then buying Motorola instead, and Samsung bought some of Sony's TV business instead, etc. And the Microsoft gossip is there all the time, from should they buy all of Nokia, or only Nokia's smartphone unit, or only invest in Nokia..

elm - haha, yeah. But they send their minions to read it, and to spam me with hostile comments... The point about the fall from fantasy to reality will be ever harder, the more Microsoft and Nokia run an unsustainable expectation. What I think, is that there is a real panic going on - look at the departures from Windows Phone now, and how the carrier community is vocal about hating it. If the image of Windows Phone crashes, then the developers disappear and the carriers cancel orders and the OS could be at 0.5% market share by year-end haha... They now need a 'rolling' series of false hope, first it was false hope from Europe, then false hope from Asia, then false hope from USA, now from China.. They are just replacing one reality check, with an ever newer and more astonishing promise of super-success. Like the AT&T release, moving it back from March to April, just so we won't know how badly it was accepted, until in July when Nokia April-June quarter data info comes out..

BTW - am really coming to the conclusion there is no way out for Nokia anymore. The news is so disasterous from all markets. That Africa distributor news is devastating, Nokia's best market in terms of continents..

android - haha, funny, yeah... But more seriously, Google could buy Nokia rather easily, take the patents, shift Nokia smartphones away from Symbian, MeeGo and Windows Phone to Android, then launch Nokia as a revitalized - and re-energized brand back into the market as a loyal member of the Google Android family of smartphones... I bet that calculation has been done many times at the Googleplex and they have already long since done their decision points, of at what price point will they move in to take over Nokia - only for the patents obviously. They'd maybe keep a few other parts (Navteq maybe) but quickly sell of the dumbphones, the networks etc..

Thank you all for the comments

Tomi Ahonen :-)

[eduardo]

Microsoft strong-arms tactics? That might help explain why Nokia decided to devote scarce resources to the dubious project of developing a tablet. Microsoft is making a huge bet on Windows 8, a questionable attempt to make a single OS for both pc's and tablets. Since it is nowhere on tablets, maybe it tried to get some market share by making a MS tablet one of the conditions of its agreement with Nokia.

Speaking of which, it sure would be interesting to see the text of the agreement. It wouldn't surprise me if it has some embarrassing provisions. Perhaps someone inside Nokia who is unhappy with how things are going will leak it.

[So Vatar]

Claims of WP outselling iPhone will be tested in a few weeks. People issuing such statements will be the laughing stock when quarterly sales numbers are issued, and many - including Tomi - will call them out for their silly announcements about massive successes for Nokia's Lumias in China. I take the freedom to already laugh now: Haha.

Re Nokia's demise:
I do not see Nokia survive the mismanagement of the last years. If nothing changes, my assumption is that Nokia is illiquid by end of 2012 or beginning 2013. Many underestimate the amount of cash they need to finance their restructuring to nowhere and ongoing operations. Nokia is cut off of corporate bond markets, and will need to file for bankruptcy earlier than most believe.

Of course some additional MS cash infusions could get them a few quarters more, but to what purpose? WP is dead and won't be resurrected or take off. No way.

I still think that a buy out and break up of Nokia is the more probable outcome, and this could be a big boost to the current depressed share price, especially if a bidding war between Apple, Google and MS starts. I actually hope for this outcome.

There are 2 factors we don't know enough about that could make such a bidding war unrealistic:
1) There are (unsubstantiated) rumors that Nokia's pension commitments are vastly underfunded, which makes buying Nokia to break it up tricky (who will end up holding the liabilities?)
2) Which patents of Nokia's formerly huge patent portfolio are still under Nokia's control. Which patents were given away to other entities, and are the remaining patents valuable and unencumbered in case someone (Apple, Google, MS, consortium, etc) want to buy them?

My preferred outcome - Nokia survives as an independent corporation selling phones and services around mobile globally - is getting more unrealistic by the day. I am sad to read that Tomi comes to the same conclusion.

[vladkr]

Thanks Tomi... that's what I thought as well, but there are few things that are still illogical to me:

- If it's for Meltemi, then why firing all the Meego team, which would have worked efficiently on Meltemi (pay them for social packages) and hiring (= high expense again) a new team ?

- Has meltemi a future at Nokia, as MS is developing a low spec of Windows, which could take place of Meltemi ?

Maybe I'm stupid, but I can't find any sense to it.... or maybe it was another no brainer day for Stephen and Steven.

By the way, I don't think Stephen Elop is stupid :

he ruined several companies, one of which was about selling chicken in North America (ruining a chicken company in North America is like ruining a vodka factory in Russia, a beer/coffee business in Finland or Bentley distribution centers in Koweit - that's quite a performance) and he still is millionaire; that's kind of talent.

[Vinicius]

LeeBase:

Is this really news? I though it was the case for a long time.

And I really wanted Nokia to launch the 808 already. They say it will come to Brazil in July, but I'm not convinced that there will be a Nokia in July. Maybe I should import it from somewhere else (like I did with the n900)?

[bjarneh]

Microsoft is using the same strategy they used in the desktop market, but they are hardly an evil empire compared to the other players, they are all evil (even google) it's all about $ in the end.

the consumer market (as the cellphone market) where you really can't bribe people to buy your product needs a different strategy (bribes work well with governments and large companies).

as Steve Jobs famously said: (quoting from memory)

"I hate the enterprise market; the best products never win. backroom deals control the sales process and we've never been good at those, we just make great products.."

i'm no fan of Steve Jobs, but there is some truth to his statement; you really can't expect Microsoft to push out Windows phones by bribes since the consumers are to many to bribe, you really need to deliver a superior product.

it's impossible for Nokia to move in the right direction when they effectively are taking bribes from Microsoft; 1 $Bn a year probably sounded like a sweet deal a while ago, now it's stopping Nokia from seeing the elephant in the room.

the N9/N950 is clearly in demand, when people are modding the N9 to get their hands on something similar to the N950, there is demand:

http://www.youtube.com/watch?v=V-9GuzIT8_8

the N9/N950 also has another important thing going for it, it's in demand by people who actually develop, programmers are demanding the N9/N950. these are the guys who actually build apps (or programs as we used to call them). these are the guys you actually need in order to get a cool app-store. there are litterally millions of programs written for GNU/Linux, not because of the profits that can be made here, but because a large share of developers used GNU/Linux exclusively, and write the programs they need.

@Tomi if you get your hands on an N9/N950 i'm 100% sure that you would retract your statements about a "short window of opportunity" for these devices before the iPhone5, Galaxy3 etc. arrives. these devices can stant head to head with anything the others can come up with for a long time yet, the problem is the money (bribe) coming from Microsoft, which like all bribes cloud your vision.

Nokia did not get an exclusive deal with Windows Phone, but since all other vendors are now dropping Windows Phone, Nokia may perhaps be an exclusive dealer after all :-)

[Eurofan]

@ bjarneh: I agree on the N9. It is a competitive product for 2013. It really is a timeless solution to the hand held device problem. It pleases me every day with a new feature that introduces itself to me on its own. A very well thought out and designed device that alone could save Nokia in 2013. With the pureview camera module, a super N9 would outsell all other $1000 smartphones in 2013 world wide, I'm sure.

[Jacob S]

Take it for what it is, but Stat Counter shows a rather significant pick up for Windows Phone in Finland since the beginning of this year. Admittedly, Finland is a small and unique market in this perspective. I am truly sorry about the development for MeeGo. The development for both iOS and Android actually seems rather flat during 2012. Symbian has been on a decline since as long back in time as Stat Counter has data. This is in line with that Nokia was the inventor of the smart phone and started at a share close to 100%.
http://gs.statcounter.com/?chart_type=line&statType_hidden=mobile_os&region=Europe&region_hidden=#mobile_os-FI-monthly-201104-201204