In Forecasting Racket, you win some, you lose some - Talouselama in Finland mocks me for my 'Nokia to be sold within weeks' comment

Yeah, in this game you win by the sword and you die by the sword (or win by the pen, die by the pen). I'm in the forecasting racket and its crystal-ball-gazing and sometimes you are wrong, and at other times you are seriously wrong. And then on a bad day, you are totally wrong. But in forecasting, you are never 100% correct, if you are 100% correct, that is an accident. Nobody can know the future.

What we forecasters, at least the professional ones, try to do, is to be less wrong than the industry average and to understand why something went wrong. I would add - truly responsible professional forecasters also take ownership of their past forecast mistakes - as I have always done - and explain WHY their forecasts change if they do - not just issue a new totally different forecast (I am looking at you, IDC, who just this past week issued their latest Windows Phone forecast which is down 40% from the one they had earlier this year, and they give no reason why the dramatic downgrade to their forecast - which BTW, I still think is WAY too optimistic. No, Nokia, Microsoft, Windows Phone will not hit 11% and will not become the third ecosystem, even if they manage to pass Blackberry at some point, which they might. 11% is totally beyond reach for Windows Phone)

Anyway. Talouselama in Finland has just been mocking me for one of my more outrageous statements I made last summer - when I said I thought Nokia would be sold within weeks. That was honestly my gut feeling at the time and it OBVIOUSLY has not happened. What I unfortunately still feel, is that Nokia is on its way to be sold, and a suitor might show up any moment. So yes, I STILL think Nokia might be sold soon, but I acknowledge, that my statement six months ago was clearly totally wrong.

But Nokia made a loss of 49% per smartphone sold this past Q3. Nokia's smartphone unit sales fell 38% in JUST ONE QUARTER, with market share in freefall from 6.7% in Q2 to 3.7% in Q3. What is the current direction with the 'magnificient' Windows Phone 8 and all its faults, its stupid distribution strategy of exclusive carriers who often don't carry the full Lumia line, and with even higher prices and more manufacturing and software errors? I am expecting Nokia market share to still fall for Q4.

If you remember, we had the crowd-sources Nokia Windows forecasting contest a year ago - check out what level of forecasts, very famous experts were suggesting for Windows Phone just a year ago, and compare to today - in Q3 Windows Phone had 1.9% global market share, behind Blackberry (the current third ecosystem) and behind Bada (soon to be replaced by Tizen who then becomes the real third ecosystem with all the carries that are committed to Tizen) and behind - get this - Symbian, the past first ecosystem when Elop killed it, and still now, 20 months after he announced Symbian's rapid death, Windows Phone cannot get past Symbian. If this is Windows Phone at its peak, what is Microsoft's future in mobile. Don't believe any 'analyst' or forecaster who promises a 'third ecosystem' for Windows Phone haha..

Read more about my Nokia and Windows Phone thoughts here.

 

And sorry about the Nokia to be bought comment. I honestly believed it last summer. I am surprised it did not happen. I still think it will, but don't have a definite timetable now. And yes, we forecasters will always be wrong, the point is to try to be less wrong than the industry, by which you are then called an 'accurate' forecaster haha... 

Comments

[virgil]

Hey Tomi, all you had to say was that you didn't specify how many weeks.....

[Lars]

T.. yep, it's a God - Dog biz. 8->

[Interested to know]

Don't worry too much, you've been more accurate than anyone else.

Most of the tech "journalists" are just blindly reprinting Microsoft and Nokia's baldfaced lies without any critical thought. Then these "journalists" take the most optimistic outlook imaginable and repeat it as truth.

Long after Nokia is gone and buried, the Finns will wake up and start to wonder how all these jobs vanished. The shareholders will start to wonder where their billions went. Then you can write a book.

[foo]

Tomi,

The fact is that Nokia continues firmly on its path to certain death.

Even if Windows Phone reached 11% of market share, they'd still have to compete with HTC and others for a slice of this tiny market.

So, even in the most incredibly positive scenario, I don't see Nokia with more than 5.5% of market share. Yes, gentleman -- 5.5% in the *most incredibly positive scenario*.

Of course, if WP stays below 5% of market share, Nokia will stay below 2.5%.

Nokia is bleeding money, and they are trying to buy time -- selling assets, factories, and even the headquarters.

The problem is: in one year they will be in the exactly same situation -- actually, a bit worse, minus the assets, and paying rent.

And Elop insisting on the Windows Phone road.

[Lasko]

... and who says Nokia hasn't been bought?

Nokia has received a considerable amount of money from Microsoft to exclusively produce Windows Phones, to transfer Intellectual Property to Microsoft and to make acquisitions impossible.

I don't see any real difference to a buy out here.

[QtFan]

Right now Nokia is hard to swallow.
-They're probably bound to MS contractually.
-Their patents were moved to patents trolls (and part of the revenue goes to MS!).
-They sold a lot of the assets, almost no cash.
-Fired and lost a lot of good employees.

Apparently Nokia did everything in the book to avoid a buy out.
MS won't buy them, because MS already has what it wants from Nokia.

[Shavy]

When i saw the deal Nokia Lumia strike a deal with CHINA MOBILE. I knew instantly someone in nokia is secretly reading your blog. Now now.. that is a good thing. Tomi in directly helped to save nokia.

Cheers

[Interested to know]

The way that they arranged to transfer all of those patents to benefit Microsoft should be grounds for a lawsuit or a prosecution.

[m]

QtFan, I agree with every one of your points.

Nokia is losing money fast, and has too many employees (since they abandoned their main markets) that need to gotten rid of. Nobody wants to buy that and deal with its problems. Better to let it deal with the problems itself, and whatever is left at the end will certainly be cleaner and cheaper to buy.

[Microsoft's nature]

A Microsoft asked a Nokia to carry him across a river. The Nokia refused because it was afraid of getting stung by the Microsoft. But the clever Microsoft argued that if it stings the Nokia then they would both drown. So the Nokia agrees and carries the Microsoft into the river. Halfway across the Microsoft stings the Nokia dooming them both. In its dying breath the Nokia asks the Microsoft why it did such a thing. The Microsoft replies "it is my nature".

[QtFan]

@m

No, you don't agree with me. Re-read my post.
Losing and firing top employees, getting rid of assets and intellectual is NOT helping Nokia be a better buy.
Broken contracts, zero assets and human resources, no IP, debts... you can't sell that :)

[QtFan]

@Microsoft's nature
Why would Nokia agree to carry a monster-sized scorpion that eats frogs(partners) for breakfast?

[Tomi T Ahonen]

Hi all

Microsoft's nature - LOVED IT..

QtFan - laughed so hard about your response to m. I posted it also on Twitter crediting you. Hilarious..

Well, I'm not done forecasting, as you may have noticed, I just called the global digital race for Android as winner and Windows as the loser (new blog out today)

Tomi Ahonen :-)

[foo]

@Doodle "Tomi, if Nokia sells 800k - 2m Lumias in Q4 I will hand it to you. However, as I expect, they will be selling more than 6m then you will have to admit that you were massively wrong. And you are in that case probably due for a super-sized apology later in 2013."

Wait a moment! Google activates 1.3 million android devices *per day*.

If being part of a strong "ecosystem" is as important as Elop says, it means he made the wrong choice: Windows Phone is loosing by 20 to 1.

But I don't see Nokia selling 6m Lumias in Q4. Early adopters and enthusiasts who bought Lumias in 2011 saw their devices becoming obsolete in less than 6 months. The brand is tarnished.

[m]

QtFan, I *do* agree with your points though in re-reading I see I got the gist of your post wrong. I agree that right now Nokia is hard to swallow. Elop is destroying the company. That won't make it a better buy, it will make it a CHEAPER buy. Disagree? Can you name one company that is saying "We have to buy Nokia NOW before it gets any worse!" Or do they want to wait till Nokia hits bottom, perhaps picking over its bones in a bankruptcy?

Nokia IS being sold and their desperation makes them cheaper. Selling off assets is the same as selling the company, except that they're doing it piece by piece and letting the proceeds fund the WP disaster rather than distributing it to shareholders.

Nokia is a burning oil platform. Potential buyers would rather wait till the fires burn themselves out. I certainly agree that Elop poison-pilled the company to make sure it was "WP or death", and now potential buyers have to wait for the death. This ensures that Elop's plans can continue, because the company is poisonous to others as long as the MS contract is still in effect.

You're saying that with all the employees and assets, Nokia was more valuable... that's true but that wouldn't help them be bought because it also makes them more expensive. Destroying Nokia makes it an easier buy.

[clarisonic mia 2]

I am really impressed by this blog! Very clear explanation of issues is given and it is open to everyone.It contains true and fair information. Your website is very useful.

[v-pills]

ergfeqweing sold and their desperation makes them cheaper. Selling off assets is the same as selling the company, except that they're doing it piece by piece and letting the proceeds fund the WP disaster rather than distributing it to shareholders.

Nokia is a burning oil platform. Potential buyers would rather wait till the fires burn themselves out. I certainly agree that Elop poison-pilled the company to make sure it was "WP or death", and now potential buyers have to wait for the death. This ensures that Elop's plans can continue, because the compa3refg

[2 kutu v-pills]

nex generation!

[web tasarım]

thank you admin good article

[Heikki H.]

I guess the most recent Lumias have been very well received here in Finland. Ordinary people are talking about getting the 920 model like it's an obvious topic of discussion. Nokia still has good brand image here, so I can't say if the phones are a hot topic anywhere else in the world.

I still wouldn't chalk Lumia as a win. And neither did Talouselämä, actually. They ran also an article saying that "Lumia sales probably came from discounted older models" and "Nokia might still be on negative in Q1, but selling assets has given them more time".