Picture 5 in Nokia Mess - How Hype, Hope and Hysteria Hide the Sad Truth - Lumia Sales Pattern

I'm continuing with the Nokia saga told in a series of blog articles, each showing one problem, with one picture. This is part 5 in the series. We've already looked at Nokia smartphone unit sales collapse due to the Elop Effect, the competitive picture of Nokia vs Apple and Samsung, Nokia market failure in context of other historical handset industry collapses, and the failure of the promised migration from Symbian to Windows Phone.

Today, I will first show you a picture that is not the reality. Imagine if this was Nokia's Lumia sales, would this be good news, or bad news. Is this a sign of a strategy that is succeeding or failing? Bear in mind, during this period of time, the global smartphone market has doubled in size:




This picture may be freely shared 

So yes, if Nokia's CEO promised his strategy would shift Nokia's massive global market dominating position in smartphones from Symbian to Windows Phone, and after an initially promising two quarters of growth, the sales would stall and run essentially flat for the next 6 months (up to today) - that would be a severe sign that the strategy is in trouble, wouldn't it? Especially as the market has indeed doubled in this same period.

Now, compare that picture to the reality. This is Nokia's Lumia sales with Windows Phone based smartphones.




This picture may be freely shared

Rather than sales flat from Q2 to Q3 in 2012, the sales fell dramatically, and the 'growth' is only impressive, if you compare it to that big fall. The reality is, that over a 6 month sales period - the performance is WORSE than the first picture I drew for you.

From the first sales quarter (Q4 of 2011) to the second (Q1, 2012), Nokia's Lumia/Windows Phone sales more than doubled in just one quarter. In the next period of 3 months (Q1 to Q2, 2012) the Lumia sales still doubled. But now, in the next six months, Nokia Lumia sales have only managed a pathetic 10% growth, while in this 6 month period the global smartphone market grew by 57%.

I cannot see this as good news for Nokia, yet it seems that most major press are echoing Nokia talking points that Nokia is now on some proven growth path and on recovery. Arghhh.....

For context, this is reality. Here I have harmonized the first 5 quarters of Lumia sales, to the last 5 quarters of Symbian sales before the Elop Effect. Conveniently, the seasonality is the same, so the Christmas sales spike hits the same point in the picture. I included the 'zero' quarter, last quarter before this pattern starts, and harmonized the growth from that point. And again, this is apples-to-apples comparision, roughly speaking the industry doubled in both 18 month periods. How badly is Lumia and Windows Phone failing on the same Nokia brand, as Nokia managed on Symbian just before Stephen Elop wrecked the success:




This picture may be freely shared

So yes, Nokia is NOT having a big success with Windows Phone or Lumia. The only reason Nokia is generating modest smartphone sales with Lumia is Nokia's massive size. Even using 'obsolete' and 'undesirable' and what many called 'uncompetitive' Symbian, Nokia did essentially three times better sales than what Elop has now managed with his 'superphones'... (Insert here rant about Elop needs to be fired, he is the most incompetent CEO of all time, he has precided over the biggest market collapse by any market leader in global industrial history)

More pictures coming as I manage to get some time to draw them...

Comments

[vladkr]

Hi Tomi,

Nokia sales won't improve due to future boycott from Russian retailers :

http://translate.google.fr/translate?sl=ru&tl=en&js=n&prev=_t&hl=fr&ie=UTF-8&eotf=1&u=http%3A%2F%2Fwww.mobile-review.com%2Farticles%2F2013%2Fbirulki-208.shtml&act=url

The original article is in Russian - paragraph 3 - but Google Translation may help you to understand.

Quickly :

Nokia ends maintenance partnerships in Russia, so most retailers in Russia will boycott Nokia phones as it will be nearly impossible for clients to have their mobile phones repaired under warranty in Russia.

Original article (in Russian)
http://www.mobile-review.com/articles/2013/birulki-208.shtml#3

[Street]

Wall Street Journal:

http://online.wsj.com/article/SB10001424127887323316804578161310361306462.html

Lumia has barely sold 100,000 units in China

[vladkr]

I also noticed an interesting pattern :

In press-releases, Nokia considers Asha Touch-phones as smartphones, whereas in quarterly results, they're counted as regular (feature) mobile phones.

So, shall we consider them as smartphones or not ?

[Spawn]

More china:

Huawei Ascend W1 launches in China cheaper than Lumia 620

http://www.gsmarena.com/huawei_ascend_w1_launches_in_china_cheaper_than_lumia_620-news-5378.php

The Ascend W1 has a bigger screen, battery, is cheaper, WP8 and better positioned cause Huawei focuses on chinese market, well its a chinese company.

[JJ]

This struggle with market share has taken all too long. Windows Phone has a loser image in people minds. No one likes to be with loser.

[Holger]

Hi Toni,

have you had a look at the flickr Nokia statistic?
http://www.flickr.com/cameras/nokia/
Yes, same results ....

Greetings from Frankfurt

Holger

[Spawn]

One more. As we know WP8 has an immense use of data even over expensive mobile data connections. And as we just learned Lumia WP8 devices have NO data-counting. Neither integrated nor as external app. Data Sense is US only. How can they fail on that?

http://wmpoweruser.com/no-universal-data-counter-feature-in-wp8-as-data-sense-is-carrier-dependent/
http://forums.wpcentral.com/windows-phone-8/202809-lumia-920-data-monitor.html

[foo]

What Nokia lost, considering that the industry grew by 57% in the last two quarters:

http://oi50.tinypic.com/1hy1pi.jpg

[svensson]

I think it is fair to say that Nokia has taken a wrong turn running off solely with WP. But I must say I am quite satisfied with my PW808, Nokia does hardware well!

[Spawn]

And one more. Lumia fail on .... sending SMS (still present with latest updates):
http://discussions.nokia.com/t5/Nokia-Lumia/Lumia-920-can-t-send-text-messages/td-p/1615590

On SMS! OMG!

[Giacomo Di Giacomo]

Let's hang on one more quarter. After the results of Q1 2013, I cannot imagine anything that Elop could say to defend the WP choice. Then he will either resign, or be kicked off, or change course, or sink with the ship.

[Spawn]

And last one since else I end with more then 121 comments on this :-)

The portico-Update that was supposed to fix the crashes and hangs did not fix them.

http://forums.wpcentral.com/nokia-lumia-810/212989-did-portico-update-fix-crashing-freezing-issues.html
http://forums.wpcentral.com/nokia-lumia-920/210013-any-way-uninstall-portico-my-crashing-problems-went-bad-worse.html

[Eurofan]

Spawn: Thanks for posting these links. I read the one at discussions.nokia.com and can't believe such software burdens Nokia's most expensive WP phone. Now I'll read your other links to wpcentral. Is the fault Microsoft's, Nokia's, or both?

[Spawn]

@Eurofan

It makes no difference. Microsoft's faults are always Nokia's faults cause
a) the customer does not care who's failure it is and
b) Nokia has no access to the code. They cannot change anything but wait for Microsoft. This is a key-feature of there strategy: depend.

[Spawn]

@Eurofan

To be more clear on that:
In Nokia Lumia only the hardware is Nokia.

Nokia can NOT even issue updates to the device. You read correct. Noia cannot issue updates to Lumia since updates are signed by Microsoft and so ALL updates to Nokia Lumia need to pass Microsoft.

The same goes with the app-store. Its Microsoft's. With the services. All Microsoft. Nokia has only some areas like there add-on apps but even those NEED to pass Microsoft to land in the market place and finally on customers phones.

Yes, Nokia gave up there whole customer-relationship, the whole thing where the big money is (which is not hardware - even not for Apple which could not sell there hardware like they do without the software - or if others would offer the same software on other, more cheaper hardware). Nokia gave up on all this for ... 3% market share.

[tired]

@ John

Sad but true. At one time every other person had a Nokia phone, now you see samsungs and iPhones. People don't even seen to be overly concerned about the lack of out-of-the-box functionality on the iPhone.

@ spawn

Haven't heard about the SMS thing from my reseller friends here. But the resellers are taking a lot of abuse on the lumia crashing. Serious verbal abuse in some cases. Some of my friends gage stopped selling Nokias in favour of Samsung. More units sold I guess.

[Eurofan]

To think that by now Nokia might be on its second or third generation of Meego phones. The new Blackberry phone will have much of the functionality of Meego's swipe interface, and like Nokia, Blackberry has some loyal users wishing to stay with their brand. Elop threw brand loyalty away when he put Microsoft in charge of the innards of Nokia smart phones. I would think that if there are any basic faults with WP8 on the Lumia 920 that all those AT&T store salesmen and women would know them by now and be warning their customers against these phones.

[glonq]

@Matthew, working to oust Elop is the best help that anybody could every provide to Nokia.

[Tester]

@Matthew:

All the pessimism is well deserved. Windows Phone has been failing for more than 2 years to gain any traction. Do you really think that just ignoring this is going to help?

People are sick and tired of Microsoft and many are just happy to buy something else.

What do you think why WP fails? It's not because it's an utter piece of shit. It clearly isn't. But it's from Microsoft, a company that has repeatedly put its utter disregard for customers on display - the most recent occurence was shoving down the Metro interface down their desktop customers' throats. They do as they please - when they please and then it's always 'screw you customer - adapt or die'. This worked as long as they had a monopoly - but in a market as competetive as the mobile market, smart customers steer clear of such a wannabe monopolist with bad attitudes.

And with so much poison in the system WP won't be able to help Nokia - ever!

[Tomi T Ahonen]

Thank you all..

Excellent comments and very good links to great additional info - was several new ones for me. Spawn - thanks! I even mentioned your SMS link on Twitter and credited you.

Keep discussion going (and ignore the trolls, I'll remove those as they pop up)

Tomi Ahonen :-)