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« Second picture in the Nokia Destruction Saga - Greatest individual Management Mistake Ever Made - Nokia vs Competition in one picture | Main | Quick notes from the smartphones battlefield and announcements from CES »

January 07, 2013

Comments

Spawn

@udk

> Nokia was not making huge profits. Apple was making huge profits

And this is your argument? Hey, Bill Gates makes much more money then me and while I make billions and grow that every year its still not as muvh as Bill Gates makes that's why I decided to not make any money any more! Sure now I not have home any longer, sleep on the streets, eat trash and will soon be dead but hey, Bill Gates was making more money then me!

Sorry, but Nokia grow profit year by year till 2010. How is that wrong and more important: how does it justify that you stop making profit and start making lose? Because somebody else made more profit? Come on,

Spawn

@udk

> Nokia lost over 70% of profits they were making

Come on, it becomes boring. I explicit say profits with Symbian. That Nokia heavily increased investment over the years what resulted in lesser total fiscal profit is another story. Yes, Nokia did heavy investments into there future rather then maximizing there short term profit. That the profitability per sold unit shrinks is only relevant if you sold the same number of units every year (context you know).

Spawn

@udk

> So you are claiming that market growth didn't stop in Q1 2011?

And now you disqualify yourself again for future discussions. Next.

Tomi T Ahonen

To all in the thread

I removed several comments that were troll-like, that clearly had not read the actual blog article. I addressed Nokia's previous decline in market share in smartphones - a natural occurance when you invent an industry and start at 100% market share. I also pointed out the natural rate of decline and showed that in year 2010, Nokia's market share decline matched its historical average. You cannot take one quarter and compare to annual sales because of various fluctuations, the iPhone is launching only one phone per year, so it sees a huge jump with the new iPhone model and that quarter is artificially high (compared to the annual average rate) and there usually is one quarter Apple actual sales decline Quarter-on-Quarter, not to mention huge swings in its market share per quarter. As to Nokia, it saw decreases - and increases - in is market share in the quarters just before the Elop Effect.

As I clearly indicate using Nokia's own shipment numbers, that Nokia 2009 market share was 39% and in 2010 that declined the normal level to 34%, there was no 'collapse' happening during 2010. But when 34% is exchanged to 16% in one year, that is a collapse. And so extreme, it is a world-record collapse in the handset industry.

Anyone who wants to come here post comments talking about Nokia collapse started prior to year 2011, has to address THIS BLOG ARTICLE AND FACTS IN IT, not post nonsense about irrelevant factors such as what happened with Symbian or some given quarter or some given rival. Nokia faced its totally normal rate of decline in annual numbers, from 2009 to 2010, in market share - the historical average decline that is normal for the market leader who invented a new industry 14 years earlier. Exact average in fact and suddenly in 2011, the bottom fell out of Nokia smartphones. The market share collapsed - in year 2011, not in 2010.

Tomi Ahonen :-)

RyanZA

Most interesting news is Elop's backtrack on Android now. If Nokia does switch to Android, does Nokia have a chance of making a come back?

1. Most of Nokia's senior staff seem to be gone now, so Nokia no longer has an industry experience advantage.
2. Nokia can no longer manufacture their own chips, so cannot have a hardware advantage.
3. Nokia's maps will be useless when moving to Android, as Android already has the best (in practice) mapping platform available today.
4. Nokia's brand used to be great, but is now synonymous with Microsoft and failure - even with Android, the Nokia brand will lower sales.
5. The Linux staff in Nokia - who used to be some of the best Linux/OSS staff in the world - have been sold/remove from Nokia, so Nokia will be starting over with no knowledge in Linux.
6. If Elop is still in charge, would anybody at Nokia have any confidence at all in what they are building? Impossible.

If Nokia does switch to Android, I predict it to fail badly at this point. If Nokia can pull back the Linux divisions they sold off, then they may have a chance - but is that really possible anymore? Nokia seems to be just too far gone at this point to make any sort of recovery.

Tester

@ukd:

Seriously, what does this graph tell us the numbers don't? In fact it perfectly matches the numbers Tomi said, namely 39%, 35% and 16% with obvious inaccuracies due to the limitations of the graphics format.

What more do you want?

Winter

@ukd
You are still confusing marketshare, market growth, and item sales. You can have declining market share if you start out with selling 100 items in a market 100 items big, ie, 100% market share. Next year you sell 1,000 items in a market of 1,100 items, ie, 91% market share. A year later you sell 10,000 items in a market of 12,000, ie, 83% market share.

Losing 20% market share on selling a hundred times as many items is something most CEOs would kill for.

But others explained that before.

Tester

@ukd:

Ugh...

That graph doesn't even have any quarterly data. It only lists the development of YEARLY market share!

Or do you see the bumps that are so obvious in 2011's data? I don't!

winter

@ukd
You simply do not want to understand. There is a huge difference between increasing sales but decreasing marketshare due to market share and the bottom falling out of your sales in a growing market.

Do you not want to understand?

Dan

It looks like "Anything is possible" is a translation to English of a mistranslation to Spanish. Look at Nokia's version of the transcript sent to some WP websites. It's WP to the bitter end.

khim

@ukd: This blog was talking about market share.

No. This blog talks about market collapses.

@ukd: What is the problem when I talk about the same subject?

Except you don't. You start with the assumption that ANY drop in market share is collapse which is patently absurd: small and even medium-sized changes in market share happen in all industries regularly.

Only when you pass certain threshold they become a destructive spirals and end with collapse.

@ukd: Don't you understand that I just pointed out that the drop in Nokia's market share started already in 2010?

No. You did no such thing. You started with absurd equation "drop in market share" == "market collapse". Then you pointed out that Nokia lost some market share in 2010 and then you are trying to shift blame for collapse from Elop to someone else. Which is, frankly, ridiculous.

Please stop this nonsense, give us some plausible definition of collapse (if you don't like the Tomy's one) and then we'll have something to talk about.

foo

@ukd "Do you have any reason why Nokia had only 29% market share in Q4 2010? They released new OS and new phones in that quarter. Usually releasing new products grows the market share. This time Nokia's market share dropped 5 points."

Nokia *increased* sales in Q4 2010.

The market share decreased because of strong competition from Apple and Samsung.

What happened after the Elop Effect took place is that sales collapsed.

Collapsing is different than loosing market share. Collapsing means selling less units while the industry grows.

I don't think Symbian would stay in the first place forever, but Elop killed the platform prematurely.

winter

@ukd
Yes, 29% marketshare because a new iPhone had come out which increased sales of iPhones faster than Symbian phones. Also Android sold well. Crucial: Symbian sales grew.

After Elop's anouncement, Symbian sales crashed.

But you do not want to understand, really.

Jamie

@ Tester

You said "Not quite correct. Those past mistakes paved the way for the Microsoft Mafia to take over the company. What need would Nokia have had to hire a foreign CEO if the previous management had done their job properly?"

Is it possible that some "mistakes" were blown out of proportion to facilitate MS THT to take over ? Whose decision was it to hire a greenhorn in mobile industry and from Nokia's competitor? Initially it was thought that one failing Mobile giant teaming up in partnership with another old guard MS.. Yet, now it is clear that is not how MS saw this "partnership". MS wanted Nokia out of mobile SW business in the name of building so called 3rd Eco system, while they inherit the SW market share. It has clearly not worked.

Was Symbian not much better than non-existent WP8 ? Elop's shambles eclipse's OPK poor performance by miles. Yet, whoever owns Nokia has not uttered a word. For OPK, there were talks of boardroom coups but for Elop, not a word. Last time Risto said that Nokia had a plan B, probably to silence critics and calm the home audience.

See what they say about Jorma..

http://www.intomobile.com/2011/01/26/nokia-chairman-ceo-anssi-vanjoki/

Put all your eggs in one busket then hand them to your competitor. Any other CEO would have done much better than Elop. With the Human Resources, Capital, Brand and Potential that Elop inherited at Nokia it would not have ended this way.

John Phamlore

@spawn

Few reasonable people will disagree that if things had been able to be maintained as they were, Nokia could have kept on the Symbian to Meego transition, made a lot more money, and be in better shape to survive. Unfortunately around the 2008-2011 time period, things were about to change dramatically for the worse for Nokia as detailed here:

http://taskumuro.com/artikkelit/the-story-of-nokia-meego

Nokia by 2008 would have known it was losing its contract fab partner Texas Instruments.

"In October 2008 Texas Instruments announced that they would stop investing in smartphones’ baseband modems ... For Nokia this meant the end of the TI OMAP path for MeeGo ..."

That means the N9 was the end of the line for that branch that depended on TI-fabbed hardware, regardless of how well it could have sold had it been pushed harder.

Remember that Meego was being developed in cooperation with Intel that had its own agenda of eventually using its own processors instead of ARM, Intel having sold off its ARM division to, I believe, Marvell.

"In addition to the lack of LTE support, another MeeGo developer described that Intel was trying to slow down the development of MeeGo on its own part."

I can't think of a worse partner for Nokia at that point than Intel, who had the three strikes against it of 1) no proper LTE support for the US market 2) sabotaging ARM support in favor of non-existent x86 mobile chips 3) having no history of contract fabbing for even Apple let alone Nokia.

Where I disagree with the article is the assertion that Qualcomm would have followed through enabling a port of Meego to the Qualcomm Snapdragon SoC.

"We received information after the article was published that Nokia was developing a version of N9 with Qualcomm Snapdragon SoC to US market (most likely RM-716) in the beginning of 2011."

If and I say a big IF Qualcomm was willing to bury the hatchet with Nokia then I do agree Meego to Snapdragon would have been the preferred path to Windows Phone. But that is why I have extensively documented here the long IP battle between Nokia and Qualcomm that was apparently settled in 2008 with Nokia paying an UNPRECEDENTED upfront cash settlement of around $2.3 billion USD in one quarter, not spaced out over subsequent quarters for licensing Qualcomm IP.

From what I have been reading, Sailfish / Jolla has first been ported not to Qualcomm but to ST-Ericsson chips. I'm not sold on such a port to Qualcomm being a priority to Qualcomm when Qualcomm has from the beginning supported Android as its preferred Linux-based mobile OS. I have been arguing that Qualcomm has done this because Google's Android has "fixed" Linux's licensing issues by allowing the Chinese OEMs to load their binary blobs for use by userland without having to expose any hardware IP. This gives Qualcomm an in to the Chinese market that they need because the Chinese are busy raising up their own national champions such as Huawei who will be competing with basically everyone in networking and telecommunications. The Chinese are following the American playbook with CDMA and Verizon by forcing Western companies to cross-license IP in order to gain access to China Mobile's legacy TD-SCDMA and future TD-LTE network.

ilarikorte

Tomi,

On the paragraph about Ballmer osborning Lumia line, the year is incorrect. Nokia had 4 lumia models out by summer 2012, not 2011.

chithanh

@winter
The pogo plug is not a good example. The whole *plug series is one big QA fail. Pogoplug? Overheating. Guruplug? Power supply failures. Dockstar? Rusting.

@RyanZA
If Elop has learned anything from Osborning Symbian, it is that he will keep it secret if Nokia is working on Android.

@CN
If you watched the Huawei presentation at CES, it seems like WP8 is the red-headed stepchild they are ashamed of and don't like to talk about. Sure, people could find the Ascend W1 if they looked for it. But only 4" WVGA screen, 512 MB RAM and 4 GB flash memory (remember that WP8 cannot install apps to SD card) is a far cry from the Android phones they showed on the same day. Certainly not a lot of engineering resources went into that device.
But Huawei have at least recognized that Windows Phone needs to enter the low-cost range to gain marketshare. If it sells for $150 or less it might become somewhat successful.

chithanh

But if everything screams "Huawei does not want to sell that phone", it can certainly be justifiable to say that they are not rolling it out, even if that is not strictly correct. Like IBM selling pre-Ratnered Itanium servers.

Tester

Hm... That Huawei-phone sure looks like an intended dud. Smart move, I have to admit. Get all the sponsoring money from Microsoft and then only pretend to support the system...

chithanh

@Baron95
That "country by country" story is not credible. The market researchers certainly do statistics based on individual regions, and an ongoing change of this scale would have certainly shown on their radar.

@CN
I did not say that Huawei produce the W1 for fun. They could have had the same motivation that IBM had for selling Itanium (to make customers who have already decided for Itanium not go to HP), or Nokia had for selling the N9 (due to contractual obligations. Maybe as part of a patent agreement?). I consider the latter to be likely, but if you have a better explanation for the silent launch, I'm all ears.

What the manufacturers really want to sell you was shown off during the CES presentations. That Windows Phone was only mentioned by Mr. Ballmer and not by the Smartphone makers should be reason for concern, not optimism.

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