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April 18, 2013



Glad to read your quick analysis... how does it compare to Nokia's plan and your expectations?


What is Nokia's share of Q1 total WP sales? Must be 90%.
Nokia is really alone with WP.


Stephen Elop must be fired because :

- OPK was fired in 2010 because he "bought" market share (successfully, but with the bias it generated afterwards)

- Elop "bought" and is buying Market share for WP, but on the contrary to OPK, with no success.

So he's doing the exact contrary of what he was hired for... unless he was for some other reason than the official one (I still think there is insider trading behind that)

I would add that with a perpetually falling R/D budget, Nokia won't be able to release interesting products in the future.

I also don't understand the opening of the Vietnamese factory, as all Nokia factories are already under-used; I guess some of them will be closed this year (Brazil or Mexico or one of the Chinese factories ?)


The gross margin on dumbphones was higher than on smart devices (22.9% vs 20.7%)! That, while the dumbphone ASP was only 28 vs 191 euro for smart devices. On top of that the op ex was 267 mil eur vs 420 for smart devices.

Nokia, you are seriously doing something wrong here!

I would suggest that Nokia concentrate on mobile phones and give up on smartphones all together, except that despite mobile phones remaining profitable, it is decreasing yearly and probably not a sustainable business.

However, in the release Elop suggests an increased focus on mobile phones:
"We have areas where we are making progress, and areas where we are further increasing the focus. [...] our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges."

Finally, a suggestion of Nokia relaxing their 110% focus on their biggest money loser (Lumia). Perhaps Elop has accepted that they've done all they can to prop up WP through intense focus and fantasy, and now must start looking elsewhere for reality.

So Vatar

Well, there is finally and end for Nokia's pain in sight:

- Smartphone sales, volume, revenue and profits are not there or irrelevant
- Feature phone sales collapse
- NSN - generating cash flow - is said to be spun off soon, at least according to Nokia management.

Behind the scenes intellectual property and r&d are destroyed, there is no pipeline of anything interesting left, at least in the handset business.

Maybe an empty Nokia shell will survive, however they will shed their remaining manufacturing infrastructure soon as they will be unable to utilize these facilities.

I also think Microsoft will give up on providing a mobile operating system, as their only somewhat relevant mobile handset maker implodes and won't be able to pay the contractual license fees for WP development any more.

What to do if Nokia wants to have a fighting chance? Replacing the Board and top management is a necessary step to have any hope. However, just ditching Flop and the incompetent board will by no means be sufficient to bring Nokia back to track to success.

After the Board / Elop added bad strategy to the previously existing bad execution most of Nokia's resources are gone, be it cash, intellectual capital, or customer good will.

Nokia is done.


And the "good news" according to Nokia and analysts is that two thirds of Lumia buyers bought a Windows Phone 8.

Or in reality, one out of three Lumia buyers bought a Windows Phone 7(.5), an already dying and left behind platform.

How this can possibly be spun as good news for Nokia, beats me.


Nokia is on flat line, could someone do something to reanimate it?
What else those smart BoD member need to see to react and bring a change, or maybe they need to go too.
What a shame see this show, i wonder what is the reputation of Mcmaster University, or the even bigger Microsoft bad reputation.
Sad, sad, sad.
Go Jolla, guess your are the new Nokia spirit!


In Brazil one of the most sold and widely available Nokia phone is the Lumia 800(and the 710).
It never sold in any significant amount until 2012Q4 and 2013Q1. When they've cut the prices in more than half. Now it's selling BELOW Galaxy Ace Duos prices!
Not only is it too cheap but it has been holding the distribution of Lumia 900 and 920.


@So Vatar: "Well, there is finally and end for Nokia's pain in sight: - Smartphone sales, volume, revenue and profits are not there or irrelevant"

You are being ironic, aren't you?

Smartphone sales were 6.1M in a *full quarter*; Google just announced that they are activating 1.5M Androids *per day*!!!

To make things even worse, 1/3 of Lumias are the obsolete WP 7.5... so we're talking about 4M top-of-line smartphones *per quarter*!!!

And I'm not even considering how many Ashas were sold as smartphones... does anybody have this information?

Meanwhile, Elop continues to sell the assets that Nokia built over the last decades...


So Vatar

@ foo:
I clarify: End for Nokia's pain ... Nokia is dead. As you correctly state sales of Lumia devices, especially WP8 devices are laughably low. They sold 400k Lumias (WP7 & 8) in Elop's most strategic market, North America / US. Generating revenues of maybe $100 Mio, give or take.

Wanna have a good laugh? Watch this Flop video from 2012 regarding the "exciting Lumias" specifically for North America. And then compare what Flop says with reality.


I notice a clear change from last year in many forums. While one year ago, the comments was mixed between optimists and pessimists, today the number of pessimists comments largely surpass the comment of the optimists. This is also the case in various financial forums. Look like most are now around stage 4 or 5 of acceptance of death ( )


@Tomi: Thanks for highlighting the statistic about Lumia sales in North America. I think this is the most telling statistic: after a year of effort Lumia sells less well in its primary target market, North America than it did a year ago. Higher sales of Lumia overall are made possible by shipments to new markets not organic growth within markets. Kind of a Boston Chicken growth where there is no growth model.

Nokia is done for.


Wow, it has really come this. I always thought common since would prevail but apparently not. It's a shame. Sad really! Nokia used to pave the way in innovation but now that's being flushed down the toilet.

The only good thing to come out of this, and really friggin good in my opinion, is Jolla. Their OS is amazing. True fighting spirit and a will to innovate. I cant't wait to pre-order their phone in a couple of weeks.

And this would mean I'd be another customer not making the Symbian to WP switch either.


I was talking to a salesman in an operator store. He says people actively ask for Nokia still (in Brazil), but they usually give up when the answer to: "Does it run Android?" is "no". When they try to explain it is a Windows Phone it usually spells a lost sale.

They work on a basis of "don't tell if they don't ask."

The problem, though, it that today it is not much different with Symbian. Most people don't even know what symbian is. But most people actively run away from windows phone.

But Nokia is gaining a little traction with the 520. At that price not even Windows Phone can keep people away from a "dual core smartphone with big screen". At that point though, it would be a sale even if it was a random, no-name chinese brand selling these.


@ foo

6m Asha devices in Q1....


@So Vatar

The best one ever is the Smartphone Beta test over...

2 month later
2.5 month later Legacy device by M$...


Nothing will change with Nokia. The board and elop are bought and paid for by ms. If the board was even sort of kind of interested in Nokia, they would have stepped in ages ago. They're not. Nokia will either sort of survive or be sucked dry by ms with the approval of the board and elop. My vote is with the sucked dry scenario. Then everyone up top will walk away from the wreckage to nice cushy jobs at ms and ms will have a giant patent portfolio to sure more companies with. Sadly Nokia died the minute elop came on board. Sorry but that's all that's left folks.


So... to summarize:
- 1/3 of the Lumia sales are for the WP7.x model
- The WP7.x model is being sold "dirt cheap" (for a smartphone)
- Lumia sales are up 27% QoQ.

It sounds to me as if the sales are being artificially pumped up again, this time by the low price of the obsolete model. That does not sound like something that can be sustained, or a healthy way into the future. Note though that all phone companies will sell their obsolete models for cheap, but that is simply nothing to brag about ;)

Petri P

Yet, despite this news, internally in Nokia there is a perpetual sense of optimism among employees. Many believe the internal propaganda that a turn around is a few quarters off and things are going according to plan, only the schedule is off a bit, so hang in there. So the company continues to waste money in so many ways.

Many of the smarter people left the company a few years ago (pre-elop) when they were paid to leave. Employees with 15+ years experience were given a very nice amount of money to pick up and go get a job at the competition. And many did. It was a win-win -- for the competitors. And then many more of the very good people left over the past year or so, happy to get into a lifeboat.

Nokia is obligated to be monogamous to Windows Phone for a while more. After that, I believe Nokia will diversify to other platforms. (The Location unit will be a bit confused then.) This will be Nokia's last, best hope. I suspect elop will be gone by then. A press release will be issued about him wanting to spend more time with his family, missing North American hockey, and "his work here is done." You know, personal reasons.

Some in the media are just encouraging elop with stories indicating sales of 5.6million Lumia devices is the start of a turn around. Of course this is the amount of Android devices sold during a holiday weekend.

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