Bloodbath Results of the Smaller Guys - LG and Nokia report Q3

Now that Nokia is just another small guy lets not give them too much attention anymore..

LG STUMBLE AND REPORT LOSS AGAIN

LG reports Q3 quarterly results. For Q2 of 2013 LG was third largest smartphone maker selling 12.1 million smartphones, profitably. Now we get their latest results and there seems to be emerging a 'Third Rank Curse' which prevents anyone from holding onto that position (in last 5 quarters we've had 4 companies holding 3rd place - Nokia, Sony, Huawei and LG. This Quarter gives us a new 3rd place ranking company again). 

So yeah, LG sold 12.0 million smartphones, which gives them a preliminary market share of 4.8%, down from 5.2% in Q3. Their Top 3 ranking is gone, they now are hoping for 4th, and might be as low as 7th, competing with Lenovo, ZTE and Sony. Very likely they outsold Coolpad/Yulong. The more alarming news for LG is that their handset unit is back to making a loss again after some profits. Life's not-so-good nowadays over at Life's Good.

NOKIA GROW SMARTPHONE UNIT SALES BUT ALSO REPORT BIGGER LOSSES AGAIN

So Nokia. The last partial quarter with Elop in charge. The end of the Elop Era. We just got the Nokia results. The overall company made a modest profit - driven by the other (remaining, non-handset) businesses. Nokia's handset unit again reported a loss. Not because of bad dumbphones - the dumbphones ie 'featurephones' unit was slightly profitable. The problems continue at the smarpthone unit which now saw increasing losses. But yes, it now seems very clear, Nokia had hit its bottom and has now achieved a 'floor' level as the 'New Normal' which is about 3.3% in global smartphone market share, plus or minus half a percentage point. For the past 5 quarters Nokia has fit comfortably inside this narrow window - 3.7%, 3.0%, 2.9%, 3.2% and now 3.5%. If you want to be an optimist, you say we've hit the bottom and Nokia is now 'rising'. The realist points out that just 18 months ago - yes 6 quarters ago, Nokia's market share was 6.7% and just 2 years ago it was 14.0%. There will not be a heroic return to the early days of Elop in charge when Nokia controlled 34% of the smarpthone market.

So yes. Nokia reports 8.8 million smartphones sold in Q3 of 2013, that is up 19% from Q2 and gives Nokia a preliminary market share of 3.5% currently. Their risk of dropping out of the Top 10 biggest smartphone makers has subsided, as Blackberry (ex RIM) and HTC continue to struggle. Nokia is now fighting Coolpad/Yulong for which gets to claim 8th ranking. Nokia cannot finish worse this quarter than 9th.

We also see the annual numbers becoming quite clear. Nokia will end the year selling around 3% of the total global smartphones, down from 5% last year, 16% in 2011 and down from 35% in 2010, when Elop was hired. Remember Nokia smartphone sales were growing strongly (with increasing and indeed Nokia-record-setting profits) when Elop was hired and every published handset analyst was convinced Nokia would easily remain the world's largest smartphone maker for years to come (with the older strategy, until we got Elop destroying that with the Elop Effect, to pursue his personal bonus of 25 million dollars to wreck the handset division business).

We have seen a nearly perfect transition from Nokia to Samsung. In Q4 of 2010, the last quarter before the Elop Effect, Nokia smartphone market share was 29% and Samsung was 11%. Today Nokia is 3% and Samsung is 33%. Meanwhile we also saw Blackberry collapse from 14% to 2% and HTC fall from 9% to 3%. Did Apple win out of these major collapses? Barely. The iPhone had 16% market share in Q4 of 2010 and has 14% today.. No, the only one who gobbled up all the destroyed rivals was the fastest mover in the smartphone space, the Korean giant we know as Sammy...

Back to Nokia. We can see the bottom, Nokia natural share in smartphones now in the Lumia age is about 3.3%, literally just one tenth of what Nokia smartphones owned of the market before Elop wrecked the business. And its also true, that since the Elop Effect, until Elop left Nokia, not once has the smartphone unit managed to produce a profit. The smarpthone unit had never reported a loss before Elop came into town. Now for Nokia/Microsoft, the next stage is to cure this company of its losses, and try to bring the smartphone unit to a sustainable business level, ie nominal profits or at least about neutral standing. Of course if the Nokia shareholders approve the sale of the handset unit to Microsoft, then the 'Nokia' handset business will become a side business for Microsoft and it can afford to run it with losses for years, like it did when it prepared the Xbox gaming console business to eventually become viable profitable and market leading business.

 

Comments

[Pekka Perkeles]

Is this ever going to end?

[Interested to know]

The Microsoft astroturfers are still spinning this as a win.

[Jamie]

It can only be a win for MSFT and loss for Nokia. Whichever way you look at it, MSFT has ensured that Nokia gives up all Handset business even the "irrelevant" feature phones - why ?

[AndThisWillBeToo]

And just 3 months ago Tomi told us how LG is on a rebound thanks to Android...

[Earendil Star]

A revealing article on Nokia's (the remaining company) future.

Firstly, let's forget about Nokia. Even the remains (i.e. what was not ceded to Redmond) continues to be in the grip of Microsoft. Management is MS approved. Decisions are MS approved.

The article speaks of "Patents, maps, and R&D muscle" to be the focus of the future Nokia.

So, let's see: patents are left in Nokia (but with MS' right to use them) because it would not be nice to see MS directly pursuing others with Nokia patents. So they let what's left of Nokia to do the dirty Patent Troll job. The job the real Nokia (i.e. the pre MS THTRH Flop one) originally never engaged in.

Maps means Here Maps, but I bet getting out significant profits from this activity (again gifted to MS and it's WP ecosystem, which in turn means also to previous Nokia competitors) will be tough, because so much of it has already been given away, and because the market has lots of competitors right now.

R&D muscle... must be a joke, since the best expertise has already left Nokia during the THTRH Flop failed experiment.

So, in summary: a company deprived of its most valuable bits is now a MS proxy to disturb competition by patent trolling and similar techniques.

What a great end for Nokia. A proxy patent troll for MS. What an end!

[Peter Sverige]

@ Earendil Star
Can you provide a link to the article you are referring?
It seems very interesting.

[Priyanka]

I wish Nokia could continue on their own rather than going into the hands of Microsoft. Now I'll never buy any Nokia device again.. I don't like Microsoft Windows Phone based smartphones much but Nokia did great with its Lumia design and hardware. Now don't know what will be the future of Lumia.

[Nicola]

Thus do you think that windows phone will become stronger? What do you think of BB's future?

[blog]

With blogs like this around I don't even need website anymore. I can just visit here and see all the latest happenings in the world.

[stretch mark removal cream review]

Every weekend i used to visit this website, as i want enjoyment, as this this web site conations truly nice funny material too.

[how much is 400 microsoft points]

Hello! Quick question that's entirely off topic. Do you know how to make your site mobile friendly? My weblog looks weird when browsing from my iphone 4. I'm trying to find a template or plugin that might be able to fix this issue. If you have any recommendations, please share. With thanks!

[ppd]

Hi, I read your new stuff like every week. Your story-telling style is awesome, keep doing what you're doing!

[ania lisewska]

Times have changed and thedre is now a plethora of sexy plus size lingerie from which to choose. s amusing is when they look over intimate apparel and extravagantly buy some. They want a woman who knows she's beautiful inside and out.

[4 man tent]

What a stuff of un-ambiguity and preserveness of valuable know-how regarding unpredicted emotions.

[microsoft points codes]

Every weekend i used to pay a quick visit this web site, for the reason that i want enjoyment, as this this site conations genuinely good funny information too.

[microsoft office software 2010]

What's up, I check your new stuff on a regular basis. Your humoristic style is awesome, keep it up!

[generateur de code psn]

If some one desires expert view about blogging and site-building then i advise him/her to pay a quick visit this website, Keep up the pleasant work.

[click through the up coming webpage]

Its like you read my mind! You seem to know so much about this, like you wrote the book in it or something. I think that you can do with a few pics to drive the message home a little bit, but other than that, this is wonderful blog. A fantastic read. I'll certainly be back.

[free arcade games for kids]

Heya i am for the primary time here. I came across this board and I find It truly useful & it helped me out much. I am hoping to provide one thing again and help others such as you aided me.

[Whatsapp v 4.0.0]

LG is doing pretty well and with the release of several good smartphones, it has become one of the strong competitor to the rivals.