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April 30, 2014

Comments

John Alatalo

I think its to early to tell how it goes with Windows Phone and Nokia (or the new brand)
After all the Windows Phone 8,1 update will be rolling out in june probably.
Not just the new devices will get it but the older ones to.
So the issue when WP7 became WP8 will not happend this time, with rewrite all the app portfoilio etc..

Windows phone 8 now have 250.000+ app and it growing with about 500 new each day. For "non geeks" the app are that matters not what OS the handset running.

So I suppose we will se how Q3 and Q4 result will be. Windows is now also free for the OEM manufactors, and early on we already see som result in this:

"Cheap Windows Phone 8.1-based Yezz Billy 4.7 and Billy 4.0 to be released soon"

http://www.phonearena.com/news/Cheap-Windows-Phone-8.1-based-Yezz-Billy-4.7-and-Billy-4.0-to-be-released-soon_id55732

And we dont know what the big brands like Samsung, HTC or Lenovo/Motorola will do yet.
So just let us wait and see how it goes.

foofoo

" So just let us wait and see how it goes. "

Usual argument for Microsoft chills (not accusing you of being one)

Let's wait WP7.

Let's wait Nokia Lumia's.

Let's wait WP8.

Let's wait new Nokia Lumia's.

Let's wait new Nokia with wonderful camera (everyone will line-up for them, right, right ?)

Let's wait WP8.1

Let's wait WP9...

Let's wait...

baron99

@foofoo I agree with the "wait for" ...that whatever is coming next is somehow supposed to placate current unhappy customers after they bought microsoft crap. I have to wonder how much Microsoft pays the group of astroturfers using the Baron95 label? ...or if it just a group of Microsoft employees sharing the burden of posting nonsense? ..It must really upset them that it is still true that NO ONE WANTS A WINDOWS PHONE! LoL

WonTheLottery

@John Alatalo
"For "non geeks" the app are that matters not what OS the handset running."

Or are they? According to research just conducted by ofcom in the UK (an 'advanced market' according to Baron95) the majority of smartphone users never install an app, not a single one. Of the minority that do install apps on average they install 23, only 10 of which they actually use. I'd bet if they did a deeper analysis they'd find a lot of commonality within that 10 too, popular messaging apps that are cheaper than SMS/MMS for example.

Beyond that my guess is most app downloads will be games for kids which will more likely be for tablets than smartphones. I bought all my kids Android tablets because Android games are a fraction of the cost (often free) of the games they used to want for their Nintendo DSs

So, if more than half of UK smartphone consumers don't care about apps, it wasn't the lack of apps putting them off buying Nokia's Windows Phones, therefore it must have been something else (remember, pre-Elop the UK had been a strong market for Nokia).

Holger

Hi Tomi
This is a interisting analysis (in german) http://www.focus.de/finanzen/news/fanfocus/smartphone-marken-im-check-neukunden-zeigen-nokia-und-motorola-die-kalte-schulter_id_3811038.html

Key findings:
- Only 25% of Nokia's customers owns a smartphone.
- Nokia has the longest lasting relationship to its customers.
- Nokia has the fewest new customer.
- Nokia has the most unhappy customers.

Tomi T Ahonen

Thank you Winter,

but I remove all references to the trolling blog. I am sure you understand. But your comment was good, thanks. But it was not necessary as I of course remove all references to that or any other trolling blogs. Cheers!

Tomi :-)

Tomi T Ahonen

More comments

Rotten - ok, good points and I don't disagree with you, that part of Windows Phone failure is bad interface and that users don't like the OS. The issue has gotten rather worse with Windows 8. But that is not incompatible with the point, that carriers revolved in 2011 and the effect has been catastrophic to the whole Windows smartphone ecosystem. The only illusion of it remaining alive was as Nokia slaughtered its Symbian market share at 13 to 1 conversion rate to Windows. But your point that Windows itself is ALSO bad, is also a valid point. I just don't see it as the primary driver of the failure.

Tomi - haha well not bada. But I will definitely go check out the first Tizen flagship and may get it. At the moment I'd need to get a new 'second' phone with a good QWERTY keyboard and the Blackberry offering is lame and Samsung's Galaxy only offers cheap models with QWERTY. If someone (other than Microsoft) offered a new high-end 'business' phone with good QWERTY, I would go for that in a heartbeat. I betcha there are dozens of millions of users of Nokia E7 etc models with QWERTY keyboards who would do the same.

Baron95 - so you bring in Kantar and you deliberately ignore China. You KNOW that Windows Phone market share in China has fallen in half in the past quarter. The Oct-Dec months Kantar had about 2% market share for all Windows smartphones in China and under 1% now for Jan-Mar (the March numbers came out last week). China smartphone market is bigger than those countries you listed - COMBINED. So don't play with math. The reality is that Windows Phone global market share is DECLINING not increasing. It is likely to be well below 3% when the big analyst houses report (obviously Microsoft is too chicken to give us the number as it keeps shrinking)

WonThe - thanks. Yeah Samsung will release first 2 Tizen smartphones by June including its first flagship. Russia will be among launch countries. And it already has the smart watches and a few of the other Tizen hardware vendors have released some smaller production run units like tablets etc. Tizen isn't dead but it is nowhere near as vibrant or promising as it was this time a year ago when major carriers were supposed to launch.

E.Casais - good point. Latest numbers I reported on the blog after we had Q4 results on installed base had Windows Phone with 46M installed base (3% globally), Blackberry is 40% bigger than Windows Phone ie it has 59M installed base (4%). Symbian is almost twice the size of WP by installed base even though no Symbian smartphones have been sold for a year, at 81M units and 5%. iOS (just on smartphones, ignoring iPad etc) has 336M installed base ie nearly 10x bigger than Windows Phone (22%) and Android has 1.1 Billion installed base (20x bigger than Windows Phone) and 66% market share.

Ok now gotta run. Hope to return soon with more comments

Tomi Ahonen :-)

Tomi T Ahonen

Sorry, I'll add one point

As LeeBase has just returned to the marketing expenditure issue. He (and others) is confusing current Samsung with past. Elop said very clearly in 2011 as we approached Lumai's first launch, that it would be the biggest in history and Elop had allocated twice the marketing budget just from Nokia's side, to what it had ever done before. This is not my conjecture. At that time Samsung was a drop in the bucket and couldn't possibly afford the marketing spend in that scale. Now that Sammy is the world's largest handset maker and by far the largest smartphone maker - and this war is a war of marketing - of course they can AFFORD to overspend everyone. THAT IS WHAT MARKET LEADERS DO.

(and math 'discrepancy' twice the budget BY NOKIA ALONE. Triple budget TOTAL SPEND when all others incl Microsoft and carriers are added.

Tomi Ahonen :-)

Winter

Tomu,
I really do not mind if you remove my comments if they hamper discussion. I hate it when blog comments are overrun by trolls.

John Alatalo

@WonTheLottery

Apps are important but not all of course. But Windows Phone 8 did miss some features that the updated 8.1 will bring. Notification center, VPN support for companies, swipe keyboard and a lot of other stuff.

So the step for a iPhone or Android user that maybe will moving to a Windows Phone 8.1 handset will not be such a big deal as before.
Like the Engadget write:

"Windows Phone 8.1 review: "Microsoft's mobile OS finally feels whole"
http://www.engadget.com/2014/04/14/windows-phone-8-1/

The app situation are not a big issue anymore. with 250.000+ and still growing fast.
So overall I think Microsoft have much things in place for once.


I dont think they will give up the smartphone race (With Elop or without him) . But if they screw things up the Nokia X platform can be the "plan B" so to speak.
Terry Myerson hinted at a interview (ZDNET) that they will continue to support it. So its not same Microsoft now as in the Ballmer era.

RottenApple

@John Alatalo:

Whatever. But the damage has already been done. Just like Windows Desktop 8.1 was unable to salvage the botched Windows 8 launch, so won't Windows Phone 8.1 do a miracle for WP.

The major criticism for me is still the utterly spartan user interface, that, compared to the competition feels like a joke. On both Android and iOS I got all the important functions nicely placed on the bottom of the screen. All I get on Windows Phone is the hopelessly confusing tiles screen and on the second page an alphabetic list of apps and phone services.

It doesn't really matter how good the OS itself is, everybody looking at a WP8.1 phone vs. a WP7.0 phone won't see any distinguishing marks on the surface. It's basically exactly the same UI with at most marginal improvements, But that's where people will look first. Essentially even the most recent Lumias have the look and feel of a 3.5 year old phone. And now please don't tell me that customers won't be affected by that (and of course the whole Metro hate that runs rampant.)

Microsoft may have a chance if they jump over their own shadow and admit that their UI needs a redesign. The current one has been poisoned beyond rescue, both on desktop and on mobile. Before that - good luck trying.

John Alatalo

@RottenApple

The Metro style works fine in a smartphone. Windows Phone and desktop Windows are not the same. And if you look at the features that is included in 8.1 you can make some changes in the interface that make it mer personal etc..

"Windows Phone 8.1: Finally, a worthy rival to Android and iOS"

http://timesofindia.indiatimes.com/tech/computing/Windows-Phone-8-1-Finally-a-worthy-rival-to-Android-and-iOS/articleshow/33858158.cms

Most rewiers think its a massive update and not a marginal one.

Yes I agree that will not do a miracle or quick fix for the platform. But their marketshare slowly growing. And Microsoft have the money to keep going:
"Microsoft has published its Q2 2014 earnings report, and the company has made $6.56 billion in net income on $24.52 billion in revenue. Revenue has increased by 14 percent from the same period last year, and net income increased by 2.8 percent"


I see no way they giving up on this.

Nokia Share Holder

Finally Nokia do not have phones anymore. Elop and Ollila made a huge mistake when they sticked to Windows Phone. But luckily it is over now. Android and iOS are already too big. There is no room for third ecosystem.

I hope that new Nokia becomes succesful in all three segment it have, Networks, Here and Technologies. Now we have a very good company and it is more finnish than phones with Microsoft's operating system.

RottenApple

@John Alatalo:


I don't think it will matter.
Windows Phone is the classic case of a product that already has comprehensively failed in the market.

The WP 7.5 update was supposed to solve all the problems. It didn't. Sales didn't take up.
The change to WP 8 was supposed to solve all the problems. It didn't. Sales didn't take up.
What makes you think it'll work the third time when it didn't the first two times. This is all wishful thinking on behalf of Microsoft. It also doesn't matter that Metro 'works better' on a phone than on a desktop. Again, irrelevant. Those who learned to hate it on a desktop have no desire to see how it works on a phone.

As for the tech press, yeah, sure. They hailed WP 7 as the revolution. It didn't come. They prophecized that WP7.5 would change it. Of course not. They predicted that WP 8 would turn things around. Of course it didn't happen. 'This is Microsoft. They'll make it work' No, did not happen.

The problem WP has is not technologocal, but psychological. People do not like it. No amount of twiddling with the OS's features will change that and it's clear that unlike Google with Android, Microsoft is unwilling to change their UI to be more appealing. They've sat it out for 3.5 years now, tried to force their UI even on desktop users - and it all completely and utterly failed. The most sold program for Windows 8 is the 'Start8' start menu replacement - and that despite a bootload of free alternatives. If people are willing to PAY to get rid of that UI, I'd say it has problems so profound that it can't be solved easily. It's not that the OS is broken or the UI is broken but that the design philosophy behind all of it is fundamentally broken.

The only way they managed to make some sales was to pump more money into the system than they were ever getting out - and then mostly in the bargain bin segment, i.e. rather undiscriminating users who look for price first and quality a distant second. They also had to rely heavily on the Nokia brand to even move these numbers and it got destroyed in the process. How do you want to cure this?

Tomi T Ahonen

John Alatalo

On Windows Phone market share. You probably are looking at old data (or comparing to historical points). The last 4 Quarters in a row from Q2 of 2013 to now Q1 of 2014 the Windows Phone market share has seen consistent market share EROSION ie decline. From 3.9% in Q2 of 2013 to 3.6% in Q3 of 2013 to 2.9% in Q4 of 2013 and now around 2.5% for Q1 of 2014 (may be worse than that). There is ABSOLUTELY no truth to claim that Windows Phone is "slowly growing" as you claim. The Microsoft Windows Phone market share is RAPIDLY DECLINING and lost literally one third of the modest market share they held exactly 12 months ago now in Q2 of 2013. Also please don't bring the discussion to the corporate financial performance side that is not the topic of this blog. But I'll let that comment stand, as you probably intended it to mean, that Microsoft is so rich and profitable, it can afford to keep the unprofitable Windows Phone project alive for quite a long time into the future...

Tomi Ahonen :-)

baron99

Notice the continuing common and very boring theme of all the microsoft astroturfing trolls... "wait and Microsoft will succeed"

RottenApple has clearly identified this non-sense theme.

....hmmmm, John Alatalo do you post as Baron95 too?

microshaft

Hey guys , really windows phone 8.1 will be the biggest ecosystem, far bigger than Android which only temporarily has any market share. Windows market share will start growing from now on as the carriers have just got on boards and now know that the cost of a phone is the entire cost over its entire life not just purchasing costs. There are loads of windows phone technicians around and mostly none for Android, so the carriers looked at that and will start preferencing windows phone now.

Tomi you will not be acurate next quarter as windows phone is set to skyrocket around 90 to 99 percent of market share as from next quarter.

Most people love windows and have complained to the carriers to stop boycotting windows phone so the carriers are starting to oblige.

Most people will feel silly in 3 months when there is only windows phone around and nothing else, as is the case for PC's.

Regards
Microsoft Public Relations Department America.

RottenApple

Dream on!

Microsoft may still have money but their best years are behind them.
All their money hasn't helped them make WP a success - on the contrary! They now have to give it away for free so that some idiot CEOs can be persuaded to support it. They had to buy Nokia's phone business because despite all their attempts it failed to become profitable. I think the most telling sign that this was an act of desperation is that they were willing to buy the entire feature phone unit along, just to make sure that Lumias continue to run on WP.

Any yet the old 'It's Microsoft. They'll make it work' mantra lives on.
The same boring arguments that were used to hail WP 7 as a success by default get regurgitated again. They didn't work 3.5 years ago when WP7 was released. They didn't work when WP8 was released 1.5 years ago. And they still won't work. In this business micracles do not happen! If a product has failed, it's over. The only way to turn a failed product into a 'success' is to force feed it to the market - see Windows 8. Nobody likes it, but there's no other choice because all older alternatives have been retired. Then again, Windows 8 Desktop can be cured - WP cannot, not to mention that it can't be force fed to a market dominated by other companies.

Concerning Microsoft developers, yes, they exist, and yes, many were badly burned by empty promises of instant success. Most, though, wouldn't even touch a smartphone, they develop 'real' software for 'real' computers.

WonTheLottery

@LeeBase
"Who called Nokia being bought by Msft long before it happened? People like me."

Actually it was people like me, people who knew the Trojan Horse's decision to exclusively adopt Windows Phone could only have one disastrous outcome for Nokia.


"I've been following the "not everybody uses apps" argument and I agree that in the unprofitable segment it's true. That's why there is such a huge disparity in the amount of money to be made developing for the iPhone than Android in the face of the HUGE unit share advantage Android has. It simply makes no sense until you realize that a LARGE segment of the Android customer base use their "smart phone" no differently than they use their feature phone."

According to a report prepared by Distimo in the 11 months to Nov 2013 freemium apps with in-app purchases went from 77% of the combined market (Android + iOS) to 92%. Google Play's revenue share of the freemium apps market went from 89% to 98%. This is a model that can easily work for HTML5 apps too, no locked-down 'ecosystem' required.

The most popular apps for both platforms are overwhelmingly games, which suggests the devices downloading apps are not being used as 'smart phones' at all but as games consoles/media players. It's actually more likely the devices not downloading many apps are the ones being used as smartphones.

RottenApple

@Leebase:

I think WonTheLottery is quite correct when he says that most smartphones generating revenue are primarily not being used as smartphones whereas smartphones being used as smartphones do not generate a lot of revenue. It makes perfect sense from the observations I made.

People who use their smartphone as a smartphone have no need for costly apps and services. They use mostly free stuff, maybe a handful of cheap convenience apps but that's it.

I really don't know many people who actually play games on their phones. There's two reasons for that. Most people are not interested in games and even many gamers find playing games on smartphones a sub-par experience, mostly due to the limited means of control. Which by default leaves a disproportionately large chunk of revenue in the hands of a tiny, tiny slice of customers.

What does that mean?
Well, ultimately it means that there's only two groups that actually benefit from Apple's leadership in profits: That's Apple itself and major game producers.

Everybody else, namely those who provide a service that's being accessed through the app and which doesn't generate any immediate revenue with the app itself cannot afford the kind of lopsided tunnel vision you exhibit. Most people use Android, not Apple and unless you provide a service aimed at money wasters you can't leave them out. It's also clear that these profits will never show up on your radar.

So the vast majority of service providers don't care one bit about Apple's profitability. It's completely irrelevant to their business, so why does this repeatedly become exaggerated as the 'main issue' with you and Baron 95?


@Baron95:

Nice distortion of facts, again!

First, why does Apple have such a high market share in Japan? No, it's not because Apple is so great. The main reason is that their major competitor is from South Korea, which for many Japanese is still a complete no-go. So without any serious competition it's not really surprising.

About Windows Phone:

The markets where Windows Phone has a high market share all share one common thing: All these markets once were strongholds of Nokia. In other words, it's not Windows Phone that made these sales, it's solely Nokia. But if that is true, the future of Windows Phone without the Nokia brand looks bleak. The development in the last two quarters is a clear indicator. Ever since the takeover was announced, WP has been fizzling. Whether this is a result of the takeover or just diminishing demand in Nokia's bargain bin phones remains to be seen. But both cases are certain proof that WP got no traction in the market. Either people buy it because it's called Nokia or they buy it because it's cheap. And both scenarios are under threat: The Nokia brand will be gone in two years and the bargain bin will, as per your own prediction, been taken over by Chinese manufacturers who will use Android.

And the comparison with Google: Please - come on!
We don't even know the ultimate financial outcome of the Motorola deal. I have seen opinions ranging from 'complete disaster' (you) to 'moderate success'.

And does it matter in the end? Google never made this deal to gain market share.

As for Microsoft: Aren't you a bit hypocritical if you deem Google's actions a failure when they capture 80+% market share with their OS, while Microsoft hangs around in low single digits?
Nokia hasn't made one cent of profit from their Windows Phone business. And Microsoft also has made substantial losses, and now that they own the smartphone unit will have to take its losses, too. Don't expect it will miraculously become profitable now. It will remain a money grave for many years to come, until someone pulls the plug. It won't even help their services because they primarily sell in the bargain bin segment, bringing us back to 'users who use their phone as a smartphone' and the above realization that those users do not contribute in any significant fashion to the 'ecosystem'. (I wonder why this euphemism is still being used for such toxic environments anyway.)

As for ignoring China: Sure, great move! Because it conveniently eliminates Google from the equation. But that's just sidestepping the issue. While for service providers, China will forever be an anomaly that is mostly ignored, the same surely is not true for hardware manufacturers. But now Microsoft is in the second group, so it's something that cannot be ignored.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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