Bloodbath update Q2 Results: LG has strong quarter, Microsoft's Nokia unit flat and still unprofitable

We have some more quarterly results in smartphone bloodbath.

LG reported surprising and strong positive news. Their smartphone sales were 14.5 million units in Q2 up 14% from Q1, giving LG a preliminary market share of about 5% and a strong hold on the rank of 5th largest smartphone maker this quarter (possibly even 4th).

Microsoft also reported on its Nokia unit, with 5.8 million Lumia smartphones reported. This is not a full quarter of sales, so when we adjust the sales for full-quarter size, it is 7.7 million which is up 5% from Q1 or right in line with the industry. Microsoft's smartphone market share (own devices ie Lumia) is thus about 2.7%. For Windows Phone overall including the other manufacturers, my preliminary estimate is 3% market share or flat from Q1.

As expected, cowardly Microsoft didn't report X Series sales of Nokia smartphones running on Android but those would have been in the several million range before their future was now ended last week. But Microsoft did report that the rest of its handsets, non-Lumia which includes most of Asha and S40 and S30 featurephones plus the X Series on Android, was 30 million. When we adjust that for full quarter, we get 41 million non-Lumia phone sales by ex-Nokia, down 29% from Q1. That is a collapse of sales. The previous quarter when Nokia still owned the unit, its quarterly unit sales decline was only 13% and that reflected the traditional slow quarter of Q1 after the strong Christmas sales in Q4. Now the non-Lumia handset sales of ex-Nokia fell by nearly a third in just three months. Very clearly the industry is sending Microsoft the message that it won't accept a phone from Microsoft as being the same as it was as Nokia. And knowing all this, no wonder last week Microsoft decided to fire half of the ex-Nokia staff it had just acquired. It only surprises me, that why is Elop still allowed to remain in control of the handset division (hardware division) over there at Microsoft.

So yeah, total Nokia handsets (dumb and smart) had 15% market share last year when Microsoft announced this acquisition. The total Nokia handsets (dumb and smart) have now only 11% of the total handset market, so whatever 'promise' was that the non-smart Nokia 'Asha' and other featurephones could propel some magical rise in Microsoft's smartphone desires, that is obviously vanishing too as we speak. Oh, PS, still no profits out of the ex-Nokia handset business that Elop wrecked. The smartphone unit has now produced 12 consecutive quarters of losses!

Ok. Thats all from the smartphone Bloodbath today...

Comments

[zlutor]

Sad to this whole story... :(

Let's guess how many months are left for remaining stuff before M$ closes the whole organization. 12-18 months?

@Tomi: do you know what happens with closed factories (e.g. in Komarom, Hungary)? Will they be sold to somebody? I meant assets there.

Once I was there - it was really impressive to see how they produce mass of phones... :-(

[Thomas]

The new CEO has, however, issued the enigmatic strategic directions "mobile-first and cloud-first".

[Asko]

@zlutor

Microsoft's new CEO said that ex-Nokia division will be profitable in two years, so I would think that they have at least two years but not much longer unless they succeed.

[falito]

last Q1 there was 5.6 miliion Lumia Phones thats is 37.7% of increase for this Q2 at 7.7 million Lumia Phones by Nokia-Microsoft, not including Noxia X...

[tontridge]

The channel boycott is still in full swing i see. I dont see any way out for them now, if the channel only boycotts, then the m$ is still as doomed as ever. No light at the end of this tunnel.

[Spawn]

Elop's "devices" devision was just removed while switching from Ballmers Windows-only devices & services to Satyas cross-platform mobile first & cloud first strategy. While xbox was moved out already and shutting down the devices-devision just begun with the mass-layoffs and aborted NokiaX+featurephone-segments it takes some time till fully applied. We will still see some new Lumia and Surface devices, more layoffs, more cuttings, more shrinking in Elop's device devision. Elop keeps there cause he has a proven track-record in shutting down things fast wanted or not. Satya just had to make sure Microsoft's cash is protected while that happens what he did. Then the whole devices-misadvantage will solved itself within next months. What stayst the end is Elop running/ruining the devision alone, some more millions for him and good bye. Its a controlled shutdown of Ballmers last expensive fail. It cannot be done fast because the $7 billion writeoff and culture-change needs time else Satya may find himself confronted with increased internal power-fights and resistance against any transformation.

[John A]

If I look at Nokias latest releases as Nokia Lumia 630/635 and now 530 they are not so impressive.
No front cam for selfies that are popular now etc..

And I saw the new Prestigio (Cyprys)and Allview (Romania) models with Windows Phone 8.1 that going for sale now in august.
Even their cheapest low budget models got a front cam.

Are Microsoft making the new Lumia models "bad" in purpose to get customer to the new OEM.s with Windows Phone 8.1?

So it make me wonder if Microsoft want to be in the hardware business at all? As I understand Satya Nadella dont realy wanted to buy Nokia at all, it was basicly Ballmers decision.

[abdul muis]

"cross-platform mobile first & cloud first strategy"

LOL at the term. How can you have 2 things as first priority? You can only have mobile first, cloud second, or cloud first, mobile second. To have 2 things as first priority is called loosing focus.

[Spawn]

@John A

> Are Microsoft making the new Lumia models "bad" in purpose

Cost-cutting on all edges. Not forget that Lumia sells on lose. Elop burned billions of cash from both, Nokia and Microsoft. 700 million this quarter alone with the 7i= billion spend for the Nokia-takeover on too. The experiment failed and there is no point throwing good money after bad.

When Elop wrote his lastest stupid memo he confirmed that Satya installed a cash barrier to prevent him, call me the General Failure, from continuing his cash burning at Microsoft. They needed to before Elop does with Microsoft what he did with Nokia. They needed to do so very fast since Elop's special talent, his mutant superhero power, to crash fortune500 companys within short time is dangerous. So, they did. He got head of the devision that actually needs to go away: devices minus xbox.

> get customer to the new OEM.s with Windows Phone 8.1?

As if shifting this irrelevant numbers of Lumia customers who would buy a Lumia again is of any interest. It isn't. Microsoft happly aborted WP7 Lumia customers because they wherr irrelevant, to less. They will do the same again with WP8.

Point is it was Ballmers and Elops game to see momentum in that 3% market share. It was there mindset to pray it will be 30% tomorrow and 130% the day after. That ended latest when Bill Gates made clear, in a public interview, that "this failed". Ballmer got gone, Elop moved to the wreck-devision, Satya applies.

There is no interest in WP, WP is aborted.+ and so are customers and partners - if any are left. That is what Microsoft's OneCore is about: only one Windows which is Windows desktop/server, still there cashcow, and no WP, there cashhole. WP is fading out. The next version is a odinary Windows with some customized UI on top. Its not WP, WP is history like CE is and later had factors more customers and partners and yet got aborted in favor of WP. History repeats. But I doubt we will see much investment from Microsoft into a new own mobile ecosystem effort. Not this time, not with Satya.

[Magnus Jørgensen]

Seeing and trying the LG phones i'm not surprised at all. They really follow what seems to be the golden rules for smartphones.
- Large screens
- User customizable
- Good Cameras

I bought LG nexus 5 this spring, and i must say its the best Android experience i have tried.
I think they will give Samsung something to fight for.

[AndThisWillBeToo]

@Magnus
"i must say its the best Android experience i have tried."

That's what the Nexuses are for. I personally have hard time trying to figure out why anyone would buy non-Nexus Android phone if they appreciate user experience even a bit.

[Rune]

>"cross-platform mobile first & cloud first strategy"
>LOL at the term. How can you have 2 things as first priority?

That was my first thought as well. But actually, mobile and cloud can often be two faces of the same coin, with mobile as client and cloud as server. E.g. for MS Office.

[abdul muis]

@Rune,

So, how's about when the mobile and cloud were not in the same page. Such as when do the MS office for android (cloud first), it will support the competing platform (microsoft mobile NOT first).

[Spawn]

@abdul

http://www.businessinsider.com/microsoft-office-for-android-2014-6

This is Office, not Office365. That means mobile (full Office available on any device, Android or iOS, connected or not) and cloud (Office365 and integrated services like sharepoint for collaboration). Both, mobile (or more rightfully 'device' as Kevin turned named) and cloud (or 'services' to pick a better term) are working together, hand in hand.

We are living in a devices & services world. So, whats the problem? That Satya named them both as first priority? Heck, Ballmer had more then a hundred first priorities and yet partners like Nokia complained back then that Microsoft doesn't take mobile serious. Now its two and mobile is explicit named. Its not even 'devices' (which covers a more bigger sprectrum and was limited under Ballmer to devices running windows) but mobile, mobile, mobile.

Productivity, achieve more, do more. Connecting people. Nokia got that a long time ago. Finally Microsoft got it too. At least something that may survive if, and thats a still big if, Satya can survive next months and years to come.

[AndThisWillBeToo]

IDC opens the game by reporting Samsung unit sales drop (YoY even).
http://www.engadget.com/2014/07/29/samsung-market-share-drops/

[RottenApple]

Well, that was quite inevitable after the Galaxy 5 utterly failed to impress...

[Sell Your Old Mobile Phone]

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