So What Do We Learn From the Nokia N1 Tablet on Android?

So the Nokia N1 tablet has been annoucned for Spring 2015 launch (China first). It runs on Android and has an 8 inch screen, 8mp rear camera and 5mp front camera. Its very light. And it will not be the monster-seller tablet of 2015. Its not a phone, there is as of yet, no sister smartphone products in the phablet size. But the Nokia N1 is the return of the 'real' Nokia to consumer electronics. What will this mean..

WONT BE BIG SELLER

So lets do quick review. Nokia was world's largest mobile phone maker from 1999 to 2011. Nokia invented the smartphone and was the world's largest smartphone maker from its birth till 2011. Nokia developed several operating systems for smarthones and its main system, Symbian, was the world's largest smartphone OS until that magical year, 2011. What happened in 2011? Nokia's new CEO torpedoed the massive highly profitable market juggernaut, Nokia's handset business (including smartphones) and sunk it with his idiotic move to Windows Phone. The quarter before Elop made his change, Nokia held 29% market share in smartphones with Nokia-record profits and during hte past 12 months had grown MORE than Apple's iPhone, so the gap to the rivals was only growing in Nokia's favor. Nokia had brand new award-winning smartphones that featured elements and aspects that it would take Apple years to copy (larger screens, better cameras, NFC etc). Nokia's app store had just grown to become the second bestselling app store just behind Apple's and closing the gap. Nokia knew how to succeed in the handset market. The problems at Nokia were in its networking unit which was making losses, and in delivery schedules and 'execution' with some phones delayed by a year even. But Nokia knew how to win in the handset business. Nokia was the bestselling phone and bestselling smartphone brand on four of the six inhabited continents including by a wide margin China, the world's largest phone and smartphone market (China is now twice the size of the USA, accounting for 40% of all smartphones sold today).

Elop wiped that all out with a rampage of destroying Nokia. Three years after the new Windows Phone based Lumia smartphones were released, Nokia's smartphone market share was down to 3%. Yes Elop had managed to wipe out nine out of ten customers for the most loyal dumbphone customer base on the planet and the second highest loyalty smartphone brand (behind only iPhone). It was kterally a world record in market leader destruction. No industry has ever seen this rapid collapse of its market leader, not even under catastrophic conditions like Toyota's brakes failures in cars, or from sheer management stupdity before like Coca Cola's launch of New Coke. Never has any company collapsed its global leadership position as fast as Elop demolished Nokia. And note, when Toyota hit its brakes or Coca Cola decided to go New, they were not twice as big as their nearest rival. Nokia's smartphone unit was more than twice as big as Apple in smartphones, and the unit was four times as big as Samsung's smartphone business. (PS we found out after he was ousted from Nokia's CEO job as the shortest-duration biggest failure Nokia CEO of all time, that Elop had a personal bonus clause that rewarded him for destroying the Nokia handset business... yeah, irony of ironies. The Financial Times calculated that Elop was rewarded an extra 1.5 million dollars for every biillion dollars he wiped out of Nokia shareholder value. The FT compared Elop's heist with the worst of Wall Street criminals like Bernie Madoff)

If you thought the Windows Phone strategy was right but Nokia was just inept at implementing it, nobody should be able to do it better than Microsoft. So now we have six months of Microsoft ownership of Nokia's handset business. How is the smartphone business? The Lumia business market share under full Microsoft control now is... 3%. And mind you, in four years since Elop announced his Windows strategy the Nokia smartphone business has not managed one quarter of a profit. Yes now its been 18 quarters straight, launching Lumia, launching Windows Phone 8, and switching ownership from Nokia to Microsoft and nothing helped. Not one quarter of profit. The Microsoft handset business dream is utterly dead.

NOKIA TABLETS

Now, we know that tablets are kind of related to smartphones, especially now when almost all smartphones are touch-screen devices. There is that class of interim devices, 'phablets' smartphones of larger than 5 inch screen size, started by Samsung's Galaxy Note and now copied by the iPhone 6 series. Phablet sales have now in Q4 of 2014 passed total tablet sales for hte first time ever. Next year is the first year when more phablets are sold than tablets.

Nokia saw this coming too. Nokia has developed tablets on five platforms (Symbian, Maemo, Meego, Windows and Android) and launched commercially on three (Maemo, Windows, Android). So where many tech brands are new to tablets and only paid attention to the market after the iPad appeared, Nokia had been there before and explored the market. Nokia, world's largest handset maker, knew also - partly from commercial launch - that a tablet is not just a larger smartphone. Its a different device. Look at Apple, the older iPhoen keeps growing sales but the younger iPad has seen its peak and sales are now declining. Is not one market, it is two, as I explianed here years ago and now recently many are coming also to that view.

The distribution and sales of tablets is drastically different from smartphones and there is no real synergy between the two. So Nokia for example resisted a Windows Phone/Lumia tablet project until the desperation set in and Elop was willing to try almost anything. As we know, the Nokia Lumia tablet was yet another failure in a long line of handset-maker tablet failures (starting with Blackberry). Tablets were a great idea for PC makers (like say Apple and Samsung) but for pure handset makers (like Nokia, Blackberry) it was lunacy and a huge drain on their marketing and sales costs.

Interestingly, for Microsoft, the tablet market is more promising than the smartphone market, for those same reasons. Microsoft Windows for the PC is sold through IT tech sales channels. The XBox videogaming console is sold through consumer electronics sales channels. These are both good for tablets. And all Windows Phone based smartphones face a global mobile operator/carrier sales boycott (or sales suppression by now, boycott is definitely too strong a word now when the market has been effectively destroyed, they don't really care anymore about Windows). This global carrier dislike of Windows was explained by Elop when he spoke to Nokia shareholders, and Elop said it was not explicit to Nokia, it was against all Windows based smartphone brands. So its first of all a fact, its been confirmed as a well-known phenomenon with Elop underlining the issue using the word 'obviously' -and it is why most Windows based smartphone makers quit the system around that time like LG, Sony, Dell and Motorola. And why the other remaining Windows smartphone manufacturers (Samsung, HTC, Huawei) all shifted away from Windows to Android today doing a trivially tiny slice of their business on Windows at best. Only MIcrosoft/Lumia remain and all 10 of the 10 most used Windows Phone smartphones now are Nokia/Lumia branded. Not one Samsung, Huawei or HTC among them anymore.

So for handsets Windows Phone is poison and smartphones on Windows do not sell. They can't turn a profit and the total Windows Phone market share for Q3 including all brands was only 2.9% (according to IDC). But IDC finds that in the far smaller tablet market, Windows is doing better. They have a 4.6% mraket share there. Microsoft can perhaps grow that Windows tablet slice to a viable business in coming years if they keep throwing tons of money at it, like they managed with XBox in videogaming after years of loss-making.

It may well happen, that Microsoft will arrive to a conclusion that the 'smartphone' side of the Nokia purchase is not viable but will still continue on the tablets, and migrate the remnants of that workforce to focus on the tablets only. And yeah, I'm not an expert on the tablets business, they might succeed there, but 5% market share is not very viable long term in terms of ecosystem etc. Especially not when you carry all the baggage that Windows has as a hated operating system. 

TROUBLE FOR MICROSOFT

But what Microsoft did not want, when it spent 7 billion dollars to buy Nokia's handset business, is to see Nokia compete against it. The exclusive licence to the Nokia brand was a long term thing for dumbphones but only a short-term thing for smartphones (and apparently, tablets). Nokia already pulled a dirty trck on Microsoft when it launched the short-lived X series that ran on Android. Microsoft killed off that project soon after they took over the handset business this year. But that was further confusion to the minds of consumers on what is the 'Nokia' (brand) intending to do. Is that Windows Phone -thingy, the whats-it-called-operation-system is it viable or not. If Nokia already launches on Android. So yeah, Microsoft had to kill it.

Now Microsoft has stopped using the Nokia branding on its newest smartphones. They are just branded Microsoft Lumia. And just months later, appears a brand new Nokia branded gadget, a tablet. This.. running Android. Even before we hear any rumors of a Nokia branded smartphone again from Finland, this is bad news for Microsoft's tablet strategy.

Will the N1 Tablet sell in enough numbers to show any relevance to Nokia's business? No, of course not. It will be the squeak of a mouse in the noise of a thunderstorm, but it is Nokia's first salvo. It does signal first of all, that Nokia wants to return. Secondly, it signals the total break from Windows. If any device by Finland's 'real' Nokia made sense to do on Windows, more than a smartphone, that would be a tablet. That Nokia now clearly spits in the eye of its 'partner' Microsoft, and does the tablet on Android is clear signal, Nokia is finished with Windows. For good. Forever.

Its a big win for Android (who doesn't need wins anymore, they have won the war). Its a signal for any remaining Windows partners. And its nasty news for Microsoft.

For consumers it will bring noise that the 'Nokia' Lumia device on Windows might not be a good purchase now. For non-Nokia branded pure-MIcrosoft Lumia, it is a clear distinction. This is not-Nokia. This is the real Nokia. And real Nokia runs Android.

Its a signal to app developers that if they were with Windows Phone because of any remaining loyalty to Nokia, its time to break with that, and just quit Windows. Go Android, thats were Nokia will be.

It is also a way for Nokia to signal to the thought-leaders, the tech press etc, what is the real Nokia vision in gadgets, when the Elop experiment is forgotten. Before Elop Nokia made very good tech products in terms of their hardware, often with very innovative and inventive tech. They were beautifully designed, durable, desirable. Now Nokia can return and tbus this first N1 device isn't needed to be any major sales success really anywhere, it just needs to be shown to various journalists and analysts who visit wih Nokia, to start to build that demand again. We want an innovative competitive Nokia back in the gadget business and gosh, does the smartphone slab i-Phon-a-clone market desperately need some innovation again, the kind that Nokia once gave us.

I am certain the plans are there for a possible return at Nokia into the smartphone space. Looking a how Sony and LG and HTC have wandered into and out of profits in their smartphone businesses, and how poorly Samsung has been able to turn a dominant market position into major sustainable profit levels, there must be doubt at Nokia whether its worth returning. On the other hand, in the biggest future markets for tech - China, India, Nigeria, Indonesia, Brazil, Russia, Mexico, Egypt, Thailand, Pakistan, Vietnam etc - Nokia is a very strong brand still today, even after all the Elop damage. A premium ultralight tablet at a competitive cost below that of the iPad and Galaxy Tab, is a clever strategy to remind consumers how much they used to love Nokia. It opens the door for Nokia if it decides to return. And now we konw for sure. Nokia has signalled, that future OS would be Android.

Comments

[Tester]

@Earendil Star:

Your posts are so pathetically insane and delusional that even Microsoft haters question your sanity. You are posting bullshit. Period.

Believe me, I have no love for Microsoft's actions but that doesn't mean that I swallow the nonsense you post. Grow up or seek help!

[Huber]

@Baron95:

"You don't you complain to Porsche and Mercedes why they don't let you boot load their engine control computers, their infotainment computers, their stability control computers, with your own ROMs, and why you can't access their file system?"

This is a new low even for you, Baron. Are you trolling or are you really _THAT_ clueless?

You cannot access the file system on your car for the same reason that you cannot access the file system on an Airbus 380 or a nuclear power plant:

IF THESE COMPUTERS CRASH, PEOPLE WILL DIE!

Also you cannot access the file system on your corporation's SAP ERP system because IF IT CRASHES, EACH HOUR OF SYSTEM DOWNTIME COSTS x MILLION DOLLARS!

When I mess up my private phone, basically nothing happens. _THIS_ is the major difference. Everybody on this board should understand this simple concept, so I do not understand why you post such nonsense here at all.

[John Alatalo]

I wonder about Microsoft strategy, it seems like they will keep Nokia X and Asha now with a new deal with Opera:

"Following an agreement between Opera Software and Microsoft, Opera Mobile Store will replace Nokia Store as the default app store for Nokia’s feature phones, Symbian and Nokia X smartphones. During the first half of 2015, the Nokia Store will be replaced by Opera Mobile Store."

Why make that deal if they would kill Nokia X and Asha and replace those with cheap Lumia models?

[eduardom]

Intel's failed attempts to succeed in mobile:

http://www.mondaynote.com/2014/12/14/the-intel-enigma/

[AndThisWillBeToo]

@eduardom
That was entertaining read and reflects interestingly against Tomi's praise of Intel the MeeGo partner.

[RottenApple]

@Baron95:

"All I am saying is that: IT MEANS NOTHING. Who cares, won't move the needle, no one will notice, it is a "I'm still here" move. No one cares."

If no one cares, why are we discussing...? :p

I think everybody agrees - including Tomi - that it really is an 'I'm still here' move. But you are wrong about the rest. People do notice, and some do care. You are again making your typical mistake and view this from the American point of view - a market where Nokia never had a strong position. But there are markets in the world that Nokia utterly dominated before Elop came along - and in many of those markets Nokia still has a good reputation, despite the non-selling Windows phones. So all this is is a signal to these potential customers, saying 'Just wait, we'll be back!' Whether it really works remains to be seen. One or two more years of waiting until they can release a phone again may well be too long. But if they do nothing right now they'll certainly be forgotten.

[togga]

@baron95 Any straw-grasping is way better than the WP disaster death-pill.

Nokia is obviously warming up consumers to a new Nokia Android-world. They will make sure to make the SW seamless. There is a huge "real" Nokia-fans (in contrast to camouflaged MS-astroturfers) waiting for a come-back so there is a market potential. Now, they need to aim for phones and some new features (new experiences).

[baron99]

http://bgr.com/2014/12/11/windows-phone-is-dead-2/

[baron99]

http://au.ibtimes.com/articles/576232/20141217/gartner-s-q3-market-share-smartphones.htm

and we all know (...well just the astroturfers), the carriers just LOVE windows. Yeah right.... LoL!

http://www.zdnet.com/article/how-verizon-convinced-me-to-give-up-my-windows-phone/

http://www.mobileburn.com/23944/news/why-windows-phone-struggles-in-the-united-states

[baron99]

...and now the Chinese are abandoning windows phone too ....Good-by to a crappy OS

http://gadgets.ndtv.com/mobiles/news/nobody-made-any-money-in-windows-phone-says-huawei-executive-629351

...and thank god they are out of the cars - Microsoft software in a moving vehicle is just plain scary ...and stupid.

[baron99]

...and more on the windows phone "death spiral" from the developer community

http://betanews.com/2014/12/08/windows-phone-has-a-massive-apps-problem/

[baron99]

....and more from the developer community

http://betanews.com/2014/12/08/windows-phone-has-a-massive-apps-problem/

[AndThisWillBeToo]

@baron99
....and more if you had remembered to mention news from the developer community

http://betanews.com/2014/12/08/windows-phone-has-a-massive-apps-problem/

[eduardom]

Most Coolpad phones have a backdoor installed in the ROM

threatpost.com/manufacturers-backdoor-found-on-popular-chinese-android-smartphone/109929

[adi purbakala]

ALL windows OS has backdoor by USA

[AndThisWillBeToo]

@adi purbakala
As has all Google OS (Android), all Apple OS (iOS, OS X) and whatever remains of other U.S. orginated OSes are left. If you plan to avoid that, pick Ubuntu, Sailfish OS or Firefox OS.

[baron99]

Clearly windows phone is dead ...only the pathetic astroturfers think is has some sort of future. They have been telling us this fairy tale for YEARS! Just too funny.

[AndThisWillBeToo]

@baron99/Earendil Star/Duke/John Waclawsky
What astroturfers? I haven't seen a single comment pro Microsoft/WP since your links above. Try to keep up: the discussion here has mostly moved to viability of Apple strategy and chances of Android makes to bring up innovations or high-margin, high price smartphones that would bring in profits that each and every company needs to stay alive.

[adi purbakala]

@andthiswollbetoo

I answer @eduaword say coolpad has china backdoor. I mean yiu said. We not secure. All os is agent

[RottenApple]

Let's be clear about Microsoft:

It's not that they do not stand a chance in mobile - it's that they do not stand a chance with their current products. It's their current Windows Phone that's basically a zombie.

Windows Phone as it is now is just a bad platform. And nothing will change if Microsoft doesn't play to their strengths - and weirdly they don't.
Even Windows 10 looks like the phone version of their OS is missing out on the most compelling aspect of the Windows ecosystem, namely to run desktop apps. Their entire focus seems to be to make Metro the unifying component. But how is that supposed to work if all 'serious' software doesn't use it? Business software - especially the kind that is custom made - needs other means of distribution, not an app store. It also needs extremely fast turnaround cycles, not some approvement bottleneck the software's maker cannot control. If they release a fully featured Windows for ARM version to run on their phones - then I'd give them a good chance. Recompiling some existing software is far, far easier than completely rewriting it (and putting yourself at the mercy of some external approvement mechanism.)

I agree that Windows Phone has some chance to sell in the undiscriminating low end sector. But even there I do not see long term success. The moment its users realize that they get short-changed on what they can do with their phones they may decide that their next phone uses a more competetive OS. Even if web based services migrate to using web apps in the long term, that still leaves things that cannot be easily done through a web browser. But we will see how much the Nokia brand helped move stuff. Microsoft has just started discontinuing its use so most of the devices in the stores still use the Nokia brand, fooling the ones that do not know. But that will change pretty fast.