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

[baron99]

It's not an article ...its a research paper. The astroturfers want facts but all I get back is opinions (or their "view" ...is there a difference) with name calling as they attempt to re-write history. I mearly pointed out there was an comprehensive research paper about Vista. Then I get a lot of crap. Speaking of crap, there is a lot of the vista crap still embedded in the microsoft code. History is a big part of the WP failure and microsoft struggles. If you are an intelligent analyst you need to figure that out.

Next, the astroturfers will be telling us how much microsoft is really loved by the operators. ...but we may have to "wait" awhile to see it :-)

[adi purbakala]

Meanwhile
The real Nokia android phone... Nokia C1 leaking in the web today.

Sweet..
Nokia C1 = entry level?

[Earendil Star]

Nokia C1... curious to see if it is confirmed or not.
If it is, we are really witnessing an attempt by Nokia to stage a comeback.
Not sure if they will succeed, but it is finally a sign of independent life after the devastating MS tenure since mid-2010.

In other news, Windows 10 is almost being released and people are still talking... Vista? Lol.
Just saying, because I have no affiliation with any Baron writing comments on this blog.

A comment on astros however.

I just went back reading some past articles by Tomi (back from 2010/11), and I believe it is really a shame he deleted lots of comments from the likes of Baron, LeeBase, ExNokian And ThisWillBeToo etc. back then. If he had kept them, we would have an eternal testimony of how biased and unfounded lots of comments were, which we can now only desume from the replies that were made. All in defense of Elop, MS, WP. Always avoiding discussion on any factual element that was brought into the debate, always neglecting the most important aspects, to sway attention from what was happening. The main reasoning was that WP was the only possibility for Nokia: WP was the way to differentiate (forgetting that it was so locked it impeded any differentiation whatsoever) vs Android, etc. etc.
The fact that Nokia's adoption of WP as *exclusive* (P)OS was crazy, as it gave MS total control on future profits, was always neglected. As was the absurd inbalance of the deal in MS' favor, given that MS was in panic mode trying to catch up in mobile, while Nokia was still n.1 worldwide. BaseLess replies were always in line with standard MS propaganda and FUD.

Fast forward 2014. Nokia's WP adventure ended in failure, the company almost went bankrupt, Nokia mobile unit is now firmly in MS hands, after being bought for peanuts. As myself and many others had correctly predicted, the Elop the Trojan tenure was a Flop. Certainly for Nokia, but possibly (and somewhat surprisingly) also for MS, given the meager results they got out of what could have amounted to a much more succesful endeavour if only they had been less shortsighted (and chosen a better Trojan than Elop).
Yet, the usual suspects, as soon as anything happens that does not run along the MS storyline, come back in force in MS' defense, and go back attacking Nokia once again. "This is no longer the real Nokia". "Copycats". Etc. etc. Why?

Why not just sit back and relax, while watching Nokia's attempt at a comeback? Why not just being neutral on Nokia's struggle to keep its brand alive in mobile, after the MS forced clauses expire? Because this is what is happening: Nokia is just trying to come back asap in mobile, lest people forget its name in the market.
Why not just wait and see what happens when the N1 and possibly the C1 really come out? Maybe they will be cool devices and have success, maybe not. But why being immediately so biased just because Nokia is no longer following the MS agenda?

As long as the usual suspects continue spreading pro-MS propaganda, insist in their bias and shy away from replying to any of the hard facts being debated, they will just vindicate their being called astros. Period.

And the usual and off-topic personal attacks to any dissenter will just add validity to this diagnosis.

[Winter]

@Earendil Star
"As long as the usual suspects continue spreading pro-MS propaganda, insist in their bias and shy away from replying to any of the hard facts being debated, they will just vindicate their being called astros."

Sorry, but what is here often called "MS astroturfing" is mostly meant as attacks on Android itself. Android is the "enemy" of Apple and proprietary OS' (or the American Way). As such, WP is defended as an enemy of an enemy.

E.g., Boron95 talks up MS as that strengthens Apple's position. Others might simply dislike a FLOSS phone stack, or Google. Yet others simply think MS won, and therefor must have been better in all respects.

And maybe, just maybe, we are wrong and they are right? I know, I do not believe it myself, but it is a possibility they will take very serious.

[Tester]

@Earendil Star and baron99:

I don't see any pro-MSFT propaganda here, just a levelheaded dicussion about their past products; why they became the way they are and why all that legacy support is a burden for development. Nobody here disagrees with the fact that Vista had problems, what they do is disagree with what the linked research paper concludes

I also see no hard facts presented, all you have is said single research paper that presents an incredibly biased analysis. Sorry, I can't take it seriously if someone predetermines the cause of failure and then writes a long treatment, trying to prove every single shortcoming from that single cause. This is 100% someone to push an agenda, not doing a reasonable analysis of a product and its problems.

So right now it's a few trolls trying to torpedo the discussion with the idiotic notion that anyone not trashing Microsoft is an astroturfer by default.

It takes no genius to decide which side has more merit in this discussion. It's not you!

[Tester]

@Leebase:

"Android's numbers must eventually count for more than just numbers. Hasn't yet."

... and the only reason is the US market. In most other countries the tides have already turned and if the US are not your prime market, Android is definitely the #1 already. And there's lots of products whose main focus lies elsewhere.

[KPOM]

@Tester, I believe iOS is also #1 in Japan, though the numbers are volatile and skewed because the pent up demand from NTT DoCoMo's delayed introduction of the iPhone in 2013 sent sales through the roof (and made the iPhone 6 launch appear somewhat subdued by comparison). iOS' market share in Canada is also similar to that in the US.

[baron99]

Such delusional astroturfers ... now they taking credit for Tomi's predictions (based on his data)! And, of course, any well written, well documented and well referenced research simply has to be biased if it doesn't match up with the microsoft talking points the astroturfers want to employ in their re-write of history. If anyone has taken the time to read the research the Q+A at the end explicitly deals with the (expected) bias attacks by the microsoft supporters/astroturfers.

It must be really killing the astroturfers that their wonderful microsoft WP is going down the toilet in a nice slow costly demise ...and us "haters" (this term represents the level of intelligence by the astroturfers who try to shut down debate by name calling) continually present facts and get biased talking points in return. But, we are "all in" to watching the toilet drain :-) ...and we can wait, and wait, and wait and wait for it. :-) It's has been a great privilege to present facts on this forum that annoy the astroturfers. WP is the gift that just keeps giving! :-)

BTW, Maybe I should post the link again:
https://www.cs.auckland.ac.nz/~pgut001/pubs/vista_cost.html

[baron99]

Wow, If Tomi is wrong so much, WHY do you come here? ...Please feel free to go off and write books with your own data and analysis. ...I am sure they will be best sellers at microsoft LoL

[zlutor]

@Tomi: any opinion about this: http://www.gsmarena.com/nokia_c1_is_the_companys_first_postmicrosoft_android_phone-news-10552.php

Code name of the project could be "Operation MiddleFinger?" :D

Maybe it is fake but if it is true really sad to see yet an other iThingy (design) clone from Nokia - even if the purpose is only to keep the brand name visible...

On the other hand it is interesting to see all devices are based on Intel SoC, manufactured by Foxconn - I think it does not cost too much for Nokia to get them into the market... :D

[abdul muis]

http://www.nokiapoweruser.com/first-batch-of-20000-nokia-n1-sold-out-in-4-minutes-in-china-next-batch-arrival-on-15th/

566,438 try to buy the Nokia N1, but only 20,000 got it. sold out in 4 minute.

[AppleTurfer]

20000 that's all Foxconn made in their first batch?