So the Nokia brand returns.. with a Vengeance

Ah, that was fabulous news to discover when returning online after two days out of coverage. All readers of this blog already knew what I just discovered.. And let me say that essentially all you ever wanted to know about how will this new Nokia deal work, and the sensible analysis about it, is already on this blog, but written by my readers in the comments section (thank you!). I don’t really need to write my own analysis, I could just quote my regular readers.

What is the deal. Microsoft quits its disastrous play into handsets via the purchase of the Nokia handset business. After firing most of the people they brought in, now part of the remains are sold, kind of, back to Nokia. The hopeless venture into ‘Lumia’ brand and Windows based smartphones will be terminated and some of the resources Microsoft had acquired will transition to the Surface tablet (and phablet) business. The end of this to Microsoft branded consumer handsets is going almost as totally a catastrophy as Microsoft’s previous attempt when they bought Danger who had been making the highly popular youth phones branded ‘Sidekick’. Yes, obviously, its also exactly as I predicted when the Nokia-Microsoft sale was announced in 2013, and what I reaffirmed when the deal was completed in 2014 and reminded that Microsoft handset venture continues to be dead, last year in 2015 when Microsoft fired Stephen Elop and gave this project one last chance.

There was that rumor a few days ago that Hon Hai aka Foxconn (makers of iPhones) was buying the remaining Nokia business from Microsoft. I wrote my initial analysis of that rumor. I also argued that it would make sense for Microsoft to sell the remaining ex-Nokia handset business back to Nokia (instead of Hon Hai/Foxconn). I pointed out that Nokia was already coming back to smartphones and Nokia could/should be able to make this loss-making unit turn back into a profitable and growing business (part of Nokia’s core competence is to turn loss-making telecoms businesses back into profits, see Siemens and Motorola networking businesses, plus now the project with Alcatel-Lucent). I speculated that if there now was a deal in the works with Hon Hai/Foxconn then there must have been at least serious talks between Microsoft and Nokia. As the new CEO of Microsoft, Satya Nadella was not involved in the Nokia purchase (that was done by ex-CEO Steve Ballmer) there was no personal reputation or political investment in that decision. Similarly, Microsoft had already written off the total purchase in its accounting books last year, so the sale of the handset business could be done without a penalty in an accounting/finance sense.

Obviously as it turns out, there had been talks with Nokia and the deal is a complicated three-way (four-way) deal where part of the ex-Nokia business is sold to a new Finnish entity, HMD, which now acquires Nokia handset branding rights from Microsoft and handset design aspects. Meanwhile Hon Hai/Foxconn has set up a company called FIH, which will acquire the ex-Nokia featurephone factories, and handset sales and marketing from Microsoft. Because Nokia already had by the original sales contract from 2013 the rights to return to sell smartphones now, this new partnership of HMD and FIH will become a Nokia brand full portfolio company, designing, manufacturing, marketing, selling and distributing smartphones, dumbphones and tablets under the Nokia brand (exclusively) and using what remains of the original Nokia design, manufacturing, marketing, sales and distribution of ‘original’ Nokia. The part left out is Windows smartphone OS and it will be replaced (we all rejoice) with Android. Nokia retains a licencing agreement with this partnership ie the Nokia brand and some share of its market success, without taking much of a risk in two very volatile businesses.

WHY THE DUMBPHONES?

The traditional handset business (dumbphones aka ‘featurephones’) was a 1 Billion handset business sold annually a few years ago but last year sold only 500 million and this year will sell 400 million and the business will be down to near zero handsets sold by year 2020. A dying business, where Nokia’s brand even under Microsoft ownership was still holding a large market share and fierce loyalty among loyal customers in mostly Emerging World countries from India to Nigeria. Nokia brand offering in ‘featurephones’ extended to near-smartphone class with the Asha series of dumbphones that had good cameras, touch-screens, 3G and WiFi connectivity and of course the full internet; they even could take apps that were written in Java such as Angry Birds, Facebook etc. Before then-CEO Stephen Elop (worst CEO in any time among any Fortune 500 sized company in any industry) decided to destroy the Nokia handset business the Nokia handset business was vibrant, highly profitable, growing faster than Apple’s famed iPhone business (yes, its true) with high customer loyalty and a powerful sales and distribution asset.

Stephen Elop (did I say, worst CEO in history, of any industry) did yes destroy the goose that layed the golden eggs. He did that to collect a bizarre bounty on his CEO contract which ended up being an incentive for demolishing the most profitable part of Nokia’s business). A key point to note, was that Nokia was the best among ‘legacy handset manufacturers’ (handset manufacturers who sold both dumbphones and smartphones, as distinct from newer handset makers who only sold smartphones like HTC, Blackberry and Apple) to MIGRATE its dumbphone customers to smartphones. While Motorola, Samsung, LG, SonyEricsson, Huawei, ZTE and others had to accomplish this tough transition, moving customers from relatively modest-cost and modest-capability phones to full smartphones, the others struggled so badly in that transition that every one of Nokia’s rivals had quarters where they produced losses in their handset unit, and their resulting market share in smartphones was WORSE than the share in smartphones. Nokia (up to when Elop - worst CEO of any industry ever - decided to destroy the business) was the only one of the legacy handset makers to report every single quarter of that transition a profit - and the only one whose resulting market share in smartphones was higher than its share in dumbphones. Yes, Motorola, SonyEricsson, LG, Samsung etc all saw a loss in market share when they tried to move their customers to smartphones but not Nokia. Nokia was able to GAIN market share while executing this tough and expensive transition. And only Nokia was doing that profitably.

So on the dumbphone business, its not a totally dead duck that this new Nokia-HMD-FIH partnership is reacquiring. It is an interesting asset which is actually profitable and still sells in the range of 80 million dumbphones per year, and which is the type of business, that Nokia once was the best in the business, at transitioning to smartphones. Its not inconceivable that Nokia is able to transition all of this last 80 million dumbphone customer base to smartphones in the next 36-48 months. These would be extremely low-cost smartphones of course, but still they would be smartphones. 80 million handsets is a 4% market share of total handset market. 80 million smartphones would have been a 5% market share last year in smartphones, and would put this unit in contention for roughly a 4th place finish in the Top 10. That is IGNORING the top-end and current Lumia etc smartphone potential. This is why this new partnership actually WANTS the old dumbphone unit ‘back’ from Microsoft. They are genuine Nokia mobile phones with excellent market share, a strong global sales and distribution organization and a high volume of handset production in very modern factories, with very competent component sourcing, etc. It is a good foundation to start from.

Note that this ‘dying’ part of ex-Nokia dumbphone business holds about a 15% market share in dumbphones currently and its main rival globally is.. Samsung. But the BUSINESS performance of this unit had suffered from 2011 onwards (Stephen Elop worst CEO ever) and still suffered from bad carrier relationships by Microsoft up to today. This unit could see a modest ‘revival’ in its last years. The Nokia basic phones are very well made, fit their intended customers very well, with aspects such as basic cameras, in-built FM radios, great battery life, etc. Once the ‘anti Microsoft’ attitude by the carrier community and distribution is removed, this unit should achieve its full potential while the HMD-FIH partnership prepared for the final migration of remaining Nokia brand customers to low-end Android smartphones.

ANDROID NOKIA SMARTPHONES

The eagerly-awaited part of this partnership is the ‘proper’ transition of Nokia from dead OS platform Windows to Android. When I speculated on what a pure Foxconn/Hon Hai purchase of the ex-Nokia business from Microsoft might become, I said I expected Foxconn/Hon Hai to focus on low-end and at best mid-price smartphones on Android to gain sales volume, and mostly ignoring the top end ‘flagship’ class contest. I also thought that Hon Hai/Foxconn would not want the actual factories nor the sales and distribution staff from Microsoft which once belonged to Nokia. Now in this new HMD-FIH partnership, essentially ‘the full Nokia’ handset business, of what is left, is transferred in parts to these two partners. Rather than just pursue a large volume low-end business, this partnership will be well prepared to actually ‘compete’ fully for a total smartphone portfolio play. Expect Nokia brand to rapidly return to flagship class smartphones and then several models all the way far far below where day Apple’s new iPhone 5 SE is priced. Because HMD has acquired Nokia design and intellectual property aspects, this new partnership can pursue ‘typical’ award-winning top-end smartphones. But differing from the past 5 years the new HMD-FIH partnership will not be stuck trying to push a dead Windows OS, but rather can thrive using the Android OS (which powers about 80% of all smartphones in use and sold in 83% of new smartphones last year).

I mentioned that Nokia designed a series of 3 ‘X Series’ Nokia Android smartphones in early 2014 just before the handset business was handed over to Microsoft. Microsoft then immediately ended those phones. They were low end smartphones but they did achieve a nice start in sales. They were ‘typical’ low-end smartphones of modest specs. But they also were priced to sell. When we consider the upcoming portfolio, expect several models as updates to those models (and possibly even launching a few of them still now, at lower prices). The more interesting part was Nokia’s R&D project for handsets (and tablets) for Android. That - which is kind of the father of FIH - has already DESIGNED Android based ‘new’ Nokia smartphones, which this unit (while still at Nokia) was hoping to then find a partner like Hon Hai/Foxconn to start to manufacture and sell. In that way, the transition from dead Windows to Android is not starting ‘from scratch’ like it did when LG went through this same process - they tried to go purely Windows first, before admitting its not viable and ended Windows and went fully to Android where most of LG’s rivals had already gone. So we could see (hopefully will see) the first new Nokia Android smartphones relatively soon. I think a Christmas launch of new Nokia Android smartphones is optimistic (but might happen in small volume) but a Spring 2017 roll-out should be very feasible as this deal is now announced in May of 2016.

We then need to think of Nokia and its potential. Apple did not invent the smartphone (in fact the first iPhone of 2007 was not even a smartphone, it was only a high-end expensive featurephone). Nokia invented the smartphone. Some foolish pundits and mostly US based ‘experts’ have peddled the myth that Nokia was somehow behind on the trends in smartphones. Nothing could be further from the truth. Lets take Apple. All major developments on Apple’s iPhone, as announced by Apple both on the hardware to the iPhone and the iOS operating system - all of them - had already existed on Nokia flagship class smartphones - sold YEARS before that latest model iPhone was annoucned. This was true all the way to last year, 2015. Yes, when Apple introduced phablets - Nokia did them in 2013 - and when Apple introduced a mobile wallet Nokia had done Nokia money back in 2010. Nokia had NFC on its smartphones long before Apple, and better cameras, plus a long slew of features, several that Apple STILL has not implemented (such as microSD card slot). What Nokia was particularly good at, was adding features that are popular in the Emerging World from the in-built FM radio, to dual SIM, to the in-built flashlight/torch function. And on the pricing, Nokia had pursued lower-end smartphones long before Apple decided to go to lower-end smartphones. Finally the world distribution, Nokia was in India, China, Brazil, Nigeria etc for years and years before Apple started to pursue those markets. It is simply ignorance to peddle the myth that Nokia was ‘behind’ Apple. As I said, the last year before Elop (worst CEO ever) destroyed Nokia’s handset business, in year 2010, Nokia grew MORE in smartphone business than Apple did. Apple was not CATCHING up to Nokia. Nokia was more that twice as big in market share as Apple’s iPhone - and Nokia was PULLING AWAY from Apple, while Nokia reported its most profitable smartphone quarter just before Elop (worst CEO ever) suddenly caused the total collapse of the business.

 
Nokia knows what handset customers want. Nokia knows what is a smartphone, Nokia literally invented the smartphone. While the original iPhone of 2007 was a revolution (and I said so back then) after that revolution, Apple’s total iPhone strategy was to add features that Nokia had in its smartphones - but on typically a four-year lag. Who was following whom? Nokia knows how to design great phones and to add features and abilities that consumers want and fall in love with. Like now, Apple is rumored to add an optical zoom (aka ‘real zoom’) to its next iPhone, the iPhone 7. It is expected to be either a 2x or 3x optical zoom. Nokia again, has done all that, but when did Nokia do the world’s first smartphone with optical zoom? Nokia did that LITERALLY ten years ago, in 2006. It was the N93. And it was a 3x optical zoom, while Apple might do a lesser zoom now. Or take Xenon flash (aka ‘real flash’ versus the LED flash on most smartphones). Apple still doesn’t do Xenon flash on iPhones. Nokia had the first Xenon flash in 2007.

And Nokia’s massive image sensor, the Pureview with 41 megapixels. The image density was literally the best on planet earth. Literally the largest camera sensor of any camera on the planet, from any camera brand from Nikon to Canon with pro cameras costing 10,000 dollars without their lenses; or any other pro camera including the Hasselblads and the like. And why do I say ‘on planet earth’ - because the only camera sensor even more advanced than Nokia’s Pureview 41mp sensor, when it was launched in 2012, was in orbit, used on US spy satellites which had 64mp sensors. There is much more to camera quality than who has more megapixels, but in terms of image resolution - the sharpness of detail - then megapixels matter. Nokia has still today (in Microsoft’s Lumia) the largest sensor ever put into any cameraphone. Now this FIH-HMD partnership also reacquires that tech, and we can expect more super-cameras on future Nokia flagships. Oh did I mention, the camera function this year becomes the most used feature of any phone, ahead of messaging (and far ahead of voice calls or internet or apps or Facebook or anything else). Who leads whom? Nokia KNOWS how to do great smartphones. What it had, was a bad OS and the sales boycott against Microsoft by the carrier community.

RETURN OF THE REAL NOKIA

So the Windows project was a disaster yes. Nokia had never stopped making great hardware - Nokia even with Windows was winning best phone awards. But the sales and distribution channel was strangling all Windows makers - and all other giant brands left the Windows family by the end of 2011 (yes at one point, 7 of the Top 10 largest handset makers offered Windows smartphones but Windows never passed 12% total market share. Nokia had 29% market share the year before Elop - worst CEO ever - wrecked that business).

Now the remains of what once was the world’s dominating handset juggernaut, but including parts of its legendary design, its overpowering sales and marketing, and its superbly efficent factories, can be ‘released’ from the restraints and constraints of Windows. Now the question is primarily, on how quickly and with how broad a portfolio will this new FIH-HMD make its comeback. I’d love to see the first Nokia Android smartphones this year but lets say they come back in any meaningful way in terms of handsets and their sales reach only next year. Lets say by the end of 2017 Nokia should have at least 5 Android models, maybe something like 8; and including one clear flagship with Pureview camera, Xenon flash etc. That Nokia brand should be at about 3% market share for Q4 of next year. That is four times better than what the same unit, selling Lumia brand on Windows is doing now, in Q1 of 2016. It will be a massive slap in the face of Windows and Microsoft, when this happens.

Then Nokia should be expanding, mostly further down in the price range, but also across more niche markets (I half expect and fully hope for a return of ‘The Communicator’ a full touch-screen large screen flaship class superphone with slider/folder physical QWERTY keyboard, in the style of the Nokia E7 and the N950). Nokia has its own ‘skunk works’ and owns a vast array of patents in the handset and wearable and portable gadget space, we could see many new ideas coming in near-future flagship class phones. But expect most of the new Nokia to be roughly iPhone-a-clones, slab touch-screen ‘generic’ smartphone designs like nearly all of any other Samsung Galaxy or LG or HTC or Sony or Huawei or Xiaomi smartphone that runs on Android. But a portfolio of at least 10 and could be as many as 20 smartphone models by Q4 of 2018 also means a market share well past 5% and Nokia brand fighting for the 4th ranking just outside the Top 3 of global smartphone brands by market share. The last time Nokia had a smartphone market share higher than 4% was in Q2 of 2012, when still more than half of Nokia smartphones sold, were powered by Symbian or MeeGo. The story will be the incredible come-back of Nokia and the damage is likely to be most felt by Samsung but also several of the other current Top 10 brands like LG. I strong recovery by Nokia can well have Sony quit its phone business and HTC and Blackberry to finally fold.

A recovery spirit with the rump-Nokia and its ‘last survivors’ now with FIH-HMD - will power the unit to more heroic and brave attempts and a continuing growth where for 2019 I think Nokia will be challenging Huawei for the Top 3 position. Nokia might be at around 7% to 8% market share which in 2019 will mean something around 135 to 150 million smartphones sold globally. Microsoft sold 21 million Lumia/Windows smartphones in the past 12 months. Nokia’s best year was 2010 when it sold 103.6 million smartphones. But as this recovery-Nokia returns to its ‘natural’ market position as a highly beloved, features-packed, premium phone brand but selling in all markets and at all price points, the fight will get tougher. From 2019 the ‘bounce back’ will be completed and I think its very likely that Samsung will still the biggest smartphone maker and Apple number 2, but the race will be on for number 3 and Nokia as FIH-HMD will be perceived as one of the strongest competitors in that market heading into the next decade. It is great news for all fans of mobile phones and smartphones. It is also great news for Finland and for fans of Nokia. This is pretty close to a ‘best case’ scenario of how Nokia could come back, and yes, we will finally get a full portfolio of ‘real’ Nokia smartphones running full Android. Tervetuloa takaisin Nokia!! Welcome back Nokia !!

Comments

[Tomi T Ahonen]

PS I am now back to officially being an nSheep. My blood turned from red back to Nokiablue.

So that means that I hate Apple now, I hate Samsung now, I hate Sony now. I hate Blackberry (wait, I have that Priv, ok, maybe I just ignore BB now) haha... no, I only hate Microsoft as always, but I am back to loving Nokia

Tomi Ahonen :-)

[Tomi T Ahonen]

So what? 150 comments? Wow.

Ok. Its 04 AM my time. What to do, what to do. I could go to Twitter. Or I could go to bed. Or I could go hang with those who have been 10 years loyal on my blog. Ah, decisions, decisions. What to do, what to do. I know, I have an even better idea: whisky!

No. I wouldn't do that. Or actually better yet, I don't need to chose, the whisky is close enough :-)

Tomi Ahonen :-)

[Tomi T Ahonen]

on May 21

Lullz - on the 5% market share. Fair point. The 'safe' forecast is to say they'll be well below that. HTC can't get to half that. Sony is only at half that. Blackberry is less than one fifth that level. Why would Nokia suddenly do better than say ZTE or Xiaomi or LG.

Three big reasons. One is the carrier boycott. It is now gone. The ACTUAL Nokia sales performance (back when Nokia still owned its handset biz) was at 3% even with a global sales boycott against it. How much higher would it have been if there was no boycott in 2012 or 2013? Maybe 4% maybe 6% maybe 8% who knows. But it took SERIOUS sales out of Nokia. That pressure to prevent their success - for the same effort - is now lifted. The Nokia total effort can see its full results, not a diminished result.

Second is sensible design and portfolio. Elop overruled the experts. We heard it again and again. There were SMART people utterly frustrated, forced to create crap-phones rather than genuine Nokias. Not because it was Windows (although that was another big part back in 2012) but because it was idiot Elop. Nokia knows - reasonably well still today - what is a desirable basic modest-price premium smartphone today for a global/emerging world market (very very different from what sells in the USA) and Nokia is exceptionally good at designing such phones.

Third is a Nokia fighting spirit. THEY WANT TO WIN. They used to win. They were ready to win. Their boss prevented them from winning. You will not believe the winning spirit they will now have (for at least the next 3 years) to prove THEY were not at fault, it was only the idiot-in-charge. They want to prove they CAN win again. Among the Finns, its what we call our 'winter war spirit' from World War 2, when Finland was outnumbered 15 to 1 in soldiers, 40 to 1 in airplanes, 100 to 1 in tanks, and yet we stopped the Soviet invaders. Those Finns will be digging deep into their 'sisu' (a kind of guts) and push the victories through, whether a design or manufacturing deadline, or a sales target or delivery date. That 5% is kind of the 'easy' part. Then the hunger by management/owners becomes - lets get back to the top - and Samsung and Huawei of today are not easy picking like Motorola and Siemens of 1997 haha.

But you're very prudent to say, won't get to 5% and you know it, I'll still be here, lets talk about that in what, 2019 and review how it went?

On your last point - to convert dumbphone users.. I think that is actually the easiest part. Microsoft-Nokia dumbphones have now a larger share of the remaining dumbphone market than Samsung. Very many of them who use Nokia are in the Asha class of featurephones not the very basic minimalist phones. Those are ripe at the next upgrade cycle to go with the very cheapest Nokia Android superduper minimalist basic touch screen smartphone. THEY trust Nokia the brand the most. They haven't even had the weird detour of Lumia and the Microsoft brand. The 'harder' battle is to win back those who once loved Nokia SMARTPHONES who now are on Android on a Samsung or Sony or LG or Huawei etc (and nearly impossible - if now on an iPhone). But I wasn't promising Nokia to get to 33% haha... (yet)

Lullz - on the picking the best phone. Actually, for most people worldwide who buy a mobile phone (smart or dumb, new or used) it is the most expensive thing they own. Its like what to Westerners would be the equivalent of our car or home. We DO spend a LOT of time and effort, picking our car (we often know as teenagers what that first car will be, having dreamed about it for years, reading all about it) or our home. Now imagine the person who earns 10 dollars a day in say Brazil.. that 100 dollar basic smartphone is a HUGE investment, its several months of savings (he or she won't have a credit card and no bank loans) and they will most likely consider VERY deeply what it is they want. Thats not to say, that perhaps empirically, they might not be aware of what all is available in that market (but probably are) and that they might still make an 'irrational' decision but which of us hasn't done that haha. But yeah, I do think for most people - who can't afford to just walk into a phone store and buy any phone - they do think a lot about that purchase. I'd say its more in the rich world where we may be quite ignorant of what is actually a good value or what is available...

William A - Actually it was your comment originally when I read it, that had me thinking that wait. No. this was not cooked up SINCE the deal was done with Microsoft. This as cooked up BEFORE the deal was struck with Microsoft. This was VERY 'Jedi move' corporate heist by Risto Siilasmaa screwing Steve Ballmer. Including the threats then to go Android when Ballmer didn't agree to some part that Nokia insisted was going into the deal.

Nokia clearly knew in 2013 (ie they wanted it) that they are coming back. They gave Microsoft the MINIMUM exclusivity period to smartphones. Ballmer no doubt wanted 10 years which they only gave on the dumbphones. But once Nokia then said, ok, if you won't take 3 years, we go Android next year, the X Series has already been designed. We'll put it into production. Then Ballmer thought, ok, in 3 years I can kill off the Nokia brand, move the Windows world to Lumia and 'obviously' Windows with Win 8 will be such a huge success, by then Nokia on whatever OS will be irrelevant. Microsoft will have 10% of the smartphone wars - when Ballmer himself can micromanage the handset biz with his monkeyboy Elop, and no Nokia 'naysayers' will be there to bitch at every stage. The Nokia deal was essentially concluded by the time Bill Gates fired Ballmer and while his firing came first (ok, announcement that he'll be stepping down) then Bill Gates had no chance to go renegotiate the pending Nokia deal, without even more obvious PR nightmare if after Ballmer exit is announced, suddenly the Nokia deal breaks down (and Nokia leaks it) and then Nokia goes Android. The Android threat was how Nokia squeezed the 8 Billion dollars out of Microsoft. Because all other major partners had already departed, Microsoft was totally dependent on Nokia at that point and Nokia knew it. Some day I hope we can read some account of the inside view to those negotiations. They have likely been epic (like with initially Nokia walking out on Ballmer when his offer was so lousy).

(more coming)

Tomi Ahonen :-)

[Tomi T Ahonen]

Manufacturingbig

You don't play that game against me. You either RESPOND or you shut up. If you try to argue points without RESPONDING, you are gone (again).

I deleted that comment. You will RESPOND or go away. You will not spew propaganda without responding

(I love deleting moronic comments. It just takes me one click)

Tomi Ahonen :-)

[Tomi T Ahonen]

(still on May 21)

Wayne 'may the gods..' - LOL thanks!

AtTheBottom - good point. (differentiation, Nokia will end up like Sony). First. Sony stupidly retracted from a global footprint - costly. They tried to focus only on the top end (dumb for a mass market brand). That transition meant big costs and heavy hit to profitability. Then they had that marketing blunder (down-numbering their flagship).

If a player STARTED with Sony's strategy, it could well be a profitable niche. If a player started global and broad portfolio, then tried to shrink to be a direct iPhone-only-rival - that is a VERY costly move. Nokia won't be attempting this mad gambit. I get it, that if you think of Sony as the model, then it looks bad. I say a far better comparison is LG. They are roughly similar in scale but they have a broad portfolio and international footprint, on a (marginally) premium brand. They've been in and out of profits. Nokia will definitely offer a broad portfolio (most of its customers are at the lower end) and a global footprint (with possible exception of USA haha and obviously not bothering with Japan or S Korea)

On the 'vanilla Android' I agree. Nokia bottom-end Androids will be nearly indistinguishable - on specs - from rival Androids. Their primary selling advantage will be the Nokia label on the device. BUT that is EXACTLY how Nokia competes now in the bottom-end of DUMBphones. There is nothing magical about Nokia low-end phones that you can't get on a similarly priced MiFone or Karbonn or Xolo. (actually the Nokia will cost about 10% more for otherwise-similar specs). BUT Nokia will - A - FIGHT for those market segments (most global brands have abandoned the low end, even Huawei doesn't want to fight there) and - B - Nokia DOES have 'all the boxes ticked' for the must-have features. Nothing is ever 'missing' in a Nokia. Its like a basic Toyota car. Good enough, good quality, trusted brand. Plus they have a reputation for being indestructible.

Its at the mid-price level where Nokia starts to get some differentiation (like with Xpress Music line with the music oriented details or with cameraphones the Karl Zeiss optics etc). Then at the top Nokia can go beyond everybody on a couple of specs like say Pureview or wireless charging etc.

As to Pureview - I am pretty sure Nokia owns that tech and only licenced it to Microsoft. I'm pretty confident the first Return-Nokia (what should we call it, Retro-Nokia?) flagship will do a proper Pureview sensor. Likely the 41mp but they might up it just a bit, to get the press out of it, to say 50mp. Its WAY cheaper for Nokia to deploy Pureview than to say try to assemble a clumsy costly mechanical optical zoom like on Zenphones and the past Samsung Galaxy K Zoom and the rumored optical zoom on the next iPhone. (me? I'd DIE for a Pureview married to optical zoom haha)

Sailfish, I think I discussed that already. I would love to see it, I can't see Nokia wasting resources on it early. If they get to say 3% market share, they might then try it. But don't hold your breath...

Hey, everybody. How does Samsung's Tizen play now go? Samsung has messed up that gambit so many ways its a major miracle they got the second phone even to the market. But now? To try to get Tizen on its feet - while Nokia - Sammy's nemesis - is back, or dump Tizen and get every person onboard to build a vast galaxy of Galaxies?

John - fair point. May we ask what country do you live in? In most of the Emerging World (outside of China) the Nokia brand is still VERY strong. Even in China its good. In Europe, its somewhat 'your dad's phone' and in the USA its a cheapo-brand.

Now on the boredom factor. Remember when Blackberry did its weird square-screen flagship (dumbest screen form factor for the pocket ever, but anyway). It got HUGE attention simply for being a bit different. It didn't sell too well but it was a rare 'different' phone form factor. Now go back to 2011, 2010, 2009 and Nokia. They had BY FAR the most varied set of form factors. I do expect most NeoNokias to be standard slab touch-screens but we WILL get some departures, attempts at different form factors. Thats part of Nokia's DNA and its the key to discovering true opportunities to differentiate. Maybe there is no other viable form factor. But we don't yet know. There may be several viable variants that can still find a significant market - which Nokia is most likely to discover and exploit. Talk to us in 3 years, if this RetroNokia has attempted a few radical departures in form factor - and they all failed - then maybe we have entered the time of the standard form factor like say modern TVs are all variants of the identical flat panel.

Barney - yeah the UI is a great possibility. To make the ReturNokia to be a bit like it was in its roots (before the iPhone, Nokias were by far the most user-friendly of all phone brands), in parts be like Apple (in a good way, obviously) and in some way, be a 'descendant' of the MeeGo N9 project. But also it means more software work which is not a well-staffed part of what remains. Might be a tall ask, might even be impossible...

PS - I want the PERMANENT DISPLAY clock on my Android screens... (like Nokia Symbian used to have)

I think a few of the new Androids have it. This kind of simple UI thing could be a way how Nokias both seem more usable, and also, seem more 'like the good old Nokia' of the past haha

Tomi Ahonen :-)

[Tomi T Ahonen]

On May 22 comments

Santiago - I haven't yet studied it deeply. We heard about a year ago that Nokia was starting its Android development team (stationed in China). So a part of the R&D would come from there. I would think these work with HMD (or maybe are taken over by HMD even?). Nokia was licencing its intellectual property to HMD to make smartphones. As to Pureview, I said before, that it was developed at Nokia (originally for Symbian based 808 Pureview) and must be tech that Nokia owns and kept. Nokia only licenced that to Microsoft. If you remember the Nokia sale to Microsoft included a lot of intellectual property for which Microsoft got perpetual licences or dual ownership - I don't think Nokia has ever abandoned its 'own' rights to its own inventions - even those cases where Elop sold some patent families to patent trolls. Nokia kept its OWN right to use those inventions...

Nokia knew in 2013 when they were negotiating the sale with Microsoft (and Microsoft also suspected) that Nokia will return - to smartphones. They knew how much Nokia buyers specifically loved the cameras. Would seem utter madness if they somehow surrendered the rights to say Pureview tech to Microsoft without keeping their own rights to use it in their own future devices. We should be reasonably confident the NeoNokias will feature Pureview.

Of the Lumia team, what remains probably half were absorbed into Surface, the rest were those 1,800 who were now fired. I'd think the management at the two buyers want 'none' of the 'poisoned' Windows related Lumia people.. So anyone who might have worked on X Series (Androids) or else anyone who did any work on any of Nokia's own OS platforms - Symbian, Meego, Maemo, Meltemi, S40, S30. But those who were pure Lumiafolks, I'd have said to Microsoft, I'm not taking any of those, haha...

Wayne - the 'I mostly agree with Tomi but there's a lot of stuff' - comment. Long, detailed, speculative but very sharp. Yes, that is how a smart management would approach this opportunity. They would have prepared for it BEFORE they concluded the negotiations with Microsoft and would have gone through all those steps, some before and the rest in the interim years. Never committing in public until they were TOTALLY sure they wanted this route - and with VERY solid intel on the actual market, the actual end-users, their feelings about Nokia, the retail channel and carriers, etc. They know this is a 'sure thing' to the degree any new venture can be a sure thing.

The carriers do not want a hardware duopoly of Samsung and Apple. They do not want a software duopoly of Google and Apple. If they can bring some tension in that environment via Nokia - at least now on the hardware side, they recall that Nokia was ALWAYS the most carrier-friendly of the major handset makers. Apple? Is the most hostile. Samsung? Has not won them over.

To some degree there is also a 'lesson' to be taught to all in the mobile industry ecosystem (especially Apple and Microsoft). That you don't fuck with the carriers. So if they punished Nokia (and Microsoft) with a sales boycott, now that Nokia has stopped misbehaving (no more Windows) then Nokia should be allowed to recover. That is a powerful lesson to give to every other tech company who plots about ways to steal the market or power from the carriers. But that lesson is not delivered, if Nokia died or vanished. They'd need Nokia to now become a major player again - without Windows. So they can say to Apple - if you try this virtual SIM ploy, we will crush you like we did Nokia.. etc.

Note also Wayne's point - Nokia has had multiple scenarios in play, seeing exactly how well or badly Microsoft succeeded with Lumia etc. Whats happening in the rest of the market, the migration rate from dumbphones, how is Samsung doing and Huawei, etc.

Oh - and note the TOTAL opposite of Microsoft. Microsoft brought in the Nokia business giving it for Elop to mess up. Rather than get competent OUTSIDE and knowledgable management who KNEW those Emerging World phone markets, they took the idiot who wrecked this thing already once. So he could do it even more thoroughly the second time haha.

Abdul - on Xiaomi, not really. X is only starting its expansion and has bare bones sales in a few countries outside of China. And it has no established carrier relations in any of them, starting first by selling online. Nokia starts with a global footprint selling significant numbers of dumbphones and (very) modest amounts of Lumias. And Nokia's relationships go VERY deep into the carriers not just on hte handset side, but as Wayne mentioned - also on the network sales side.

The phablet stat was over 5 inches in size. On screen size.. yeah, the physical limit is roughly that 7 inches. BUT we are just about to get into the era of the foldable/rolling/expanding screen. Samsung may bring its first version out on the next Galaxy. Theirs is rumored to open like a book. So a 6 inch smartphone would open like a book to have an 8 inch screen.. MASSIVELY bigger yet it still fits in the pocket. And designed so that you never see the 'seam' where it folds.

How far is a foldable 'giant' screen concept from a classic Nokia Communicator? Not darned far, I say. Thats before we get to projectors.. And then there still is the brightness, pixel density (clarity) and contrast (blackness) including use outside in daylight. I think there is plenty of life left in the screen wars haha...

Arup - thanks, yeah I remembered it was one of the Japanese brands, I didn't want to go Google it to find which (its very late/early morning for me haha) but yeah. Pureview 41mp sensor was manufactured by Toshiba.

Winter - yeah AI and learning comes close to 'reading our minds' which can be magical if done right... Can also be supercreepy if done wrong haha

Wayne - LOL yeah.. then just when they reach the top 3, Nokia go and finish the RetroNokia project by re-hiring Elop as their new CEO :-) - they will do it just so I won't lose my sanity here on the blog :-)

OK now I can't keep my eyelids open anymore... gotta go get some Zzzzs

Tomi Ahonen :-)

[Abdul Muis]

@Tomi

"William A - Actually it was your comment originally when I read it, that had me thinking that wait. No. this was not cooked up SINCE the deal was done with Microsoft. This as cooked up BEFORE the deal was struck with Microsoft. This was VERY 'Jedi move' corporate heist by Risto Siilasmaa screwing Steve Ballmer. Including the threats then to go Android when Ballmer didn't agree to some part that Nokia insisted was going into the deal."

Wow... So at some point Nokia realize the only way to cut Microsoft/Elop/Balmer strategy is to force Microsoft to buy Nokia in a way like.... "You (Microsoft) make our daughter (nokia) pregnant. Either you married her and pay us the big bride token, or she will abort (stop WP) and married to the king (Google), and you will got nothing since I know you were barren (No one want to produce WP)"

You really need to write a book about nokia. It will be best seller.

[Santiago]

Off topic- what whisky are you having Tomi? Thought that as a Finn you'd prefer vodka haha (love finnish vodka btw).

[Abdul Muis]

@Tomi

Talking about other screen type... Motorola have a great product to come.
https://www.youtube.com/watch?v=4_3XneTRCLw

From Lenovo/Motorola Tech World 2016 (already fast-forward to 11:15)
https://www.youtube.com/watch?v=MBgQLraVGJQ&t=675

http://www.androidauthority.com/motorola-just-schooled-lg-modular-design-697566/

[Abdul Muis]

The above post...
I post the wrong link for the last part....
It should be this one:
http://www.androidauthority.com/lenovo-foldable-smartphone-concept-697706/

[chithanh]

It will be interesting to see how Lenovo will sell consumers on this modular phone. For now the phone is marketed as high-end device and will thus not see much adoption.

The foldable devices are still concepts which won't reach the market anytime soon. But if the concept catches on, we'll probably see similar things from other Chinese manufacturers within 3-6 months after launch.

[Winter]

What is it with these rumors that Samsung would switch to Tizen?

http://www.techspot.com/news/65204-samsung-exec-claims-company-eventually-move-all-devices.html

Would that not allow Nokia to take over the top spot?

[Tester]

If Samsung is doing something this incredibly stupid, yes, there will be a vacuum that a smart competitor will fill.

What I find far more interesting here is that Samsung actually thinks that the Apple way would work for them. Are they this arrogant or just utterly clueless?

[chithanh]

Well the article said "eventually". They didn't say that Samsung would switch overnight, which would clearly be a very dumb move.

I think the plan is to gain some share at the low end like they had with Bada, and work upmarket from there.

BTW. If the 64 million figure in the article is correct, Tizen has gotten Bada's #3 position in the smartphone market back.

[Tester]

@chithanh:

Working up from the low end is doomed to fail. These are precisely the users which do not help create an ecosystem. Nobody will develop apps for them and their usage habits are not really what counts here.

We've already seen this in some markets with Windows Phone which always had a disproportionately high amount of bargain bin customers. As a result the interest in apps was even lower than the market share suggested when being compared to Android.

The developer interest in Tizen is extremely low and it'd need a miracle to change that

And thinking that their market share leadership is sufficient driving force - let's take a look at 5.5 years back when Nokia was market share leader - and look where they ended up when they switched to a new OS with little to no support in the market. For Samsung this would end up the same - their only selling point would be 'no Google connection'. Well, they could have that with Android as well - and not suffer from the app-black-hole.

[Nomi]

My only issue is Timo stand in front of mirror and ask yourself this question. Should people help me and my people (finish). Are we so nice people should buy our things, want to deal with us, want to do business with us, want to meet us,, want to visit our country and may be come and work here. I found finish people very toxic kind of people. If you hate every other country people and are racist to the bone, why should anybody be buying your country things?