Nokia Projects Disastrous Losses as Shares Plunge 17%

http://www.bbc.co.uk/news/business-17678806

by ytNumbers • 14 years ago

53 42 14 years ago

bbc.co.uk

hkmurakami• 14 years ago

"Shipments of Symbian devices are declining faster than we anticipated"

Why management thought that consumers considering a Nokia smartphone (perhaps generously?) over a bevy of competitors would pull the trigger instead of waiting until a Windows8 phone is ready.

nextparadigms• 14 years ago

Why would Windows Phone 8 make any difference? I don't think announcing they will go WP7 is what killed their Symbian market. It would've died anyway. They've lost more than half their market share in China last year alone. Android has a market share of almost 70% in China now:

http://www.reuters.com/article/2012/04/10/net-us-android-app...

pagekalisedown• 14 years ago

Seems like they hitched their wagon to the wrong horse going with WP7 over Android.

r00fus3• 14 years ago

It's not even Windows8 phone - they didn't have the N900 or a single other WP7-capable device when they declared Symbian to be a burning platform to be jumped off. Then they killed Meego and effectively disowned the N9.

They abandoned their suppliers, retailers and customers without any meaningful avenue for transition/upgrade.

What did they possibly expect from that disastrously stupid announcement Feb '11?

sp332• 14 years ago

1. If you're considering buying a phone now, WP8 is not an option. If you like the Metro interface, you can get it now with a Lumia.

2. It's cheap. In fact you can buy a Lumia for free, since it's $200 - $100 promo - $100 rebate for a data glitch. http://arstechnica.com/gadgets/news/2012/04/nokia-to-give-lu...

3. Maybe people are buying now because they actually bought into all the marketing hype. I mean Nokia rented Times Square, so someone probably found that compelling.

mtkd• 14 years ago

The full impact of a recession for a couple of quarters is usually not felt until several years later.

What we're seeing with Nokia, BestBuy etc. is the companies that didn't adapt facing extinction. It should be happening to more - but they're being propped up artificially - that can't be sustained indefinitely.

If you think the valuation for Instagram was wild - look at their metric trends against these monoliths.

"but Instagram don't make anything" - in the western world we don't really need to consume physical products so much any more - I've got 5+ TVs in the house and 3 fridges - our consumption is moving to non-physical products.

loverobots2• 14 years ago

Nokia did adapt, it made one hell of a move backed by lots of Microsoft and AT&T cash for promotions and had /has a special relationship with Microsoft. Their native OS was no where near ready and being another Android phone maker wasn't appealing (Other than Samsung, is anyone else making money on Android?).

Sometimes, it just doesn't work out.

huggyface• 14 years ago

Other than Samsung, is anyone else making money on Android?

HTC? Somehow the myth that HTC is losing money has become a meme, when actually HTC is doing gangbusters, just not as handsomely as they did before Samsung started soaking up Apple-like profits. I suspect HTC will do quite well on the backs of the One X and One S.

Motorola would have long been a gravestone if not for Android. So would have SE and LG.

Most reviews of the last Symbian phone saw it as a quickly evolving, credible device. Elop seemed to give up right when it was coming to fruition.

nakkiel• 14 years ago

"Their native OS was no where near ready"

By that, I suppose you mean Meego.

I have recently used a N9 phone running Meego for a couple of hours and it was a real pleasure. In many regards it's better than Android has been until recently. It's snappy and looks well finished although look-wise there's work to make it compelling.

It's not really fair to give any real feedback on such a short utilization span but I wouldn't say the OS is "nowhere near ready".

Had they spent the same effort on Meego rather than on integrating the Windows OS, they would have a very, very good OS.

With Qt, they would also have very good technical fundation for developpers. Love or hate it, Qt programmers are very loyal to the library and praise it. With its ease of use, it could have been a developper-frendly platform.

I'd write a Qt app over a Dalvic-Java or Obj-C one anyday.

What I'd like to note on this story is that most tech writers feared that if Nokia didn't take this path, they would be shamed and welcomed their move. Now, given the sales both Microsoft and Nokia are shamed for taking this path.

mattmanser• 14 years ago

Isn't the problem more "but Instagram don't sell anything".

Bestbuy and Nokia are facing very different problems. For Nokia, the market's there and even speeding up because of tight upgrade schedule, it's just they failed to move on smart phones for too long and are playing catchup. For Bestbuy, computers, routers, printers, etc. are reaching saturation and the things that aren't, the iPads and Kindles, their margins will be razor thin because people are buying the brand, not the generic product. Maybe I'm wrong, but if you were Apple would you give Bestbuy anything more than scraps?

csomar• 14 years ago

I think the OP wanted to highlight that people are consuming the OS (Android and iOS) and not the phone itself. That's why Samsung sales skyrocketed.

r00fus3• 14 years ago

"No one could have predicted..." Classic head-in-the-sand, barely-reactive executive "leadership".

Is this what Microsoft and the Nokia BoD planned when they hired Elop, who scrapped Meego and their N9 (now N900 running WP7) and wiped out their entire existing "burning platform" revenue stream from Symbian?

This was all planned - it's not a disaster. The problem is, the plans may have been too successful.

ticks• 14 years ago

When you say planned, do you mean for Microsoft to eventually purchase Nokia on the cheap, or to simply obliterate them?

vladd• 14 years ago

Simply obliterating them kills Windows Phone for good, I cannot imagine M$ wanting such things.

r00fus3• 14 years ago

The plan was to obliterate Symbian and replace it with Windows Phone. Symbian probably died faster than they planned.

moylan• 14 years ago

i thought it was to buy nokias patents at a knock down price later.

AJ007• 14 years ago

May be the plan was just "get a competitor out of the way." Whether they end up buying them or putting them out of business and purchasing all their patents doesn't matter. Though, hopefully for Microsoft, someone else doesn't beat them out on the latter.

bnolsen2• 14 years ago

"Nokia's challenges have been exacerbated by rampant competition - notably from Apple and Samsung who are extracting a disproportionate amount of margin from the industry at present,"

Disproportionately high or low ? I guess what they are saying is that smartphone profitability is falling due to lower margins.

MS/Nokia are in huge trouble, especialy after seeing that report that google makes almost no money off smartphones. It seems the only way for Nokia/MS to really compete with google is to also make no money. Sounds like Nokia is now in the wrong business.

excuse-me2• 14 years ago

"competition" - that's the solution then. Once RIM have managed to destroy themselves in the corporate world you are left with the choice of buy Microsoft

MSFT's only hope in mobile, and their only reason for going there is to be the standard business solution - the only one that works with MS-exchange, MS-domain-emperor(or whatever it's called today) and MS-office cloud.

Once you ensure that corporates/government only allow MS mobile devices onto their networks you have a pretty nice market sewn up. And one that doesn't care about price and buys new kit regularly

The only tricky bit is persuading all those corporate and government customers that they haven't had a perfectly workable blackberry solution for years, and that they shouldn't save money by allowing workers to use their own iPhones.

Duff• 14 years ago

You're thinking in terms of a 2005 business model.

Even government organizations are buying lots of iPhones, even though Apple is an obnoxious vendor for those organizations to deal with.

Microsoft sells stuff these days by bundling product licensing. So unless Apple does something really dumb, you're not going to see enterprises mandating anything Microsoft mobile other than ActiveSync anytime soon.

forgottenpaswrd• 14 years ago

I said it before, and I have not changed my opinion:

In the Microsoft -Nokia agreement Microsoft wins disproportionately and Nokia loses even if it wins.

If Nokia wins e.g with tablets, other companies will use Windows, if it loses stock price goes down and Microsoft buys it(now officially) for cheap.

Elop looked and looks like a MS insider designed for the transition from Nokia to Microsoft subsidiary.

Funny how Samsumg and Apple margins are "disproportionate" when Nokia used to carry those margins with their high quality phones.

buu7002• 14 years ago

Microsoft buys it(now officially)

I wonder what the implications would be for Qt and KDE. I know Microsoft has made some Linux commits in the past (in regards to its own interests), but I can't imagine how it would justify actively developing a product which has no place on Windows Phone (yet?) and only serves to weaken Windows' stranglehold on the desktop.

JoshTriplett• 14 years ago

Take a look at the KDE Free Qt Foundation: http://www.kde.org/community/whatiskde/kdefreeqtfoundation.p...

HTelrunya• 14 years ago

1. Android would be short term profits. Let's just take Chinese market. China has 70% Android. Now, I am coming to the market and building a new Android phone. It's awesome and everything but how do I stand apart from HTC, Samsung, Moto and low cost options like ZTE? Imagine a Lumia running Android. Would I be able to beat HTC and Moto and Samsung with that?

2. I guess we will start seeing the Nokia MS partnership success going forward when Nokia really has a chance of adding value to MS products.

I agree that Nokia took on the insane task of reviving themselves as well as MS. But if they can get some sort of adoption with WP7, they can continue to survive and add value to the ecosystem going forward with WP8. They have to continue on life support until their true strategy kicks in to place.

Tuna-Fish• 14 years ago

> I guess we will start seeing the Nokia MS partnership success going forward when Nokia really has a chance of adding value to MS products.

I doubt that. The biggest change was that the mobile devices turned from devices (that people buy and use, but rarely get 3rd-party software for) into platforms (that people buy to have access to 3rd-party software). The big difference is that there are not that much positive externalities for market share for devices, but positive network effects absolutely determine the platform market.

That's why Windows rules the desktop, and that is why Android will do so in the handset. I predict that all competitors will effectively be dead in 2 years, and only Android and iOS remain.

AutoCorrect2• 14 years ago

what's funny is that MS is probably making more off the Android market than the WinPhone market - all they have to do is threaten a patent lawsuit, and suddenly they're making a couple of dollars for every Android phone a vendor makes.

gareim• 14 years ago

The argument against Android has always been that manufacturers using it have no power over their users. By that, I mean that customers could pick up another brand and it would still be Android. I remember reading some tech sites opinions on the Nokia-WP7 strategy and how the benefit was that it would give Nokia that edge that separates it from being just another manufacturer.

But if Nokia is successful and WP dominates, what's to stop everyone else from using WP as well? I guess skinning it, which is one of Nokia's rights in the Nokia-Microsoft deal, but that's like what HTC is doing with Sense and Samsung with TouchWiz. It's not as if a skin will really give you an edge.

The only real way to have won is to have your own OS and to be in control it. Meego might have worked better for Nokia than WP7 long-term since Nokia could influence the direction Meego was going in.

asmithmd1• 14 years ago

Did anyone else see how they executed on the launch of the new product that if not successful the company will die:

http://www.forbes.com/sites/ericsavitz/2012/04/09/the-very-s...

Most stores closed on Easter Sunday and recordings talking about the iPhone 4S. I would say Nokia is done.

joejohnson• 14 years ago

I wonder how much of this is related to the bug and subsequent price drop for the Lumia 900. I was hoping for this phone to become a successful competitor to Android in the lower-end smartphone market.

nextstep• 14 years ago

This will make Nokia even cheaper when Microsoft decides to buy them. This whole scenario reminds me of an old editorial cartoon which lampooned two companies (HP maybe?) as two sinking ships tossing a rope to each other.

sekou• 14 years ago

I don't know how much market share Apple has in India or the more prosperous African countries, but without selling any kind of low-priced/low-tech phone Apple doesn't compete at all with Nokia or Samsung in that market segment. I wonder if Nokia is talking about lower sales specifically in the smartphone segment or lower sales due to "competition" in other segments as well.

Nokia Projects Disastrous Losses as Shares Plunge 17%

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