Linked by Thom Holwerda on Tue 29th Oct 2013 15:04 UTC
PDAs, Cellphones, Wireless

Nokia has just announced its Q3 2013 financial results, revealing an operating profit of EUR118 million ($162 million) from EUR 5.66 billion ($7.8 billion) revenue. That's up massively year over year, but nonetheless represents another quarter of middling results. The report is the first since Microsoft agreed to purchase Nokia's phone business, and that division - Devices and Services - performed as expected, posting a small loss of EUR 86 million ($118 million).

So, Microsoft is buying the part of Nokia that is losing money, while the parts that make money remain in Finland. Seems like a good deal for Nokia-proper. In the meantime, Microsoft will be saddled with a devices division that is still losing money, and whose increase in sales consists largely of low-end, low-margin devices (like the 520). Interesting - especially since Windows Phone was supposed to prevent Nokia participating in a race to the bottom. I'm sure Microsoft's super-successful Surface division welcomes Nokia's devices division.

The cold truth: even more than 2.5 years after announcing the switch to Windows Phone, Nokia's Lumia range still cannot make up for drop in sales of Symbian devices and feature phones. This is roughly the same timeframe in which Samsung rose to the top. With Android.

Read into that what you will.

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Comment by Nelson
by Nelson on Tue 29th Oct 2013 17:02 UTC
Nelson
Member since:
2005-11-29

Just wanted to point out I called the volumes for this quarter with 100% accuracy. As in exactly what I predicted would happen did happen. Exactly. Down to the percentage increase.

http://www.osnews.com/thread?575084
I called for a little less than 9 million and ~20% sequential growth in my analysis. Just something to keep in mind before the Always Wrong Club shows up.

A few important things to take away here: NSN and HERE continue to perform strongly.

D&S deepens losses (or increases investments, depends how you view the glass) but that's largely irrelevant now that they're part of a rich behemoth like Microsoft.

Lumia shipments continue to increase at a nice rate, its been around a year of sequential increase (and over a year I believe of underlying profitability).

For comparison, LG had flat shipments this quarter. That's an opportunity for Nokia (and others) to catch up to the other OEMs.

re: 520. I think Nokia moving volumes is good because it increases the developer target audience which improves the ecosystem and drives high end sales. We'll see how the 520 successors perform.

Next quarter I expect a stronger sequential increase than this due to seasonality. They can probably crack 10 million on the back of compelling low and mid range devices.

It feels good being right though, I've got to say.

Reply Score: 3

RE: Comment by Nelson
by M.Onty on Tue 29th Oct 2013 17:18 UTC in reply to "Comment by Nelson"
M.Onty Member since:
2009-10-23

Just wanted to point out I called the volumes for this quarter with 100% accuracy. As in exactly what I predicted would happen did happen. Exactly. Down to the percentage increase.

http://www.osnews.com/thread?575084

I called for a little less than 9 million and ~20% sequential growth in my analysis. Just something to keep in mind before the Always Wrong Club shows up.


Might I suggest the Always Uninterested In Exact Financial Predictions About a Once Great Handset Maker Club as a more precise, if less succinct, name?

Reply Score: 6

RE[2]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 18:57 UTC in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

They're so uninterested they consistently make bad calls? That's a new one.

I get made out to be a shill, a troll, an astroturfer, etc but quarter after quarter it is my predictions which stand out as being on the mark. Every time.

Reply Score: 3

RE[3]: Comment by Nelson
by tylerdurden on Tue 29th Oct 2013 19:13 UTC in reply to "RE[2]: Comment by Nelson"
tylerdurden Member since:
2009-03-17

*snif* They grow up so fast, it was not long ago you couldn't parse Nokia's own financial statements correctly, and now you're an "expert."


LMAO

Reply Score: 2

RE[4]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 20:32 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

You're welcome to show me where I was wrong.

Reply Score: 2

RE[5]: Comment by Nelson
by tylerdurden on Tue 29th Oct 2013 21:41 UTC in reply to "RE[4]: Comment by Nelson"
tylerdurden Member since:
2009-03-17

In the words of the dude...

http://www.youtube.com/watch?v=uQl5aYhkF3E

Reply Score: 1

RE[6]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 21:46 UTC in reply to "RE[5]: Comment by Nelson"
Nelson Member since:
2005-11-29

So you can't. Gotcha.

Reply Score: 2

RE[7]: Comment by Nelson
by tylerdurden on Tue 29th Oct 2013 22:58 UTC in reply to "RE[6]: Comment by Nelson"
tylerdurden Member since:
2009-03-17

But... but I was cheering you on!

Your out of context selectively arbitrary number was spot on! Congrats.

Reply Score: 2

RE[3]: Comment by Nelson
by Thom_Holwerda on Tue 29th Oct 2013 19:43 UTC in reply to "RE[2]: Comment by Nelson"
Thom_Holwerda Member since:
2005-06-29

I predicted Nokia would not make it with Windows Phone.

I was right.

They had to sell their devices division to Microsoft.

Reply Score: 8

RE[4]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 20:36 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

I think your criteria for failure is a little peculiar in light of a years worth of increases, increases in North America, a growing ecosystem, and a strong brand name.

But yeah, sure, "failure". I called these results 100% on the mark. You've been so wrong on everything the broken clock analogy doesn't even apply.

Reply Score: 3

RE[5]: Comment by Nelson
by JAlexoid on Wed 30th Oct 2013 00:34 UTC in reply to "RE[4]: Comment by Nelson"
JAlexoid Member since:
2009-05-19

I'm sorry, but weren't you the one yapping about that the low end devices aren't low margin? These numbers and previous quarters just ads to the proof that they are selling low margin devices, that have high development and support costs.

Reply Score: 3

RE[6]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 01:19 UTC in reply to "RE[5]: Comment by Nelson"
Nelson Member since:
2005-11-29

I'm sorry, have you magically come back with tangible proof that the 520 is a low margin device?

If you have access to the 520 BOM please fill me in because I've been trying to get ahold of it.

Nokia's D&S loss once you exclude one time restructuring and amortized costs is actually fairly low (if an increase from previous Q) but it is by no means burning a hole in anyone's wallet.

I think Nokia has pretty good fixed costs now in D&S judging by their drop off in operational overhead as well with increases due to new product roll outs.

Reply Score: 3

RE[7]: Comment by Nelson
by JAlexoid on Thu 31st Oct 2013 01:23 UTC in reply to "RE[6]: Comment by Nelson"
JAlexoid Member since:
2009-05-19

Yes... Yet, unlike you, we have Nokia's results. You actually have nothing to prove otherwise. The likelihood of it being a low margin device is higher and has more backing evidence than your assertion.

And if you're going demand a factual BOM(that only covers the manufacturing part), then I'll have to ask for the same to prove your side.

Reply Score: 2

RE[7]: Comment by Nelson
by glarepate on Thu 31st Oct 2013 20:03 UTC in reply to "RE[6]: Comment by Nelson"
glarepate Member since:
2006-01-04

Don't need the BOM info to figure this out.

Look at the earnings report and the distribution of 52x handsets among all WP units:

Lumia sales up 19%. ASP dropped from €157 to €143 which is down 9.1% Selling more, getting less per unit average.

Adduplex shows that the 52x makes up 32.8% of all WP handsets, not just Nokias. So it wasn't recent price drops on older handsets that killed the ASP because they weren't selling a lot of the older, higher margin Lumias. But loads of 52x though.


Lower margin ; QED.

Reply Score: 1

RE[6]: Comment by Nelson
by unclefester on Wed 30th Oct 2013 08:11 UTC in reply to "RE[5]: Comment by Nelson"
unclefester Member since:
2007-01-13

These numbers and previous quarters just ads to the proof that they are selling low margin devices, that have high development and support costs.


The Nokia 520 is nothing more than a generic bottom of the range ARM smartphone. The profit margins are likely to be very high (>100%).

Reply Score: 2

RE[7]: Comment by Nelson
by JAlexoid on Thu 31st Oct 2013 01:15 UTC in reply to "RE[6]: Comment by Nelson"
JAlexoid Member since:
2009-05-19

>100% margins are only possible with production costs being 0.

Reply Score: 2

RE[3]: Comment by Nelson
by No it isnt on Tue 29th Oct 2013 20:13 UTC in reply to "RE[2]: Comment by Nelson"
No it isnt Member since:
2005-11-14

But you are a shill. You show all kinds of positive results and predictions for Nokia, except the ones that actually matter: will they survive? Well, they didn't.

And still, you're technically right.

Reply Score: 5

RE[4]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 20:33 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

Uh, Nokia is still alive. Feel free to keep making things up though.

Reply Score: 2

RE[5]: Comment by Nelson
by No it isnt on Tue 29th Oct 2013 21:33 UTC in reply to "RE[4]: Comment by Nelson"
No it isnt Member since:
2005-11-14

Yes, yes. Not as a handset maker, though. Like I said: you're technically right.

Reply Score: 4

RE[6]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 21:41 UTC in reply to "RE[5]: Comment by Nelson"
Nelson Member since:
2005-11-29

And NSN is now solely a mobile broadband solution, but that isn't "dead".

D&S, the 32,000 employees, and 8,000 patents got transferred to Microsoft for $7 billion dollars. How is moving to a company with a market cap of $300 billion dollars dying?

Did Skype die? Did Yammer die? I think we can say that Nokia is no longer in the phone business, and we can say that Microsoft is in the phone business. But we cannot say that Nokia or any part of it died.

If Nokia had laid off the 32,000 employees and shuttered its phone division, closed its plants, and thrown in the white flag then perhaps -- but that's not at all what happened.

Edited 2013-10-29 21:41 UTC

Reply Score: 3

RE[7]: Comment by Nelson
by mbpark on Tue 29th Oct 2013 22:42 UTC in reply to "RE[6]: Comment by Nelson"
mbpark Member since:
2005-11-17

I went through the IFRS financials.

Nokia made out very well. They transfer a lot of employees out to Microsoft in the EU with its comprehensive social welfare systems. They get cold hard cash to pay off the $2.291B in financing they took this year which resulted in their high CFF. They keep the business units that make money.

Microsoft, depending on how they structure the deal with their international subsidiaries, will find a way to make money on a declining asset. Yes, they have high YoY, and you probably did make money. However, I don't see this making money for Microsoft without a few financial wizards figuring out how to bury the losses in the income and cash flow statements.

This much I will say for Nokia: They are moving to a higher-margin business where they provide middleware and mostly getting out of the consumer segment. NSN should provide higher margins.

Microsoft is a nice big company, but they fail to see beyond Windows, Office, Windows Server, Active Directory, Exchange, and Sharepoint. XBox is the exception. They're almost as bad as Dell at integrating their purchases. Microsoft needs someone like Gates to put it together at the top like he did, because Ballmer hasn't.

Speaking of which, Nokia wasted tons of money, and had poor leadership. At least Elop got some money for a division that couldn't put it together. Too bad that several good mobile operating systems were the casualty of their mismanagement.

Reply Score: 6

RE[7]: Comment by Nelson
by JAlexoid on Wed 30th Oct 2013 00:41 UTC in reply to "RE[6]: Comment by Nelson"
JAlexoid Member since:
2009-05-19

And NSN is now solely a mobile broadband solution, but that isn't "dead".

Which is totally irrelevant in the context of this long debate - Nokia + Windows Phone + Elop. NSN was doing great and had no relation to Nokia's handset business, except the shared canteen at Karaportti campus.

Did Skype die? Did Yammer die?

And what does your emotional and wildly inaccurate comparisons have to do with it?
Nokia is not dead. But Nokia the mobile phone is, unlike Nokia the rubber boot.

Reply Score: 2

One quarter? That's (relatively) easy.
by sgtrock on Tue 29th Oct 2013 17:23 UTC in reply to "Comment by Nelson"
sgtrock Member since:
2011-05-13

What's your prediction for next year? The year after? Is the new Microsoft smartphone division ever going to turn a profit?

Reply Score: 3

Nelson Member since:
2005-11-29

I think they'll turn a profit at around 12.5 million which is what Microsoft guided in their investor slides, so perhaps by Q2 and Q3 next year at current trajectories.

As far as volumes, I'm expecting stronger Q4 than this quarter. Anything beyond that depends on product rollouts and stats I extrapolate from which aren't out yet. And there's a little intuition mixed in there somewhere.

I expect a profit short to medium term after the MSFT deal closes. How fast they get settled within MSFT can change this.

Reply Score: 3

RE: Comment by Nelson
by JAlexoid on Wed 30th Oct 2013 00:30 UTC in reply to "Comment by Nelson"
JAlexoid Member since:
2009-05-19

A few important things to take away here: NSN and HERE continue to perform strongly.

And a more important note to make is that NSN and HERE are largely irrelevant to you general narrative of WP growth.

We also were the ones that will go "told you so" with "it's the low margin devices".
But it's good that you are focusing on the positive.

Reply Score: 6

RE[2]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 01:21 UTC in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

My narrative of WP growth? This is yet another quarter of double digit unit volume growth. They're at double digit share in many countries. The ecosystem has grown considerably. They're #2 in many regions already.

The hype is real.

Reply Score: 3

RE[3]: Comment by Nelson
by JAlexoid on Thu 31st Oct 2013 01:12 UTC in reply to "RE[2]: Comment by Nelson"
JAlexoid Member since:
2009-05-19

Yes, your narrative is all about WP. NSN's profits has jack-s***t to do with WP.

"narrative is any account of connected events, presented to a reader or listener in a sequence of written or spoken words"

Reply Score: 2

RE[4]: Comment by Nelson
by Nelson on Thu 31st Oct 2013 01:31 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

I'm speaking about Nokia as a whole in my analysis. As a whole they're doing just fine, and they didn't die for precisely the reasons I said they wouldn't a year ago (seriously, go and check the thread).

And D&S is also looking up, but they are two separate observations.

NSN has little more than a casual relation to D&S in that its strong profits (and Nokia's reduced operating expenses) keep the company afloat and allow investment into D&S.

I think you jumped the gun a little bit on this and seem to be unfairly trying to downplay NSN and HERE because you think I'm using them to prop up D&S.

Reply Score: 3

RE: Comment by Nelson
by bnolsen on Wed 30th Oct 2013 01:56 UTC in reply to "Comment by Nelson"
bnolsen Member since:
2006-01-06

to go from arterial bleeding to hemorraghing isn't exactly a good success metric.

Reply Score: 4

RE[2]: Comment by Nelson
by tylerdurden on Wed 30th Oct 2013 03:31 UTC in reply to "RE: Comment by Nelson"
tylerdurden Member since:
2009-03-17

The PR world revolves around selective delusion. So "hitting rock bottom" being heralded as unquestionable proof of a "most successful buoyancy strategy" should not be that surprising. They can't sink any lower after all.

Reply Score: 3

RE[3]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 10:27 UTC in reply to "RE[2]: Comment by Nelson"
Nelson Member since:
2005-11-29

I think Nokia bottomed out a year ago, considering since then they've posted shipment increases every quarter.

But its a fact free zone when the Always Wrong Club is involved.

Reply Score: 3

RE[4]: Comment by Nelson
by _cynic_ on Wed 30th Oct 2013 11:42 UTC in reply to "RE[3]: Comment by Nelson"
_cynic_ Member since:
2012-04-18

LOL, it's always funny reading your crap.

So everything in Nokia is making profits, except smartphones...

Microsoft is buying the 118mi losing division? Make that 268mi. Let's not forget the MS quarterly gift.

Another thing people forgot Nokia smartphones ASP have reached a new record low of 196USD! Around half the global market average.

Reply Score: 1

RE[5]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 11:55 UTC in reply to "RE[4]: Comment by Nelson"
Nelson Member since:
2005-11-29

And what does a loss matter to a company with the size and resources that Microsoft has?

They are the most stubborn and tenacious competitor on the planet. D&S is dangerously close to break even.

A loss posting division with rapidly accelerating losses and deteriorating unit sales is cause for concern. Not one with increasing unit sales, decreasing expenses, and an improving ecosystem.

You miss the forest for the trees, but my post is the funny one...riight.

Reply Score: 3

RE[4]: Comment by Nelson
by tylerdurden on Wed 30th Oct 2013 18:03 UTC in reply to "RE[3]: Comment by Nelson"
tylerdurden Member since:
2009-03-17

I think Nokia bottomed out a year ago, considering since then they've posted shipment increases every quarter.


LOL, did you just provide an example for my point?

Even with those increases, Nokia's current WP line moved only 60% as many units this year as Symbian was selling 3 years ago. Heck,WP is selling as many units for Nokia now as Symbian did in 07. Worse still, Nokia's shipment numbers in the smartphone space have remained pretty much flat during the past 3 years. So basically Nokia experienced a "lost" half a decade... in the market segment which has experienced the highest growth rate during that same time period. And that is even after 3 years of full effort and massive cash inputs.

Suddenly, when actual context is provided, those selective "growth" numbers you croon about don't look that impressive.


But its a fact free zone when the Always Wrong Club is involved.


... but enough about yourself.

Reply Score: 3

RE[5]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 18:12 UTC in reply to "RE[4]: Comment by Nelson"
Nelson Member since:
2005-11-29

That's great and all if you're trying to show that Nokia once sold a lot of phones. I think everybody is aware of that.

The thing to note is how have they done since then and how are they doing now. The answer is not too shabby given the increases since last year.

You're a smart guy though, misguided, silly, but smart so I don't think that you don't know this. You just for some reason unbeknownst to me continue to play dumb.

I don't think its reasonable to have expected Nokia to have growth rates and volume shipments out of step with basically every OEM except Samsung and Apple simply because they once did. It isn't 2007 anymore (for real, check your calendar), so obviously market conditions then don't apply.

So if by context you mean red herring volume shipments completely unrelated to their current strategy, then yes ill grant you that.

Reply Score: 2

RE[6]: Comment by Nelson
by tylerdurden on Wed 30th Oct 2013 19:13 UTC in reply to "RE[5]: Comment by Nelson"
tylerdurden Member since:
2009-03-17

People, who are interested in actually understanding an issue, are aware that context is crucial in order to understand what numbers and figures reflect about a specific situation/event.

Unsurprisingly, those with astroturfing narratives as their primary motivation tend to consider the actual contexts of their (marketing) figures to be "red herrings," for they may detract from the PR effect of said numbers.


From your response it's rather easy to tell on which camp you reside.

Reply Score: 3

RE[7]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 19:33 UTC in reply to "RE[6]: Comment by Nelson"
Nelson Member since:
2005-11-29

Like I mentioned, it depends on if you think Nokia has some out of the ordinary trait that would make gargantuan shipment increases possible. The amount of volume they'd need to both offset and then improve on Symbian's past volumes are astronomical.

No OEM is currently exhibiting growth patterns like that save for the market leaders. Unless you expected Windows Phone to catapult them overnight to market leadership (insane if you thought it was possible from either WP or Android), Nokia's current growth trajectory is fantastic.

They're growing faster than other Android OEMs at comparable volumes and seeing a stabilizing financial situation.

You can call it PR, or Astroturfing or whatever uncreative name you toss out next, but this is exactly what I've been saying would happen. Apparently this quarter I was especially on target.

The Always Wrong Club moniker may annoy you, but its an accurate depiction of some on this website.

Reply Score: 3

RE[5]: Comment by Nelson
by zima on Tue 5th Nov 2013 16:39 UTC in reply to "RE[4]: Comment by Nelson"
zima Member since:
2005-07-06

Nokia's current WP line moved only 60% as many units this year as Symbian was selling 3 years ago. Heck,WP is selling as many units for Nokia now as Symbian did in 07. Worse still, Nokia's shipment numbers in the smartphone space have remained pretty much flat during the past 3 years.

Only problem with Symbian handsets - they weren't really used as smartphones.

Reply Score: 2

RE: Comment by Nelson
by crocodile on Wed 30th Oct 2013 07:38 UTC in reply to "Comment by Nelson"
crocodile Member since:
2010-01-18


I called for a little less than 9 million and ~20% sequential growth in my analysis. Just something to keep in mind before the Always Wrong Club shows up.


What is the point of this when Nokia actually is loosing money by selling smartphones??

Nokia 2 years ago had ~33% of phone market and now it has ~3.3%. Clearly this is a failure for NOKIA and a sequential growth means nothing when one has a very small percentage of the phone market!

For every small company(and small "fishes") it is very easy to show sequential growth and this makes the sequential growth meaningless.

Reply Score: 4

RE[2]: Comment by Nelson
by hamster on Wed 30th Oct 2013 08:19 UTC in reply to "RE: Comment by Nelson"
hamster Member since:
2006-10-06


What is the point of this when Nokia actually is loosing money by selling smartphones??

Nokia 2 years ago had ~33% of phone market and now it has ~3.3%. Clearly this is a failure for NOKIA and a sequential growth means nothing when one has a very small percentage of the phone market!

For every small company(and small "fishes") it is very easy to show sequential growth and this makes the sequential growth meaningless.


Nelson enjoys taking numbers out of context. He's also not affraid of moving the goalposts. Which is why he claims to be right every time. He did in one thread go from 10 to 8 million sold phones and now he was spoton the 9 million sold units...

Reply Score: 4

RE[3]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 09:02 UTC in reply to "RE[2]: Comment by Nelson"
Nelson Member since:
2005-11-29

Find the thread. I link the post with our very conversation.

Reply Score: 3

RE[3]: Comment by Nelson
by crocodile on Wed 30th Oct 2013 10:04 UTC in reply to "RE[2]: Comment by Nelson"
crocodile Member since:
2010-01-18

"
What is the point of this when Nokia actually is loosing money by selling smartphones??
Nelson enjoys taking numbers out of context. He's also not affraid of moving the goalposts. Which is why he claims to be right every time. He did in one thread go from 10 to 8 million sold phones and now he was spoton the 9 million sold units...


Nokia 2 years ago had ~33% of phone market and now it has ~3.3%. Clearly this is a failure for NOKIA and a sequential growth means nothing when one has a very small percentage of the phone market!

For every small company(and small "fishes") it is very easy to show sequential growth and this makes the sequential growth meaningless.
"

Exactly! Nelson's statements miss the big picture which is that Nokia is loosing money while selling phones and Nokia has been doing this for a long time this already!

See here: "Nokia Q3 2013: $7.9B in Revenue but Phone Division Loses $118M"
http://www.technobuffalo.com/2013/10/29/nokia-q3-2013-7-9b-in-reven...

Reply Score: 2

RE[4]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 10:23 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

Nokia is losing money, but dramatically less money than say, a year ago. That is gradually improving as its device volumes improve and as its restructuring efforts taper off, as I said they would.

I had the audacity of suggesting that with their cash on hand back in 2011 they could

a) Weather the storm so go speak
b) Improve other divisions to improve the overall company financials
c) Improve D&S volumes to improve the profit margin

I don't reply to a lot of comments like your or the OP because they are a mischaracterization of my positions. I don't care what Nokia had 2 years ago, only what they have and where they're going with it.

But just to entertain that a little bit, the #3 position holder in smartphone volumes is LG with around 5% of the market.

Samsung and Apple control the big numbers and are pretty much the only ones who do. Surprise, surprise. They're the market leaders. Nokia isn't going to get there overnight, if at all.

What is incontrovertible is that Windows Phone is growing in many regions, especially important regions with low penetration. That is the exact same growth traits Android experienced in its early days. You don't simultaneously thrive everywhere, you have offshoots of success from place to place.

If we're going to set the bar every quarter at "They're not Samsung/Apple" then your comments pretty much go without saying and apply to every other OEM on this planet (though presumably you don't refer to their strategy as failures).

LG posted a loss this quarter on flat volume shipments. Nokia posted a profit on 20% growth. But Nokia is failing.

And a word about the sequential and YoY improvements. The argument about "its a small base" are meaningless now that they are in the same range as other OEMs.

Every quarter it becomes harder to post double digit gains, yet they keep doing it. They keep doing it while others do not.

Consider my reply to the OP a reply to your post above as well as pretty much the same things apply.

Reply Score: 3

RE[5]: Comment by Nelson
by crocodile on Thu 31st Oct 2013 13:55 UTC in reply to "RE[4]: Comment by Nelson"
crocodile Member since:
2010-01-18

Nokia is losing money, but dramatically less money than say, a year ago. That is gradually improving as its device volumes improve and as its restructuring efforts taper off, as I said they would.
...


That is the most important point! Nokia is loosing money while selling phones! The goal of a business is to make money! This means that selling phones is not a good bussines for Nokia. It is as simple as that!

Everything else like future income estimates, guesses, and future projections are just that and nothing else!

Reply Score: 1

RE[5]: Comment by Nelson
by crocodile on Thu 31st Oct 2013 14:06 UTC in reply to "RE[4]: Comment by Nelson"
crocodile Member since:
2010-01-18

Nokia is losing money, but dramatically less money than say, a year ago. ... I don't care what Nokia had 2 years ago, only what they have and where they're going with it.


Ok. So you care about Nokia one year ago but not two years ago! That is very convenient for you logic!


But just to entertain that a little bit, the #3 position holder in smartphone volumes is LG with around 5% of the market.


I am not interested in Apple and Samsung and LG.
All I am saying is that Nokia is loosing money by selling phones so this is not a good business for them!
Nokia should and it got out of the bad business of selling phones! Clearly, there is nobody making money by selling Windows phones!


What is incontrovertible is that Windows Phone is growing in many regions, especially important regions with low penetration.

Again growing compare to what?
And how it helps Nokia that it grows in some markets by some strange computations when overall Nokia is loosing money by selling mobile phones????
Really?


That is the exact same growth traits Android experienced in its early days. You don't simultaneously thrive everywhere, you have offshoots of success from place to place.


What is the point of this? Is somehow Windows Phones like Android? I do not think so. By this logic even Jolla phones will succeed because they look like Android in beginning!


If we're going to set the bar every quarter at "They're not Samsung/Apple" then your comments pretty much go without saying and apply to every other OEM on this planet (though presumably you don't refer to their strategy as failures).


I am not interested in others. I am interested in Nokia. Obviously Nokia was number 1 in mobile phones 3 years ago with ~33% and now is barely has 3.3%. This is a complete disaster for Nokia mobile phones! One does not have to be genius to see this!



LG posted a loss this quarter on flat volume shipments. Nokia posted a profit on 20% growth. But Nokia is failing.


Not interested in LG!


And a word about the sequential and YoY improvements. The argument about "its a small base" are meaningless now that they are in the same range as other OEMs.


Yes, YoY and quarter to quarter comptutations are meaningless for any company which has less than 10% of the market!!!


Every quarter it becomes harder to post double digit gains, yet they keep doing it. They keep doing it while others do not.

It is very easy to have growth quarter to quarter when you are below 10% of the market!

Reply Score: 0

RE[6]: Comment by Nelson
by Nelson on Fri 1st Nov 2013 23:07 UTC in reply to "RE[5]: Comment by Nelson"
Nelson Member since:
2005-11-29


Ok. So you care about Nokia one year ago but not two years ago! That is very convenient for you logic!


It makes sense when you are tracking the success or failure of a strategy. Nokia was on a downward trajectory due to collapsing Symbian market share. It finally bottomed out after posting billion dollar losses last year.

This is me June 2012:


So where does Nokia stand? In dire straits financially. Its a time issue, and I don't know if their restructuring will be enough. However, that's not to say that they're going to go into bankruptcy. They're too crucial to Windows Phone for Microsoft to ever let that happen. If the time came, they'd get a cash infusion from Microsoft (or outright be bought out) and they'd be okay until their transition was over.

Nokia is a freaking cheap stock (It's like 2 bucks a share) and the potential upside is amazing if what trends, momentum, and analysts say are true.


Nokia shares are now about to hit $8. Anyone who listened to me and invested is swimming in money right now.

I go on


They need to:
- Restructure, downsize, become a leaner company
- Double down on Windows Phone investments
- Push Windows Phone into the low end Smartphone range (Totally, completely achievable. Its not an IF, its a WHEN proposition).


All of which they have done, especially the last bullet point to great effect.


I am not interested in Apple and Samsung and LG.
All I am saying is that Nokia is loosing money by selling phones so this is not a good business for them!
Nokia should and it got out of the bad business of selling phones! Clearly, there is nobody making money by selling Windows phones!


I think you're wrong for the same reason a lot of people here were wrong last year. You look at figures in isolation instead of identifying a trend. Windows Phone sales trend upwards and as they trend upward (strongly I might add, Sony grew 4%, Lenovo grew 9%, LG grew 0%, and Nokia grew 19%) their financial position will stabilize.

They lost a billion dollars last year. People back then were saying Nokia was going to die imminently. Now they've posted a profit (after I warned it was inevitable due to underlying profitability for five quarters in a row and fading out restructuring charges) and the D&S division is starting to stabilize.


Again growing compare to what?
And how it helps Nokia that it grows in some markets by some strange computations when overall Nokia is loosing money by selling mobile phones????
Really?


Growing compared to Sony, LG, Lenovo, ZTE, Huawei, HTC, and BB.

Nokia is on a region by region basis growing as well in key markets, and this is starting to spread. I warned about it when it was 6% in the UK and now its crossed double digits there.

Things are trending upwards.


I am not interested in others. I am interested in Nokia. Obviously Nokia was number 1 in mobile phones 3 years ago with ~33% and now is barely has 3.3%. This is a complete disaster for Nokia mobile phones! One does not have to be genius to see this!


I understand they were 33% and that they were #1, but they are not anymore and expecting them to be #1 again without first being #9, #8, #7, #6, #5, #4, #3, and #2 is foolish.

They won't go from zero to 60 over night. Things take time, and time has proven me right. I've predicted Windows Phone increases exactly the quarters they've increased, pretty much exactly on target (in fact this quarter I predicted Nokia's volume shipments exactly).

I predicted that the Q3 sales dip was a blip (while others ridiculed me for it) and it turns out, holy fuck, it was a blip.


Not interested in LG!


You should be! Because Nokia was two quarters behind the other market rivals and now they're about one quarter behind. This is what continual double digit growth does. Nokia is catching up faster than its rivals can pull away, and soon Nokia will crack the Top 5 smartphone vendors again. (Its currently ~8)

In fact I expect that to happen next quarter. From there if it continues on its trajectory it can overtake the #3 position before this time next year.


Yes, YoY and quarter to quarter comptutations are meaningless for any company which has less than 10% of the market!!!


So for any company that's not Apple and Samsung sequential and yearly increases are meaningless?

You know Lenovo is #3 with only ~5% market share right? That's such a ridiculous notion that I'm not sure why I even bothered responding.


It is very easy to have growth quarter to quarter when you are below 10% of the market!


Not it is not or other vendors (LG for example) would be doing it consistently.

Reply Score: 2

Re:
by kurkosdr on Tue 29th Oct 2013 17:13 UTC
kurkosdr
Member since:
2011-04-11

Microsoft should repeat the Xbox scenario (sell hardware at a loss to help the platform grow).

Where are the price cuts for Lumias?

Reply Score: 4

RE: Re:
by bnolsen on Wed 30th Oct 2013 02:16 UTC in reply to "Re:"
bnolsen Member since:
2006-01-06

i think thats the 520.

Reply Score: 2

what's left of nokia if you remove phones?
by NuxRo on Wed 30th Oct 2013 07:24 UTC
NuxRo
Member since:
2010-09-25

So the phones are loosing money but otherwise Nokia "proper" is doing great. Are they back in the boots business?

Reply Score: 4

Nelson Member since:
2005-11-29

The other half of the company. Mapping, network infrastructure, and the AT division which focuses on forward facing projects. And a boatload of weaponized patents.

Reply Score: 3

glarepate Member since:
2006-01-04

Except the other 'half' of the company is 3 quarters of it ; the other 3 divisions that make up Nokia.

Reply Score: 1

zima Member since:
2005-07-06

And mobile phones are a minitority of Nokia employees...

Reply Score: 2

Never go against the market!
by PieterGen on Wed 30th Oct 2013 15:43 UTC
PieterGen
Member since:
2012-01-13

Even if you are right, it is not wise to go against the market.

BlackBerry's CEO Mike Lazaris in 2008: "The most exciting mobile trend is full Qwerty keyboards. I'm sorry, it really is." Let's assume that Qwerty keyboards ARE better for text input - even then it's stupid because the market clearly wanted full touch screens. Don't be smarter than the market.....

Microsoft's Steve Ballmer legendary "There's no chance that the iPhone is going to get any significant market share. No chance." Wrong! Look at the market!

Nokia's move to Windows: "People want an alternative for Android and iOS". Why not go with the strongest grower on the market (Android)? Look at the reviews: "Nokia has great hardware, but you'll have to live with WindowsPhone......"

Let's compare it to automobiles. Say Honda was in trouble, because people now bought electric cars from companies like Tesla. The smart move for Honda would be to go with the flow and build an electric car, of course! And certainly not make an expertimental hydrogen car, "because people need a 3rd choice, next to fossil fuels and electric" And yet this is what Nokia did.....

Edited 2013-10-30 15:44 UTC

Reply Score: 2

RE: Never go against the market!
by zima on Tue 5th Nov 2013 16:41 UTC in reply to "Never go against the market! "
zima Member since:
2005-07-06

And certainly not make an expertimental hydrogen car, "because people need a 3rd choice, next to fossil fuels and electric"

Actually, current hydrogen production comes from fossil fuels...

Reply Score: 2

first party
by TbouncerT on Thu 31st Oct 2013 17:30 UTC
TbouncerT
Member since:
2013-10-31

I like to look at it like WP has a proprietary maker now. (I know Nokia was basically that, but now it's internal with MS now). I can see this helping the WP market even more now. Just like Apple's iOS & iPhone. WP needed this to happen, MS needed to MAKE the phone on top of making the OS. Look at Xbox division and how well it is doing from version 1 to 2 (soon to be 3). Yeah, Surface isn't doing as well....yet (when they merge WP and RT, I think that'll make it a lot better). WP and Surface are showing improvements. In any case, it's nice to have options.

Reply Score: 2

RE: first party
by glarepate on Thu 31st Oct 2013 19:38 UTC in reply to "first party"
glarepate Member since:
2006-01-04

Yes, the market/sales for these phones is improving. What about retention of consumers to create an installed base?

Totally anecdotal and unsupported by any evidence that I have been able to discover. (I did look for info about installed base numbers and didn't find any. My google-fu is weak here!):

I saw a post on one the the Nokia stock boards saying that there are currently about 32 million Windows Phone handsets in service now. Nokia sold about 24 million Lumias so far this year. WP handsets have been available for just about 3 years now. How/why can the user base be that low (if that figure is correct)?

This makes it look like users are leaving the WP platform at a very large rate if Nokia can sell that many phones and the user base still be that small.


Anyone able to find numbers of phones with contracts? Because if this is true MSFT will have to brace for deficit spending on these phones for now and maybe indefinitely.

Reply Score: 1