Linked by Thom Holwerda on Thu 18th Oct 2012 10:56 UTC
PDAs, Cellphones, Wireless Things ain't going well for Nokia. Their quarterly results are - again - a disaster, and Lumia sales have dropped 28% (50% if you look at just the US). Windows Phone 8 is really going to be a make-it-or-break-it kind of thing. If it doesn't go well, the company might consider going back to focussing on rubber boots.
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Comment by Nelson
by Nelson on Thu 18th Oct 2012 16:17 UTC
Nelson
Member since:
2005-11-29

While Lumia sales decreased, it was expected. Its been sunsetted by Carriers with little or no advertising left, Nokia has announced new devices, so naturally it will lead to a decrease.

They still sold 3 million of the things, down from around 4 million the prior quarter. This is the first time _since_ launch that there hasn't been Quarter over Quarter increases in sales. About a year in, that's pretty impressive.

They also sold 6.5 million Asha Touch phones, which is encouraging. This I believe, more than Windows Phone, is the line up that can end up being a life boat for Nokia.

Also impressive is Nokia's cash conservation. They actually posted a non-IFRS profit of ~$78 million iirc.

non-IFRS meaning when you take out one time charges like pensions or severance pay which is not really structural debt.

I think under Elop a few good things have happened:

- Streamlined the company. Yes, there were job cuts, but they were needed. Nokia was absolutely massive and a big part of their cash problem was not scaling down fast enough. A lot of inefficiencies.

- Got devices to market relatively quickly. The Lumia line got out to people pretty fast. They sold millions of them over the course of the year, and established some real mindshare with their Lumia brand.

- Improved the Windows Phone ecosystem by leaps and bounds. Got key 2nd Parties to ship flagship apps, landed a bunch of exclusives. They totally dominated in the evangelism story here.

Sure, there were missteps along the way. The Lumia 800 was a non targeted blind push to Carriers. There is still retail sales channel training to be done. Etc.

They're relatively small mistakes though, in the grand scheme of things.

I think with Windows Phone 8 there are a few enabling things which will make Nokia have a better time:

- More H/W diversity in screen resolutions, SoC, sensors, etc.. More experience engineering for Windows Phone.

- OS which has largely caught up in features and apps. Remember since Nokia has joined, 100,000 apps have been added to WP7. Up from 20,000. WP8 will only accelerate this by having API parity with Windows 8.

- Carriers know Lumia, know it reviews well, Nokia has a beach head in the USA.

- HTC and Samsung are investing more in WP8 which will grow the ecosystem and mindshare as a whole.

There are still a lot of uncertainties, but Nokia is in a better position than they were a year ago.

I expect their stock will tick up a bit due to their cash conservation.


/armchair analyst

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