Linked by Thom Holwerda on Thu 14th Jun 2012 15:15 UTC, submitted by Jos
PDAs, Cellphones, Wireless And the burning platform is still, uhm, burning. "Chief Executive Stephen Elop is placing hopes of a turnaround on a new range of smartphones called Lumia, which use largely untried Microsoft software. But Lumia sales have so far been slow, disappointing investors." It's a shame to see a once proud company in such a downward spiral, but alas, it's the way of business. If you get complacent - as Nokia had gotten - you will fail.
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Its a restructuring
by Nelson on Thu 14th Jun 2012 21:50 UTC
Nelson
Member since:
2005-11-29

Nokia is way too large for itself to support. They're outsourcing manufacturing, cutting costs, and making strategic investments where it matters.

The Lumia 900 has sold very well in the United States, and still, even now, holds its own against the HTC One series.

The AT&T push here has been huge, and they say they're very pleased with sales. Same goes for T-Mobile and some of the Canadian partners up north.

So in the US, undoubtedly its been a marked improvement over other Windows Phone OEMs.

The Lumia 800/710 abroad made great inroads I believe, as was evidenced by the fact that Nokia quickly surpassed every other Windows Phone OEM to become the top selling OEM.

Sure, they're not Android numbers, but they don't really need to be there for now. The Lumias use lower end parts, so manufacturing costs are less. Plus the 800 manufacturing was outsourced to Compal (Who also said they were pleased with demand, and actually increased in profit due to it). A steady stream of news from them shows that they're increasing shipments, not decreasing. You don't order more if you're not selling well. I believe they also are manufacturing the 610.

Speaking of the 610. They're just starting that roll out and I expect it to be huge. The price point is sweet and reviewers seem to love the device. Try running Android on a 800MHz 256MB device and have it perform anywhere near the Lumia.

In specific markets (Finland, US, UK, Russia, Germany to name a few) they're making great inroads with strong sequential growth.

Windows Phone YoY growth has been pretty impressive. There are an estimated 13.5 million Windows Phone handsets in the wild.

Kantar recently reported that in major markets, Windows Phone holds a 3-4% marketshare.

So quite obviously, things aren't as bad as they're made out to be. Lumia sales may be "slow and disappointing" by Android standards, but anyone who expected the Lumia to move 20 million a quarter was out of their mind anyway. Things like these take time.

Nokia's biggest pain point right now isn't Lumia, its the collapse of Symbian sales. Lets say this again. The problem is not with the Lumia, it is the collapse of Symbian sales.

To combat this, there is the huge elephant in the room: Windows Phone 8. Expected to cover a wider range of hardware, enable lower price points, and allow Nokia to compete in the low-end Android dominated markets.

I think a low-end Windows Phone is a great proposition, and can't see why a slow, confusing, unstable Android phone would do better.

Nokia just sold Vertu for $250 million (Interesting how Thom left that out) and bought the same Imaging technology which RIM just licensed in BB10. Expect to see that technology make its way into Lumias (As well as their Pureview 42 megapixel camera t ech) .

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.

Edited 2012-06-14 21:52 UTC

Reply Score: 1

RE: Its a restructuring
by sukru on Thu 14th Jun 2012 22:05 in reply to "Its a restructuring"
sukru Member since:
2006-11-19

You have summarized it very well. I could not have done better.

They lost a good opportunity on Maemo and MeeGo (N900). And they could no longer develop Symbian to be competitive. I do not think they had much choice but push WP7 at that time.

And... I have a WP7 phone (HTC not Nokia), and I like it a lot.

Edited 2012-06-14 22:06 UTC

Reply Parent Score: 3

RE[2]: Its a restructuring
by shmerl on Thu 14th Jun 2012 22:21 in reply to "RE: Its a restructuring"
shmerl Member since:
2010-06-08

They didn't loose the opportunity. They killed it on purpose (for no reason, besides pleasing MS).

They're too crucial to Windows Phone for Microsoft to ever let that happen.

But Windows Phone is not crucial for Nokia, despite all the PR which placates it otherwise. I.e. while MS benefits from pushing WP on Nokia, Nokia only suffers from that partnership. IMO in the long run, it will either damage Nokia beyond repair, or will cause them to dump the MS deal if they'll get sober in time.

Edited 2012-06-14 22:27 UTC

Reply Parent Score: 12

RE[2]: Its a restructuring
by Nelson on Thu 14th Jun 2012 22:25 in reply to "RE: Its a restructuring"
Nelson Member since:
2005-11-29

I think they should've redoubled on their Symbian support (instead of ringing its Death Knell years before they can replace it). If Symbian sales would've held strong, Nokia would actually be doing great right now. That was a severe miscalculation on their part.

I'm on the fence about the MeeGo stuff, on one hand, the project was really going nowhere (Evidenced by N9 not even using the publicly available MeeGo stuff, but Nokia's own incarnation), on the other hand it did create a lot of ill will. This I think was a harder decision.

They've done well for Windows Phone. I hope with WP8 (being announced in six days) that they'll launch some low cost phones to replace Symbian.

Reply Parent Score: 1

RE: Its a restructuring
by Moocha on Thu 14th Jun 2012 22:21 in reply to "Its a restructuring"
Moocha Member since:
2005-07-06

I agree, the very much avoidable Symbian collapse is a huge problem, but where you see hope for the Lumia I see complete failure by any standards you care to name - profitability, average sales price, market share, desirability, brand, you name it.

The problem is that in order to compete in the markets you mention (the developed world - highly saturated markets) you need a much better phone than the Lumia series can provide (you're going against the iPhone), OR you need high sales volume on a profitable handset (current Lumias are sold at cost or at loss, and no, it's not relevant if you report a 500% growth if your baseline share was 0.1%).

If you try to compete in those markets with a product that barely cuts it as a mid-range phone and neglect markets with much, much higher growth potential like India or China where you were enjoying a dominant market position... then you're simply trying to commit suicide...

Reply Parent Score: 4

RE[2]: Its a restructuring
by Nelson on Thu 14th Jun 2012 22:32 in reply to "RE: Its a restructuring"
Nelson Member since:
2005-11-29

A lot of it can be addressed with time. I think we'll just have to disagree on the Lumia success, I see clear momentum. Maybe not run way success, but very clear momentum.

Sequential growth is also high, so its indicative of an ongoing trend of growth.

I don't believe Lumias are sold at a loss, I've never heard of them being sold at a loss.

WP8 will enable high resolutions, differing SoC chipsets, better cameras, essentially a wider range of hardware. I think on the high end, Nokia will have no problem beating others. Their Camera tech is particularly impressive.

For the low end, it remains to be seen if WP8 can address that, though I sincerely hope it can.

Reply Parent Score: 2

RE: Its a restructuring
by Bill Shooter of Bul on Thu 14th Jun 2012 23:05 in reply to "Its a restructuring"
Bill Shooter of Bul Member since:
2006-07-14

Nice double talk. Portraying their weaknesses as strengths. None of that is true, but that's what a Nokia spokesperson woudl have to say.

Reply Parent Score: 7

RE[2]: Its a restructuring
by Nelson on Thu 14th Jun 2012 23:09 in reply to "RE: Its a restructuring"
Nelson Member since:
2005-11-29

Nice useless comment, thoroughly enjoyed it, right inline with my expectations.

Reply Parent Score: 2

RE: Its a restructuring
by JAlexoid on Fri 15th Jun 2012 00:57 in reply to "Its a restructuring"
JAlexoid Member since:
2009-05-19

I think a low-end Windows Phone is a great proposition, and can't see why a slow, confusing, unstable Android phone would do better.

It may be slow compared to WP7, it's no less confusing and definitely not unstable.

It may be that only Nokia can produce a low end device, because everyone else can't do that.

Now, when the first WP8 devices start to roll out, we will see a new generation of low end devices. Sony Xperia U is already on the heels of 610. And Xperia lowend is far below what any WP7 can provide(not to mention the low end of Samsung, low-end of ZTE and the new mid-range Intel devices).

If the market gets frozen for the next 9 months(I seriously do not expect WP8 to be out earlier), then I would agree that WP8 has great chances. However a lot will happen in those 9 months. iPhone refresh is coming in fall. If Apple pushed iPhone4 to $350 and keeps iPhone3Gs it's game over for WP and a lot of Android base. New baseline Android will be released - the next Nexus. Samsung's, HTC's and Sony's budget lines will be refreshed.

Regardless of how I feel about Microsoft, WP7 is having issues capturing the market and WP8 looks to be picking up from WP7 in an even more contested market.

Reply Parent Score: 3

RE[2]: Its a restructuring
by Nelson on Fri 15th Jun 2012 01:14 in reply to "RE: Its a restructuring"
Nelson Member since:
2005-11-29

Windows Phone will be out by October, like it usually is.

Reply Parent Score: 2

RE: Its a restructuring
by pos3 on Fri 15th Jun 2012 04:25 in reply to "Its a restructuring"
pos3 Member since:
2010-06-25

Symbian was selling very well in India after the burning memo. Many buy WP in India because its Nokia not because of MS.

But Android is decimating Nokia's higher and lower end markets.

Nokia Android would have a been a runaway success in India.

I am using ICS on a 600mhz 300MB mobile.From your comments in this site i see that you are a Microsoft fanboy. Have you ever used a Android mobile?

Reply Parent Score: 3

RE: Its a restructuring
by Radio on Fri 15th Jun 2012 06:59 in reply to "Its a restructuring"
Radio Member since:
2009-06-20

Ahahah, so much spin!

The Lumia 900 has sold very well in the United States, and still, even now, holds its own against the HTC One series.
Who cares about the USA, a saturated market? And why compare it to the One series specifically (the one which suffered delays thanks to an Apple ban)? Cherry-picking much?

Sure, they're not Android numbers, but they don't really need to be there for now. The Lumias use lower end parts, so manufacturing costs are less. Plus the 800 manufacturing was outsourced to Compal (Who also said they were pleased with demand, and actually increased in profit due to it).
Nokia has its own factories, but they are throwing money at Compal because their own factories can't produce the Lumias? Marvellous!

Windows Phone YoY growth has been pretty impressive. There are an estimated 13.5 million Windows Phone handsets in the wild.
Yeah, but all the smartphone market is growing at an astonishing rate. The rising tide lifts all boats. The real question is: is WP growing as fast or faster than competitors?

Kantar recently reported that in major markets, Windows Phone holds a 3-4% marketshare.
Well, I guess that answers it.

Lumia sales may be "slow and disappointing" by Android standards, but anyone who expected the Lumia to move 20 million a quarter was out of their mind anyway. Things like these take time.
They don't have time. Market saturation is coming fast (as close as next year, 2014 if it goes more asymptotic), and old users are locked in the ecosystem they choose by the apps they bought.

If Samsung, HTC, LG, and the other Windows Phone OEMs put in as much effort as Nokia, and each sold as much as Nokia does with the Lumia, Windows Phone marketshare would look much closer to 10% than it does now.
Woah. "If" ALL WP partners were putting all their efforts together, they WOULD get a meager 10%? THAT's a value proposition! Can't see why they didn't do that. Beats me.

Reply Parent Score: 5

RE[2]: Its a restructuring
by Nelson on Fri 15th Jun 2012 07:36 in reply to "RE: Its a restructuring"
Nelson Member since:
2005-11-29

Who cares about the USA, a saturated market?


The only people who complain about market saturation are those who can't think of new business models. Times change, and companies will too.

However, all of that is an aside, and not part of the point. The point is Nokia reestablished itself in the USA after a near zero presence.

Whether it signs up new people, or converts existing Androids and iOS users is irrelevant.


And why compare it to the One series specifically (the one which suffered delays thanks to an Apple ban)? Cherry-picking much?


The comparison I was making was an observation made based off of preorders, which don't much care for an import ban that lasted like a week, and which predated said import ban.

I'm not really cherry picking, on sites like Amazon the Lumia topped the charts for quite some time.

Nokia has its own factories, but they are throwing money at Compal because their own factories can't produce the Lumias? Marvellous!


It was a timing and logistics thing mainly, the 900 is produced in house by Nokia.

Not that there's anything wrong with outsourcing manufacturing. I wish they'd do more of it, or do you think less of Apple for outsourcing their manufacturing? Very few OEMs live a double life as an ODM.

Yeah, but all the smartphone market is growing at an astonishing rate. The rising tide lifts all boats. The real question is: is WP growing as fast or faster than competitors?


Obviously it is, thanks to Nokia, since it has grown in key markets (Gone from 1-2% to 3-4%) which means it is outpacing smart phone market growth (otherwise itd be flat if it was keeping up, or negative if it was being outpaced)

Well, I guess that answers it.


A marked improvement from the sometimes sub 1% representation of Windows Phone. My point with these figures is to show that the Lumia (in its limited time of availability, in its gradual roll out) has made inroads, moreso than other OEMs.

They don't have time. Market saturation is coming fast (as close as next year, 2014 if it goes more asymptotic), and old users are locked in the ecosystem they choose by the apps they bought.


Under the current business model. Like I said before, things change. Microsoft is working on allowing people to migrate their apps from say, Android to Windows Phone.

You can check it out here: http://www.unwiredview.com/2012/05/17/what-app-problem-microsoft-is...

Microsoft has an app store with 100,000 apps. The growth of the store has been explosive. Apps wont be a limiting factor.

Woah. "If" ALL WP partners were putting all their efforts together, they WOULD get a meager 10%? THAT's a value proposition! Can't see why they didn't do that. Beats me.


"By now", not 10% ever. Its a great start. I'm sure HTC (who's not looking too good lately either) would love to have a couple million more Windows Phones sold under its belt.

Competition is less stiff than on the Android side, dealing with Samsung and all.

Reply Parent Score: 2

RE[2]: Its a restructuring
by Odisej on Fri 15th Jun 2012 09:23 in reply to "RE: Its a restructuring"
Odisej Member since:
2006-05-11

Finally a sensible answer. Well, I come from a country with a micro market if you will. One million potential buyers is not a lot. But it is a great place to follow the trends. Much more than in some huge market such as Germany.

This is what is happening here. Three years ago there was nothing but Nokia. If you would ask any "opinion maker" Nokia was a way to go. Since forever. Their brand was so strong operators were fighting who will have the latest and the greatest Nokia. They were the king and the queen.

Than came Samsung (not Apple but Samsung) with Galaxy S. Their approach was well planned and timed. They were able to overshadow Apple in a month. After Samsung other Android manufacturers followed, HTC being quite aggressive, Sony ...

And Nokia? Its completely gone. They tried with N9 which was overpriced compared to what Samsung and others were offering. They are putting a lot of effort into Lumias now. You can see the commercials on stairs, buses, everywhere. Yet, everybody is talking about Galaxy S3. If you ask an "opinion maker" today - folks who read sites like OSNews - they would not even mention Nokia. It's that bad.

But if you were to merge Nokia hardware with Andorid software... I bet it could still be a winner in this market and in Europe in general. The window of opportunity is small though as Nokia is fading from day to day while Samsung and HTC are going supernova.

Btw, the other day a talked with a Thai gentlemen. Hhe was looking for a phone for his daughter back home. What did she order - HTC One or galaxy S2 or S3.

Edited 2012-06-15 09:25 UTC

Reply Parent Score: 1

RE: Its a restructuring
by spiderman on Fri 15th Jun 2012 10:01 in reply to "Its a restructuring"
spiderman Member since:
2008-10-23

Dude, the US is a niche and WP is a niche. So your argument is that Nokia is doing well on the super niche market that is WP in the US.
Man, Nokia used to be number 1, so far above number 2 that it wasn't even funny. WP is a total failure. They have killed Symbian and Maemo for it.

Reply Parent Score: 3