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

Reply Score: 5

RE: Comment by Nelson
by dukes on Thu 18th Oct 2012 17:16 in reply to "Comment by Nelson"
dukes Member since:
2005-07-06

Nelson, that was pretty insightful. Thanks.

Reply Parent Score: 2

RE: Comment by Nelson
by TBPrince on Thu 18th Oct 2012 18:20 in reply to "Comment by Nelson"
TBPrince Member since:
2005-07-06

Nice put.

Also add that Lumia 800 marketing effort was bad, so bad. Nokia needs to learn about marketing smartphones. For example, while Apple shows features in its iPhone ads, Nokia didn't and aimed to create generic ads. This works for feature phones but doesn't work for smartphones.

Its second attempt for Lumia 610 was way better than first and sales improved. And I consider Lumia 800 a rushed product. The first real phone on par with Samsung's and Apple's model 900.

Moreover, Windows 8, Surface and X-boxes unified eco-system will improve scenario a lot, as rushed steering to reconsider WP made by Samsung, HTC et al is a sign something is happening.

WP7 still has some glitches, some roughness, something to learn in small features which could be improved a bit but can make a difference. However, having used Android 2.x and 4.x for months and having switched to Lumia 900 for a few weeks, I can say WP looks way more modern and captivating than Android 4.x.

My opionion of course.

Reply Parent Score: 2

RE: Comment by Nelson
by cdude on Fri 19th Oct 2012 07:07 in reply to "Comment by Nelson"
cdude Member since:
2008-09-21

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


Like losing most of your customers and killing of your company?

But yes, small mistakes in the great scheme of things like growing the WP ecosystem (even if it actually declined when watching past 2012)!

"Keep course. The ice rock will sidestep and if not, its only a small mistake in the great scheme of things!" says the captain of the titanic 4 quarters before the ship went finally down.

Actually in reality the ship already hit the ice rock and is sinking faster and faster but that was only the first collision. Trust the captain that the second collision will bring you past the rock! And if not, who cares about such a small ship in the great scheme of the universe?

Edited 2012-10-19 07:16 UTC

Reply Parent Score: 2

RE[2]: Comment by Nelson
by Nelson on Fri 19th Oct 2012 07:21 in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29


Like losing most of your customers and killing of your company?


Is there a source for "losing most of your customers"? Sure, sales declined YoY, but they still sold a boatload of phones last quarter.

Devices and Services margins are looking up though, and Q4 guidance indicates they will look even better next quarter.

Nokia is far from dead. In fact, it is now possible to see at least a light at the end of the tunnel.


But yes, small mistakes in the great scheme of things like growing the WP ecosystem (even if it actually declined when watching past 2012)!

"Keep course. The ice rock will sidestep and if not, its only a small mistake in the great scheme of things!" says the captain of the titanic.


I don't know what you mean? And look, let's cut the bullshit. Nokia was in a clear, dramatic, and rapid free fall prior to Mr. Elop taking control of the company.

However, under Mr. Elop Nokia has returned to profitability. He's put a ground under the free fall. Say what you want, but the cash conservation in Nokia is extremely good.

Location has risen in profitability, Nokia Siemens is profitable, the Average Selling Price of Smart Phones rose 18% YoY, they sold 6.5 million Ashas, 3 million Lumias during the line up sunset, and are on the eve of a monumental launch of their next flag ship Lumia phones.

So maybe in your invented reality, Mr. Elop made huge and terrible mistakes. However, in real life, he actually saved Nokia. History will vindicate him.

Reply Parent Score: 2