Submitted by So, The Wall Street Journal is reporting that Microsoft was very close to take over Nokia, but that the talks eventually broke down, probably beyond repair – at least for now. The reasons the talks broke down illustrate something that I have repeatedly tried to make clear for a long time now: Nokia isn’t doing well.
Ever since Nokia CEO Stephen Elop burned all his ships in the middle of the ocean by declaring all his existing platforms dead long before the eyed new platform was ready, Nokia has been on a massive downward spiral. This downward spiral is best illustrated by Asymco’s chart that I already used when discussing Nokia’s latest quarterly results. The gap is the exact moment Elop announced the death of Nokia’s existing platforms, and effectively killed the company.
On top of Nokia smartphone sales being quite lacklustre, their feature phone business isn’t doing much better – those sales are dropping like a brick too, faster than the company expected, even. I summed up Nokia’s awful performance as such:
Ponder on this figure: in total WP7 and WP8 combined, Nokia only sold 19.9 million Lumia phones. That’s it. To put this into perspective: in the first quarter Nokia sold Lumia devices (Q3 2011), Nokia still sold close to 20 million Symbian devices. In other words, Nokia was pumping out more Symbian phones per quarter in 2011 than it has sold Lumia phones in total to date.
So, according to The Wall Street Journal, Microsoft was in talks with Nokia to buy the company – but the talks broke down because of price, and Nokia’s “faltering market position”. In other words, Don’t take it from me, don’t take it from anyone else – even Microsof itself says Nokia is kind of a lost cause. And with the failure of Nokia, we have the failure of Windows Phone.
And thus, we’ll see the Surface phone this year, or early next year. Guaranteed.
Elop is an idiot. He confirmed that when he declared Android to be it’s competition, and wanted to compete only using WP7 against all the other handset makers that were selling both wp7 and Android, or iOS.
Besides firing Elop, I think Nokia could stand a chance at some recovery if they started selling Android phones immediately. Their hardware looks really good, and regardless of one’s opinion of WP7, it isn’t making a dent in the Android/iOS ecosystems.
If their hardware had software on it that could sell better, they could at least try to turn things around.
If they decide to stand proud on their sinking ship, or fail to turn things around, I could imagine someone will want to buy them, if only for their patent portfolio (I’m only guessing it would have to be somewhat decent). I see Amazon, Microsoft, Google’rola, Apple, Samsung all bidding.
There was time when nokia and motorola would consist of 90% of mobile related patents.
Android wont save nokia as samsung is only profit making android manufacturer and even it’s looking to replace it (tizen)
I’ll just make the bold bet that Samsung will never replace Android with Tizen.
Me too.
Tizen is just another dead born project to join Maemo and Meego.
From the outside it looks like a few telecomunications projects I took part on that kept R&D busy for years without real customers on the outside.
No sane developer will pick it over the existing operating systems for native apps and for web based ones, it does not offer any advantage anyway.
I could see it happening. Since Tizen can be TouchWiz’ed and run Android apps the users would not even notice.
It’s the “Plan B” or negotiating leverage. When Google wants to put the screws to their largest outside OEM, Samsung can look Google square in the eyes and say, “We don’t care. We’ll just use our own thing. Oh, and it runs your applications.”
They use tizen. They just use it for leverage rather than product development.
I disagree. I think there will be a point soon when Google’s Android is just holding Samsung back. And if they can leverage a compatible alternative that would avoid licensing fees it would make real sense to switch.
There are no licensing fees to Android. There would be to Tizen, however, if it were to run Android applications flawlessly. Plenty of applications depend on things like Google Maps, which is not part of the base AOSP distribution (and without which Android pretty much sucks).
Oh, and before Android is “holding Samsung back”, Tizen at least will have to catch up with it. Which it won’t — ever. Hell, Tizen hasn’t even caught up with MeeGo Harmattan.
They don’t need to cause MeeGo isn’t in competition. They need only to be similar good to Android. HTML5 vs Java. Can’t say which is more worse yet.
Edited 2013-06-21 17:42 UTC
Of course Tizen won’t have to compete with MeeGo. It still has to be better. MeeGo was a year behind Android when it launched some years ago. Since then, Android has been developing at an incredible speed, and MeeGo dropped all its good stuff to become Tizen.
MeeGo didn’t became Tizen. Tizen was another product and it was worked on before MeeGo got aborted.
Nope, except for some part that Tizen IVI has taken from MeeGo (which as also targeting the IVI market), Tizen is not derived from Meego at all:
https://github.com/kumadasu/tizen-history/blob/master/tizen-history….
Why? Most of the users don’t know or even care what the underlying OS on their phone is. If it runs and has the features and apps they want nobody will care that Tizen hasn’t caught up to Android. After all, the majority of people think that TouchWiz IS Android and that the back button is supposed to be on the left not the right.
OK, before making such ludicrous claims as “the majority of people think that TouchWiz IS Android”, you should try to come up with some evidence supporting that. In the meantime, you really have no credibility whatsoever. Then again, this isn’t about making credible arguments, is it? You’re just shovelling shit, hoping that some of it sticks.
“Samsung was the biggest contributor to Android’s success, amassing 42.0% of all Android smartphone shipments during the year. Following Samsung was a long list of vendors with single digit market share, and an even longer list of vendors with market share less than one percent.”
http://www.idc.com/getdoc.jsp?containerId=prUS23946013
Which proves nothing, of course. You’re a moron.
If so many consumers know enough about the inner workings so much that anyone “could see it happening” then it’s not a worthwhile project.
I said they could try to recover using Android, Never said it was for certain. Beats being too proud to try a change from their failed model.
I owned a Lumia and the hardware quality is absolutely amazing, I’m sure that Android phones made by nokia would sell like hotcakes, but honestly, Nokia is a parasited company at this point and lacks their own will.
Of course, it all went downhill as soon as Nokia got infected with that idiot Elop and all the M$ baggage he carried in with him. I say fire the fucker now and kick him out with all his accomplices, before Nokia is worthless.
Actualy he done good for first Q or two. (Look at the pick)
Its only when he issued “burning platform”…
Well its as if he lost his mind then…
How can you kill your own brand, when you do not have anything to replace it with (look at pick, Lumias started to sell much letter…)
For the first quarter or two it would be his predecessor’s work, it takes a while for new management to really start making changes. Once Elop’s changes took force, the dive started.
Exactly. Hardware quality. I have very fond memories of my N8 and I regret selling it, only because a friend insisted so much that he wanted it.
Let’s see: try to take part of a still growing market or wallow in an extremely low growth market, spending tons of marketing money and getting nothing out of their investment.
Just because no one but samsung is making money off android doesn’t mean everyone else is losing money hand over fist with android.
Nokia might have a better shot at using their name and hardware to actually push into the android market and possibly compete with Samsung.
Supposedly Huawei is looking into buying Nokia.
Nokia was in a fantastic position to make the best Android devices, they threw their lot into the wrong pot. Oh what could have been. I was jonesing for a Nokia Android premium device for so long. Imagine a Nokia Nexus. Oh well. I hate that this article dredged up my years of waiting for Nokia to make a good Android device until that assclown took over.
The central question is still why Elop’s Nokia went all-in. HTC, Huawei, Samsung all doing WP and Android. Samsung, back then way smaller then Nokia, even Bada and Tizen. Samsung applied then the same strategy Nokia had bringing the featurephone platform Bada and the own platform Tizen together, an upgradepath. Android apps run there, so did they run under MeeGo. Nokia even had QT which bridges to Android. All thrown under the bus and reset for a, back then unproven new, platform. One they have zero control over. One with zero upgradepath, synergy. Why? They could have done WP without burning everything else and closing all the doors they need now. It was not needed and it kills them now. Why they STILL only do WP even now and still not build any bridges to S40 Smarterphone Asha. Why that suicide strategy?
Edited 2013-06-22 13:05 UTC
Because Microsoft paid them $250m per quarter for an exclusive. That was far more than they were likely to make in the Android market. Selling stuff is nice. Getting the profit for not selling stuff is better.
When they (MS) pretty much control Nokia’s smartphone division in a de facto manner, with little in terms of capital investment.
I wouldn’t consider $1B+ little capital investment.
That is a 5 year contract. So it comes down to a bit over $200 million per year. And it is mainly in the form of “funny” money (cross licensing, ad money MS has to sink anyway to promote WP, etc). Microsoft actually recoups part of it, because Nokia still has to pay on a per phone licensing basis, and they get access to some of Nokia’s key tech in that space (mainly the navigation technologies).
So it is a great investment as far as microsoft is concerned: they get to take control of a 15 billion market caped company for peanuts basically, while they are shielded from the risk in case Nokia goes south (which they would be on the hook for, if they had acquired them directly). Honestly, it’s a much more intelligent approach than google’s right out purchase of motorola.
Edited 2013-06-21 00:20 UTC
Nope. The quarterly “platform support” payments are definitely in cash, not “funny money.” Even if they pay back the total amount in licensing fees it’s still a net gain for Nokia.
Can you provide a reference to the actual structure of the contract? I have heard otherwise.
Microsoft is most definitively known as a profitable entity, not a charity.
Edited 2013-06-21 05:16 UTC
It’s in the Nokia quarterly financial disclosures.
This one?
Actually past quarters Nokia’s license fees where higher then the platform-support payments received from Microsoft.
True, but they are still ahead the money that Microsoft paid in platform payments ($250M – $250M = $0 whereas $0 – $250M = -$250M).
The dude above was so nice to paste matching sentences. The central points in there are:
1. commitment (contractual binding) that is running over years.
2. vary over the life of the agreement.
3. Minimum commitments.
1 and 3 bind them both. If Nokia switches strategy they still need to continue pay. 2 and 3 combined with those “expected to” statement tells that if Nokia sells more Lumia they receive more platform support payments, maybe even pay lesser fees per device. If they switch strategy the case turns around and Nokia needs to pay more.
That agreement is a burden now for any alternate strategy. Well done, Elop.
Edited 2013-06-22 13:21 UTC
HP took out Palm. Nokia committed suicide with M$’s help. That move WP by default to #4 spot from a field of 6 Mobile OSen. Nice move for not a lot of cash.
That is, if they launch a couple AOSP (think Nexus status) smartphones with excellent quality, good battery and interesting price, and available all over the world. Just a couple of phones, mid range (dual core) and top range (quad core).
They know how to build excellent quality phones, just look at the N9.
After that a nice tablet (7″ or 8″) and I think they would regain lots of brand status.
More like lost in the sea of Samsung Android devices.
Its better to bee 4-6% Android OEM that can differentiate by hardware and some services, and UI, and apps, and mods to OS.
Than to be unprofitable 2% WinP OEM who can differentiate only by hardware.
And Nokia do not sell Lumias with profts…
So it would change little market presence and no profits to small market presence and little profits.
If that is wrong approach……………..
Or they could just release one that’s aluminum. That usually gets mouth breathers in a tizzy.
The Lumia 925 is pretty nice. I do wish it had Xenon Flash though.
Just wait for Lumia EOS. Just wait.
I think you have aluminum confused with diamond plate steel and ‘truck nuts’.
Why insult people who just happen to like aluminum as a material? What’s wrong with liking it?
Most phones that are aluminum (like the HTC One) sell for no other reason than they are aluminum, even though they’re not any more/less durable than a well made plastic phone. That makes them fashion accessories, and the people that buy them shallow.
Ah, so the only criteria that matters, according to you, is durability, and anything else is irrelevant. Must be nice sitting there on the high horse and looking down upon the world around you.
No, I’m saying that if Nokia wants to build a killer Android phone, they just have to make one with an aluminum build. It doesn’t matter how it performs, what features/specs it has, if it’s not any more durable than any other smartphone out there, or even if you have to install a launcher to disable some horrible bloatware. People will buy it anyway just because it’s aluminum. If you can make it silver, that’s an added bonus:
http://www.youtube.com/watch?v=3u2f0wIs1wE
Seeing how sure Thom is I sure hope he has put his savings into a short of NOK, sure to pay off with this sort of insight. The price going up of late only means there is more money to be made when it crashes to zero!
Nokia has been imminently dying for a while here at OSAlert.
The Register had the same buyout story 12 months ago — Since then the Nokia stock is up 50%.
In my short time on OSAlert I’ve come to learn that:
– Nokia is always 90 days from bankruptcy.
– Every new Microsoft product and/or announcement is a sure sign of their impending doom.
– [Insert Year Here] will be the year of the Linux desktop.
The whole thing is stupid. I’ve long been arguing for a more measured analysis of Nokia, in which hey, maybe they aren’t going to die, and hey, maybe Windows Phone does sell more than two phones.
In order to understand the seemingly irrational hate, it is important to understand where it comes from. MeeGo was the white horse of every fanboy with a hard on for Linux. No matter the fact that it was severely behind schedule and under cooked. No matter the fact that MeeGo on the N9 wasn’t even real MeeGo. No matter the fact that Nokia was actively DYING during this time.
They hate that Nokia killed MeeGo. They hate it even more than Nokia killed MeeGo for Windows Phone. Nokia went from darling to devil overnight on OSAlert.
Its been crazy land since then.
The last time I’ve been in our local mall. Nokia’s bou^A·tique is a ghost town. 12 years go, Nokia is the only kid in town. Now, people have move on with My|Phone, Samsung, Cherry Mobile and many other Android devices in addition to iPhone. Had Nokia release an Android device, it would sell, since many people are interested in phones in the name of Android.
Edited 2013-06-21 04:30 UTC
I am surprised your town still has a Nokia shop. Here they got all closed within last year.
Yeah Nokia shop here closed too and then reopened as a generic mobile phone shop.
Too bad really, it was the best place in the mall to get away from all the crowds and enjoy some quiet time.
Edited 2013-06-22 13:23 UTC
For every Nokia shop closed at least one Samsung shop opened here. Unfortunately its not places to go an relax cause they are crowed with people all time.
Meanwhile beside Apple and Samsung shops I also saw Huawei and LG shops springing up. In some malls there are all of them close together. Nokia? Not one any longer. You also not see anybody carrying Nokia’s any longer whereas 1-2 years ago it was all Nokia land.
It took Nokia one full smartphone-circle, 2 years, to complete vanish from landscape. Stunning.
Edited 2013-06-22 13:47 UTC
I read a similar article [1] yesterday, and immediately opened up OSAlert, thinking to myself that “this would be the perfect article for Thom to troll Nelson”.
Anyway, I think you got some of the “facts” wrong. From the perspective of a true Linux fanboy, the real tragedy happened when the MeeGo merger was announced by the previous CEO. I have no insider knowledge, but my thinking is that if you want to get a team to pivot from DEB to RPM, you might as well just kill the project.
Few weeks after the announcement of Meego, N900 was made available in my country and I immediately placed a pre-order. Never had any faith in MeeGo.
[1] http://www.unwiredview.com/2013/06/20/nokia-in-acquisition-talks-wi…
Edited 2013-06-21 04:44 UTC
Man.
MeeGo N9 GOT AWARDS FOR DESIGN OVER ***IPHONE***
Yes, professionals gave it better ratings than they gave to Apple product.
German press advised their german readers to go shopping to SWITZERLAND because Nokia refused to sell N9 in Germany.
That is success. And of course you WONT find any info about how N9 sold in Nokia info releases. But you will easily find Nokia CEO statements about NOT CONTINUING WITH N9 AND MEEGO **EVEN IF** ITS SUCCESSFUL.
Oh and MeeGo would run some of Symbian Apps, it would be big differentiation for Nokia, and Symbian partners would be able to jump in…
WinP was clean break.
Its impossible that WinP could outperform MeeGo in short term. Its just not possible. (And Nokia did not shared any info which by itself is indicative..)
No it isn’t. Success = healthy revenue from current unit sales + growing market share. Rave reviews are useful to have, but only inasmuch as they translate into actual sales. In the end the only metric that actually matters is bums on seats putting money in the bank.
Many great technologies have been bested by inferior alternatives simply because the latter were better than the former at marketing themselves. Just ask the Lispers, or the Burroughs folks, or the original MacOS, and so on.
I think we can have the number now, if only they didn’t terminate the N9 (which I think, is a success, than first-tier released winphone).
Well first off the N9 MeeGo design went through once it was terminal project. There would have been much more passionate internal battles if MeeGo was still having to fulfill irreconcilable promises. But let’s ignore that.
So what? It won a design award. Yippee. There are 4 MeeGo based phones in the pipeline between 2011 and 2014. 4. Basically one a year. Assume they all win design awards. So what? How much do you think a design award is worth? $5m, $10m. Let’s say $100m since they all win one that’s $400m, or about 2 months of the subsidies that came from Microsoft and carriers, that is to say less money than the subsidies on the 720.
MeeGo was a disastrous mess of contradictory objectives and unfilled promises being developed at a snail’s pace. Elop and the board killed it because he had no choice. He is not insane or stupid. Nokia’s senior management failed to come to consensus on design issues in time and failed to allocate needed resources in time. By the time Elop got there MeeGo was a mess that Nokia didn’t have enough money to save.
Furthermore, the result was far worse than MeeGo fans like to pretend… (for example, the conclusion in http://www.mobile-review.com/review/nokia-n9-2-en.shtml )
Symbian also a mess – 3 years ago or so its yearly costs were higher than the ENTIRE r&d of Apple; with meagre results.
Shows how little you follow Nokia – they were never quick to share this info, about any of their handsets. And Meego on N9 was dreadful (for example, the conclusion in http://www.mobile-review.com/review/nokia-n9-2-en.shtml )
True dat. I think on balance, throwing in Nokia’s lot with WP probably was the better bet at the time. For all the praise the N9 device got, it had absolutely no ecosystem around it: Nokia would’ve had to build that up from scratch all by itself; a huge challenge. WP offered Nokia the promise of a readymade ecosystem, giving them a big boost in playing catchup with Android and iOS. In Elop’s shoes, I’d have made the same call. Strong ecosystem will get you through times of weak products better than great products will get you through times of lousy ecosystem.
Elop’s one single screwup (and it was a spectacular one) was burning Symbian before their WP handsets were anywhere close to shipping. That created a classic Osborne Effect where the existing Symbian customer base jumped ship to competing iOS and Android platforms – which were already available – instead of migrating smoothly to Nokia’s new WP platform, which wasn’t.
In addition to seriously damaging Nokia as a business, that little stunt also hurt WP’s credibility as a trustworthy alternative to iOS/Android, which not only damages MS’s credibility but also means there’s less of a WP ecosystem to help buoy up Nokia; and so it goes around and around. None of which’ll discourage the peanut gallery’s favorite narratives that WP sucks because its app store is smaller than iOS and Android’s, or that Elop was an inside agent setting up Nokia for MS takeover. Say what you like, at least they’re consistent in their inconsistency.
It’s also worth remembering that MS themselves are only partway through their own product transition, and while it’s far from smooth they are not standing still. If MS can provide strong business integration in the next WP release, that might give Nokia a boost by eating Blackberry’s share and maybe clawing back some of the iOS/Android business users. iOS in particular should be a soft target for a business-friendly WP, since Apple’s a consumer product company and while they do great shiny they can’t sell business infrastructure for shit.
Personally, I’d wait for Nokia’s Q2-Q4 results before calling it one way or the other. The graph shows their freefall phase is ended (i.e. they’ve no more Symbian users to lose), so now the question is whether they’re currently at the bottom of a large U-curve – in which case it’ll head back into overall growth – or sliding into a long tail along with Blackberry and the other has-beens and also-rans.
I don’t think that was even much of a screw up. Symbian phones weren’t making much margin and sales had been falling for 3 quarters. Elop by shocking his people get them to move off MeeGo fast. He bought himself a transition that say compared to RIM’s BBOS to QNX transition took 11 months less. Nokia is not the CIA. He couldn’t have killed off MeeGo as quickly as he did in secret.
Those 11 months were key to how Nokia passed RIM in sales and is having far greater manufacturing capacity than RIM has for this generation of phones. Given Nokia’s high restructuring and write down costs I don’t know that he did the wrong thing.
No, it did grow.
http://www.asymco.com/2013/01/10/getting-to-know-the-meaning-of-sis…
Remember that the new Symbian^3 generation made its appearance with the N8 in Q4/2010. Anna, Belle, 808 PureView came all after Elop’s burning started.
Its just that that “transition” completely failed except the plan was from the beginning transition Nokia customers to Apple and Samsung. Was it?
The only reason why N9 came to market where contractual bindings with Intel. Elop still did his best in declaring the N9 dead before arrival, no matter how it would perform, in not delivering to any major markets, no marketing, no support.
Nokia did not passed RIM. Q1/2013:
http://phandroid.com/2013/05/14/gartner-q1-2013/
Edited 2013-06-22 14:14 UTC
How does that graph show what you want? It has 1Q2011 way below 4Q2010. And that’s raw numbers. The smartphone market was growing rapidly so if you look at marketshare the falloff is earlier: http://dominiescommunicate.files.wordpress.com/2013/01/android_bypa…
The plan was to transition Nokia over from a maker of Symbian phones to a maker of Asha at the low end and Windows Phones at the high end. That didn’t fail. it happened. Nokia’s customers are still mostly dumb phone customers and they still are dumb phone customers mostly. Certainly they have had tremendous erosion of Symbian customers but their products were comparatively terrible. That problem predates Elop.
Yes, it was a dead product. A cool niche phone by the time it was released.
IDC and Kanter have closer to 7m. That number seems low but I’d agree that Gartner is a reasonable source and that based Gartner’s numbers Nokia did worse.
Don’t bother with him, cdude lives in his own bubble where Nokia before Elop the saboteur was doing only great, and now it’s doing only bad.
Elop was absolutely right to pull the plugs on obsolete Symbian and stillborn MeeGo when he did. The problem was he did it without any thought to public image control, airing all of Nokia’s stinky laundry in full view of stockholders, customers and news media, which is something no CEO should ever do. Say what you like in private (and roll the heads of whoever disagrees), but in public view everything always smells of roses.
Discontinuing MeeGo, fine: that was new management correcting their predecessors’ poor direction/stamping its own mark on the company. Replacing one not-yet-released product with another not-yet-released product doesn’t affect existing customers or sales one whit. Companies do that sort of thing all the time and control the PR side no problem.
But Symbian was Nokia’s established keystone product representing a large established customer base and a large predictable source of revenue. Yes those customers and income were declining, but not so rapidly it wouldn’t tide them by until their new WP platform was ready. That’s the point at which Nokia should’ve been publicly burned Symbian in order to force those users to jump to WP. Even if they lost some percentage to iOS/Android during the transition, it would still have created a huge instant audience for their new WP products, not only securing Nokia’s own commercial future, but also going a long way to bootstrapping the WP ecosystem as a whole. That in turn would’ve made WP a much more attractive proposition to other handset vendors, app developers and potential customers – which in turn would create more new customers for Nokia’s WP products; and so on into self-sustaining growth. Publicly burning Symbian too early didn’t just cost them all their existing Symbian users, it cost them almost all of those future WP users too.
Like I say, a huge newbie mistake, and one Elop could’ve avoided if he’d paid more attention in CEO history class.
…and they readily overlook how the killed Meego kitten wasn’t that good; sort of in the tradition of Nokia OS (as highlighted in the conclusion of http://www.mobile-review.com/review/nokia-n9-2-en.shtml for example)
With their stock, how is this an extreme prediction?
I challenge you to find where anyone on staff said anything like that. It’s an unquestionable fact that Windows 8 has not been a success. Writing about that doesn’t mean the sky is falling.
That’s just bs. Not one of the staff at OSAlert uses Linux on their desktop as a primary OS. I wonder if you can find where anyone said something like that that wasn’t in jest. We’re all fans and proponents of desktop Linux, but I don’t think anyone thinks it’s about the break and become the next #1 OS on a PC.
In the New Era of Truthiness, facts are collateral damage.
Same thing was said about Apple in the 90s now look at their market valuation.
I never said the staff wrote anything of the like. That said, 100M licenses in 6 months doesn’t actually qualify as a failure either.
Obviously missing the joke.
The turnaround of Apple Inc. required an extraordinary intervention by both Steve Jobs and Microsoft. Unless we see such a similar extraordinary intervention at Nokia, I don’t see how the two are comparable.
As someone else said above me, Nokia’s Q2-Q4 results will show us the real picture.
Adam S, OSAlert is largely about the comments though …and you can certainly see the sentiments highlighted by bentoo prevailing in them.
And as we just learned Microsoft and Nokia are in talks about a buy out since a year or so now.
Huawei’s interest just became public NOW. Who knows how long they try to negotiate behind private walls to … buy out Nokia. A year?
Also there is the Lenovo Nokia buy out case which became public a few months ago. Be sure that before it became public private talks where going on.
So, who do you tell nothing like that is going on for a long long time now? Its just that Nokia is a high risk. Just like Microsoft wrote in his reasoning why negotiation failed. Nokia is falling so fast that when you buy out today its worth 1/10 of what you payed tomorrow.
Edited 2013-06-22 13:39 UTC
Strawman? Anybody with a little insight knew that Nokia had cash reserves for several more disastrous quarters.
However regarding the long-term outlook, the credit rating agencies have been rating Nokia below investment grade for some time. So they don’t expect recovery.
Nokia is now irrelevant to mobile. Innovation now happens elsewhere. Asha and Featurephone sales are dropping like a rock. Lumia is still 1/3 WP7.
Here at OSAlert and outside in the wild wild customer market world. Denying reality may work for you but it doesn’t for Nokia.
I hope you have invested your savings in a short of Nokia then.
Repeating this over and over does not make it true, the stock market was down on Nokia last year, the past year though the people putting money on the line are a lot more mixed in opinion.
I’ve learned not to argue with him, it’s an exercise in futility. According to his past remarks on this website, Nokia has one quarter left to live. He (like many other rabid Nokia haters) have been irrationally ringing the death knell for Nokia.
Now they’ll go all revisionist on us and ask for more time to let Nokia die and say that its “obvious” that Nokia wouldn’t die over night (I guess the obviousness must be in hindsight, because it is a decidedly different tune now than then).
The fact of the matter is that I’ve been calling for a more measured tone for months, and now that the facts are bearing out and, holy shit, look, Nokia isn’t dead, some people here are having to rethink their positions.
Probably not cdude though, he’ll still stubbornly insist the sky is falling, link to a baseless Tomi article, and tie it together with some nonsensical garbage.
“The reasons the talks broke down illustrate something that I have repeatedly tried to make clear for a long time now: Nokia isn’t doing well.”
Don’t worry. Give it a little while, soon enough someone will come in and claim that this is bullshit, claim that they have “proof” that Nokia is doing fine, and insist that there’s no problem. It’s a typical occurrence of in the comments of news items like this regarding Nokia’s bleak future. Too bad companies almost never go out with a bang and just disappear, and instead tend to drag themselves along making news for months or years as a zombie…
Edited 2013-06-20 23:44 UTC
There is no problem, considering your side’s only argument is “it takes time to die” despite it being contrary to the rhetoric they’ve been throwing around for a year.
Yeah, what will soon be the third straight quarter of double digit growth in Lumia sales sure is a bad sign.
Or Nokia strengthening their cash on hand last quarter, or them posting non-IFRS profits for three quarters in a row. I mean, this is the point where this whole thing gets ridiulous.
I’d understand if Nokia was treading water, but they are not,they are actively increasing their volume, strengthening their financial position, and launching a barrage of new handsets on a regular basis.
You are not entitled to your own reality, and you don’t get to call people out for breaking rank with the “Nokia is dying!!111” echo chamber that we have here.
Up is down and down is up on OSAlert apparently.
^^^See? And Nelson is *exactly* the person I was hinting at… it never fails.
I’d be surprised if anyone cares about Nokia at this point as you do.
Edited 2013-06-21 01:49 UTC
Let me know after Q2 where you’ll put the goalposts next.
Yeah–I’m sure you’ll be there.
But seriously, I’m just hoping *something* happens–either Nokia just outright fizzles out (at this point, I’d prefer this… just end it already…) or they just hurry up and quit flopping around like a suffocating fish out of the water. These Nokia progress reports, which never really show any good news and only bad, are just getting more and more annoying.
And no matter how you spin it, even Microsoft giving up on a chance to buy them is not a good sign.
Edited 2013-06-21 02:12 UTC
The only time MicroSoft doesn’t buy company Y are:
1.) When it thinks it can do a good enough job to capture X% of the market share held by company Y and spend less than X% of the market cap of company Y in the process.
2.) When it sees company Y as diseased. The cost of acquisition, restructuring, and brand value is more expensive than the cost of directly competing with company Y.
In both situations, their ‘go-to’ option is to form a brief partnership involving cross-licensing, knowledge and expertise transfer, and cooperative development agreements.
Once the agreement runs it’s course, they re-evaluate the options, having gained valuable insight into the inner workings, culture, and business environment of company Y.
It’s a matter of time. If they’ve had takeover deals fall through, it’s a safe bet that option 2 is what we’re dealing with here.
It’s not like we haven’t seen this before.
Your analysis seems, to me at least, pretty spot on.
Although, from what I have seen personally, Microsoft has a very aggressive and strongly ingrained corporate identity and “culture.” And, for the most part, they don’t seem to give a rat’s ass about other “cultures.” IMO, it’s part of what has make them so successful.
Microsoft is exceedingly good at understanding the customer bases and supply chains of their “collaborators” though. And they can “sniff” if and when it makes business sense for them to bypass a partner.
Given how asymmetric their relationship is, Nokia is going to be on a tough spot even if their market share rebounds and Lumia WP devices somehow take off.
A commenter on Tomi’s blog posted an interesting link which may affect expectations for Q2 performance. Nokia appears to have stuffed the channel in Q1. So Q2 might be more difficult for them.
http://www.tech-thoughts.net/2013/05/Windows-Phone-Inventory-Build-…
http://www.slashgear.com/nokia-q2-profit-warning-rumored-as-lumia-s…
When exactly is this profit warning coming? Because that was a month ago and it still hasn’t come.
That was my whole point, I was well aware of that article and did indeed lend it some credibility..a month ago. We are now much closer to Q2 results and there has been no such warning.
Now I don’t 100% preclude that from happening, and if they did stuff the channel last quarter we’ll obviously see that in their Q2 report.
As it stands, Nokia has maybe 1 week or a week and a half to issue a profit warning. Q2 Report is July 19th.
You maybe? Thom definitely. Otherwise, you just wouldn’t post.
Nah, not really. To be honest, I just want to see one of two things happen:
1. They get their asses out of the rut they’re in, or
2. They just die, preferably sooner instead of later
…because honestly, I’m just getting sick of hearing about them.
Whether they survive or not, I really couldn’t care less.
Edited 2013-06-21 05:19 UTC
You’re aware of the fact that you are not forced to read every single story in this site, right?
You do realize that whether I choose to “read” it or not, it Nokia is constantly making it, complete with summary, to the top of the home page–right? It’s kind of hard to avoid.
Edited 2013-06-21 05:26 UTC
Which is why nature gave us non stationary eyeballs, so we can look elsewhere. That is also why Beelzebub invented the scroll bar…
Little do you know, you’re talking to someone with incredibly bad eyesight… lazy eye and extreme nearsightedness… and on top of that, broken glasses (that recently had to be welded back together and are no longer even angled correctly) with an outdated prescription (need to get an eye exam and a new pair of glasses badly). But yeah, theoretically maybe it *should* be easier, and for some people I’m sure it is.
But hey, this is getting off-topic. If OSAlert provided the ability to automatically block all articles flagged “Nokia” in the same way Adblock Plus does ads and completely removes them, chances are I wouldn’t hesitate to do take that chance. I’ll just leave it at that, because there really is no point in arguing.
Edited 2013-06-21 06:15 UTC
Okay. This is enough. BURN THE WITCH. Just kill this f***ing company already.
http://www.groklaw.net/article.php?story=20130619184238925
Now I no longer want to see this company survive at all. Destroy the troll. So pathetic they have to do the dirty work of Microsoft for something as ridiculous as a patent covering sending–gasp–links in e-mail messages.
Nokia now has no redeeming values. F*** them.
Dissociative identity disorder?
Why is it so hard to figure out? With either outcome they will finally get out of the news, and that’s all I care about. Not their status (or existence) as a company.
I frankly laughed my a$$ off when i read your initial comment and the response was absolutely as predicted. Well at least there’s someone out there that admires nokia and elop. (hehe)
I don’t think Nokia should sell to Microsoft, they are well on their way to a recovery.
This is completely aside from Microsoft’s ulterior motive of advancing Windows Phone — Nokia is doing a great job of conserving cash and strengthening their financial position.
None of these require necessarily a Windows Phone smash hit, just to sell enough to be a player.
Nokia has not yet issued a warning on their upcoming earnings, which indicates to me that their Lumia sales have indeed increased for Q2 at least as well as they said they would during their guidance.
If true, this is encouraging news. They need to keep it up for Q3, and they’re home free into the Holiday season which will naturally lift their sales.
Basically if Nokia can go to selling 15-20 million Windows Phones a quarter by Q1, they’ll be easily doing in a month what used to take them a year to pull off.
Its also not that unrealistic given the sequential growth they’ve shown for a few quarters.
I’m interested in seeing how Asha sales do in Q2. I want to know if they just reacted negatively to seasonality or if the sales really are having problems.
Beyond Lumia sales, their ability to divest more from NSN will be key to strengthening their cash position.
NSN has very, very nice parts of it, and other not so nice parts. Sell off the useless parts and keep the good parts and they will be golden. In fact, I expect them to do this.
All of this Nokia stuff aside, Microsoft will not launch their own phone this year. I’ll go on the record predicting that this will certainly not happen.
I think HTC’s One sales are softer than people think. Microsoft has an opportunity to poach HTC with enough money. If they can get solid commitments from HTC to go along side Nokia’s it will benefit them both.
How do you know?
Are you representing Nokia’s CFO?
In our country, Nokia is no longer a player but of 1% to 5% market share(My personal estimate) while 12 years ago, they owned 99% of all feature/dumb phones.
Ah, you were just speculating…
Convenient little things called financial reports where the health of the company has been steadily improving. Nokia is still in a precarious situation with regards to mind and market share, but it is no longer in danger of having the lights cut off and the doors closing.
They’ve executed on their Windows Phone strategy rather well, launching a line up of products in rapid succession which should help provide them with a boost ahead of the holiday season.
They’ve posted underlying profit for three straight quarters and are continue to scale out their Lumia volume.
If we see another 20% increase in volume in Q2, I think it will be undeniable that Nokia is on their way to a recovery.
This would prove one way or another if they are channel stuffing, which is great. If they did channel stuff their Q1 sales, they’ll see a drop in Q2 sales.
No, why would you get that impression? Does bringing up independently verifiable facts make me a CFO representative? I’m confused here.
Your personal estimates aside, they are growing their market share in many regions of the world. Look at their gains in Italy, the UK, and Eastern Europe as proof of this.
Yes, the exact thing every body else does, or did you think I was engaging in insider trading or something of the sort? I only have the information that has been publicly disclosed and whatever other statistics and trends I can extrapolate from.
Do you have some non speculative information to share, or are you in the same boat?
As you may know, Nokia is not only Windows Phone company but majority of shipped phones contain S40. Where are those on the diagram?
Nokia’s strategy is to have low-end S40 and high-end WP phones so you must also consider S40 to get the complete picture. Microsoft of course doesn’t give a damn about S40 but still it is a big part of Nokia’s business.
The sales figures of S40 (Asha) are even more sad. S40 is now competing against lowest-end Android smartphones, a losing proposition.
I’m interested in seeing Asha Q2 numbers before I get worried, Nokia warned that Q1 seasonality would have a negative effect on Asha sales. That could factor in (but not fully explain) the drop.
If we see another drop, or flat volume shipments for Asha devices than I’ll agree that it is time to worry about Nokia’s Asha strategy.
9m to 5m is a really bad drop, to be fair, so we’ll see.
So many people saying Nokia would have fared better with Android, not listening to the ones that remind us Samsung is the only one doing well with Android.
So many taking for granted that Android does good to a brand. (don’t even get me started on my opinion of the OS …)
Yes it did good for Samsung’s brand that made shitty phones before and now they have a 1/2 decent OS. But Sony mobile brand image, HTC, etc have deteriorated since Android. Brand image is very elusive, and the biggest asset of a company nowadays.
You may not like WP, but Nokia’s brand image is still faring much better than Sony or HTC brand image (mobile market wise).
Nokia took a bet, it’s doing bad, but have increasing sells and stable brand image.
Sony and HTC took their own bet, and sales profits decline, so as their brand image.
Would MS, Google or other companies even consider buying HTC? Would they buy Sony Mobile division?
It takes many parameters and let history do its thing before we can judge if Nokia did good or bad.
If they file bankruptcy they obviously did bad. But as long as they survive other companies (having headquarters in an expensive country as Finland) they are doing well.
Over the years following Tech companies I saw more than one company go down despite doing “what the public considered best” …, and more than one company going up against the waves because they had something differentiating.
I am no Apple fan-boy, but it’s probably one of the best examples that you have to do bold things sometimes.
For Sony’s part, this is not entirely correct. They were more or less dead in the water before they went with Android, and would likely have closed up their mobile shop(then Sony-Ericsson) some time ago without Android.
They got a good boost from one of their earlies Android phones, the Xperia Mini, which sold quite nicely and more or less saved them. Unfortunately they where not able to keep up the momentum and keep growing.
For some time they kept focusing on underspeced phones and old Android versions. Not having a state of the art model did not work well in the market and with their brand image. They have recently(less than a year) started to change that, and it seems like it’s a lot more new Sonys around then a year ago.
The story is quite similar for HTC, they also try to turn with their HTC One.
And meanwhile Huawei became number 3 and makes good profits with … Android!
Nokia has such a great distribution channel and reputation. They have the capacity to not have all their eggs in one basket. Business 101 is to adapt your company to technological changes and give the customers what they want. If customers want a Nokia Android phone make it happen. You have the factories, you have the service centres and everything. Just do it.
Edited 2013-06-21 19:17 UTC
You are 1-2 years to late. Its all closed and gone already.
That doesn’t go well with the self-declared war of ecosystems they are still on.
Edited 2013-06-22 14:52 UTC
This article is pretty mental tbh.
Almost everyone I know here in the UK is either a) planning to replace their current handset with a Lumia the day their current contract ends (usually iPhones users), or b) has JUST bought an iPhone/Galaxy and is deeply, deeply regretting it every time they see someone holding a Lumia.
I work in the club industry, so I meet around 1.5-2k people a week, and EVERY time I’m outside having a cigarette and checking my phone, people come up to me and say, “omg is that a Lumia/Windows Phone?” then ask to look at it.
This perceived “disinterest” in WP must be a uniquely American thing or something, because over here it just doesn’t come across like that whatsoever. Quite the opposite in fact.
Sheet, then why are you wasting time on this site, buy as much Nokia stock as you can son!
Did you really just register on this site to talk about how popular Windows Phone is? Who do you work for?
Really? That’s odd. Everyone I know here in the UK is either a) technically illiterate and bought a cheap Windows Phone 7 because it was cheap b) are buying Android ‘phones: mostly Nexus or Galaxy devices.
To be fair though I don’t know a single person who regrets buying an expensive Windows Phone device like the Lumia, but that could be because I don’t know a single person who’s bought a Lumia.
So only Americans are not buying Lumias? Do Nokia just not bother to include this secret cabal of millions of happy Lumia owners in the UK in their financial results?
It’s amazing how different our two experiences are. It’s almost as if…as if…an anecdote is not the same thing as data!
Update: the entire two people I knew who bought a cheap Windows Phone 7 device have apparently replaced them with…Android devices! Specifically, a Sony Experia and a Samsung Galaxy SIII. So that’s -2 market share for Windows Phone in my universe, giving it an all time low of…0 devices!
The perceived “interest” in WP must be limited to the area you live in or the people you know, because it goes straight against Nokia’s numbers in pretty much the whole world.
Yeah your research project with a statistic sample size of 1 pretty much destroys the notion put forth in this article.
Two questions though. First, was this some sort of geek club? What kind of people would go OMG a Windows Phone? And secondly, could it be yours just happened to be the first one they ever saw in the wild?
I think you struck a chord here.
Which chord was that? The “Hurr imma gonna talk shit” chord (which is somewhere around E major, I believe)?
I guess what I’m speaking about are the overly emotional and defensive responses from the usual suspects here. Apparently incensed that someone’s experience could be contrary to their own (while at the same time pointing out that his own experience is anecdotal), the lot of you jumped down his throat for doing nothing more but offer his own perspective.
Its known and understood that it is anecdotal, but still, I don’t think he goes around and replies to the incessant Windows Phone hatred spewed on this website, however anecdotal and unfounded it may be. I’m having a little trouble following the reasoning behind the pile on.
I’d also like to point out that Windows Phone 8 has an 8.4% market share in the UK (up from 4%), so I suggest you either open your eyes or get more friends. Its very plausible that his experience may very well be more common than you think.
Whenever this topic of Android comes up people keep forgetting that for the last year or so Nokia has been supply constrained not demand constrained. They are selling every phone they can make. They don’t care what the aggregate numbers for Windows are, they care that the demand for Windows is sufficient to allow them to sell their manufacturing capacity at a high margin.
People forget that Q4 and well into Q1 Nokia was severely supply constrained. It may have to do with overwhelming demand, but it also may have to do with the way they manage supply and with component shortages.
It is a fact though that Nokia would’ve sold more Lumias in Q4 had they not been constrained, they’ve said this much. I just don’t know if it would’ve been a dramatic increase, but it could explain Q1 sales beating out seasonality.
I don’t like Android (although, I love GNU/Linux and open solutions). Therefore, I have to look for something else now, especially because Symbian is dead. My current mobile is still Nokia N8 – great, compact camera plus some additional features. The original Nokia’s browser is terrible, so I use Opera’s one.
Now, I would like to have a hardware which is an evolution from N8 with Windows Mobile 8 on it. As far as I can see, all Windows Mobile powered Nokias are to some level limited.