If the results from Nokia are any indication, Stephen Elop is in a tight spot – and unless the Lumia launches in Q4, 2012 reap a rich harvest, Elop may be under a huge pressure. Nokia has reported a third-quarter net loss of $1.27 billion as revenue plunged 19% and sales of its flagship Windows Phone fell to 2.9 million units. Revenue dropped to $9.45 billion and furthermore, Nokia has given a grim outlook for the rest of the year. While the numbers seem to have reversed as against Q2, 2012, Nokia is now pinning all its hopes on the Lumias – a desperate and a dire situation to be in. Given the dominance of the iPhone5 and the Androids, Nokia’s comeback kid, Lumia may risk a lukewarm response which may not re-kindle the comeback hopes for Nokia.
Nearly 20 months after the announcement of the Windows smartphone polarization, Stephen Elop really hasn’t much to show in terms of smartphone numbers. While Nokia’s reliance on the strategy of third platform option against Apple and Android is definitely true, but Elop just seems to be talking more Microsoft. As a phone maker, Windows has not really turned things around for Nokia. Has it? Instead over the last 2 years, Elop has steadily and unfailing ditched every other promising option – be it Meego, Maemo, Meltemi and now Symbian Belle in favour of Microsoft Windows.
So, Q4 is now the crunch quarter – Nokia will have to our perform with the Lumias – make it a smashing success. Anything less than smashing success will not inspire anyone. Given the Apple iPhone5’s 58 million numbers and the march of Samsung Android’s, it is difficult to imagine customer interest and instore-purchase of Nokia Lumias to be moonbound in the 1st quarter of its launch. What really beats me – is that Nokia has now put Symbian in maintenance mode and all the future roadmap of Symbian is cancelled. Nokia Symbian devices still outsells Windows-powered Lumias, by 3.4 million to 2.9 million, in Q3, 2012. Pulling the (investment and development effort) plug on your cash cow isnt the wisest thing – is it?
1. Indian Mobile markets on a growth curve. Year-on-year, shipment growth of 13.8%.
2. Q3, 2011 Indian mobile phone market grew by 12% in units shipped, over the previous quarter (Q2,2011), to clock 47.07 million units.
3. Nokia had 31.8% of the mobile phones shipment share in the Q3, 2011 followed by Samsung at 17.5%
4. Dual-SIM handset shipments notably with a sequential growth of 25.2% over the previous quarter
5. India Smartphones shipments for Q3, 2011 show an impressive growth of 21.4% over previous quarter Q2,2011 & 51.5% year-on-year
6. Android on a roll in India: Android saw a growth of 90% over the previous quarter
7. Android overtook Symbian to emerge as the top Smartphone platform in India for the first time.Garners 42.4% of the Smartphone market
8. In the Smartphone segment, #Nokia led with ODM shipment share with 35.3%, but Samsung came closer at 26%.
9. Apple iOS consolidates in Indian markets, with a 3.09% share of the Smartphone market, compared to 2.6% in Q2 2011
10. Smartphone contribution to the mobile phone shipment in India increases to 6.5% in Q3, 2011 from 5.6% in Q2, 2010
• The global mobile handset market gained 5.6 percent in the third quarter to 440.5 million phones. It slowed from 35% growth reported a year earlier and 16.5% in the previous quarter. The slowdown in Western Europe has been compensated by stronger growth in emerging markets such as China.
• Nokia retained the top spot with a 23.9 percent market share, climbing from 22.8 percent in the second quarter, down from 28.2% year on year. Samsung, LG Electronics Inc., Apple, and ZTE Corp. rounded out the top five vendors.
• Smartphone sales by volume grew 42 percent. Smartphones gained one percentage point from the previous quarter to 26 percent of all mobile-phone sales. Smartphone sales to end users reaching 115 million in the quarter
• Google Android accounted for 52.5 percent of smartphone sales, more than doubling its share from a year earlier. This is up from the 20.5 million Android-powered smartphones sold in the third quarter of 2011, when Android accounted for a 25.3 percent market share.Android benefited from more mass-market offerings, a weaker competitive environment, and the lack of exciting new products on alternative operating systems. Android was estimated to sell 60.5 million units in the third quarter of 2011
• Samsung, maker of the Galaxy line of Android smartphones, became the biggest smartphone maker for the first time. Samsung sold a total of 24 million smartphones in the third quarter compared with Nokia’s 19.5 million. Symbian handsets lost almost 20 percentage points from a year earlier (36.3% last year) to account for 16.9 percent of smartphones as the company shifted to Microsoft Corp. Nokia accounted for 22.1% smartphone sales in the quarter that ended June.
• Research in Motion Ltd. (RIM) declined 4.4 percentage points from a year earlier to 11 percent of the smartphone market in the quarter.
• Apple was the world’s fourth-largest handset vendor, while its iOS operating system was the third-largest smartphone operating system with a 15% market share, down from 16.6% a year earlier. With a limited number of iPhone models taking on a plethora of Android-powered handsets from multiple manufacturers, Apple’s iOS actually lost market share in the worldwide smartphone market last quarter despite growing sales
• ZTE Corp.’s smartphone market share increased to 3.2% from 1.9% in the same quarter a year ago, while Research In Motion Ltd.’s (RIMM) share declined to 2.9% from 3.0%.
Analysts predicted that sometime around the first week of July, the Mobile phone population of the world touched 5 billion devices mark.The global mobility is at 73%.However growth in the mobile phones devices markets continues unabated as Gartner recorded 16% Y-o-Y growth in number of mobile devices sold. However, look deeper and there are a few other interesting trends.Smartphones as a sub-category is powering growth in mobile phones. While smartphones have grown at 74% Y-o-Y as against 16% Y-o-Y growth registered by Mobile phones, Smartphones have also contributed 75% to the differential volume units in mobile devices sales.
Smartphone sales continued to rise at the expense of feature phones.Google and Apple are the obvious winners in the smartphone ecosystem. The combined share of iOS and Android in the smartphone operating system market doubled to nearly 62% in the second quarter of 2011, up from just over 31% in the corresponding period of 2010. The platforms’ popularity can be tied to their usability and apps
The mobile phone category is rapidly evolving and is actually moving away from brands. Sample this: While the today number of branded OEM units remained constant at 252 million, the entire growth in the mobile phone category was powered by Local brands and white label manufacturers such as ZTE and Huawei. Others, ZTE and Huawei grew 52% by unit volumes Y-o-Y. Nokia, Samsung, LG, Motorola, Sony-Ericsson, Blackberry-all the players who defined the market pre-2008 are loosing thier markets.
Consumers in mature markets are choosing entry-level and mid range Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions. Local ODMs are making decisive inroads into the markets basis a better value equation and prices on their handsets. Operators are also increasingly looking at the device bundle space to support value propositions to consumers. Mobile phones category is one where value-for-money is winning over the brands proposition. Do we term this as commoditization? In some sense, yes!
Canalys has stated the obvious in terms of smartphone platform market shares: Android rules and has captured 48% of the smartphone market in Q2 of 2011. Smartphone adoption continues to grow rapidly across the world, reaching a total of 107.7 million units shipped in Q2 of 2011, a 73% year-on-year growth.Android was the biggest driver of smartphone shipments in Q2, as Android-based smartphone shipments were up 379% year-over-year, coming in at 51.9 million total units shipped.Successful Android-based products from vendors such as Samsung, HTC, LG, Motorola, Sony Ericsson, ZTE and Huawei, as a catalyst for the platform’s growth. As written about earlier Apple has over-shot Apple and is the No.2 smartphone platform. Android’s growth has powered Samsung as the No.2 smartphone maker globally.
Android was the number one platform in 35 of the 56 countries Canalys tracks, resulting in a market share of 48 percent. Nokia’s leadership position has proved most resilient in key emerging markets, and it still leads in the BRIC countries: Brazil, Russia, India and China. The problem for Nokia is that demand for its Symbian-based smart phones has dissipated very rapidly, particularly in operator-led markets, such as Western Europe, where it’s been strong in the past. It badly needs the first of its Windows Phone devices to launch as soon as possible to arrest a decline and, hopefully, silence its critics.Even while Nokia-WP tie-up was announced in February, the first of these devices will be launched only towards end of 2011.Nokia is set to have several more difficult quarters before a possible reversal of fortunes.
RIM had a challenging quarter in North America, with its market share slipping to 12%, down from 33% a year ago. However, Blackberry continues to see significant interest and uptake of its devices, for example in Indonesia and South Africa where it is the leading smart phone vendor. Nonetheless, it must continue to innovative and recapture lost momentum. It’s critical that the next-generation BlackBerry OS 7-based products launch ahead of the upcoming holiday season to compete in the market.
Mobile phones device sales increased 19% Y-o-Y to total 427.8 million units in Q1,2011, On the same lines, Smartphone sales registered a 85% increase and accounted for 23.6% of overall mobile sales in 2011. Smartphones registered 100.8 million unit sales in 2011. Smartphone numbers have seen a depression due to the situation in Japan and the fact that buyers haven’t invested in smartphones in Q1,2011 anticipating stronger and bigger device releases in Q2,2011.
The smartphone numbers only re-inforce the familiar rise of Android to Ubiquitous status, the marginalization of Symbian in Smartphone OSs and pressure on Nokia to defend its leadership. Symbian lost 24% share in 9 quarters, whereas Android gained 35% of its market in the same 9 quarters propelling the likes of HTC to No.7 in Devices and lifting the ASPs for Motorola, Sony Ericsson and Motorola. Android currently is in the mode of moving into the $100 price feature phones to get into the mass mode.
Nokia’s move from Symbian to Windows was announced this February and there is a 1 year or more waiting time before the Nokia Windows Phone hits the shelves. In the meantime, consumers are expected to shy away from Symbian and thus in the ensuing quarters, Symbian market shares are expected to free fall further. By the time, the Windows tie-up kicks in for Nokia, Nokia could well be around 10% market share points and combined with Windows, it would claw back to 20% but never really challenge the dominance of the Android OS, eco-system and partners.
With presence across 90 countries from 186 CSPs, Apple has doubled its number of units sold Y-o-Y. It is unlikely that Apple will push past the 20% market share in Smartphones majorly, but the unique eco system of devices, applications, platforms and services would make it the most profitable mobile platform.
In the first quarter of 2011, RIM announced that it would transition its BlackBerry portfolio to the QNX platform in 2012. This should make its smartphones more competitive in graphics, performance and touch, and unify RIM’s tablet and smartphone user experience.
Windows devices launched at the end of 2010 failed to grow in consumer preference and CSPs continued to focus on Android. In the long term, Nokia’s support will accelerate Windows Phone’s momentum to double figures.
“.. we must build, catalyze, and/or join a competitive ecosystem”.
Stephen Elop has sent the rumour mills ablaze with the statement of “joining” a competitive ecosystem. Elop’s first quarter at the helm of Nokia operations has seen a mix of good and bad news for the no.1 mobile devices company in the world. Net Sales have grown but profits have nose dived and while ASPs have been north directed, Nokia’s fall in smartphone market shares have been staggering. Elop is having a rough time steadying the ship and is now expected to announce major changes in strategy on 11th February. Many see it to be Nokia’s move into Android or Windows Phone.
Nokia already has Symbian and Meego Oss for its devices. While, there is merit in letting the ageing Symbian slowly drop off and possibly feature it only at the low end devices, Meego would be Nokia’s high end devices.Unfortunately, there is a little problem: a phone today is appealing if it comes with developers. And developers go where there are a lot of phones. There are no MeeGo phones, therefore there are no Meego developers.Developers today build for iPhone first, then Android. If they have a good reason (i.e. Microsoft paying) they build for Windows Phone 7. If they are in the enterprise, maybe they look at BlackBerry. If they want to support the existing bunch of devices, they suffer and go with Symbian as well. Hard to think they will pick yet-another-OS
Will developers go for MeeGo? Honestly, it is hard to be optimistic. Thus, there is just one alternative, unimaginable until a year ago: that Nokia will start building phones with a third party OS, like any other device manufacturer excluding Apple.
Options? Probably just two: Android or Windows Phone 7.
While Elop could leverage his old roots at Microsoft to forge a new Nokia-WinMo combo, there is one problem – Windows Phone 7 is still not a winner (yet) and it needs to attract developers (a lot). Going with Microsoft is a bigger risk, but Nokia will be treated as “special” for sure by Microsoft. In any case, it must be an attractive proposition, because Microsoft will offer the moon.Windows Phone 7 needs developers and, possibly, having Nokia behind it will attract them. If that happens, we’ll have a third OS with equal chances to Android and iOS.
However, Nokia could take the Android root. Google is not the easier partner to work with and Nokia will probably not be considered “special” by them. But it is a sure bet. Nokia with Android will sell a lot. It is a killer combination.
So, from what it looks Elop would have to choose between being Android’s many wives, loosing differentiation but boosting sales or partnering with WinMo, which will take time in terms of the developers base building up, sales kicking in. What is it… the Hobson’s choice?
About 2 months back, I had a chance to “hold” the N8 for a “test drive”. I was using the Moto Milestone/Droid then and I intended to put the two through paces. I never got to do much on the N8. My first touch experience on the N8 was a little disappointing (to put that mildly). The Milestone was a joy in terms of its experience and user interface (Call it the Android experience). I thought it best not to rate the N8 and let the jury come out with their votes. Little wonder then, that the jury also finds the N8 to be inadequate.
The N8 was the most anticipated Nokia launch which was to restore customer faith on Nokia smartphones. The N8 clearly does not do justice to its expectations. What Nokia doesnot understand and must learn is to live outside of its wonderland. A Smartphone is a combination of Hardware, OS and Applications. All of these three in equal measure contribute to make a great or a good smartphone.
Nokia is intent to taking the war only basis hardware. So it does well to pack up a 12MP camera with Xenon Flash that shoots at 720p, HDMI port that links up with the LCD, a direct hard drive access and other specs. It also does fair in terms of integrating Flashlite, Multitasking and Capacitive touch. “Fair” because the Flashlite experience is “lite” at best, Capacitive screen is a little low on responsiveness and the 16.7 Million colours do not measure up-to AMOLED screens doing rounds of smartphone specs currently.
Now for the pain-The UI. The Nokia N8 runs the new improved Symbian 3 OS.When was the last time Symbian was heard to be a smartphone OS? That would be in 2007 when Nokia launched N95. Since then Symbian has walked baby steps whereas the Android and iOS have taken the F1 cars to improvement.
What I had experienced in my brief fling with the N8 was a sluggishness, inconsistent response of the UI and the Navigation and Lack of Polish in user experience, Cumbersome software experience, lack of Intuitiveness and sophistication in the UI. So the 12MP takes a brilliant pic, which however cannot be directly loaded to Picassa or Facebook. Instead you have to go to the menu screen, figure out the Social networking icon and select the service, choose the pic and upload it. There… that is lack of intuitiveness and smartness! Point rests!
Smartphones are supposed to be the gateway to internet. Not so much with the N8 where the web experience is sub-optimal. As compared against the iPhone or the Androids, it is just about a few leagues behind! For a better browsing experience, one can choose to download the Opera and that has a greater polish than the N8 browser.
The third is about the Apps experience: The Ovi store. What could be better said than just the fact that Ovi store is not pre-loaded into the phone. A user needs to install that on the phone!!!!! Cant imagine an Android phone without the Marketplace?? The Ovi Apps store is not the best in business as we all know. The Music library is definitely great, but software library is a little below grade.
So there you have it: The Nokia N8 redeems itself of its past sins in some measure (Remember the N97 with a Resistive screen?). However it clearly doesnot do enough to get at par with the game boys of today (iPhone and Android). Bottomline: The Nokia N8 may be the best Camera phone yet, but it is an also ran in the domain of smartphones.