The future of Nokia

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    Posted: 21 June 2011 11:49 AM

    Like RIMM, Nokia is going through a major strategic shift, with massive internal and external challenges. They have announced they will have Windows 7 phones by the end of this year. Will it matter? Why?


    ————http://blogs.barrons.com/techtraderdaily/2011/06/21/nokia-consumer-carrier-support-lacking-says-gleacher/?mod=yahoobarrons

    JUNE 21, 2011, 10:15 AM ET
    Nokia: Consumer, Carrier Support Lacking, Says Gleacher

    By Tiernan Ray

    In case you missed it, Nokia (NOK) yesterday held its Nokia Communications conference in Singapore, at which the company unveiled the ?N9? touch-screen smartphone, which The Wall Street Journal?s Sven Grundberg today roundly panned as being nowhere near as disruptive as the company would like to think.

    The phone runs the ?MeeGo? operating system that Nokia is moving away from, not the Windows Phone 7 operating system from Microsoft (MSFT), and it seems like it?s the kind of iPhone competitor the company should have introduced five years ago.

    More broadly, Nokia CEO Stephen Elop told the assembled that he is confident a Windows-based Nokia phone will be in volume shipments by next year, that the company will have ten new smartphones in the next 12 months, and three new models with ?dual-SIM? capabilities.

    Reflecting on the news, Gleacher & Co.?s Stephen Patel this morning reiterates a Neutral rating on the shares, asking whether the strategy will work.

    We are concerned that despite the broad carrier reach of Samsung, LG and HTC, which have introduced multiple WP7 models, shipments have been around ~2mil units/quarter. Even if NOK were to double the volumes of all existing WP models and sell ~15mil units in CY12, we see about 20% or $0.09 risk to our CY12 estimate which assumes 30mil WP units next year. We think customer preference for iPhone/Android has outweighed carrier preference for a viable third ecosystem.

    Patel thinks ?lukewarm carrier support for Nokia?s transition plan threatens Nokia?s traditional scale and distribution advantages.?

    Nokia shares this morning are up 12 cents, or 2%, at $5.97.

    [ Edited: 21 June 2011 11:52 AM by Red Shirted Ensign ]

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  • Posted: 21 June 2011 12:06 PM #1

    10 new smart phones in 12 months

    Darts. They’re throwing darts.

    1 or 2 models from AAPL disrupted their world and they answer with 10. Im not sure they can be saved.

         
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    Posted: 21 June 2011 12:07 PM #2

    Nokia’s hopes are most dependent on the volumes and pricing of iOS devices ( I didn’t say features because that would be redundant), followed by upcoming features in iOS 5 and Cloud (bang, I just went redundant).

    If Apple doesn’t want to sell in volume in _______ countries, then the other makers have a prayer.

    Samsung, Nokia, blah, blah, will be carrion eaters compared to Apple.

         
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    Posted: 21 June 2011 12:40 PM #3

    Why Did Nokia Launch The N9 Meego Phone?
    Jun. 21 2011 - 8:31 am |

    http://blogs.forbes.com/parmyolson/2011/06/21/why-did-nokia-launch-the-n9-meego-phone/?partner=yahootix

    Nokia’s new N9 smartphone
    Nokia this morning unveiled a great looking, all-screen smartphone called the N9 which promises to be its most powerful device yet. Thanks to its Meego/Qt software cocktail it has a more intuitive user interface than previous offerings from the world?s biggest device maker, and it looks impressive.

    But you might be wondering: if Nokia is working with Microsoft to run Windows on its future smartphones, why release a Meego phone?

    The issue isn?t so much with the phone, but with the ecosystem. There isn?t much of one?relative to Apple?s and Android?s, or the one Nokia and Microsoft are collectively cultivating for Window Phones.?Nokia dragged its feet in building up a community of developers around Meego, and now that it has the lovely N9 running on Meego Harmattan, an open sourced operating system with Nokia?s user interface on top, there isn?t much choice for users who want to buy and customize apps.

    Sure, it?ll come pre-loaded with some apps and there?s always the Ovi Store for more, but the store?s future is uncertain the wake of Windows Marketplace. Nokia has meanwhile been laying off thousands of software engineers so that it can transfer R&D to Microsoft, so there won?t be much in-house support for the Meego apps and services. Some might see the N9 as a waste of money with no ecosystem in place.

    So why bring out a Meego phone at all?

    Learning. Both Nokia?s head of design Mark Ahtisaari, and smartphone marketing exec Ilari Nurmi answer this question in the same way: Nokia wants to ?learn? from its new Meego-based device. When pressed to elaborate, Nurmi answered, ?Let?s see what we are going to learn? while Ahtisaari said they would ?Learn, then refine, then continue. The key thing is to show we can innovate on top in a way that is uniquely Nokia.?? When asked what ?uniquely Nokia? was, he answered, ?designed for true mobility.? So Nokia wants to watch how people buy and use the N9 to learn?how to design better phones?not just hardware for Microsoft, but future smartphones where it might also design the user interface.
    Showing. Nokia is showing the industry it can make a disruptive phone that successfully marries hardware and software . ?It?s about proving a point to industry watchers and consumers,? says Gartner?s Carolina Milanesi. It might also prove a point to Microsoft. We don?t know all the details of Nokia? partnership with Microsoft on Windows Phone, but if the the N9 sells well that could strengthen its position as a licensee to Redmond, helping further differentiate itself from other device makers like Samsung, HTC and Dell. The N9 is Qt enabled, and Qt as a user-interface framework is more popular among developers than Meego. So think of Qt as the future here. Nokia said today that Qt would be core to ?bringing applications to the next billion users.? That suggests Qt will come to the lower end Series 40 platform, and it would be weird for it not to be available for Windows Phones eventually too. Nokia has said nothing of this, but if Qt was brought to high-end (Meego), mid-range (Windows) and lower (S40) phones, that could give it a handle back on software and further differentiation.?Today?s announcement gave some confidence to investors too: Nokia?s shares were up 2% this morning in Helsinki.
    Customers. Developers and apps are important, but look where Nokia is announcing the N9 today: Singapore. While mobile users in Asia do download apps and software service, they don?t do so nearly as much as their Western counterparts. ?Customers in Asia still value hardware as a key factor,? says Milanesi. ?There?s demand for apps but it?s not the main reason for a customer to buy a phone.? They are more interested in the design, form factor and megapixels of the camera.

    The new Nokia N9
    We only know a little?about the dynamics of Nokia?s relationship with Microsoft on Windows Phone. We don?t know what kind of freedom Nokia will have as a licensee to do things differently from the likes of HTC and Samsung. But Nokia?s past work on Meego and future development of Qt could give it extra bargaining power in its relationship with Windows.

    ?This can go either way,? says Milanessi, adding that it doesn?t always matter what a phone?s operating system is. ?It proves the point that Nokia gets it and they can create devices that have a rich experience.? If they end up doing so on a platform like Windows then perhaps all the better.

    [ Edited: 21 June 2011 12:42 PM by Red Shirted Ensign ]

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    Posted: 22 June 2011 01:41 PM #4

    A nice demo of the Nokia N9

    http://m.youtube.com/#/watch?desktop_uri=http://www.youtube.com/watch?v=BSZssHGR-Qg&v=BSZssHGR-Qg&gl=MX

    Based on meego, it can’t get real traction, as it is an orphan…but the lack of any buttons and the styling are intriguing.

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  • Posted: 22 June 2011 03:09 PM #5

    Red shirted ensign - 21 June 2011 03:40 PM

    Why Did Nokia Launch The N9 Meego Phone?
    Jun. 21 2011 - 8:31 am |

    http://blogs.forbes.com/parmyolson/2011/06/21/why-did-nokia-launch-the-n9-meego-phone/?partner=yahootix

    So why bring out a Meego phone at all?

    Learning.

    This is brutal. Can you imagine Apple coming out with a new phone carrying a dead-end operating system just so they can learn some internal lessons and experiment on their customers?

    Talk about the opposite of creating a superior user experience. Talk about the opposite of branding. Nokia just doesn’t give a damn about their customers’s user experience. They’re treating the end user like experimental lab rats.

         
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    Posted: 25 June 2011 05:23 PM #6

    Red shirted ensign - 22 June 2011 04:41 PM

    A nice demo of the Nokia N9

    http://m.youtube.com/#/watch?desktop_uri=http://www.youtube.com/watch?v=BSZssHGR-Qg&v=BSZssHGR-Qg&gl=MX

    Based on meego, it can’t get real traction, as it is an orphan…but the lack of any buttons and the styling are intriguing.

    The N9 hardware will also be used for the first Nokia Windows Phone 7 device. Maybe the limited release of the Meego version is simply a tease for a device that won’t be out for another year.

    http://www.youtube.com/watch?v=oUEWT03Ebrg

         
  • Posted: 25 June 2011 06:48 PM #7

    Drew Bear - 25 June 2011 08:23 PM
    Red shirted ensign - 22 June 2011 04:41 PM

    A nice demo of the Nokia N9

    http://m.youtube.com/#/watch?desktop_uri=http://www.youtube.com/watch?v=BSZssHGR-Qg&v=BSZssHGR-Qg&gl=MX

    Based on meego, it can’t get real traction, as it is an orphan…but the lack of any buttons and the styling are intriguing.

    The N9 hardware will also be used for the first Nokia Windows Phone 7 device. Maybe the limited release of the Meego version is simply a tease for a device that won’t be out for another year.

    http://www.youtube.com/watch?v=oUEWT03Ebrg

    Nokia is so messed up.

    First, Elop tries to be tongue-in-cheek about the “confidentiality” of what he’s showing, but his timing and his comedic touch are so off, that no one knows if he’s kidding or being serious. But that’s just an aside. You don’t need to be a good showman in order to be the CEO of a tech company (although it helps).

    Second, Nokia shows off a MeeGo phone with software that is already end of life. Why? Why would people buy this dead end product? What does Nokia think of it’s customers when they purposely sell them a phone with a soon to be obsoleted operating system? Atrocious. Unforgivable.

    Third, at the same time they show off their newest phone they show off their NEXT phone because…they want to freeze sales? ...they want to point out that the current phone is end of life? ...they haven’t got a fricking clue what marketing is all about?

    Fourth, what’s the deal here? Is Nokia going to be using Windows Phone 7 on their phones or are they going to be adding a proprietary skin over Windows Phone 7? If the former, then why are you hinting at the latter? If the latter, then why didn’t you just stick with MeeGo?

    The Kin was a huge disaster that came and went and was gone in 90 days. Windows Phone 7 is going to be like the Zune only one hundred times more costly, one hundred times more painful and one hundred times more important to the future of Microsoft. How Microsoft thinks that Nokia is going to save them is beyond me. How Nokia thinks Windows Phone 7 is going to save them is beyond me. It’s like two drowning men. Their attempts to use the other to save themselves is just going to get them both pulled under all the quicker.

         
  • Posted: 26 June 2011 06:37 AM #8

    By going with Microsoft, handset makers (starting with Nokia) may avoid grief from the patents Apple is not willing to license. We’ll just have to wait and see. I think Nokia’a switch to MS was a sacrifice made to break the deadlock in Apple patent cross licensing. (MS have their own multi-touch patents, prior art, and cross licensing deal with Apple). Now Nokia’s got this cross license, they become an ally of Apple when it comes to playing hardball on patents with HTC, Samsung, RIM etc. Apple, Microsft, and Nokia now to some extent share a patent moat on smartphones, and the prospects just got worse for the others.

    If it’s cheap enough, this N9 could sell quite well to new smartphone users who still don’t know if they want more than just a phone+text. There’s still plenty of them.

    It may be bad marketing to show off your next phone at the same time as your newest shipping phone, but frankly, I think Nokia has to be upfront about its situation, to retain the trust of customers when/if they get past their current problems.

    [ Edited: 26 June 2011 08:12 AM by sleepygeek ]      
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    Posted: 29 June 2011 02:30 AM #9

    Horace has some very astute observations on why it will be so hard for Nokia to rebuild itself.

    http://www.asymco.com/2011/06/28/nokia-a-trop-ecoute-les-reseaux-telecoms/

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  • Posted: 29 June 2011 08:24 AM #10

    Red shirted ensign - 29 June 2011 05:30 AM

    Horace has some very astute observations on why it will be so hard for Nokia to rebuild itself.

    http://www.asymco.com/2011/06/28/nokia-a-trop-ecoute-les-reseaux-telecoms/

    Horace seems to have nothing BUT astute observations.

    [ Edited: 29 June 2011 08:38 AM by FalKirk ]      
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    Posted: 29 June 2011 08:36 AM #11

    The best customers theme is key, and not just for Nokia.

         
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    Posted: 29 June 2011 09:26 AM #12

    while nokia and microsoft try to sort things out amongst themselves, they will remain in smartphone limbo.
    now, if apple were to introduce a new low-cost, mid-range model they could really do nokia some damage . . .

         
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    Posted: 02 July 2011 04:13 PM #13

    http://www.cnet.com/8301-17918_1-20076181-85/nokia-to-exit-japan-by-august/

    I don’t know if this final exit from Japan really means much since Nokia basicallymleft this market two years ago.

    But it struck me….could we see Apple walking away from the third largest economy in the world? From tens of millions of upper middle class consumers? From tech loving teens?

    The fact that Nokia did not think it could play in such a market is telling.

    Third world only….that may be Nokia’s future…or it’s present.

    In edit: here is the link to the pullout of Japan in 2008. Fascinating in hindsight.

    http://news.cnet.com/8301-1035_3-10109528-94.html?tag=mncol;txt

    [ Edited: 02 July 2011 04:16 PM by Red Shirted Ensign ]

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  • Posted: 21 July 2011 09:13 PM #14

    The press is reporting that Nokia took a 500 million dollar loss this past quarter, which is true. But it’s actually much worse than that. They made ~250 million previously, so they actually dropped 750 million.

    They announce that pretty much all of their phones are end of life and then they’re surprised that no one wants to buy one?

    Then they hook their future to Windows Phone 7 which Microsoft “inadvertently neglected” to mention in their in their earnings report today because it has zero traction in the smart phone space.

    People have this weird notion that there’s going to be some kind of mystical alchemy that occurs when Nokia puts out a Windows Phone 7 phone. Why? If people are not buying Windows Phone 7 phones and they’re not buying Nokia phones then why oh why would they want to buy a Nokia Windows Phone 7 phone?

         
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    Posted: 21 July 2011 09:22 PM #15

    FalKirk - 22 July 2011 12:13 AM

    then why oh why would they want to buy a Nokia Windows Phone 7 phone?

    Do you know how many Apple haters there are out there.  And how many Android haters?
    Well if you happen to be both, you may be interested in a Windows7 phone.  Sorry, that bottle of Claret at dinner loosened something.

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