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Nokia Issues Profit Warning
jones_supa submitted an article in the Guardian. From the article "Shares in the Finnish phone maker Nokia plunged by 15% on Tuesday as the company warned that it may make no profit on phone sales in the quarter to the end of June, and that overall phone sales will be 'substantially below' its earlier forecast of €6.1bn to €6.6bn. Carolina Milanesi, mobile phones analyst for the research company Gartner, said Tuesday's warnings could mark the low point for Nokia, which has not made a loss in its handset division for more than a decade."
Free Software Faces a Test With Qt
Ka-poof!
"Flyin' in just a sweet place,
Never been known to fail..."
It's been that way for decades.
"I've got more toys than Teruhisa Kitahara."
TFA says it's mostly due to them getting cut at both ends. By the Chinese on low price phones, which Nokia has traditionally sold an ass-ton of, world wide. And by android and apple on the top end. (I think this is a lot more in the US than the ROTW, but US is a big smartphone market...)
Kind of a shame really, I was looking forward to more N900-esque phones, but I don't think that will be happening anymore. I'll also miss smartphones with buttons on them.
"It remains to be seen how low [market share] could go, but for smartphones we are talking about going under 20% this year." Only two years ago Nokia had a 40% share of the smartphone market, but it was passed in the first quarter of this year by Android, with 32%. Nokia had 24% and Apple 18%.
Sent from my PDP-11
When they finally do, they'll be discovering that the other big manufacturers have Windows phones, too. I'll bet that'll be a big shock to them.
When Nokia made their deal with Microsoft, they basically told the world "Don't buy any of our current phones because we're orphaning them."
Remember, they said that they would be switching ALL their phones to WP7. Would you lock yourself into a long-term contract for an orphan phone?
Microsoft wasn't stupid - they could foresee that Nokia share value would collapse - by next year, they'll be able to buy Nokia outright for a lot less than the money they gave them.
"Coming soon - The Microsoft X-Phone - it works great with your X-Box!"
Let's call it what it is, Anti-Social Media.
It seems more likely to me that the decision to partner with Microsoft was because they knew they wouldn't be making a profit and something had to change.
I think the real reason they're not making a profit is their phones are so dreadfully out of date with what people want now that they aren't selling as well. Nokia's had a branding and model issue for quite some time - go to nokia.com and see how many different phones you can find. Different colors, shapes, too many options. Too many OSs, no clear dev schemes for third parties.
Compare that against apple's previous 'We have one phone that comes in black' and current 'We have one phone that comes in black or white'.
First and foremost, Nokia is losing money because of Nokia.
Secondly Apple / Android is why Nokia is losing money.
Thirdly, Microsoft is why Nokia will continue to lose money.
No, this is why they signed a deal with the devil. Everybody has been taking a crack at Nokia lately and they haven't been able to deal a single decent blow in return, iPhone and Android have been eating the aging Symbian for lunch and the Maemo/Meego replacements haven't been ready. They could of course become the latecomer to Android, but so many companies now make good Android phones they'd be sure to disappoint. So they went to bed with Microsoft, the market already then realized it was a mark of desperation sinking their stock price. Now we learn it's actually worse. I figure the layoffs are about to begin and who do you think that will be, the Microsoft Phone developers or the Qt developers?
Live today, because you never know what tomorrow brings
The CEO? Surely not! I bet he's very confident he'll get his old Microsoft job back plus bonuses in much the same way that Rick Belluzzo was given a President+COO job at Microsoft to thank him for killing PA-RISC and HPUX in favor of NT-on-Itanium (when we was EVP at HP) and killing IRIX and MIPS in favor of NT-on-Itanium when he was CEO of SGI.
The other shareholders? Sure, they got screwed; but they were probably so enamored with how awesome it was to be a microsoft partner that they never noticed.
The employees? They've been wishing that all along.
Same happened to their first cell phone partner
http://www.theregister.co.uk/2003/01/07/sendo_sues_microsoft_over_secret/
"Microsoft's secret plan was to plunder the small company of its proprietary information, technical expertise, market knowledge, customers and prospective customers," the filing said. "Microsoft gained Sendo's trust and confidence through false promises that Sendo would be its 'go-to-market-partner'."
This information was passed onto low-cost manufacturers in Asia, Sendo alleges. The first Microsoft Smartphone launched in Europe was the Orange SUV, built by Taiwanese firm HTC. It will be interesting to see if this deal is dragged into the case.
How is the lagging Symbian business, which has been rotting for years, remotely related to Microsoft?
When you tell the world you are jumping ship, you can expect many potential customers will as well. Similar to the Osbourne effect.
They actually had no choice in the matter.
They had sat on their backsides and done nothing for years, and when they finally realised it, the one realistic option of forgetting about their own in-house phone OS and going with Android (like Motorola did) was something they refused to do because the Nokia name would have been absorbed into the Android eco-structure with a dilution of their brand name.
Microsoft needed a phone manufacturer for Windows Mobile (or whatever it's called now) and Nokia needed an OS - plus the Nokia name would stand out still.
Nokia were a great mobile phone manufacturer who completely ignored smartphones from the outset - so they were in deep shit even before the Microsoft partnership.
Gentoo Linux - another day, another USE flag.
I agree with you.
For years Microsoft have been desperate to get into telecoms so they can link products like Exchange and Outlook properly into instant and multimedia communications. That's why they have the Office Communicator product to provide the linkage across IM, VoIP and (I assume at some point) video.
Most other telecoms companies have invested heavily into SIP (Session Initiation Protocol) which, for those who don't know, is an open protocol that allows messaging/telephony/video endpoints to register and intercommunicate on the Internet.
Skype doesn't use SIP but their own proprietary protocol, though I believe it can and does interface to SIP - and Microsoft bought Skype recently.
One of the last pieces of the puzzle to solve in VoIP telecoms is to do smart stuff with mobile phones, where you can do transparent movement between cellular networks and the Internet, and build all of that into Enterprise telecoms - so, for example, if you are away from your desk and your desk extension phone rings, you can pick the call up on the mobile phone in your pocket, stuff like that.
Clearly, with what Microsoft has been doing and buying in the past few years, they are definitely interested in telecoms and VoIP, partnering or absorbing a company that make cellular handsets would make sense as part of that overall strategy.
Gentoo Linux - another day, another USE flag.
I'm probably not the standard consumer - but it's definitely going to be a factor for why I wont be touching Nokia. And I've stuck with them since I first had a cell phone. I really, really like their hardware - they take most of the abuse I can throw at it. I currently have an e71x which is overall a fairly decent phone, but it's getting dated compared to the options available today.
The degree of my loyalty to their product is noted by the fact I'd almost seriously consider trying out the latest Win Mobile platform in order to retain the Nokia hardware - however, my contract renews in two months. Do I just snag whatever Nokia is offering now or do I wait some undisclosed time until their hardware has Win Mobile on it? Probably not. Most likely I'll just get some android variant and then maybe reconsider in 2 more years.
I work for a large cellular firm. Not more than a handful of employees use our software products but instead use the Apple iPhone. It shows in the software quality side of our product. If we actually used our own product, those errors would disappear because they are obvious and the developer would fix his own phone.
I suspect the same thing happens at Nokia. I am currently running a Nokia N8. Hands down, the best cell hardware available. I can make calls, from my office, will full bars indicated. My iPhone 4 could not make the connection and appeared out of service while I work in the middle of a large city. I can drive through the local mountains with no dropped calls on the N8. The iPhone, constant drops. Why do people put up with the hardware, because they think the software is so good. Can't make a phone call, no biggie because I have this neat bird rage game from the easy to use app store. My N8, takes amazing photos and videos, but moving the media is as straight forward as it should be.
So I can tell you with a high degree of certainty that Nokia employees are not using Nokia products. If they were, the simplest app errors I find on my N8 would not exist. The owner of that software component would soon feel the problem and fix it. My N8 has basic problems with Bluetooth functionality. Screens popup when no user action triggered it. My ear can hangup a phone call because when I answer it and put my head to the phone, my ear touches a button and the software happily complies. Did the developer check the orientation sensor and disable the buttons? The dialer is inconvenient. How many automated systems are out there Nokia? And whenever I encounter one, it is a pain in the butt to punch in the dialer. How about when the orientation is more horizontal, pushing the dialer button puts it into speaker mode. But, only if you aren't on a connected blue tooth. I could go on an on.
Maybe that isn't enough to convince? I worked for Nokia a while ago. Many engineers had Nokia branded phones. They would write custom software and re-flashed their phones for even more innovative functionality. Then the Motorola Razor came out. Within a month, every engineer, in the meetings I attended, had a Razor. The Razor was perhaps the beginning of the end of good Nokia software. They just can't seem to catch up and even my N8, which as an updated UI drops back to an old school UI when I push the button.
When Nokia bought Trolltech, I was a little apprehensive and felt they would probably kill the framework. When they started working hard on the phone platform, I really started to get into it. My desktop QT code was reusable on my devices. But Nokia didn't disappoint. After a record QT Dev Days event, which seems to indicate a swelling interest by developers, Elop mothballs QT. Figures, Elop isn't a visionary. He is a snakeoil salesman trying to get his next bonus at the expense of a long range vision and plan. Everyone thinks they can be a Steve Jobs, but when you tie your products to your month to month, and quarter to quarter results, you get rushed, poor products.
At Microsoft, many of the Engineers do use the Windows 7 phone. It's not bad and is usable....for 2004. but Microsoft will slowly evolve the platform and will probably carve out a large piece of the market. If they put native code back in, I will develop for it. but none of this is going to help Nokia. What's going to be their value add? Their employees will still probably not use the phone so their rendition will just be a poor copy of a Windows 7 device while they try to sell their GSM chips.
If I were Elop, I would have tied bonuses to owning the company products. You own a device not branded by Nokia? You forgo bonuses and promotions. Apple produces compelling technology because your employees have a passion in it. They live and breathe the brand and work to produce the best product available. My guess is that Elop has a Blackberry or a Windows 7 phone. It starts at the top. He should ow
Declare the maximum number of devices = 6 and maximum number of platforms = 2. 1 smartphone, 1 basic.
That solves 99% of the problems which Nokia have created for themselves.
Whether their smartphone platform was Symbian or Meego wouldn't have mattered, the R&D organisation would have been able to concentrate on actually making it good.
Their problem was not Symbian. Their problem was and still is 150 (yes really) different phone models. Elop hasn't actually fixed the problem.
Now like all Windows OEMs, they're a box shifter, so they need to get into a box shifter mindset. R&D will have to go entirely, there is no place for it in a low margin box shifting business.
Deleted
When Nokia made their deal with Microsoft, they basically told the world "Don't buy any of our current phones because we're orphaning them."
More importantly perhaps, they told developers considering one of their many mobile platforms not to bother with any of them, and to focus on offerings from other companies instead. For their smartphones and plans for an ovi store that will be the kiss of death.
Nokia will coast for another few years as they have a huge install base and dominate the low-end, but when higher end phones start moving down, they will have a real problem, and being in hock to Microsoft is going to be part of that problem.
As for Qt, I think Microsoft will be hostile to it from the start, and encourage Nokia to burn their boats (and they have a place man at the head of Nokia to implement this). So the outlook for Qt is not good - it will probably be starved of cash and developers and left slowly to die. Best case would be if Nokia spins it off again right now, before they are taken over by MS or go into a death spiral.