Nokia Dethroned As Top Phone Maker By Samsung

SternisheFan writes "PCMag's Angela Moscaritolo writes: 'Samsung is expected to account for 29 percent of worldwide cell phone shipments, up from 21 percent in 2011, when it nabbed the No. 2 spot in the market. Meanwhile, Nokia's share this year will drop from 30 percent to 24 percent this year. Nokia had held the top spot in the mobile phone market since 1998.'" Not just highest sales of smartphones, but of all cell phones.

Comments

Reduced share, courtesy of Microsoft.

[sethstorm]

When they moved from generally useful "multi-tool" phones to relatively functionless whorephone candybars, courtesy of Microsoft-owned executive Mr. "Burning Platform" Elop, market share took a dive. In addition, salespeople couldn't even figure out how to sell them.

That, and it didn't help that their "sold only in a Third World hellhole" N9 phone, which ran Meego Harmattan, has a better sales record than the Windows Phones that were "meant for the First World markets".

Re:Reduced share, courtesy of Microsoft.

[tuppe666]

Samsung and HTC are the only ones making squat in that market,

Actually in context of this article, LG and Acer have dropped windows and are now profitable. HTC looks to becoming a Windows only vendor. Sony [Larger than HTC] gains in Android...are offsetting its Windows PC losses. LG is profitable again after dropping Windows. Lenovo; Huawei [also Larger than HTC], ZTE and Lenovo have made massive gains in marketshare....Nokia is now tenth behind all these manufactures. All this in a GROWING market :)

They make massive profits...not as high a margin as Apple, but then that recently lost 25% of its market cap simply because nobody believes that could continue.

Whilst it's easy to knock the MS angle here...

[HerculesMO]

Really it's a changing demographic that Nokia hasn't kept up with. They sold lots of 'dumbphones' and 'feature phones' in an era now, where consumers want smartphones. They were late to the game, and as a result their behemoth status doesn't help them.

That said, I have a Lumia 920 and really, really like it. OS aside, it takes amazingly good pictures and I can beat a person to death with it and not have to worry about whether it works afterwards. Those also, were my requirements for buying a phone... good camera and durable. I have kids, kind of a necessity.

I know you won't want to hear this

[Kupfernigk]

And whenever I post on this subject I get modded to -1 by Nokia fanboys. But I have quite good karma, and I do have this thing about living in the real world. So.

Look at RIM. They are trying to re-invent themselves with a QNX-based platform. In order to deliver that, they have basically abandoned their old platform to existing products and a new low-end phone to try to retain market share in places like Nigeria. Development on existing products has stopped. They know that they can only afford to do one OS and they must do it well.

We've already read about the internal fighting in Nokia around Maemo/Meego. It is fairly obvious that the investment wasn't there to take it forward as a new platform to compete with the iOS/Android bandwagons. It falls into the category of things with good foundations that didn't get a chance and lost momentum, like webOS. (I have an N900, I have a Pre 2 and a Pre 3, I do know what I am writing about).

Elop was right about the burning platform and he was between the Scylla of Android and the Charybdis of Microsoft. Regardless of where he came from, he could see that Taiwan and Korea were already ramping up Android and Nokia would be a me-too. Microsoft offered investment and a different offering. Basically, he knew that he would be screwed by Microsoft but he also knew he would be screwed by Samsung, HTC, LG, and even Asus. So what do you do in the circumstances? You cannot do both because having too many offerings - a long term Nokia failing - leads to excessive support and R&D costs, along with insufficient volume for a given product

Elop isn't a saint, he is a CEO. I am pretty sure that in the same situation anyone who understands the industry, and business in general, would have made a similar decision. It might be of the order of "do I abandon ship in this shark infested water or do I keep pumping and hope I get to Tahiti", but it still looks like a rational decision.

Re:I know you won't want to hear this

[ifiwereasculptor]

And whenever I post on this subject I get modded to -1 by Nokia fanboys.

Nokia fanboys? +1 funny!

Re:I know you won't want to hear this

[Anonymous Coward]

They know that they can only afford to do one OS and they must do it well.

Lol. That must be why Samsung is doing so badly with at least 4 (in order of sales and popularity, Android, Bada, Windows Phone 7, Windows Phone 8). Besides, your comparison is flawed. RIM didn't abandon all R&D to become dependent on a untrustworthy competitor, like Nokia did. RIM is pursuing an alternative, and which might work or not, but which doesn't put them in the dependence of a convicted monopolist.

Regardless of where he came from, he could see that Taiwan and Korea were already ramping up Android and Nokia would be a me-too.

So he picked the worst solution, even inferior than being a me-too, being a me-too with a OS nobody wants and tied to a partner/competitor that had already betrayed several other mobile companies (Sendo, anyone?).

Elop isn't a saint, he is a CEO. I am pretty sure that in the same situation anyone who understands the industry, and business in general, would have made a similar decision. It might be of the order of "do I abandon ship in this shark infested water or do I keep pumping and hope I get to Tahiti", but it still looks like a rational decision.

Sorry, but no. The only way that a decision of destroying completely a major platform (symbian), abandoning all R&D, choosing a platform that nobody wanted and that isn't customisable and prohibits most differentiating factors, could look like a rational decision was if Elop wasn't thinking in what was best for Nokia, but instead was acting in what was best for Microsoft and for the flop Windows Phone.

If we were talking of a rational CEO, not only would he have abstained from the burning platform memo, where he destroyed symbian without having yet an alternative, but he would also have refused to put all eggs in one basket; or at least he would have prepared a plan B for when (as it happened) Microsoft would "osborne" his platform and/or start competing directly and/or started favouring a competitor. Two of these three situations have already happened. Since the only actions taken by Elop are more of the same, either he is not rational or he is not working with Nokia's best interests in mind.

Re:I know you won't want to hear this

[Anonymous Coward]

Dead. Dead dead dead dead dead.
Nokia is dead. They're just still staggering around from a fatal wound, much like RIM. It's only a matter of time for both. They're both pushing failed platforms.

RIM died by the sin of arrogance and by MBA. (My personal theory is that RIM execs fancied themselves infallible business gods, fired all the useless 'cost center' developers and replaced them with boot licking middle managers. Yeah, this is inflammatory but ask any ex-rim employee and they'll probably say I'm actually understating the problem)

Nokia had a chance to remake themselves. It was obvious that they had to ditch their old development practices that led so many dead end OSs. There are a whole lot of very detailed write-ups about the various things that went on in Nokia. Long story short: Death by feature creep, death by one piece of software doing too many things for too many people.

Anyway, just as Nokia could have been poised for their greatest victory.. Microsoft happened. They could have been the BEST andriod phone maker. They could have put out devices that made apple, samsung, and HTC look like flimsy unusable garbage. But no. They bought the lies. The hired that hatchet man. Their flagship device was obsolete before it was released, and nobody wants windows phones anyway.

RIP Nokia.
RI- No, fuck you RIM. Burn in hell. Burn in hell and may a tapdance stage be erected on your grave. (Former BES admin here)

Re:I know you won't want to hear this

[aliquis]

Thing is some people do want a Windows Phone.

So you fail.

Sure it's not 50% of the market and Nokia don't sell only Windows Phones yet but anyway.

I'd also like a source for the claim someone made about how N9 sold better than the Windows Phones. Care to share some sales figures for N9 vs Lumia 920 for the first weeks?

I don't feel sorry for Nokia

[Viol8]

They became #1 and got complacent and lazy with only half hearted efforts to push and market anything that wasn't a feature phone and with half finished OS's running on them. They could have been Samsung if they weren't too busy counting their money when Apple brought out the iPhone and had pulled their fingers out and produced a serious competitor.

Re:I don't feel sorry for Nokia

[Dcnjoe60]

They became #1 and got complacent and lazy with only half hearted efforts to push and market anything that wasn't a feature phone and with half finished OS's running on them. They could have been Samsung if they weren't too busy counting their money when Apple brought out the iPhone and had pulled their fingers out and produced a serious competitor.

Actually, that is called the "fat cat" syndrome and many leaders in their field go through it, particularly tech fields. When companies worry more about protecting their existing profits and product lines instead of innovating, others can come up and knock them off their perch. Happened with IBM, Microsoft, now it looks like Apple might be going through it, plus a myriad of other companies. It isn't just for tech companies, either. The US auto industry went through it in the 60s and 70s and now play second fiddle to Honda and Toyota.

To remain a leader in a field, one has to continually lead. To use an american football analogy, once you sit back in a prevent defense, you might protect against the big play, but you enable your competitors to chip away at you until they no longer need a big play, just a short play.

Fat cats either have to go on a diet and become lean, like IBM did, or they simply starve and die, like most others do.

Elop wants to make RT tablets now

[Anonymous Coward]

Latest news from Nokia is that they are in talks to make Windows RT Tablets, the flailing Windows tablet. I think it's pretty clear who Elop represents at this point and it ain't Nokia.

http://www.engadget.com/2012/12/19/nokia-windows-rt-tablet-hints/

So they could, right away built a competitive Android phone, just like every little player is doing, only they can make decent hardware still (well until Elop sells that side to Microsoft for a handful of magic beans, which I think is a given at this point), and Nokia still has its marketing. So they could still turn this Elop mess around.

But not with Elop in charge.

ME too

[tuppe666]

he could see that Taiwan and Korea were already ramping up Android and Nokia would be a me-too....You cannot do both because having too many offerings - a long term Nokia failing - leads to excessive support and R&D costs

Skipping the waffle. You seem to not have been aware that HTC; Samsung; LG; Dell; ZTE; Alcatel; Fujitsu Toshiba; Acer all have offered windows phones. Its not tied to any one product....those look like Taiwan and Korea manufactures to me. Although the list is getting smaller [HTC looks likely to drop Windows phone] simply because of its massive failure....Oh and it has closed all its factories, and has moved production from Finland to China.

Samsung [Then a quarter the size of Nokia...now Nokia 10th largest smartphone manufacture] Bada; Tizen; Windows ;) and Android, I belive they are kissing ass and taking no prisoners right now.

Looks like an insane decision then however you try and spin it. The fact that is has proved to be stupid just shows how irrational it really was.

Great Hardware

[PCK]

Just saying that going with Android makes Nokia another "me too" company totally discounts that Noka phones are always beautifully designed and very robust.

The last two nokia phones I've had have terrible software problems but I could not fault the hardware. Where as my experience with HTC phones one had a joystick that broke and my current HD2 has had the USB power connector fail on me.

If they had gone with Android they could have easily competed with Samsung and had a good percentage of the Android smartphone market. The problem is Elop somehow managed to convince people that with Windows Mobile he could restore past glory and be like Apple. Sure they now have nearly have 100% of the Windows Mobile market, but whats that at the moment? 1% of smartphones?

The thing is Elop does n't understand the industry, he came from Microsoft. He's a Microsoft man, the question at the time should have been something like this "We have two available OS options, one has a proven record of being something customers want and the other has failed pretty badly up to now." . Which one would you go with? Sure you will have to compete with Samsung with the same OS, but they're now competing with Apple, Samsung and everyone else with a different OS and failing badly.

Regardless, it's a moot point now but I don't recall anyone at the time saying this was going to end well for Nokia.

Nokia 2007 share: 39%, 2010:36.6%

[Anonymous Coward]

Market share:
2007: 39%
http://www.nytimes.com/2007/10/18/business/worldbusiness/18iht-nokia.4.7948524.html?_r=0
2010: 36.6%
http://www.sramanamitra.com/2010/05/05/nokias-market-share-declines/

Market value:
$115B in 2007, PE 11
$50B in 2010, PE 12.95
$15B now, PE - (loss)

http://www.stock-analysis-on.net/NYSE/Company/Nokia-Corp/Valuation/Ratios#PE

Zune.
When he made that decision, the flaws in the thinking were pointed out then, it's not like he made a *good* decision at the time and somehow it turned out bad, Microsoft already had Windows phones out in the market, it already couldn't sell them. It had failed badly with Zune. It already had a search engine that wasn't winning against Google, it already had a maps system not winning against Google's maps.

I mean, the guy made a bad decision, he was told it was bad, it was demonstrably bad, it turned out bad, and people defend his bad decision based on some imagined *badder* reality.