Nokia lowers Devices and Services outlook for Q2

Not a surprise.

Internet is laughing at Nokia's latest announcement 😊
http://www.boingboing.net/2010/06/16/nokia-announces-treo.html

Unfortunately it seems Nokia's marketing skills go in line with their engineering skills. Why did they announce pink phone for teenage girls before N8 availability? Nokia Connection 2010 ending with a pink phone, stealing air time form not yet shipping N8 and giving great laugh to tech community all over the world.

Just a small correction, it's Nokia that are, and will continue to BE squeezed by Android and iOS..

Sadly, Nokia's days of doing the squeezing seem to be over..

Nokia should just stop talking about Symbian^4 and focus on Symbian^3 instead.

What is the point of talking about 2011 OS when they can't even get 2010 OS out the door!

NOKIA!!! MOVE YOUR ASS NOW............

Unregistered wrote:Not a surprise.

Internet is laughing at Nokia's latest announcement 😊
http://www.boingboing.net/2010/06/16/nokia-announces-treo.html

Unfortunately it seems Nokia's marketing skills go in line with their engineering skills. Why did they announce pink phone for teenage girls before N8 availability? Nokia Connection 2010 ending with a pink phone, stealing air time form not yet shipping N8 and giving great laugh to tech community all over the world.

People really need to understand that Nokia is a global company with a very wide portfolio. If they laugh at a device like this (which is basically targeted at emerging markrts) it's a rather short sighted attitude.

Never about just one product.

Unregistered wrote:Just a small correction, it's Nokia that are, and will continue to BE squeezed by Android and iOS..

Sadly, Nokia's days of doing the squeezing seem to be over..

We shall see.

Unregistered wrote:Nokia should just stop talking about Symbian^4 and focus on Symbian^3 instead.

What is the point of talking about 2011 OS when they can't even get 2010 OS out the door!

This is going to be one of the problems of an open source strategy. People should not see it as an issue, but rather as an opportunity and a good thing. Every platform will change - it is far better for the community to actually know the details in advance, rather than trying to second guess everything.

The idea that Symbian^3 is late is also largely a exaggeration. We're on the time scales that the SF talked about a year ago. Devices in H2 2010 for Symbian^3 and H1 2011 for Symbian^4.

Nokia has put the N8 back a bit, but we're talking weeks not months and months. And this is about them want to release something of good quality - surely something consumers should welcome given all the complaints about how Nokia releases stuff to early. Guess they can't win with some people!

Well, the stock was already in the high single digits, and another 10% hit? That has to be painful for the remaining shareholders, but at this point, from a strictly Wall Street perspective, it looks like people are bailing out of the stock.

I have to say, if it keeps going south, Nokia is a takeover target. The boys in Espoo might be getting a visit from the likes of Steve Ballmer in the near future. That last one should give *everybody* the shivers.

Sure, sure Rafe. Good is bad, up is down, falling market share is a good thing in AAS bizarro land.

Whatever.....

Rafe wrote:Guess they can't win with some people!

Obviously Nokia is not winning anything right now, both one the market and in mindshare.
They have lost technical leadership and marketig seems to follow the same patch.

Nokia may be late only a few weeks (so far...) vs their internal schedule, but they are late two years vs competition. Both in terms of hardware and OS. There is no way N8 wit Symbian^3 will "squeeze" anything, let alone iPhone 4 or Android. Maybe they should cocentrate on small things, like fixing basic functionality of the Ovi store, so I could update my apps withouth unistalling them completelly?

Having worked as an executive in a large MN CPG business, Nokia applies a traditional product portfolio strategy that has been very successful because it segmented the market and allowed the company to compete on multiple levels/price points while still leveraging its scale. I do think for feature phones this strategy will continue to play out well. However, the problem comes when the same company tries to manage its higher end smart-phone business. Here, the average consumer is more savvy, more demanding, usually more time constrained, and frankly, unwilling to put up with geek related issues. They do not want to invest large amounts of time learning about how to use the phone...it must be completely intuitive and reliable. Nokia needs to keep its smart-phone portfolio streamlined, relevant, and coherent. It needs to reconnect with the consumer and put him/her front and center. It looks from the outside like too many cooks in the kitchen with great ideas fighting for Executive FaceTime (forgive the pun) and precious resources. Product Managers acting like PR people is ludicrous and ineffective. It's kindergarten. Nokia needs align internally, focus its smart-phone approach, energize the consumer and developer base. A champion that can create excitement would also be nice, for a change. Nokia, you still have great capabilities...but the market has moved the cheese...so get on with it.

Whilst the N8 looks nice it is no more than a competent answer to the iPhone 3GS a year late. The never ending story of Nokia and their inability to be release timely and competent handsets and something which cannot be denied Rafe as their recent reorganisation (second in 7 months - always a sign of panic setting in) was specifically to speed up the development cycle an area they acknowledged to shareholders they had failed in. After all a great device a year after everyone else has brought the equivalent out is unfortunately not a great device and a certainly a wasted device.

I know there is a lots of talk about iPhone 600k preorders (in fact it is obviously way more than this as delivery has been put back for a second time to July 14th) this is the cumulative effect of the mindshare and ecosystem Apple has been allowed by Nokia to build over the last 3 years as well as watching Android come from nothing to in 2 years an O/S which rivals Nokia's certainly looks more modern and once Google have worked on 3.0 (working feverishly by all accounts and at speed of development compared to Symbian I believe it) will not require "skinning" and will be out before S^4. All these iPhone pre-orders are customers lost to nokia and more importantly the are highend customers worth 5+ times Nokia's asp, additional if we assume an equal conversion rate then c.40% of them were Nokia/Symbian owners, lost to Nokia ecosystem never to come back. In fact far from being Apple upgraders I think a disproportionate number could be ex Nokia/Symbian owners following the dreadful damage caused by the shambles of the N97 (still not fixed by the way a year later - still waiting v3.0 months after some others have been released with v5.0) and the lack of any Nokia release for more than a year. If you doubt me look at Nokia fans like Micky Aldridge and a quite a few of the longtime Nokia stalwarts on Nokia Users switching after years slating it to the iPhone (mainly because it works) this is happening all over Nokia forums (even here on AAS go and look at the N97 forum and count the numbers of previously blind devotees who have switched to HTC desires or iPhones and found the grass much greener) and the many Nokia blogs being discontinued ,the same happened to SE a while back. Once they switch away they very rarely come back to Nokia or Symbian (at least with current offering). Before you tell me that there are many quiet satisfied users out there why is it one of the weakest priced of the one year old smartphones at the recyclers and was also the most active for a couple months?

Despite continual assurances that Nokia's results will turn around and really if you look inside the figures they are way better tan they seem things continue to deteriorate. And they`re going to get worse because all these iPhones and as relevantly HTC desires (it`s the same price bracket as N8) are Nokia N8's not going to be bought at release.

Who do you see buying the N8 who won't already have spent their budget (even if it's a real stretch or they settle for a cheap 3GS) on iPhones (given 2 more months of open sales before the N8) where is this pent up high mid-end demand going to be? Particularly if they adopt the very sensible attitude of waiting for three months before buying N8/S^3 after the S60V5 and N97problems which burned many (quite a few still stuck seething on contracts judging from Nokia's own forums) at which point as I keep contending why won't they wait for SF^4 devices only 3 months away or indeed the new iPhone or just switch to Android 3 devices?

With their share price at these levels and more relevantly it's performance in comparison to RIM, Apple and HTC there is going to be a lot of pressure on top management and if it slips to around 6 Euros then I think the current management will be very unlikely to be picking up their New Years bonuses (they will of course get massive pay out as ever for driving the company into the ground) at these levels Nokia becomes a genuine takeover target (Apple could buy them if they wanted to out of cash holding) and it will be affecting their corporate bond ratings and impacting their financing costs. The N8 and S^3 are not going to turn this ship around, S^4 may have done (and may do yet) but Nokia are sailing perilously close to the wind and I'm afraid they are going to have to trim many more staff and settle for being a smaller company and player all through complacency and inaction over the last 5 years. After all if Google can create an OS in two years (sort of 😉 ) what have Nokia been up to, what is it about Symbian that has made it so slow to improve (or is it Nokia's programming ability)? Whatever, the 18months to 2 years spent messing about open sourcing Symbian whilst a worthy endeavour look at the moment like a complete waste of time that would have been much better spent improving the OS to enable it to compete and then open it up if wanted. At the moment it seems Sony have dropped Symbian and Samsung have played a brilliant political game and totally out manoeuvred Nokia getting them to waste time on Symbian whilst preparing their own OS as well releasing on all the other platforms and attacking Nokia's low end - score 1 to Samsung.

I think it's time to buy some Nokia stocks, given they just got cheaper (thanks stupid americans for being so predictable). I totally agree with Steve, that 2011 will be the year where they indeed will squezze the iPhone. By that time Nokia will have so many affordable powerfull Symbian^3/^4 based smartphones (and a plethora of extremely affordable low-end smartphones) that they certainly _can_ compete head-on.

Nokia story - always a year away never today.

Things are going to be different next year awesome phones to be released blah blah, the SE fans on Esato kept repeating that mantra for over three years whilst SE disappeared off the face of the earth in market share terms (and profitability terms - see the link).

If they can't make decent handsets now (and the N97 and S60 V5 were sub dismal) how is that going to change in a year? And seeing how much better SBP shell on Symbian is than Nokia/Symbian's own efforts how embarrassing is that for both of those organisations, that a small company can provide a quzantum leap better experience in half the time - ridiculous. Nokia clearly have too many in god knows what area but it's clearly not programmers.

The same decision makers that brought the company and its handset strategy and vision (or lack of it) are still at the helm. Why should next year be different? Yes they will improve their handsets but unfortunately for Nokia they don't exist in a bubble although they seem to be living in one, their competition will have improved their handsets more - how do I know because I can see the platform to do this already in place and they have record of doing this unlike Nokia who just deliver airy assurances and slow development cycles. The rel of S^3 is not that late but it is slow as it was meant to be functionally complete in Feb and Nokia have not been doing anything else since 2009 and delaying the N8 release whilst understandable to prevent another N97 is extremely unfortunate in that they have no handsets in the market place that can stand up to the raised level of competition this year and they're getting killed and they're only going to enter the fray in the last quarter effectivley with an upper mid end phone with an OS that looks like one that many got burnt with and a handset that emphasises photography something that the majority of highend purchasers don't seem that fussed about in comparison to ecosystem.

Look, snoFlake, you're simply wrong, and you are over-interpreting Nokia's numbers here. There is NOTHING surprising in those numbers. Plus, you are completely missing the point about Nokia's strategy - what they are doing is hard in the short-term, but in the long term it is the only right thing to do. If they tried to do the same as Android and iPhone, now that would indeed make them irrelevant. Samsung is basically trying to copy the iPhone 1:1 with Bada - now that IS stupid! Esspecially since the Wave is buggy as hell.

Yes, we all heard and felt the N97 debacle - and people using it as an argument as to why Nokia will fail. It's like a scratched record - is this really the only concrete argument you naysayers can find? Huh?

The two major re-organizations that Nokia have done both makes totally sense (merging devices with the guys that do software and reducing custom closed Symbian dev.). I mean come on! This is exactly what you have been critizising Nokia for, not being able to create software that is integrated and plays well on the devices (always referring to N97), and not that they do a major re-organization to address exactly that, you call it "panic". That is just idiotic...

...ohh and your points about SonyEricsson are also kinda ignorant, in fact SE is doing quite well at the moment. Both their Symbian devices - Satio and Vivaz and their Android devices X10 and X10 mini are doing very well in terms of sales, and SE making money again.

snoFlake - thanks for actually making some on topic and reasonable comments.

Agree on N8 (well mostly - I think it gives the iPhone 4 a run for it money too) what most people seem to forget is that it is just one product. Nokia always has multiple products - that compete collectively with others. Indeed you can argue than the N8 is not Nokia's primary iPhone competitor. That will come with the MeeGo device, which will have similar pricing.

I disagree with people saying Nokia can not release timely and competent handsets - maybe if you restrict that comment to just the high end - and even then its debatable. Handsets like the E72, 5230, C3 are market leading. Actually a lot of the debate comes down to this - you can not talk about Nokia as if it were only producing high-end handsets. I do think there are problems at the high-end, as I've said many times, but...

The 600k iPhone orders is interesting, but I can't help think that if this was Nokia they would be being castigated for messing up their numbers / estimates on amount of product needed. Apple seems to do this every time - and, if I'm cynical, it looks increasingly like it is a deliberate ploy to make demand appear strong / generate media interest. Incidentally I think a lot of the iPhone pre-order will be from existing customer upgraded, rather than brand new ones.

I do agree about losing customers who switch away... but at the same time I would say that the majority of people switch when there contract ends not before. The assumption that everyone one and their dog is watching and waiting for specific phones is ludicrous. Most people walk into a shop and make a selection from what is there. People on this forum or looking at detailed mobile info on the web are the exception not the rule. They do not behave like the majority of the market. What this means is that the timing of releases is not as critical as most people assume.

I have noted the number of blogs and forums going quiet and it is a cause for concern for Nokia. However this stuff is cyclical to a great extent - been though this sort of pattern several times. Is it worse this time - maybe - especially if you look at the western markets. Conversely there's a much bigger online community in certain market - China, Indionesia, India that there was before. This obviously reflects Nokia's current strength and weakness and I would not expect anything else. But it is true to say Nokia are currently in a pickle. What's unreasonable is to make a an absolute judgement of what happens next. Yes you can argue that it will all fail horribly (in which case Nokia is in real trouble), or you can argue it will work brilliantly. I think it will be somewhere in between personally.

As a final point - compare Nokia's result to other big mobile manufacturers (LG, Motorola, Sony Ericsson etc etc.) over the last few years, then compare the performance of share prices.

Who will buy N8 - well see above point about when people buy a new phone. I agree Nokia has probably lost a substantial portion of the geeks who buy a phone the day it comes out. But they are the most fickle. I'd expect them to look at MeeGo devices as the next shiny thing actually.

You're probably right about the N8 not turning the ship around as noted above its not about one emblematic device (the Apple way). I do think it will start improving the situation though.

Agree on share price and related bits. But then the market does not behave rationally or with long term view in mind.

Open sourcing Symbian could prove to have been waste of time, but could prove to be exactly the right thing to do. We have to wait and see. Have they been doing no development for the last few years - no... Has it been slowed by moving to open source - yes.

I think its more a case of Android and iPhone focusing on the UI / UX layers. You could make an argument Symbian and Nokia should have done the same... But I think the technical foundations that Android and iOS are built on may well cause serious issues in the future. This is the idea that Symbian is in a much better position to address the market and technology requirements going forward (things like SMP and SHAI). I wouldn't buy into this 100% myself incidentally.

I hope you're right Rafe I really do, on several levels.

I do believe in open source - use linux a lot, the majority of my PC's

Whilst I understand the Apple walled garden is an effective way to make sure things work I'm hoping it doesn't become too dominant as we have already seen it push up phone ownership costs and now the iPad is pushing up media consumption costs so I am wary of over Apple dominance. Meanwhile Android concerns me nearly as much - do I feel happy giving Google all my personal data including where I am and where I've been and what I was buying and looking at when I did so? Not really they may do no evil but do I want to trust them or any future owner not to, I think not.

I was a big fan of Psion (clunk! Pound in box) and liked the early SE UIQ handsets (what a crying shame and missed opportunity) so I would think it would be very sad to see it brached off into obscurity.

And I'd like some return back on my shares 😃 OK coz I waited 'til last Autumn I'm only down c.30% but that's still pretty poor (mea culpa for not cutting them with this profit warning rumours last week could've saved 10%) but seriously at these levels there's going to be serious share holder discontent and OK the Finnish Govt has probably got a lock on them and not sure who'd want to buy them yet as they're doing great job on their own of giving away #1 position but I don't want them to disappear and reduce platform diversity.

But boy oh boy are they making it tough! I really hope there is some good news to come before the wave breaks.

snoFlake wrote:If they can't make decent handsets now (and the N97 and S60 V5 were sub dismal) how is that going to change in a year? And seeing how much better SBP shell on Symbian is than Nokia/Symbian's own efforts how embarrassing is that for both of those organisations, that a small company can provide a quzantum leap better experience in half the time - ridiculous. Nokia clearly have too many in god knows what area but it's clearly not programmers.

S60 V5 was just .... uninspired. Its functional, does most of the things you'd want, but in general its never quite so intuitive - the migration of the S60v3 interface to touch just wasn't fully thought out.

snoFlake wrote:
The same decision makers that brought the company and its handset strategy and vision (or lack of it) are still at the helm. Why should next year be different? Yes they will improve their handsets but unfortunately for Nokia they don't exist in a bubble although they seem to be living in one, their competition will have improved their handsets more - how do I know because I can see the platform to do this already in place and they have record of doing this unlike Nokia who just deliver airy assurances and slow development cycles. The rel of S^3 is not that late but it is slow as it was meant to be functionally complete in Feb and Nokia have not been doing anything else since 2009 and delaying the N8 release whilst understandable to prevent another N97 is extremely unfortunate in that they have no handsets in the market place that can stand up to the raised level of competition this year and they're getting killed and they're only going to enter the fray in the last quarter effectivley with an upper mid end phone with an OS that looks like one that many got burnt with and a handset that emphasises photography something that the majority of highend purchasers don't seem that fussed about in comparison to ecosystem.

Hopefully the success of the iPhone and Android are giving Nokia senior management a right royal kick in their senses - its desparately needed.

Nokia had the Download! application for years prior to the Apple App Store - if they'd actually bothered to sit down and get it right, rather than the half baked waste that they had, they would have been there selling apps, making money, etc. way before Apple got to market. Ovi is a step in the right direction, but the selection of apps is .... relatively dull. Some reasonable ones out there, but not enough to drag Apple/Android fans over.

What worries me is that the N8 is only months away from release, is being demoed left/right/center, yet S^3 is only now functionally complete? Thats definitely of some concern.

A lot of people are commenting that the overall look of the interface is too much like whats gone before, and that could well put off more. Even a totally redesigned set of icons would go some way towards correcting that, but all those efforts are possibly just waiting on S^4.

One thought just occurred to me - is Nokia working like a typical large corporate - every single change has to go through levels of management approval, and therefore takes ages, if ever, to go through? If so, they need a radical shakeup at the top.

I have no doubt that the Nokia hardware & software dev teams are more than capable of putting together a top quality device - look at what they did with the practically skunkworks Maemo devices (surprisingly good support, getting a lot of N810 features back ported to the 770, etc) - I'm not totally convinced that they're going the right way fast enough.

snoFlake wrote:Nokia story - always a year away never today.

I agree 100% - promises, promises... Only this time I am tired of waiting and will switch to iPhone 4.

Waiting YEARS for Ovi Store, Symbian^3, decent high end devices, Symbian^4 etc. And when finally something is released, quality is very disappointing (like Ovi Store). Is it so so difficult to copy user experience form Apple/Android ? Does it have to take 3-4 years?

snoFlake wrote:And seeing how much better SBP shell on Symbian is than Nokia/Symbian's own efforts how embarrassing is that for both of those organisations, that a small company can provide a quzantum leap better experience in half the time - ridiculous. Nokia clearly have too many in god knows what area but it's clearly not programmers.

Yes. Even one developer can provide much better interface and overall experience than Nokia - in Gravity.

Rafe wrote:
Agree on share price and related bits. But then the market does not behave rationally or with long term view in mind.

Hi Rafe, I think the market did react with a longer term view in mind as Nokia did project a lowered future outlook. As to all the phones in the pipeline, whether they will be successful or not is still up in the air. To suggest that things will get better once all the products are released is also unconfirmed. As for 2011, one can only guess if Symbian 4 and Meego will be a hit. As we all know Android and iOS will both have things in the pipeline as well.

Why Apple stock jumped yesterday is because we got some sales numbers of the new Iphone 4. Real numbers to work with. Whether Apple uses this number to create a marketing campaign is irrelevant.

I was one of the first to stand in line in New York City store for the N95 a few years back. Nokia kept all of us out of the store specifically to video tape us waiting in line for this new phone. I'm sure that was a marketing campaign as well as there was no need for that.....there was no one in the store and only about 30 of us outside. My point is all companies use images and number to their advantage.

I hope Nokia get's their act together as we've been hearing the same thing for the last 3 years and things have been getting worse. The markets behave based on information provided to them. With downgrades of sales, margins, shuffling of executives, this will only spook the market into thinking problems with Nokia.

Folks- it ain't working- the marketing, design, engineering, testing, on and on...Only thing they can do well is supply chain but that is drying up as their demand is waning...Nokia is done
Massive layoffs/ an acqisition is near, but current management will stay as that is what they are working on, not making good products, but keeping their over-paid jobs.

When I refer to a long term view I'm talking about 12 months +. Short term is generally less than six months. The lowered outlook refers to Q2 and Q3. There's a small mention of Q4, but that in the context of things being better (i.e margins will go down in Q2 and Q3 and then up in Q4.

The lowering of expectations is actually a good thing, I believe, since if they do better or as originally planned they can announce "better than expected performance" and shares will go up, i they do as the now current announcement "nokia performed as expected" so share stay the same.

In case of devices, USA mobile customers tend to criticize Nokia whithout owning or even touching one Nokia handset, not know how it looks or works, they are in Apple's land, so they have huge influence from Apple, many USA people believe the specs in apple's iPhone are innovations (never seen before) but the recently announce iPhone 4 has the same specs than the N95 (from 2007) except from the touch screen.

Nokia needs marketing in every sense, they announce phones before they have them already cooked up, so people get excited but excitement passes after a few weeks, because right now is mobile time, there are announcements every month (from HTC, Google, Microsoft, Apple, Sony Ericsson, you name it) The advantage Apple always had was the phrase "Available Tomorrow" no they didn't do it, thanks to Gizmodo. And also needs to focus on supply partners (telcos) in the USA, outside the US, Nokia has good partners and good numbers, but the USA is much noisier, and thanks to that noise 10 million iPhones sold sound more than the 50 million Nokia phones sold.

They need to learn from Steve Jobs in marketing, name things already established with fancy names and made the world believe you did it alone, "Retina Display" the Nokia 5800 has better resolution than the iPhone 3GS and the N900 FAR better, common people (most of the consumers) don't get the term "resolution" so explain it with apples and oranges (like steve did). Also the memory, instead of 32GB, explain what is that, more than 5000 songs.

Also lets remember that Nokia was last providing phones with cameras, and then they become the best at, they where last to provide the phones with MP3 players and now those are the best selling worldwide, so Nokia was last with touch screens, but they are going to improve, they are slow but paying attention and learning.

Nokia thought that nobody would put pressure on there sales an shares,an never moved the software on its mobiles to the next level,but now Apple an Anroid dinting there sales an shares really bad,the company had a go boom with the N95,but since that never released anything outstanding to keep people buying Nokia phones,an people now switching to Alternative mobiles,they didn"t think touch screen mobiles were going to be so popular an did not join the market till late an got loads of catching up to get themselves back on track,thats why we are finally going to get the N8 as they realised the Samsung an Sony Ericsson we getting its buyers switching to these phones an leaving Nokia,Hope in the 3/4 of 2010 an 2011 Nokia start releasing mobiles more outstanding,an hope the Symbian^3 or 4 is really bug free or the Meego mobile is really going to be outstanding to shock the others ,Nokia as also got stop announcing its mobiles to early if they are not finalised we get the iPhone 4 released 2 months before the N8,instead of releasing the N8 the same time ,to see who outsells who