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Nokia Q2 2010 results - profits down, smartphone sales up

48 replies · 18,843 views · Started 22 July 2010

manual_ wrote:I'm not denying the fact Nokia sells a lot of phones. But then again it's not earning that much as they are low end devices. People buy them because they are cheap. So they make Nokias statistics look kinda good but they don't say that people like and buy Nokia smartphones because they are great smartphones. They buy them (as you say) not to install things on them or use "advanced" smartphone features but because they are able to make a call. And if you "install things" and try to use them...well that's a different story. Nokia and Nokia fans shouldn't be too happy about that.

And that iPhone reception problems argument is getting old. I know some people think Jobs is the devil in the flesh and will not listen and believe a single word he says but in my book 2 dropped calls out of a hundred is a far less significant problem than having to remove a battery because of a system crash or waiting for an app to do what it's supposed to do and so on and so on...So much for the (overall) stability part😉

Reception/connectivity on my mini isn't actually so hot. It also drops calls sometimes. Add WiFi disconnecting quite often, active bluetooth headset connection causing the phone to slow down significantly and Nokias claim of "prioritizing antenna performance" starts to sound quite shameless.

The article:
http://www.theregister.co.uk/2010/07/22/nokia_manifesto_risku/page4.html
is an excellent read and I'd love to see that posted as it makes a more valuable top story than yesterdays post on how great a phone N97mini is:d
It exposes the root of a problem - Nokia is a slow and bloated corporation lacking real leadership and vision. And it shows in their financial results.

When did I mention Apple? If you feel the need to fire up the Apple Defense Force whenever someone mentions the word reception, that's your own issue.. The rest of that stuff.. I'm guessing that's not in response to my intentionally narrowly scoped comment?

Nokia has a lot riding on the N8, and everyone, including Nokia, seems to realize that except for a lot of people here. While it's good news that Nokia managed to maintain overall market share (which was not expected), the bad news is that Nokia's ASP continues to fall. A successful N8 is critical to Nokia's attempt to regain the profitable higher end.

All is not well with Nokia right now. There wouldn't be so many people calling for a new CEO if things were going well. N8 took too long to come to market (it likely won't be available in large numbers until Q4), which has left Nokia with little more than the flawed N97 series to battle for the high end for over a year (an eternity in the industry).

Mr Mark wrote:@Manual

Given the lower ASP for the smartphones it actually appears to be the 'normal' mobile customer who is buying these phones.

Perhaps the UI really isn't as bad as some people make out? Apparently 24 million people thought so this quarter.

Or a lot of people are buying it who don't know and/or don't care that it is a "smartphone." Instead, they are looking for a cheap phone, and a 5800 or similar model is put in front of them and it fits the bill.

It's one thing to put a smartphone in someone's hands. It's something entirely different to get that person to use it as one (and sell services, etc.). That's where Nokia seems to fall down. It reminds me somewhat about most of Tomi Ahonen's rants about "European superiority" focus on how European carriers were quicker than American carriers to monetize services such as SMS and MMS. While that is true, those aren't "smartphone" features and do not undermine the argument that smartphone development was just as rapid, if not more so, in North America (with innovative companies such as Palm, RIM, Microsoft, and later Apple and Google). Similarly, while Nokia managed to get Symbian into more hands, in terms of web browsing, application sales, etc. they were quickly surpassed by others.

[QUOTE=KPO'M;471763]Nokia has a lot riding on the N8, and everyone, including Nokia, seems to realize that except for a lot of people here. ).[/QUOTE]

Actually, 99.999+% of the world population don't care.

Unregistered wrote: The problem is the ancient Symbian system for those who still lives under a rock. They need to move to Android and take all the sales

Are you able to justify this comment by explaining what is wrong with Symbian?

Why not just improve the UI and make it better than the various Android offerings? As an Android user I can tell you that it wouldn't take much.

RollerSMB wrote:When did I mention Apple? If you feel the need to fire up the Apple Defense Force whenever someone mentions the word reception, that's your own issue.. The rest of that stuff.. I'm guessing that's not in response to my intentionally narrowly scoped comment?

What were you referring to, then, when you mentioned reception?
Do you think Apple needs any defense? I don't. It's doing great as a company and actually leading the charge now.
It's Nokia who is in the defense mode. And it has some devoted defenders. That's great. But their vision is so narrow and they're entrenched so strong in defending their local fragments of the frontline (be it UI, xenon flashes, FM transmitters, multitasking, resistive touchscreens, physical keyboards and so on) that they seem to loose objectivity and fail to see that the problem is more complex and only holistic approach gives hope to solve it.

manual_ wrote:What were you referring to, then, when you mentioned reception?
Do you think Apple needs any defense? I don't. It's doing great as a company and actually leading the charge now.
It's Nokia who is in the defense mode. And it has some devoted defenders. That's great. But their vision is so narrow and they're entrenched so strong in defending their local fragments of the frontline (be it UI, xenon flashes, FM transmitters, multitasking, resistive touchscreens, physical keyboards and so on) that they seem to loose objectivity and fail to see that the problem is more complex and only holistic approach gives hope to solve it.

I think that when anyone mentions poor reception, people always instantly think of iPhone because they have always been so poor at signal.

[QUOTE=KPO'M;471764]Or a lot of people are buying it who don't know and/or don't care that it is a "smartphone." Instead, they are looking for a cheap phone, and a 5800 or similar model is put in front of them and it fits the bill.[/quote]

You're right What they're looking for is a cheap phone that you can call people with, browse the web, download apps, take photos and navigate on. Which coincidentally is what a smartphone is.

"anyone saw this in El Reg?

great interview with Juhani Risku by Andrew Orlowski - http://www.theregister.co.uk/2010/07...nifesto_risku/"

@chilko:

Wow, that was an interesting article and it explains a lot.
I agree a 100% with Risku's assesments!

Nokia should get rid of their London hot-air divisions, trim their middle-managers and get rid of the management people who haven't delivered. It is also true that bringing in an american CEO will only make matters worse - american businessmen only think about short-term kickback and leave within 5 years. American greed, aggression and arrogance is NOT the way for Nokia!

Mr Mark wrote:You're right What they're looking for is a cheap phone that you can call people with, browse the web, download apps, take photos and navigate on. Which coincidentally is what a smartphone is.

No, more likely they are looking for a cheap phone to call and text people with, and they neither know nor care that it can browse the web, or download apps.

Plenty of "dumbphones" can take pictures and navigate. Isn't Nokia Maps also available for S40? In any case, I wouldn't call them defining characteristics of smartphones.

Unregistered wrote:"anyone saw this in El Reg?

It is also true that bringing in an american CEO will only make matters worse - american businessmen only think about short-term kickback and leave within 5 years. American greed, aggression and arrogance is NOT the way for Nokia!

Yeah, we all know how disastrous Steve Jobs has been for Apple, Jeff Bezos for Amazon, and Eric Schmidt for Google. They never consider the long term...

I'm not saying that Nokia needs an American CEO, but there are plenty who have proven themselves valuable to their companies. OPK is a lawyer by profession. Nokia may need someone with an industrial design background. Nokia is doing fine in the commodity phone business. Where they struggle is in the high end where design sells.

[QUOTE=KPO'M;471837]No, more likely they are looking for a cheap phone to call and text people with, and they neither know nor care that it can browse the web, or download apps.

Plenty of "dumbphones" can take pictures and navigate. Isn't Nokia Maps also available for S40? In any case, I wouldn't call them defining characteristics of smartphones.[/QUOTE]

There are no definingh characteristics for smartphones. It's just something for geeks to argue about when they're not playing world of warcraft.

Unregistered wrote:Are you able to justify this comment by explaining what is wrong with Symbian?

Why not just improve the UI and make it better than the various Android offerings? As an Android user I can tell you that it wouldn't take much.

Nokia has a terrible track record on the software front. They have taken years upon years and nothing much have changed. It's actually become worse... Where as Android is moving forward at such rapid rate even iPhone OS will struggle to compete in the short future. The problem I see for Nokia is by the time they have a much better UI which is comparable to current Android offerings they will always be a few steps behind. Look how terrible OVI is...

Mr Mark wrote:You're right What they're looking for is a cheap phone that you can call people with, browse the web, download apps, take photos and navigate on. Which coincidentally is what a smartphone is.

Are you serious about all of those? Please compare browsing experience or apps on Symbian and much hated iPhone or (less hated) Android. You seem to compare raw feature list as many people fiercely defending Symbian do. This is wrong. This does not do any justice to the actual experience user has. This is what Nokia fans and Nokia themselves should finally understand. You can have all the features possible and still have mediocre or plain bad product. Features (or specs) don't mean a thing. It's what you can do with the product AND how efficiently what matters. That's what diferentiates a good product from the bad one. And it doesn't matter if the screen is resistive or capacitive if you have full multitasking or limited one. Actually I'm writing this on an iPad I have for the weekend and while I fully agree multitasking is needed in some scenarios I'm astonished how efficient I can be without multitasking. It's much better than full multitasking on mini I actually have to avoid not to kill the device. But i digress...
Smartphone may be the features it has. But a good smartphone has to have those features implemented perfectly. It's up to the user to decide what he settles for. If you feel Symbian has enough to offer - fine. But seeing Nokias smartphone performance on the market shows not that many people think as highly about Symbian as you do.

[QUOTE=KPO'M;471837]No, more likely they are looking for a cheap phone to call and text people with, and they neither know nor care that it can browse the web, or download apps.

Plenty of "dumbphones" can take pictures and navigate. Isn't Nokia Maps also available for S40? In any case, I wouldn't call them defining characteristics of smartphones.[/QUOTE]

I think you are wrong mate. That might be the case a couple of years back but not anymore. I don't have the data to prove this admitedly, but what I see around me says you're wrong. You're underestimating the people buying these cheap phones. I see a lot of kids and students using cheap symbian touchscreens for web browsing. Most of them know it's a smartphone, I actually asked a lot of them that question. They know what they're holding is different than the SE walkman phones or any S40 devices they used to own. And they asked me how they can buy apps. Sadly though ovi store is not an option as most don't have credit cards. So they buy some crap java stuffs sold through their respective telcos website as that's the only option they have. And they look for cracked softwares as they have no means of obtaining legal copies, which I think is sad. Don't underestimate people who buy cheap phones. A lot of them know why they're buying 'em. A lot of those who don't, eventually realize they've bought something that's different than what they had previously , and begin to realize what a smartphone is ( I was in this situation once upon a time 😉 ). And the others, just plain don't care, but I don't believe they make up the majority from what I've seen. To hell with what the 'experts' are saying, look around, I mean REALLY LOOK AROUND. Come to any part of east Asia, and have a look. You are wrong..

Unregistered wrote:I think you are wrong mate. That might be the case a couple of years back but not anymore. I don't have the data to prove this admitedly, but what I see around me says you're wrong. You're underestimating the people buying these cheap phones. I see a lot of kids and students using cheap symbian touchscreens for web browsing. Most of them know it's a smartphone, I actually asked a lot of them that question. They know what they're holding is different than the SE walkman phones or any S40 devices they used to own. And they asked me how they can buy apps. Sadly though ovi store is not an option as most don't have credit cards. So they buy some crap java stuffs sold through their respective telcos website as that's the only option they have. And they look for cracked softwares as they have no means of obtaining legal copies, which I think is sad. Don't underestimate people who buy cheap phones. A lot of them know why they're buying 'em. A lot of those who don't, eventually realize they've bought something that's different than what they had previously , and begin to realize what a smartphone is ( I was in this situation once upon a time 😉 ). And the others, just plain don't care, but I don't believe they make up the majority from what I've seen. To hell with what the 'experts' are saying, look around, I mean REALLY LOOK AROUND. Come to any part of east Asia, and have a look. You are wrong..

Even if we stipulate that your assumption is correct, that still doesn't bode well for Nokia. It suggests that their phones are the cheap substitutes for more profitable iPhone, Android, or even RIM models. A few years ago, Nokia had compelling offerings at all market segments (low, mid-range, high). Now they have compelling low and mid-range models, but lack a compelling high-end phone. Plus, the mid range is shrinking. Again, a lot is riding on the N8, as well as the first Symbian^4 and MeeGo phones. If Nokia hits it out of the park, then they may experience a resurgence. If they don't, they risk becoming a purveyor of commodities. It's the GM syndrome. Once they had compelling offerings in all segments. Then they ceded the high-end to European and Asian manufacturers. Then Asian manufacturers started attacking them in the mid-range. Throughout all this, GM maintained a high overall market share, but had much lower profit margins.

[QUOTE=KPO'M;471837]Plenty of "dumbphones" can take pictures and navigate. Isn't Nokia Maps also available for S40? In any case, I wouldn't call them defining characteristics of smartphones.[/QUOTE]

The analysts do however. If you have an issue with that write to them and try to get the definitions changed.

manual_ wrote:Are you serious about all of those? Please compare browsing experience or apps on Symbian and much hated iPhone or (less hated) Android. You seem to compare raw feature list as many people fiercely defending Symbian do. This is wrong. This does not do any justice to the actual experience user has.

And your point is...?

It's still a smartphone.

Mr Mark wrote:The analysts do however. If you have an issue with that write to them and try to get the definitions changed.

The same analysts who, along with the market, have pushed Nokia's stock below $10 over the past two years? Maybe analysts do consider them smartphones, but they obviously aren't impressed with Nokia's smartphone sales.

Anyway, since "analysts" don't consider S40 phones to be smartphones, perhaps navigation and taking pictures aren't defining characteristics of smartphones, but part of the minimum requirements.

Also, whether or not a phone is technically a smartphone doesn't change its selling price, which is whatever the market will bear. Nokia may push out smartphones to feature phone buyers because it can. That doesn't mean those buyers will ever graduate to Nokia's more expensive lines, or that they will purchase Ovi services or other revenue-enhancing services. That's been Nokia's biggest problem lately.

[QUOTE=KPO'M;471912]The same analysts who, along with the market, have pushed Nokia's stock below $10 over the past two years? Maybe analysts do consider them smartphones, but they obviously aren't impressed with Nokia's smartphone sales.[/quote]

Agreed. They still count them though.

Anyway, since "analysts" don't consider S40 phones to be smartphones, perhaps navigation and taking pictures aren't defining characteristics of smartphones, but part of the minimum requirements.

Don't know, you would need to ask them. Generally the ability to install third party software features in there though. Point is the current definition covers everything from the iPhone 4 to the Nokia 6760.

Also, whether or not a phone is technically a smartphone doesn't change its selling price, which is whatever the market will bear. Nokia may push out smartphones to feature phone buyers because it can. That doesn't mean those buyers will ever graduate to Nokia's more expensive lines, or that they will purchase Ovi services or other revenue-enhancing services. That's been Nokia's biggest problem lately.

Absolutely. Nokia have no realistic high end presence at the moment. On the other hand Ovi seems to be growing at a pretty impressive rate so, yeah, they might.