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Print 18 comment(s) - last by Mint.. on Sep 10 at 12:28 PM

Nokia bets it all

Things haven't been going well for Nokia recently in the smartphone space. Oddly, the company is one of the world's biggest shippers of mobile phones but the vast majority of the phones it ships are low-profit “dumbphones”. The company wants to regain prominence smartphone market where profits are high, but so far has been unable to do so. 
 
Nokia tied up with Microsoft in hopes that Windows Phone would help turn around the smartphone market. So far, that simply hasn't happened with customers staying away from Microsoft's mobile phone operating system and Nokia smartphones in general. Nokia has effectively bet the farm on Windows Phone 8. Once the operating system for smartphones launches, the fate of the company -- and CEO Stephen Elop -- largely rests on the success of Nokia smartphones running the operating system.
 
Some analysts believe if Microsoft and Nokia see the success predicted with smartphones using the new Windows Phone 8 operating system, Nokia could overtake Apple for the second-place spot in the smartphone market (Android is currently number one).
 
“This is a make-or-break moment for Nokia,” said Carolina Milanesi, an analyst at the technology research firm Gartner in San Jose, California. “Everything is resting on Windows Phone 8. If that doesn’t work, it will cause an existential crisis for the company.”
 
Since Nokia shacked up with Microsoft, it has seen profits battered. The company has lost $4.9 billion reports the New York Times since announcing the switch to Windows Phone in February of 2011. By June of 2011, total sales at Nokia decreased by 19% from the year earlier.
 
While Nokia is betting big on Windows Phone 8, Nokia is expected to begin additional price cuts on existing Lumia smartphones in an effort to sustain sales through the transition to Windows Phone 8. Nokia already slashed the price of its Lumia 900 back in July.
 
Canalys analyst Pete Cunningham said, "I don’t think we are going to ever see Nokia return to the dizzy heights it was once at. Can Nokia build a sustainable business in this space? We think it can. Windows 8 will help them do that. But the market dynamics and power have shifted."

Source: New York Times



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stupid
By Captain Awesome on 9/3/2012 11:13:59 AM , Rating: 3
What Nokia is doing is stupid, if Windows Phone 8 fails then Nokia dies. If Windows Phone 8 is a great success, then all of their competitors will make Windows Phones too.

They're taking a huge risk for a tiny possible reward.




RE: stupid
By shabby on 9/3/2012 11:27:27 AM , Rating: 2
All their competitors already make windows phones, all nokia has is apparently a design advantage over others.


RE: stupid
By BabelHuber on 9/3/2012 12:05:11 PM , Rating: 5
Exactly!

Nokia had huge problem in Northern America with Symbian, so creating WP7-phones for this market makes sense. It also makes sense to sell these phones e.g. in Europe or Australia or other 1st world countries.

OTOH Symbian did very well in other countries, especially in China and Japan.

Every sane CEO would have kept this asset and would have nurtured it in the countries it already was a success.

Not so Stephen Elop. He destroyed Nokia in markets where it was strong and by this insulted the carriers which were committed to the Symbian/Meego-strategy.

Samsung became big by supporting any OS that comes along while Nokia became small by betting only on WP7.


RE: stupid
By DFranch on 9/3/2012 1:15:39 PM , Rating: 2
You're absolutely right. Why Nokia announced to the world that Symbian was dead 9 months before they had a WP7 device ready, and more than a year before a flagship device is beyond me. They could have slowly phased WP7 in to their lineup, and once they had a wide portfolio of WP7 devices, then they could have phased symbian out. Nokia might have felt that in areas where Symbian was strong they would not be accepting of WP7 without killing it. Still seems like it would have been smart to have waited.

That said, I can't wait to see the details on the Lumia 920. I'm really hoping for some form of pureview.


RE: stupid
By Mint on 9/10/2012 12:21:26 PM , Rating: 2
Symbian did well in other countries, but the phone markets there were going to follow the same pattern as NA. Since then, smartphones have come down in price too fast to make any money on feature phones, and Symbian had zero chance against iOS and Android. It was a sinking ship, regardless of its Titanic share at its peak.

Even with Windows Phone, despite the great UI, the only real reason it has a chance is Windows 8 helping to overcome the chicken and egg problem of the apps and media market.

Nokia's other realistic choice wasn't Symbian, but rather Android, and down that path I'm rather skeptical that they could avoid getting crushed by Samsung.


RE: stupid
By DFranch on 9/3/2012 1:06:34 PM , Rating: 4
quote:
If Windows Phone 8 is a great success, then all of their competitors will make Windows Phones too.


You could have used the same logic when talking about Android when it first came on the scene. It turns out many companies seem able to sell android and turn a profit. If WP8 catches on with the masses, then Nokia will be the premier WP8 manufacturer.


RE: stupid
By Mint on 9/10/2012 12:28:50 PM , Rating: 2
quote:
It turns out many companies seem able to sell android and turn a profit
Not as much as Nokia was making in its heyday. Aside from Samsung, almost all other Android makers are bit players.

But you're right in that Nokia is trying to be the Samsung of Windows Phone, and they took their chance there rather than being just another HTC on Android or another RIM with Symbian.


RE: stupid
By Belard on 9/3/2012 10:19:43 PM , Rating: 3
Maybe... but they can have a team hidden that has a version of Android 4.0 running on their Lumia 920/820/720 hardware.

If WindowsPhone8 fails like WP7... they can turn their hardware into Androids.


Everything is going according to plan.
By Articuno on 9/3/2012 10:46:49 AM , Rating: 4
If Nokia somehow succeeds in selling WP8 to the masses, Microsoft has a top tier hardware manufacturer to create Windows Phones with. If Nokia fails, Microsoft can buy them out of bankruptcy and use their patent porfolio to attack Apple and Google.

Win-win for Microsoft.




By corduroygt on 9/3/2012 11:49:18 AM , Rating: 2
Samsung is not a top tier hardware manufacturer?
This is a lose-lose deal for Nokia, MS can always find other companies to make their phones.


By Camikazi on 9/3/2012 12:18:13 PM , Rating: 2
MS won't attack Apple or Google they make a good amount of money from each iOS and Android phone that is made so there si no reason for them to go after those two. Neither of them will go after MS either since Apple has an agreement with MS (ever wonder why MS has never been attcked by Apple?) and Google knows they do not have the power to do anything to MS.


By nafhan on 9/4/2012 2:08:00 PM , Rating: 2
quote:
If Nokia fails, Microsoft can buy them out of bankruptcy and use their patent porfolio to attack Apple and Google.
That could go a step further: they could buy Nokia to actually become a phone/tablet hardware company.

Their main competitors, Apple and Google, are already into hardware, and MS is already a hardware company in the console space. Couple that with the recent Surface announcements, and MS becoming a cell phone manufacturer isn't that far fetched, IMO.


Abracadabra ... Microsoft!
By drycrust3 on 9/3/2012 11:02:31 AM , Rating: 4
quote:
Nokia could overtake Apple for the second-place spot in the smartphone market (Android is currently number one).

A month ago I would have said Microsoft doesn't have a chance of beating Apple, but now, after Samsung lose that court case, it would not surprise me if Microsoft do become number one in the USA.




RE: Abracadabra ... Microsoft!
By sprockkets on 9/3/2012 11:54:18 AM , Rating: 2
Samsung losing a court case that will likely be overturned on appeal isn't going to make WP sales go from virtually nothing to SG3 levels of 10 million in a couple of weeks. MS and Nokia already poured hundreds of millions of dollars into marketing the Lumia only to get 4 million sales or so, worldwide, in about 9 months time. That's downright pathetic.

Also, I doubt those millions of people were waiting for dual core processors or adjustable squares either.

Now if those people actually like tablets and Win8 computers, the WP8 might start selling. But if they didn't like the phones to begin with why like the computer...

Either way Oct 26 onward will be fun :)


By polishvendetta on 9/4/2012 11:51:18 AM , Rating: 2
Windows Phone has a few things going for it.

I havent heard anyone speak badly about Windows Phone 7. The people I know that have WP7 have all said using it was better then using an android phone. Granted thats not many.

If MS can truly bring this whole ecosystem together with Win 8, Win Phone 8 and Xbox live, then that gives them something no one else has out of the box.

And I think Windows Phone 8 will absolutely ride on the success or failure of Surface. As of right now theres alot of buzz about the Surface and if specifically Nokia can attach their brand, and their phones, to the minds of people interested in the Surface then they might have a win.

Overall its the devices that make or break an operating system. And since Nokia seems to be prepared this time around for a big launch, the new Lumia's should fare better then the previous gens.


More Carriers Please!
By randygrenier on 9/3/2012 11:38:10 AM , Rating: 2
Duh! Contributing to the limited success of the Lumia phones in the U.S. is that it is only available from one carrier. Many of us have carrier preferences. Some employers also have contracts with certain carriers. It doesn't take a business genius to figure this stuff out.




RE: More Carriers Please!
By DFranch on 9/3/2012 1:28:34 PM , Rating: 3
Actually, I think T-Mobil has had several WP7 devices, Sprint and Verizon only had 1 each. Hopefully Verizon will finally throw some support behind Windows Phone. I had to switch from Verizon to AT&T to get a my Focus S, and while their coverage is decent, Verizon was better.


nokia new phones
By sikku on 9/5/2012 6:08:48 PM , Rating: 2
nokia lumia 920 and nokia lumia 820 great phones with amazing specs ... have alook in detail at "http://sevencolourgossips.wordpress.com/2012/09/06...




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