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Finnish phonemaker hopes to correct course in 2012

Precious little went right for Finland's Nokia Oyj. (HEL:NOK1V) in 2011, at least that's the direct picture based on its Form 20-F [PDF] filing with U.S. Securities and Exchange Commission (SEC).

Nokia Results

From layoffs to billions in lost revenue Nokia clearly had one whopper of a painful year.

The biggest negative there is definitely the massive 25 percent drop in smartphone sales.  One smartphone equals several feature phones in profit, so the feature phone dip -- due, according to Nokia, to its feature phones lacking the popular dual-SIM option in H1 2011 -- is far less troubling that the smartphone plunge.

Digging for good news amid the clouds, one can point out that in 2011 customers knew Symbian was going to die, but did not have access to Nokia Windows Phone offerings at all in some markets (like the U.S.) or did not have alternatives until very late in the year in other regions (Europe).

By contrast in 2012 Nokia has already launched a number of attractive handsets, including the Lumia 610Lumia 710, Nokia Lumia 800 ("Sea Ray"), and Lumia 900 LTE, which are all on their way to U.S. carriers.  And Nokia has the Lumia PureView 808 waiting in the wings with its massive imaging sensor (41 MP, but not a gimmick, in that it is five times the size of current top-of-the-line sensors) for H2 2012.

Nokia white Lumia phones
Nokia's stylish Lumia Windows Phones look to push the phonemaker to recovery in 2011.
[Images Source: Engadget]

Likewise, Nokia can look forward to more payments from Microsoft Corp. (MSFT) who rewarded Nokia with $250M USD in Q4 2011 for picking Windows Phone.  Lastly Nokia's feature phones are now dual-SIM equipped, and it's aggressive expanded its Asha line, which offers premium features like pictures, internet, and apps to feature phone customers.

Nokia was still the world's largest phone maker in 2011.  But it must step up its game in 2012 -- both to avoid getting left farther behind in the smartphone race, and to avoid getting bumped by a surging Samsung Electronics Comp., Ltd. (KS:005930) from the world's top phonemaker slot.

Fortunately there is evidence that Nokia may be on the verge of the turnaround it needs.  Nokia's miserable year, absence from the U.S. holiday season, and hopes for the future can perhaps best be summed up by the famous refrain of the Counting Crows' song A Long December:

A long December and there's reason to believe
Maybe this year will be better than the last.

Nokia certainly hopes so.

Source: Nokia [PDF]

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Should have gone Android.
By quiksilvr on 3/9/2012 1:31:09 PM , Rating: 2
Or at least Windows and Android like HTC and Samsung. Putting all of your eggs into a small basket isn't the best solution in a business standpoint.

RE: Should have gone Android.
By phatboye on 3/9/2012 1:39:16 PM , Rating: 3
if you lie down with dogs, one day you just might wake up with fleas

RE: Should have gone Android.
By maven81 on 3/9/2012 2:07:27 PM , Rating: 5
Because there aren't enough Android phones on the market? How would you compete with a "me too" product?

They did the right thing, but the most important thing for them will be marketing. Most people I know aren't even aware that these phones exist.

RE: Should have gone Android.
By phatboye on 3/9/12, Rating: -1
RE: Should have gone Android.
By spread on 3/9/2012 6:37:30 PM , Rating: 4
if you believe that Nokia did the right thing then why are they losing money left and right.

Because they haven't fully transitioned, that and they scared away potential sales by stating they were moving to Windows Phone too early and dumping Symbian altogether. They shouldn't have dumped anything and provided support for at least a couple of more years meanwhile transitioning to Windows Phone handsets.

The other issue is that Windows Phone is relativelly new. With a new product, it always takes time to build critical mass.

With Android, the market is already saturated.

They did the right thing. Windows Phone is picking up steam and Microsoft is doing even more advertising for it.

RE: Should have gone Android.
By Ringold on 3/9/2012 11:30:35 PM , Rating: 3
With a new product, it always takes time to build critical mass.

I agree; won't pass judgement on them myself until probably after this years holiday season.

RE: Should have gone Android.
By melgross on 3/12/2012 9:58:59 AM , Rating: 2
Where is the evidence that WP7 is picking up steam? Nokia's WP7 sales in Europe were characterized as being disappointing by analysts, and predictions for near future sales were lowered. Sales in the US haven't gained at all.

MS is hoping that WP8, available late this year will finally make a difference, with its Win 8 kernel. That finally gives it the ability to use multi core CPUs and a higher resolution than 800x480.

Whether anyone will care by then is an open question.

RE: Should have gone Android.
By sprockkets on 3/9/12, Rating: 0
RE: Should have gone Android.
By someguy123 on 3/10/2012 12:05:33 AM , Rating: 2
Samsung can profit well on its phones because it has a huge hand in memory and LCD/OLED screen production, which they can shove directly into their phones. It's hard to match the margins of a company like samsung when you're most likely going to samsung or LG for the screens on your phones.

RE: Should have gone Android.
By sprockkets on 3/10/2012 11:20:27 AM , Rating: 2
So? What does that have to do with anything? Samsung makes Wp7 phones. If Nokia is going to succeed, they have to convince people THEIR wp7 phone is better.

See my point? The OS is irrelevant. Before Nokia released any wp7 phones everyone said wp7 wasn't selling because no one made a premium handset, NOT because the OS sucked.

RE: Should have gone Android.
By someguy123 on 3/11/2012 5:32:16 PM , Rating: 2
How is it irrelevant? With WP7 you have a selling point. with android you're another android phone in a sea of android. At that point samsung can just undercut/push out new technology. It's not logical if you're interested in competing rather than merely surviving.

RE: Should have gone Android.
By slunkius on 3/12/2012 2:28:43 AM , Rating: 2
with android you're another android phone in a sea of android

and with WP7 you are another windows phone in the sea of windows (albeit smaller one). but the problem persits, you are still "me too" maker. whats to stop other makers from swimming in this sea?

RE: Should have gone Android.
By Jeffk464 on 3/12/2012 12:46:17 PM , Rating: 2
I sure do love the 4.65" OLED screen on my Samsung galaxy nexus. Now if we could just put someone new in charge of naming samsung phones.

RE: Should have gone Android.
By Jeffk464 on 3/12/2012 12:42:19 PM , Rating: 2
Nobody is buying windows phones, why would they think its a good idea to jump over to that OS?

RE: Should have gone Android.
By Belard on 3/12/2012 5:55:11 PM , Rating: 2
I see some people with Windows Phones... I'm looking at going getting the Lumina 800 series, once it has the higher-res screen, rather than another Samsung.

By chµck on 3/9/2012 1:59:37 PM , Rating: 3
They should not be abandoning Symbian. It is a fantastic, efficient OS. And now that they are getting their act together in the US, they are improving Symbian at a great pace (hardware & environment that can shuffle 41mp pictures, true multi-tasking, good battery life with smaller batteries). Their biggest mistake was Elop announcing that they were killing symbian. This caused a mad rush to abandon symbian, destroying the app pool.

RE: Symbian
By spread on 3/9/2012 6:40:43 PM , Rating: 2
Symbian was great but I'm sure it cost them lots for R&D. With Windows Phone it's new, they have pull with Microsoft and can request features and changes and Microsoft is doing the development. They know what they're doing when it comes to software.

Nokia not so much, but their hardware is fantastic. It's a good match.

Game isn't over yet.
By Tequilasunriser on 3/9/2012 4:20:36 PM , Rating: 2
Nokia will be the player in the smartphone arena to turn things around for Windows Phone.

They only just got Windows Phone. It hasn't been a year, hell, it hasn't even been half a year.

Give them time. With adoption of A15 multi-core processors and general upgrades to the hardware requirements for WP8 I think we'll see a true competitor to Android and iOS.

Both companies success depends on proper execution of hardware upon the release of Windows Phone 8.

RE: Game isn't over yet.
By TakinYourPoints on 3/9/2012 10:06:07 PM , Rating: 1
I agree, it has been such a short period of time. Would people rather that Nokia pull an HP and dump WP7 after only a few months?

Windows Phone 7 is a really nice platform and it should have the opportunity to compete. I recommend WP7 to people who are averse to iOS for whatever reason or just want something different, and everyone I know who's gone with it seems to like it a lot.

By messele on 3/9/2012 1:55:39 PM , Rating: 2
They dropped all those sales yet only less than 2% of their staff? We should not gloat over Nokia as they did a lot for pretty much all of us in their golden age and that is really sad.

Expecting a massive cull of jobs in 2012 even if they start to turn those sales around.

Android isn't the answer by the way, it's a very cramped sector and I'm not sure competing with Samsung and HTC while having the same OS is what they need.

What they need is to differentiate themselves like Apple do. only their own OS or Windows could do that right now but I can't help but thing they've been sold up the river by Microsoft.

"me too"
By tharik on 3/9/2012 3:44:08 PM , Rating: 2
"Because there aren't enough Android phones on the market? How would you compete with a "me too" product?"

Because Nokia has superior products people would have purchased them with Android installed. They made a big mistake tying their phones to one OS, no matter how good or bad it is, they should have giving people a choice.

Right hand v. Left hand
By JRT256 on 3/10/2012 4:10:58 AM , Rating: 2
Nokia purchased Qt which I would presume would be to offer a user interface based on it.

But, the right hand doesn't appear to know what the left hand is doing. So, they did the most illogical thing and decided to go with Windows for their phones.

I realize that KDE, which would probably be the basis for a Qt interface smart phone, has not been doing well. However, it doesn't appear to be anything that a few good software engineers couldn't fix.

So, although I see the point that using Android might have been better, the best strategy would be to offer a Qt/KDE smart phone -- a unique product.

An insightful write up
By MrMilli on 3/10/2012 7:58:39 AM , Rating: 2
Jason you should read this article:

Their Biggest Mistake
By DFranch on 3/12/2012 9:27:41 AM , Rating: 2
Wasn't switching to WP7, it was announcing it like 9 months before they had any products to offer. Why they didn't wait until they had a couple of WP7 phones in the market, then announce they were switching to WP7 is beyond me. If they waited until at least late 2011 to announce WP7 exclusivity, they would be in a much better position today.

You may not want to hear this...
By Landiepete on 3/13/2012 4:14:06 AM , Rating: 2
but a friend bought one of the newfangled Nokia phones and, having used iPhone, Galaxy and Blackberry in the past says it's an excellently built, nice looking and very fast phone that works really well.

So maybe they ARE getting things right. Now they just have to find people to buy them.

Windows phones lol
By Argon18 on 3/9/12, Rating: -1
RE: Windows phones lol
By maven81 on 3/9/2012 2:55:39 PM , Rating: 2
By that logic Apple should give up their PC business. Worldwide they are an absolute niche player with what, 5% of the market?
Everyone has to start somewhere. I'm not expecting Windows Phone to get more then 5% at this rate, but if everyone thought like you do there would be zero innovation.

RE: Windows phones lol
By Nortel on 3/9/12, Rating: -1
RE: Windows phones lol
By invidious on 3/9/2012 3:24:15 PM , Rating: 2
Maybe now, but that wasn't the case 10 years ago.

RE: Windows phones lol
By omnicronx on 3/9/2012 3:42:59 PM , Rating: 3
Their PC business is growing, but the PC market in general grows every year making it very hard for Apple to gain in market share..

Even though the accounted for 20% of the PC market growth last year (which is by far the largest for any manufacturer) since PC's are grouped as a whole, Apples market share is remains pretty stagnent..

They only just surpassed 5% worldwide marketshare this past year for the first time in 15 years.

So I would say the comparison is quite fair, and gets right to the point that you can be a niche and be successful. (i.e they may have only been 5% market share, but their dollar share is three times higher at 15%)

RE: Windows phones lol
By InsGadget on 3/9/2012 4:14:46 PM , Rating: 2
Apple's market share of the PC business is growing every year though so it isn't really a fair comparison.

Is not Windows Phone marketshare growing also? At probably a higher rate than Macs are, I'm sure, considering they started from scratch.

Also, looking at some of the European countries the Lumias are more readily available in, you can see that Windows Phone is beginning to make inroads.

But, please, continue on with your regularly scheduled FUD ..

RE: Windows phones lol
By Mitch101 on 3/9/2012 5:03:06 PM , Rating: 2
People make it sound like if you don't have a iPhone/Android your missing out on something. If you buy and android or an iPhone seems like you have to play keeping up with the Joneses. Android users have to upgrade to the latest processor and iPhone's have to upgrade or they don't get the latest Apple features which would run on their previous hardware.

The Windows Phone is excellent I don't regret for a second getting one and everyone I know with one feels similar.

Windows Phone Never needs rebooting, Never freezes or hangs, fast/smooth as any other device out there as I think carriers are the bottleneck anyhow, runs all the apps I could need, I feel there are less garbage apps because its a pay service, great cloud service and unlimited if you have home server, wireless sync from day 1, good GPS when needed, great voice controls, zune pass, just a solid device all around.

If your as happy with your Android and iPhone as I am with my Windows Phone then whats the problem?

RE: Windows phones lol
By arnold123 on 3/9/2012 7:38:13 PM , Rating: 2
That's so true Mitch. I was on iOS (3s n 4) for 2 yrs before i got my focus S last yr and WP7 feels way ahead of time compared to iOS. I like the way how MS approached the mobile OS and WP7 gets work done more efficiently with less clicks and without having to install or open a different app for everything u wanna do.

Of course WP7 doesn't have the 500K apps like iOS or Android , but i am not sure missing 50k fart and mirror apps is a bad thing and the games on WP7 are way better with Xbox integration.

Anyways I have no problem with people loving the OS they are on , but trashing and talking crap about an OS without using it as your primary device for a considerable amount of time is stupid. Hence no comparison to Android from me.

RE: Windows phones lol
By jnemesh on 3/9/2012 6:01:45 PM , Rating: 1
Actually, Microsoft is BLEEDING market share! They are down to 4.4% of the overall smartphone market here in the US, and they include legacy Windows Mobile products in that figure as well! They have less than 2% market share with WP7 phones alone. Considering that Android is activating 850,000 devices A DAY, they have a LOT of ground to make up. Problem is...the "flagship" Nokia phones that are supposed to save the platform HAVENT EVEN SHIPPED! And when they do, they look EXTREMELY outdated next to the new Android offerings. (single core vs. quad core, lower resolution displays, etc). Anyone who thinks that they will turn this around this year is fooling themselves. They have another Kin on their hands, but no one wants to admit it after pumping MILLIONS into it...

RE: Windows phones lol
By Mitch101 on 3/9/2012 11:06:40 PM , Rating: 2
Seriously if you try the Windows phone with a single core chip you will be impressed. The OS is magnificent and snappy.

The X-Box 1 is a 733mhz single core chip with 512meg of ram that was able to play far cry/doom 3 and I think it did some darn amazing things because it was well optimized just like the Windows Phone.

RE: Windows phones lol
By StevoLincolnite on 3/10/2012 1:31:29 AM , Rating: 2
The X-Box 1 is a 733mhz single core chip with 512meg of ram

Actually. It had 64mb of ram. The Xbox 360 has 512mb.

Most games are programmed to the metal and the OS has an incredibly tiny footprint and everything can be optimized to the standardized hardware, hence why they can get away with visuals that are equivalent to a much faster PC.

Phones are a little different in this respect, you have allot more processors and graphics chips and other hardware that needs to be supported and kept in mind, nothing compared to the PC landscape, but it's certainly not like a console either.

RE: Windows phones lol
By Mitch101 on 3/10/2012 11:53:35 AM , Rating: 2
Thanks for correcting on the memory.

Im amazed at how much CPU/GPU and people think they need for the OS and apps. Were probably close to X-Box 360 in a phone yet some think its not enough for a 4.3" screen? ONLY Games could possibly need more CPU on your phone and even then the screen is 4.3" in size. Do we have serious gamers on 4.3" screens out there?

RE: Windows phones lol
By TakinYourPoints on 3/10/2012 8:20:22 PM , Rating: 1
Seriously if you try the Windows phone with a single core chip you will be impressed. The OS is magnificent and snappy.

Absolutely. The only place specs truly matter is when your mobile operating system performs like a pig, and WP7 and iOS are very well optimized. You'd have WP7 on Snapdragon or iOS on the A4 being far smoother than Android on the technically faster Hummingbird.

Some people pay way too much attention on specs (omg 1.5ghz!) when they should be paying more attention to practical user experience. The OS matters too.

RE: Windows phones lol
By spread on 3/10/2012 1:31:24 PM , Rating: 2
They had to cut the old and cruddy Windows Mobile platform, this is why they are "bleeding market share".

As far as Windows Phone 7, it is picking up steam. It's a harder sell because nothing from Windows Mobile is backwards compatible.

RE: Windows phones lol
By invidious on 3/9/2012 3:11:23 PM , Rating: 2
Before Android, Apple and RIM held the smartphone market. And before that RIM and Palm held the smartphone market. Things can always change, especially in a growning industry.

There is plenty of room for windows phones to grab a piece of the pie, I'm not saying they will, just that they can. Nokia has more opportunity to distinguish themselves by going with Microsoft, being just another Android device when your competators already have a strong lead is a recipe for mediocrity.

RE: Windows phones lol
By mcnabney on 3/9/12, Rating: -1
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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