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Nokia's plan to slowly phase out Symbian for Windows Phone 7 and continue selling Symbian devices during the phase out, is increasingly looking like a colossal blunder.  (Source: Nokia)

"Never let go." "I promise."... Apparently customers aren't buying this philosophy when it comes to the quickly sinking Symbian platform. They're jumping ship to Android or Apple.  (Source: Paramount Pictures)
Company's slow transition to Windows Phone 7 may cost it the global lead in smart phone sales

Finland's Nokia Oyj. (HEL:NOK1V) is the world's largest smartphone maker.  Nokia also has a very big problem.

The company recently tied the knot with Microsoft Corp. (MSFT), promising to phase out its proprietary Symbian smartphone operating system for Microsoft's slick new Windows Phone 7 OS.  The company insisted that the move had nothing to do with the fact that an ex-Microsoft Canada executive recently became Nokia CEO.

Regardless of the move's origins the question quickly became when would the switch to Windows Phone 7 be made?  Nokia has opted for a "gradual" transition in which it slowly phases out the operating system.  At the same time it will release Windows Phone 7 handsets, which will live side by side with Symbian handsets.

The approach has its merits, when looked at from a certain perspective.  But Nokia badly underestimated a major issue raised -- nobody will want a phone on a dying platform.

According to reports Nokia's market share loss has accelerated from a slow bleed to a pouring stream.  

Signs of this have crept up in recent financial filings.  Nokia has lowered its Q2 2011 outlook[press release] for devices and services.  It went from predicting 6.6B € ($9.5B USD) to 6.1B € ($8.8B USD).  That's a big drop.  The drop is fueled by lower predicted volumes -- which seem to be stemming from poorer than expected Symbian smart phone sales.

At the same time the company's operating margins have dipped from a predicted 6 to 9 percent to "around breakeven."

Annual targets are also being scaled back.

If there's one ray of sunshine among the storm clouds it's that Nokia reports an "increased confidence" level that it will deliver Windows Phone 7 handset(s) by Q4 2011.

The question, though, is whether that will be too late.  For now Nokia will have to continue trying to pitch customers a dying platform -- Symbian.  Nokia predicted sales of 150 million more Symbian smartphones "in years to come."  Now, as customers defect to Apple, Inc. (AAPL), Research in Motion Ltd. (RIM), and Google Inc.'s (GOOG) Android, it seems like a matter of time before that number becomes the latest financial figure to be slashed at the Nokia headquarters.



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poor decisions
By Pessimism on 5/31/2011 5:23:54 PM , Rating: 5
Their mistake was announcing this transition 3 quarters too early, before they have Win7 products in brick and mortar cell shops for immediate purchase. At that point they would simply halt manufacturing of symbian smartphones and restrict it solely to the $49 dumbphones they sell zillions of to basic, low income and emerging markets, where it could die a slow, quiet death or continue to work perfectly fine for that application as it has for the past ~10+ years. Smartphone users are picky and typically replace their devices every couple years anyway for the newest and shiniest, so it would be no skin off their back. Everyone wins.




RE: poor decisions
By JasonMick (blog) on 5/31/2011 5:33:11 PM , Rating: 3
quote:
Their mistake was announcing this transition 3 quarters too early, before they have Win7 products in brick and mortar cell shops for immediate purchase. At that point they would simply halt manufacturing of symbian smartphones and restrict it solely to the $49 dumbphones they sell zillions of to basic, low income and emerging markets, where it could die a slow, quiet death or continue to work perfectly fine for that application as it has for the past ~10+ years. Smartphone users are picky and typically replace their devices every couple years anyway for the newest and shiniest, so it would be no skin off their back. Everyone wins.

Can't argue with that, because I completely agree.

Honestly, Symbian has enough apps and services to make it a viable platform for as long as Nokia continues services -- even if development slows due to the impending phase out.

But like you said no one wants to buy an outdated smart phone on a modern network, particularly when there's viable better options that are free or inexpensive... So the psychology of the phase out is what's really damning to Nokia, here, not necessarily the beast itself.


RE: poor decisions
By Samus on 6/1/2011 12:57:18 AM , Rating: 2
I've had a Nokia e73 since January, and its one of the worst cell phones I've ever had. Should have never abandoned Blackberry. I'd much rather have the new Sidekick my g/f just got (in a color other than purple.)

I've had to hard-reset the phone numerous times. Sometimes various apps just stop working properly, such as Joikuspot (wifi hotspot app) and photo browser (randomly doesn't refresh pic library.) The phone needs constant reboots as it becomes irresponsive over a few days (even if I close background apps)

I've had the noise cancelation feature crash the phone during calls numerous times.

The battery life is terrible considering the slow CPU and huge battery.

The bluetooth stack is buggy as shit. It is one of the most complained about things of the Symbian^3 E series. It randomly disconnects a device. Sometimes it stays connected to my Focus Sync for an entire drive, sometimes it drops after 10 minutes, and it almost always drops bluetooth after a call. Sometimes it doesn't even initially connect at all unless I turn the bluetooth feature off and on in Symbian.

This phone should have never made it to production. Even with numerous updates over the past six months, I haven't noticed a single damn improvement.

I feel ripped off. My Nokia N8 is simply amazing, but my business phone has always been a Blackberry. I was so thrilled with the N8 I figured a phone with a physical keyboard running the same OS would be a great alternative to Blackberry.

Wrong. Nokia, get the fuck rid of Symbian already. This shit is over 10 years old. Think Windows NT. It was great at the time, but after so many service packs, it showed its age and was replaced.


RE: poor decisions
By Smilin on 5/31/2011 5:40:47 PM , Rating: 2
They had no choice on the announcement. Had they kept it quiet the world would have found out anyway (hey why are there WP7 dev spots open and symbian guys being laid off?)

Sure they could have had a firesale on existing devices but you would so royaly screw those customers that they won't be back. As it stands some of them will be lost anyway.

They'll still be able to dump old devices but consumers will know what they are getting.

As for Nokia being in trouble? Pfft. MS isn't going to let them go under. Even if they begin to take heavy losses they'll have a big wad of reserve cash from signing the deal.

So no, no real choice about the announcement. The best they can do is move fast which it looks like they are. I didn't expect to see a Nokia WP7 until 2012.


RE: poor decisions
By DanNeely on 5/31/2011 7:07:30 PM , Rating: 2
They could've kept the axing of Symbian hidden if they wanted. Their old long term plan was Symbian + Megoo, with the latter gradually displacing the former from the top down. If they said their new plan was Symbian + WP7 and implied the former would still be around for a few more years it's collapse wouldn't've been nearly as dramatic. Granted it would mean continuing to employ all the symbian devs for the rest of this year; but that couldn't be as costly as the losses they're taking now are.


RE: poor decisions
By Belard on 5/31/2011 8:15:48 PM , Rating: 2
Nope... as JasonMick and Pessimism have stated...

Symbian should have been regulated to their bottom end phones, which would have keep many people happy. But instead, Nokia kills off their Symbian development team (remember the walk-off?) and announced that Symbian is a dead end.

Who in their right mind would spend money for a dead platform when they can get an Android, iPhone or a NON Nokia WP7 phone (today) for about the same price?

When it came to standard "dumb"phones, it didn't matter so much... you had the basic features (contacts, ringtones, camera, maybe Mp3 player)... but with GPS, Apps stores, modern UI - that leveled the playing field amoung the dozen or so cell-phone makers... and now we have computer companies getting into the business (Dell, HP, ASUS, Acer) because they CAN simply get the SDK from Google and stick it into the hardware.

The era of dumbphones is fading away. My son is 6years old, he's mastered iPhones and Android... I don't see him accepting his own cellphone that is... plain.


RE: poor decisions
By robinthakur on 6/1/2011 6:08:27 AM , Rating: 2
So we have to wait until 2012 for...what exactly? Are the current WP7 handsets of discernably worse hardware quality to what Nokia will be offering? Whilst I've owned some solid Nokia handsets my last one back in 2007 was plastic and fragile compared to the iPhone which replaced it, which continues to set the standard for build quality.

Some of Nokia's designs are quite nice, certainly better than the rampant Mac IP theft of the Asian companies, and in particular I look forward to better cameras, but the fact that they will be using WP7 makes them less attractive to me.

That and I still have bad memories of having to send my phone back to Nokia to install a new firmware version to get rid of all the obnoxious carrier customisations. I'm not sure how Nokia have survived this long without a competitive OS other than spending a bunch of money on marketing and trading on their former glory.


RE: poor decisions
By mondo1234 on 5/31/2011 6:59:34 PM , Rating: 2
They shouldn't have said the word "transition". They should have said they were adding WP7 their portfolio of OS's and phased out sybian later. It will get worse before it gets better.


RE: poor decisions
By mcnabney on 5/31/2011 8:32:55 PM , Rating: 3
Microsoft didn't write a check for a few Billion to get Nokia to 'add' WP7 to their lineup. They wrote that check to be the public and defacto smartphone OS for the #1 mobile device manufacture. MS is doing the equivalent of drowning the rescuer to prevent themselves from going under in the mobile marketplace.


RE: poor decisions
By mondo1234 on 6/1/2011 12:16:30 AM , Rating: 2
quote:
MS is doing the equivalent of drowning the rescuer to prevent themselves from going under in the mobile marketplace.


Whether their intention or not, the stock drop would make buying Nokia a better deal.


RE: poor decisions
By drycrust3 on 6/1/2011 11:51:06 AM , Rating: 2
quote:
Whether their intention or not, the stock drop would make buying Nokia a better deal.

Assuming they continue to make a reasonable profit. One of the "products" Nokia sells is they write cellphone software for other companies. As soon as they said they were going to phase out Symbian those other companies would have started looking for alternatives that they can do inhouse. Regardless of the timeline, my guess is that by the end of this year most of those other mobile phone companies would have moved to other Operating Systems, which would mean even less Symbian work for Nokia.


RE: poor decisions
By atlmann10 on 5/31/2011 8:25:00 PM , Rating: 2
Come one everyone this is Nokia we are talking about. They should have gone into over drive as should have Microsoft 6 months before this was even put to any execution at all. Both of them have the money and teams to do this. Remember we are talking about two of the largest corporate conglomerates on the face of the planet. However; if they don't stem this bleed, and hit the market with a very viable replacement, and fast. Neither of them at least in this division may be so any longer.

One thing to realize especially with smart phones and their market as pessimism said people replace there smart phone bi-annually, and some of them even annually or faster. With that market and new smart phones as well as smart phone hitting the market like warm cookies the market has NO patience at all anymore.

As it looks right now if Apple does not get off their a77 and intro something real at this June conference they may be loosing even more smart phone market than they have already lost this year. The amount may not be substantial yet, but by fall in this market it will be. Intel has also lost their way on much of this transitioning market, and will loose more.

They seem to be starting to understand the threat now, and where ARM may not be as much of a threat on the desktop and laptop end of it they have other competitors to worry about loosing share to there as well as on tablet/slate units. As I have said on this forum in other posts as well as in other forums around the web the whole market probably to a 30% tune is going to change and it is going to do so fast.

I see a family having a server within 3 years in a lot of places in the developed world. Don't get to crazy on the no replies against what I am saying until you see what I am saying here. Yes power users and gamers may need a desktop as will the DIY users, many are one and the same for at least 2 of these together if not all 3 though. So that market percentage is small.

A general family will be using smart phones and tablets for web surfing, email, and social focuses. They can do this for a whole house and securely with a home server wired/wireless setup to. Then specialty users and uses will be all a desktop is needed for besides design, art, gaming and other high end home uses will be all a desktop is needed for then.

Yes; companies will still use computers, but a good 50% of Intel, and Microsoft's market may disappear in the blink of an eye. A Linux home server is more efficient anyway really, when truly used as a server.

So in a wrap up Nokia should have been working on this with Microsoft in total secrecy (and I mean blanketed secrecy here) before the announcement was even made. 3 months is like a year in technology now especially on the smart phone side of things. Think about it we will have another large wave of new dual core smart phones following this one. Then we will have quad core smart phones by Christmas. That means we have gone from single core to dual core to quad core, and DDR to DDR2 and then DDR3 with SSD on board in less than a years time or will have by the end of this year.


RE: poor decisions
By cokbun on 5/31/2011 9:56:04 PM , Rating: 2
not everyone is smart, but they can still have an iphone


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