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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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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.


"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer














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