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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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Nokia is interesting
By mmncs on 5/31/2011 6:16:09 PM , Rating: 2
I don't understand why people are so surprised with the sales decline, since that is very obvious when changing technology. When Nokia announced their alliance with Microsoft I saw it as very smart move. I guess I'm one of the only ones, but I am also a developer. The lack of channels and usability has been the biggest problem for Nokia and the alliance cures this, since Microsoft have some of the best developer tools, biggest user base and now they have Skype as well. An acquisition which I think is not as stupid as many have stated, but lets see.

Nokia is one of the best at mobile and network technology and still not to forget has the largest mobile user base. And I really don't understand why people are so dissatisfied with Steven Elop, since he is doing everything which is needed. Cutting expensive, making a quick shift, fast in executing, targeting the developer community and is very aware of the competition he is up against.

And as I said Nokia technology is good they have the patents to prove it. Moreover as a former Symbian C++ developer I know this technology is good. Very fast, the architecture is very well designed and has a low energy use. The problem has always been the developer tools, the multiple platforms and the distribution channels. I remember trying to get Symbian development to work under Microsoft Visual Studio and with no luck, shifting to Borland which is not my favorite. It was just a drag. I think most developers will agree.

Now it's going to be one platform where there is one of the largest developer bases in the world. I would reckon just a bit larger than iPhone developers. That was with sarcasm for those of you who don't know anything about this, there is lots more and I would reckon this is largest developer base in the world. Moreover this base is ready to easily push application on a platform where the usability and the channels have been radically improved. Just look at the numbers of applications in the last period of time. Not to forget that this platform actually has gotten a warm welcome from end-users taken into account the competition.

The problem with this kind of stock is that people don't anything about these things, which means that it will probably continue to decline and then there the few who are going to make a huge profit. Maybe Microsoft?

Microsoft in general not doing so bad. Moreover have they made mobile the primary key concern and they have the money to do it, lots of it. Not to forget, how they did concerning Internet Explorer not so many years ago, do you remember?

Google is cool but I must also admit that I am not that impressed with Android. They are already facing the same problems as with Java Microedition - J2ME. With different platforms, functionality, different user interfaces, etc. This is crap work for developers and ends up making software for the lowest denominator. It is not fun now and this is only going to get worse.

I am impressed with Apple wow! I love my iPhone and had to have it even though I am not an Apple fanboy. Fantastic phone, but they have done their share and it's only to copy now. Moreover when people in the future realizes how closed and tightly coupled they are to this platform when new technologies arise they are going to be surprised and I don't think it is going in Apples favor. Look at the history it just repeats.

Well let's see, this is very interesting. I'm quite sure that we are going to see some long faces once again.

Believe me I don't think Nokia will be as big as before but to announce that they are done I would believe is very wrong. And how fast is the market? what has really happened the last year Apple, adding facetime? Sorry, but it is not revolutionary what has happened the last few years, only the iPhone when it first arrived.




RE: Nokia is interesting
By Belard on 6/1/2011 11:56:16 PM , Rating: 2
Agreed.


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