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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 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.


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