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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 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.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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