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Finnish phonemaker hopes to correct course in 2012

Precious little went right for Finland's Nokia Oyj. (HEL:NOK1V) in 2011, at least that's the direct picture based on its Form 20-F [PDF] filing with U.S. Securities and Exchange Commission (SEC).

Nokia Results

From layoffs to billions in lost revenue Nokia clearly had one whopper of a painful year.

The biggest negative there is definitely the massive 25 percent drop in smartphone sales.  One smartphone equals several feature phones in profit, so the feature phone dip -- due, according to Nokia, to its feature phones lacking the popular dual-SIM option in H1 2011 -- is far less troubling that the smartphone plunge.

Digging for good news amid the clouds, one can point out that in 2011 customers knew Symbian was going to die, but did not have access to Nokia Windows Phone offerings at all in some markets (like the U.S.) or did not have alternatives until very late in the year in other regions (Europe).

By contrast in 2012 Nokia has already launched a number of attractive handsets, including the Lumia 610Lumia 710, Nokia Lumia 800 ("Sea Ray"), and Lumia 900 LTE, which are all on their way to U.S. carriers.  And Nokia has the Lumia PureView 808 waiting in the wings with its massive imaging sensor (41 MP, but not a gimmick, in that it is five times the size of current top-of-the-line sensors) for H2 2012.

Nokia white Lumia phones
Nokia's stylish Lumia Windows Phones look to push the phonemaker to recovery in 2011.
[Images Source: Engadget]

Likewise, Nokia can look forward to more payments from Microsoft Corp. (MSFT) who rewarded Nokia with $250M USD in Q4 2011 for picking Windows Phone.  Lastly Nokia's feature phones are now dual-SIM equipped, and it's aggressive expanded its Asha line, which offers premium features like pictures, internet, and apps to feature phone customers.

Nokia was still the world's largest phone maker in 2011.  But it must step up its game in 2012 -- both to avoid getting left farther behind in the smartphone race, and to avoid getting bumped by a surging Samsung Electronics Comp., Ltd. (KS:005930) from the world's top phonemaker slot.

Fortunately there is evidence that Nokia may be on the verge of the turnaround it needs.  Nokia's miserable year, absence from the U.S. holiday season, and hopes for the future can perhaps best be summed up by the famous refrain of the Counting Crows' song A Long December:

A long December and there's reason to believe
Maybe this year will be better than the last.

Nokia certainly hopes so.

Source: Nokia [PDF]

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Should have gone Android.
By quiksilvr on 3/9/2012 1:31:09 PM , Rating: 2
Or at least Windows and Android like HTC and Samsung. Putting all of your eggs into a small basket isn't the best solution in a business standpoint.

RE: Should have gone Android.
By phatboye on 3/9/2012 1:39:16 PM , Rating: 3
if you lie down with dogs, one day you just might wake up with fleas

RE: Should have gone Android.
By maven81 on 3/9/2012 2:07:27 PM , Rating: 5
Because there aren't enough Android phones on the market? How would you compete with a "me too" product?

They did the right thing, but the most important thing for them will be marketing. Most people I know aren't even aware that these phones exist.

RE: Should have gone Android.
By phatboye on 3/9/12, Rating: -1
RE: Should have gone Android.
By spread on 3/9/2012 6:37:30 PM , Rating: 4
if you believe that Nokia did the right thing then why are they losing money left and right.

Because they haven't fully transitioned, that and they scared away potential sales by stating they were moving to Windows Phone too early and dumping Symbian altogether. They shouldn't have dumped anything and provided support for at least a couple of more years meanwhile transitioning to Windows Phone handsets.

The other issue is that Windows Phone is relativelly new. With a new product, it always takes time to build critical mass.

With Android, the market is already saturated.

They did the right thing. Windows Phone is picking up steam and Microsoft is doing even more advertising for it.

RE: Should have gone Android.
By Ringold on 3/9/2012 11:30:35 PM , Rating: 3
With a new product, it always takes time to build critical mass.

I agree; won't pass judgement on them myself until probably after this years holiday season.

RE: Should have gone Android.
By melgross on 3/12/2012 9:58:59 AM , Rating: 2
Where is the evidence that WP7 is picking up steam? Nokia's WP7 sales in Europe were characterized as being disappointing by analysts, and predictions for near future sales were lowered. Sales in the US haven't gained at all.

MS is hoping that WP8, available late this year will finally make a difference, with its Win 8 kernel. That finally gives it the ability to use multi core CPUs and a higher resolution than 800x480.

Whether anyone will care by then is an open question.

RE: Should have gone Android.
By sprockkets on 3/9/12, Rating: 0
RE: Should have gone Android.
By someguy123 on 3/10/2012 12:05:33 AM , Rating: 2
Samsung can profit well on its phones because it has a huge hand in memory and LCD/OLED screen production, which they can shove directly into their phones. It's hard to match the margins of a company like samsung when you're most likely going to samsung or LG for the screens on your phones.

RE: Should have gone Android.
By sprockkets on 3/10/2012 11:20:27 AM , Rating: 2
So? What does that have to do with anything? Samsung makes Wp7 phones. If Nokia is going to succeed, they have to convince people THEIR wp7 phone is better.

See my point? The OS is irrelevant. Before Nokia released any wp7 phones everyone said wp7 wasn't selling because no one made a premium handset, NOT because the OS sucked.

RE: Should have gone Android.
By someguy123 on 3/11/2012 5:32:16 PM , Rating: 2
How is it irrelevant? With WP7 you have a selling point. with android you're another android phone in a sea of android. At that point samsung can just undercut/push out new technology. It's not logical if you're interested in competing rather than merely surviving.

RE: Should have gone Android.
By slunkius on 3/12/2012 2:28:43 AM , Rating: 2
with android you're another android phone in a sea of android

and with WP7 you are another windows phone in the sea of windows (albeit smaller one). but the problem persits, you are still "me too" maker. whats to stop other makers from swimming in this sea?

RE: Should have gone Android.
By Jeffk464 on 3/12/2012 12:46:17 PM , Rating: 2
I sure do love the 4.65" OLED screen on my Samsung galaxy nexus. Now if we could just put someone new in charge of naming samsung phones.

RE: Should have gone Android.
By Jeffk464 on 3/12/2012 12:42:19 PM , Rating: 2
Nobody is buying windows phones, why would they think its a good idea to jump over to that OS?

RE: Should have gone Android.
By Belard on 3/12/2012 5:55:11 PM , Rating: 2
I see some people with Windows Phones... I'm looking at going getting the Lumina 800 series, once it has the higher-res screen, rather than another Samsung.

"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller

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