Print 39 comment(s) - last by datdamonfoo.. on Jan 14 at 12:43 PM

  (Source: Nokia)
Signs of recovery raise hope among investors

From large layoffs to mortgaging its headquarters, Finnish phonemaker Nokia Oyj. (HEX:NOK1V) is clearly has been in trouble in the consumer market, and the company appears well aware of that.  Seeing the writing on the wall of its aging Symbian operating system, Nokia made a bold move adopting Microsoft Corp.'s (MSFT) Windows Phone operating system, becoming the first major OEM to throw its weight squarely behind the new platform.

And while the transition has been painful, it is finally showing signs of paying off with Nokia announcing the sale of 4.4 million Lumia (Windows Phone) handsets in Q4 2012. Sales were boosted by high end handsets like the slick Lumia 920 Windows Phone 8 handset, and by expanding its reach to three of America's top four carriers.

At last the Symbian phaseout is almost complete.  Only 2.2 million Symbian handsets were sold in the quarter.  The rest of smartphone sales (9.6 million units) consisted of Asha full touch phones.  Asha is a popular low-cost option in developing markets and uses its own proprietary bare-bones operating smartphone operating system.

Nokia Lumia 920

While smartphone sales are down almost 20 percent from the 19.6 million units Nokia moved last year, the drop off was less severe than analysts were expecting.  And the fact that roughly two-thirds of Nokia high-end smartphones are now Windows Phone indicates that the transition is almost finished.

As a result of the cost cutting coupled with stronger sales, Nokia says it has achieved underlying profitability again.  That's a huge development for the OEM who endured several painful quarters of large losses.  Nokia estimates it pocketed €30M ($39.8M USD) in non-recurring IPR income on total sales of €3.9B ($5.2B USD).

Overall Nokia sales of all mobile devices fell to 79.6 million units -- from a volume of 113 million units last year.  Nokia recently lost its global lead in handset (including non-smartphone sales) to South Korea's Samsung Electronics Comp., Ltd. (KSC:005930).

Overall mobile phones brought in €2.5B, smatphone sales were €1.2B, and services sales (which include patent settlements with Apple, Inc. (AAPL) and others) pulled in €0.2B.

Nokia stock jumped up over 20 percent in early trading on the hopeful news.

Gartner, Inc. (IT), a top mobile research firm, has estimated that by 2015 that Windows Phone will be the #2 smartphone platform in the world, bumping Apple and its increasingly-dated Palm-style user interface to third place.

Sources: Nokia [Q4 2012], [Q4 2011]

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RE: That's good news
By Tony Swash on 1/10/2013 6:33:36 PM , Rating: -1
It seems to me that technology is changing very fast, that the current mobile mutation is at least as big and as important as the PC revolution. When the PC arrived mini-computers and the traditional mainframe business did not vanish it just became a bit of a back water, important things were done with mini-computers but the vast majority of the population stopped thinking about them and computers came to mean PCs. The money, the buzz, the innovation shifted to the PC.

The same sort of things seem to be happening to PCs. Sales of PCs will enter a gentle decline, the unit price Microsoft can get for a Windows license and for Office will fall, Microsoft's Windows revenues are already on the smallish side compared to what is happening in the mobile space and those revenues will tend to decline, Unfortunately Microsoft appears to have comprehensively missed the mobile boat and has near to no presence in mobile markets as makes no difference. Windows Phone is a minute player in the handset market and will never - never -generate significant revenues for Microsoft. Microsoft's late entry to the tablet market will probably gain no traction and sell in numbers that will not in any way compensate for the fall in long term fall in Windows revenues. X-Box is profitable finally but it hardly generates the sort of money being made in the mobile markets. Why bother with any of this?

It's time for a radical rethink at Microsoft. It should start with Microsoft accepting it is not a player in consumer operating systems and devices and instead become a software publishers across all platforms equally, concentrating on enterprise oriented solutions. It could be a success (i.e. continue to survive, continue to make money and continue to be big) if it is more like IBM but will fail if it tries to be like Apple.

RE: That's good news
By txDrum on 1/10/2013 6:50:17 PM , Rating: 3
I disagree. By all accounts Windows Phone devices are selling pretty decently. Certainly not a huge hit, but the whole "will never gain any significant revenue" was said about the iphone when comparing it to established players like RIM. Failing to innovate/bad management can EASILY change up the mobile landscape. If Apple, or Android, decides to stop making smart decisions (unlikely, but who saw RIM doing it when they were at their prime?), Mozilla OS, RIM, or Microsoft could all jump in.

RE: That's good news
By Tony Swash on 1/10/13, Rating: -1
RE: That's good news
By StevoLincolnite on 1/10/2013 10:06:27 PM , Rating: 2
Apple doesn't give their OS away for free.

And instead of hating the competition all the time Tony, hows about singing a little praise? Without competition Apple, Microsoft, Google will be completely and utterly stagnant.

Companies only innovate when they have to, not just because they can.

RE: That's good news
By Tony Swash on 1/11/13, Rating: 0
RE: That's good news
By JPForums on 1/11/2013 8:57:12 AM , Rating: 2
To be fair, Tony is not really hating the competition. He simply takes a overly pessimistic view of the competition which sometimes causes him to exaggerate their faults and struggles while overlooking their merits and opportunities. If he really hated Microsoft, for instance, he wouldn't be offering advice on how he thinks they can stay in business and remain relevant/profitable.

RE: That's good news
By Cheesew1z69 on 1/11/2013 1:53:46 PM , Rating: 2
Sometimes? Every post..

RE: That's good news
By Tony Swash on 1/11/2013 3:16:42 PM , Rating: 2
Perhaps I should use your comments on Apple as a model of balanced and objective impartiality :)


RE: That's good news
By Cheesew1z69 on 1/11/2013 3:38:50 PM , Rating: 2
Perhaps you should go suck an egg...

RE: That's good news
By retrospooty on 1/11/2013 3:49:48 PM , Rating: 4
"He simply takes a overly pessimistic view of the competition which sometimes causes him to exaggerate their faults and struggles while overlooking their merits and opportunities."

That is a very fair statement. While doing that he takes an overly optimistic view of Apple which sometimes causes him to ignore Apple's faults and struggles while over-hyping their merits and opportunities.

"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken

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