x

Nokia: How Low Will It Go?

12:05 PM -- As Nokia Corp. (NYSE: NOK)'s mobile phone crown still clatters at its feet, one analyst has published a dire forecast for the company's smartphone market share this year. (See Nokia Loses Its Mobile Crown.)

In a sobering blog, independent analyst Tomi Ahonen predicts that Nokia will end 2012 with only a 3 percent market share in smartphones, down from 13 percent at the end of 2011. Ahonen also forecasts that smartphone unit sales at Nokia will be 7.4 million in the fourth quarter of 2012 (of which Lumia units will be 7 million) -- well down from the 19.6 million units it sold in the same quarter last year.

Talk about a plummet. And that's only the outlook for smartphones. (See Nokia's Nightmare Scenario , Euronews: Nokia's Q1 Device Disaster and Is Nokia Losing Operator Support? )

Ahonen wrote the following in his blog about Nokia's smartphone forecast:

Note, by the end of 2012, essentially all Nokia smartphone production will have shifted to Lumia, i.e. Windows Phone-based smartphones. Thus the 'comeback' for Nokia (and Windows Phone) can start in year 2013. That comeback starts not from Nokia's powerful position it had when Elop took over in 2010 of 33%, it starts from literally only one tenth that, at 3% of the smartphone market. No handset maker has ever survived this type of comprehensive collapse and it would be foolish to think Nokia could achieve that miracle.

Nokia's turnaround was never going to be easy, and time is not on the company's side. As the company loses market share at the smartphone high end as well as at feature-phone low end of the market, it's questionable whether the business can sustain Nokia's current strategy. The company will need to do something more drastic to claw back business. (See Don't Count Nokia Out Just Yet, Will Nokia Have a Smartphone Resurgence? and Euronews: Will Nokia Take the High-End Road?)

But hey, when you're down, what better time is there to start taking competitors to court? Nokia on Wednesday filed suits against High Tech Computer Corp. (HTC) (Taiwan: 2498), BlackBerry and ViewSonic Corp. in the U.S. and Germany over claims they are infringing 45 different patents.

— Michelle Donegan, European Editor, Light Reading Mobile

sarahthomas1011 12/5/2012 | 5:34:24 PM
re: Nokia: How Low Will It Go?

Doesn't Microsoft make more money on Android from licensing than it does its own smartphones? Maybe that strategy will work for Nokia too!

Michelle Donegan 12/5/2012 | 5:34:23 PM
re: Nokia: How Low Will It Go?

It's too soon to write off Nokia, but can the company weather 2012 on its current course; or does it need a whole new direction?


 

sarahthomas1011 12/5/2012 | 5:34:22 PM
re: Nokia: How Low Will It Go?

I'm not sure a whole new direction is feasible for Nokia at this point, given the huge commitment they've made to Windows Phone. They do need to produce some more devices at attractive price points though - and fast.

desiEngineer 12/5/2012 | 5:34:21 PM
re: Nokia: How Low Will It Go?

This bet by Nokia was the wrong one - Microsoft loses next to nothing if Windows Phone doesn't take off - they still make most of their money on Windows/Office.  Nokia loses everything if Microsoft decides to get out because they aren't making any headway vs. iOS and Android.


-desi

Chhilar 12/5/2012 | 5:34:20 PM
re: Nokia: How Low Will It Go?

They will sell 10 million Lumia units in Q4 of 2012.  As Woz has pointed out, the UI is out of this world.  Just got my Lumia last week and have been an Android user since the G1(also own two other newer models), iPhone user since the 3Gs.  The superiority of the experience cannot be overstated.


It took the iPhone seven quarters to pass the ten million mark.  Lumia will do it in four.  Just look at how fast Android left iPhone in the dust after that.


Things change fast in the smartphone market.  This analyst is looking backwards - wrong direction.

jepovic 12/5/2012 | 5:34:15 PM
re: Nokia: How Low Will It Go?

Nokia seemed almost invicible just a few years ago, with like 40% of the world market. Before them there were other cell phone giants, although none as dominant; Ericsson, Motorola... Remember Palmpilot?


Funny how noone makes the connection to Apple. If we can learn anything from the history of consumer electronics, it is that brands come and go, and in the end the asians take over. Is there something magic about Apple which makes them immune to competition and fashion? I think not.


If (when?) Apple drops, it will be fast and hard.

paolo.franzoi 12/5/2012 | 5:34:13 PM
re: Nokia: How Low Will It Go?

 


jepovic,


All markets and companies go through it.  Probably the best to ride it all out is GE and even they have had their struggles.  Let me name some other companies that have looked unbeatable:


Microsoft


IBM


Xerox


General Motors


Lucent


AT&T (the old one)


Kodak


There is the problem of market disruption and it is the place where analysis fails.  Analysis is prediction based on data.  Disruption makes the old data irrelevant.  Disruption is for vision based in data, but at some level is is belief or faith based.  Tech markets tend to face disruption more often, but situations change in all industries.


seven


 

krishanguru143 12/5/2012 | 5:34:07 PM
re: Nokia: How Low Will It Go?

I hate the UI.  There is no UI that is great for every use and every person.


 


10 million units will be about all Nokia will sell for an entire year.  When Nokia started to sell WP handsets, sales slightly increased but the majority of their sales came at the expense of HTC and Sumsung and their WP offerings.


 


Why would I trust what Woz has to say?


 


The analyst is just stating the reality of it all.  MeeGo outsold ALL of WP7 sales in Q3 2011.  Have you used MeeGo or even Belle?

btierney 12/5/2012 | 5:34:00 PM
re: Nokia: How Low Will It Go?

One of Kodak's problems is they are saddled with old school pension obligations.  That and the issue of foreign cash that they'd be stupid to bring into the US.


Not to mention the BIG one that they missed the market transition to digital DUH.


 


Cape 

HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE