It’s clearly been a dismal year for both companies as they saw their market shares erode badly and their stock values plummet.
For Nokia new CEO Stephen Elop came on board, announced the end of Symbian and a new deal with Microsoft to create a new generation of phones running the Windows Phone OS. Sounded great except it would be almost a year before those Windows phones hit the market and all Elop and company could do was talk, taking a shot at chief rivals Google and Apple whenever he had the stage, such as the World Mobile Congress in June, and wait for those phones to arrive.
Nokia finally revealed the first phones last Fall, the Lumia 710 and 800 phones While they got mostly decent reviews, recent numbers suggest sales are lagging in England, far below initial estimates The phones won’t appear in the US until early 2012 starting with the Lumia 710 on Sprint.
The question is can Nokia begin to rally in 2012. It probably has a better shot than RIM, which has stumbled and bumbled its way through 2011.
It screwed up the PlayBook launch by not being able to decide if wanted to be a consumer device or a business one, an anonymous executive published a letter about inner-turmoil at the company, it had a horrible outage and oh yes, it continued to bleed market share like nobody’s business.
RIM’s value went down even more than Nokia’s, leading to speculation of a sale. Heck, there was even a rumor Amazon, Microsoft and Nokia had kicked the tires on them. Everyone was giving the company advice on how to proceed, usually starting with showing the co-CEOs the door.
If you want to get a true sense of how far RIM has fallen, consider that as recently as 2009 it had 44 percent of US smart phone market share. By this year it dropped down all the way to just a mere 10 percent. That’s a monumental fall and it’s hard to see how the company will ever turn it around.
Nothing is impossible, but it seems the market has moved on without these companies. To think, either could ever catch Apple or Google is probably no more than a pipe dream right now, but there is a clear race for third place and one of these companies could get it.
Whether either company can get it together enough to grab that market share remains to be seen. Nokia could find a consumer market hungry for an alternative, but right now Google and Apple look awfully strong and there doesn’t appear to be a huge interest in the Windows Phone OS.
RIM still has a shot at the secure phone business. As I wrote in July, Security Could Be RIM’s Ace in the Hole, and I still believe that, if they can build a clear, coherent message and a set of products to go with it.
As we head into a new year, these two companies are at a cross roads. If they don’t pull it together this year and begin to show some signs of life, it’s hard to imagine either ever will.]]>
In fact, it was reported that Android passed Nokia’s Symbian OS for the first time, and Reuters was quoting a Gartner analyst who was predicting that Android would control 50 percent of the Asian market by 2015.
If that weren’t enough, Apple passed Nokia in worldwide market share for the first time. It’s all part of a continuing decline for a mobile phone maker that once controlled the market, particularly in areas like China where its lower end phones sold extremely well.
But as you are no doubt aware, Nokia made the decision earlier this year to abandon the Symbian and MeeGo phone operating systems in favor of a Windows Phone 7 strategy. The announcement came long before any Nokia phone running Windows was close to ready. leaving the company effectively in limbo.
The results have been exceedingly ugly as Nokia has jettisoned market share in huge numbers, even in markets like China in which it was traditionally strong. In fact, Bloomberg reported that Nokia’s sales in China dropped a whopping 41 percent from last year, while European sales dropped by 30 percent.
Meanwhile Nokia reported selling 16.7 million phones in the most recent quarter compared with over 20 million iPhones That’s astonishing really when you consider there are many, many Nokia phones across a range of price points, while Apple just has just a few iPhones, all sold at a much higher price that probably won’t do as well in Asia.
It’s easy to criticize CEO Stephen Elop’s strategy, but the fact is that Nokia was stuck with an old OS nobody really wanted anymore, and while MeeGo looked promising, as Sarah Perez pointed out on ReadWriteWeb, it would not likely have been enough to be competitive with Android and Apple.
This leaves Nokia in the unenviable position of trying to find a way to sustain its market presence in the midst of transitioning to an entirely new line of phones running Windows..
It seems clear at this point that Android and iOS will control the top two spots moving forward, and the remaining battle will be for third place. Microsoft is betting that by affiliating itself with Nokia, it can help cement that third place position, while Nokia is hoping that Windows can revive its flagging phone sales
It still remains to be seen if this approach can work for either company, but it is clear that in the short term, Nokia continues to take it on the chin in China, as well in other markets it once dominated, and it has to hang on until those Windows phones are ready and see where the chips fall.]]>
As I wrote here earlier this month, Nokia is stuck in limbo waiting for those Windows cell phones later this year, so it’s running just as fast as it can to try and stay in the media spotlight.
To that end, it has dispatched employees like Kwan to speak about the company’s vision. You have to give Kwan credit, she didn’t try to sugar coat the current situation admitting the company is facing challenging times and stating outright that Nokia hasn’t been competitive in the North American market for the last few years. Of course, she would have sounded silly if she suggested otherwise.
Kwan recognizes that there is lots of valuable data both in the internal and external social streams, and the challenge is to break down the social media silos, bring information together into one place and figure out how to take meaningful action.
She said Nokia has developed three tools to help employees do this: a visualization tool to help make sense of conversations on internal social networking tools, a social command center to build an understanding about what people are saying about Nokia on external social networks like Facebook, Twitter, and yes, blogs; and finally a crowd sourcing platform where customers and interested parties can contribute ideas to improve Nokia products.
All sounds great in theory, but tools are tools and it’s really going to come down to the phones themselves and if people want to buy them. I’m a fan of using social media in this fashion, but Nokia already knows people are down on their brand right now. They can try to deal with customer problems in real time, which is certainly a worthy goal, but they can’t do much to change phones in the short term based on marketplace perception if it turns out to be negative.
Meanwhile, Nokia CEO Stephen Elop was trying a little social media magic of his own this week when he “leaked” a prototype of one the company’s early Windows Phone 7 entries. He even went so far as to suggest that people should shut off their cameras in a public forum. Of course, not everyone did and it “leaked.”
If you follow the link above, you can see a detailed demo of the phone, but beyond the design, what you’re seeing is pretty standard Window phone fare. Sure, they’ll add some Nokia-centric tools on there, but it’s hard to establish some serious differentiation in the market at this point, regardless of the OS your phone is running.
What’s clear, however, is that Nokia is doing everything it can to stay in the news and stay relevant. Elop is trying to build enthusiasm in the market and trying to use social media channels to drive that. The company is also hoping to manage customer experience with their social media tools and leverage internal knowledge hiding in internal social chatter.
Ultimately social media might not save Nokia, but it might keep the brand alive long enough for the new phones to emerge in the marketplace and let the chips fall where they may.
Photo by pro1pr on Flickr. Used under Creative Commons License. ]]>
In fact, Elop reminds a lot of his former boss at Microsoft, Steve Ballmer, full of foolish optimism against all odds, never willing to give an inch to the mess his company is in.
Instead, Elop, in a speech this week to the World Mobile Congress tried to paint his chief competitors as a Hobson’s choice for cell phone buyers, trapped on one side by the evil closed Apple, and on the other by Google, a pretender that says it’s open when it’s loaded with proprietary code.
Fine, who can blame the man for trying to take down the competition a peg or two. After all, when his company’s Windows phones finally do hit the market late this year (assuming they meet their targets, that is), he wants to soften the market and have a place for his company’s phone to land.
And IDC is actually predicting that once Nokia phones running Windows Phone 7 do hit the streets, Nokia could make the Microsoft OS Number 2 in the world by 2015. That’s a bold prediction, especially given the sorry state of the Windows phone OS market today, but it has to at least encourage Elop that his strategy could work.
If you want to see the reality that Elop and Nokia face, however, check out the latest comScore marketshare statistics released last week, which showed Microsoft actually losing market share between January and April this year — not exactly the trend you hope to see when you release a new OS as Microsoft did late last year.
I’m not sure what makes Elop or IDC believe that slapping a Nokia label on a phone running Windows Phone 7 will suddenly magically make the market want it. Even if Nokia makes phones that are much, much better than the current offerings from HTC and Samsung, I’m not convinced it’s going to make much difference. Elop admits that in order for Nokia to succeed it has to cover a number of price-points across a range of markets from the sophisticated smart phone markets in the U.S. and EU to more practical phones for the Asian market.
Even now, as he attempts to put down his formidable competitors at Apple and Google, he is probably 18 months away from covering all of those markets and no amount of rhetoric is going to change that.
Elop might even believe in his strategy — he has little choice but to plow ahead — but while he makes speeches, more people across his range of markets are making other phone choices, and it’s going to be a very hard sell for Nokia to get them back.
I’m not ready to write them off just yet, but I will say, even under the best of circumstances, it’s going to take a long time for them to right their ship and restore their stock prices — IDC’s optimism not withstanding — and I’m wondering how long it will take before investors run out of patience.
Photo by jjjj56cp–thanks for 66+K views in my 1st year! on Flickr. Used under Creative Commons License. ]]>
Dear Symbian Developers,
OK, it didn’t say it like that exactly, but it might as well have. You see Nokia has made it crystal clear that Symbian is not part of its long term plans. There are many phones still in development and that momentum will carry them into 2012, but Nokia has a new love — a long-distance romance in Redmond, Washington, and that will be the focus of its energy moving forward.
And Nokia was not shy about its intentions. When it comes time to upgrade, they hope customers will get a Nokia phone running Windows Phone 7 — not Symbian.
That’s not to say, however, they are ready to kick poor Symbian to the curb just yet. As they like to say on Facebook, “it’s complicated.” That’s because Nokia does a lot of business in a lot of places where Symbian is firmly entrenched. It may be losing ground in the US and western Europe, but it’s still all that and a bag of chips in India, China, Turkey and Russia. It would be foolish to simply walk away from these lucrative developing markets, so Nokia will be dare I say, be torn between two lovers for a while.
Where does that leave Symbian developers exactly? Well, obviously not in a good position. As Harry Fairhead wrote on I Programmer, it’s not looking promising:
“The letter then goes on to say that there are many Symbian devices in the pipeline and a lot of existing Symbian users. Most programmers view this as just the inertia left in the system as the motor driving the flywheel is shut off.”
Indeed. Nokia didn’t make nice with Microsoft for nothing. Like any love triangle, there is a time to extricate yourself from the older lover while moving on to the new one. Microsoft has reportedly paid Nokia a lot of money, so one can presume reasonably that they want some semblance of exclusivity eventually.
It doesn’t leave those who make their living off the Symbian ecosystems in a terribly comfortable position. There will be opportunities to be sure, but there is little doubt that Nokia is going in a new direction.
In the end, like many long-term relationships coming to an end with a new, more desirable lover in the picture, the end will likely be slow and painful, but make no mistake, the end is coming.
And if you’re all in with Symbian, you might want to think about exploring other options sooner than later because your sugar daddy is moving on.
Photo by quinn.anya on Flickr. Used under Creative Commons License.
That’s because new Nokia CEO, Stephen Elop, a former Microsoft executive, wrote a poisoned pen memo to his employees the other day, which was couched in metaphor, but suggested strongly that these two operating systems did not have long for this world.
If you haven’t seen it, I suggest you read it, because it’s highly entertaining, and as Engadget points out, brutally honest. Here’s a bit to give you a bit of a taste if you don’t feel like clicking through:
“The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”
He takes no prisoners and he tells no lies. He basically comes out and says the company is standing on the precipice and has little choice but to do something dramatic.
Preston Gralla writing on Computerworld’s Seeing Through Windows blog suggests it’s a sign that a deal with Microsoft to use Windows Phone 7 is imminent. Gralla believes this makes much more sense than producing yet another Android phone.
It’s hard to say what will happen, but such a Nokia-Microsoft partnership makes a lot of sense to me. Still, it will be hard for Nokia to simply give up on Symbian. According to recent data from IDC, Symbian was still a market leader in the fourth quarter last year, although it was losing ground very quickly to phones running Android, and this was particularly acute in the North American — much to Elop’s chagrin.
Still, as IDC points out, Nokia just released a new version of Symbian at the end of last year and in spite of Elop’s haranguing, IDC reports it sold 5 million units in the fourth quarter alone, calling it “a strong showing” for a new entrant. But the analysts tempered their enthusiasm saying that the phones were mostly older and that the new MeeGo operating system that was supposed to make Nokia players in the smart phone and tablet markets is still a long way away. In fact, Elop admitted in the memo that by years end there would be only one MeeGo device shipped.
If your company is supporting Symbian, which wouldn’t be unlikely in Europe, this can’t be good news. For some, it might mean they just switched over to a new OS, which Nokia might abandoning right out of the gate.
Elop is in a tough position. Does he abandon his existing products and give up on a market that still sold 5 million phones last quarter, or does he hitch his wagon to his old friends back in Redmond, giving Windows Phone 7 a monumental lift, and giving his flagging company a ghost of chance to survive in the increasingly competitive mobile phone and tablet markets?
It can’t be an easy decision, and how you feel about his answer from an IT perspective, depends on whether you have placed your bets on Symbian, Windows Phone 7 or another mobile OS altogether.
Photo by bfhoyt on Flickr. Used under Creative Commons License.