Nokia's earnings disappoint as it struggles to combat Apple's iPhone - Page 4

Apple have simply gone after one segment of the market. The top.

As a strategy, it has not brought communication technology to the peoples of Africa.
Instead, all they have succeeded in doing is going from zero sales to becoming the most profitable handset manufacturer on the planet in three years. So I think they can live with that decision.

The iPhone retail cost *is* high, but its manufacturing cost is no higher, (and perhaps lower) than many of the would-be rival products. The lack of competition means there's no need for a price war yet. But if there were a price war, there's no evidence that Apple would lose it.

C.

Yep. And the big question is, will they be able to maintain the big advantage (differentiator) that they currently have at the top or will it erode as others catch up. If it erodes, will Apple drop their price to compete or will the others increase their price to get a better profit.

So the question isn't really "will Apple lose a price war" rather than will they engage in one? To my knowledge (admittedly can be wrong) they never have. If so, they have to reinvent and innovate hard if the competition manages to catch up or even surpass Apple in the categories it is strong now (User experience, Ecosystem and 'sexyness'). The further we go, the more commodotised even the good UI phones become (assuming competition works). BTW, look at what made Nokia's market share grow so rapidly in the nineties->2000s and maintain customer satisfaction. Hint: It wasn't technical superiority (Ericsson had that).

Regs, Jarkko
Regs, Jarkko

The trouble with that line of reasoning is that the initial cost of a handset is just the smallest fraction of the cost of actually owning and operating a handset. Unless Nokia or Google or MS create their own wireless network or gett some kind of preferential deal with an existing wireless carrier (and why would they?), it's actually not possible for them to substantially undercut the iPhone's TCO.

Add to that the ever shifting subsidy picture (with iPhones being free with contract in some markets) and the "Apple doesn't compete on price" thing doesn't really apply.

I am not sure that argument is valid.

Microsoft's products have weakened in recent years. But the infrastructure associated with Windows made it unattractive for people to move to other platforms. Price and feature competition does not work very well with large infrastructures are in place.

The iTunes platform means that if a better phone comes along, current users may not be motivated to shift, if that means losing all the apps and music.

I'd argue that the Nokia, Samsung, HTC lock-ins don't work nearly so well in the opposite direction.

I am also not convinced that catching-up is a trivial and inevitable as you suggest. Apple's lead is nothing to do with hardware. The iPhone hardware is something anyone can build.

The real advantage is Cocoa,(previously known as NextStep). A lot of Apple's competitors look at the iPhone and simply see a Unix OS with a GUI on top. And declare, "we can do that". And they can! HTC made a very fancy GUI indeed.

But unless they create something as powerful as Cocoa - they (and their developers) remain at a disadvantage.

C.

You know, I'm not sure if anyone has mentioned it before in this thread...

This news is extremely interesting, coming about a week after Sony-Ericsson announced a return to profitability.

Obviously, Nokia cannot blame their loss on Apple alone.

Personaly, I prefer SE phones ove Nokia for a number of reasons. And SE's "Greenheart" campaign seems to be a commercial as well as an environmental win.

The phone I currently have my eye on (waiting until it's further subsidized by my carrier) is the J10 Elm. WiFi, a 5MP camera and active noise cancellation in an inexpensive, slim, environmentally conscious candy-bar phone? Count me in!

I didn't try to make it sound trivial. Far from it but I don't want to make it sound as if it were impossible either.

Now that you mentioned Cocoa, Nokia does have something similar -- Qt with a much broader target platform mix than Cocoa (at least: Windows, OSX, Symbian, Meego, WinMo). The developers of Angry Birds (a popular game on the iPhone) said that porting from iPhone to Maemo and Qt took all of three days! IF the majority of apps are that easy to convert to Nokia's development framework (coming in Symbian ^3, ^4 and Meego as the preferred development framework), why wouldn't Nokia and any other Meego or Symbian device have just as broad an application portfolio than the App Store?

Of course the App Store itself is another story.

This is the thing I haven't fully understood (even though some have pointed me to invormation on Coca) due to my lack of being a developer. Of all the apps in the App store, how many use features available in Cocoa that are not available in Qt. Or is Qt so similar feature wise that most apps can be ported directly. Or is it even a valid comparison? Nokia is clearly pushing for Qt and there's a lot of positive commentary on Qt. Is it "good enough"?

Regs, Jarkko

The breadth of Nokia's hardware devices, and growing list of OSes creates a headache that demands a cross-platform solution. Apple don't face that problem. And so Cocoa and QT have quite different objectives.

A game is not a good example for looking at the power of Cocoa. I doubt if Angry Birds uses Cocoa at all. Cocoa solves issues relating to model/view/controller apps. Where users create and manipulate documents, or lists. A Twitter app might be a better example.

A valid comparison might be looking at a good twitter app on the iPhone and comparing it with a good twitter app on another platform.



I am not familiar enough with Qt to comment - but I am sceptical than any cross-platform software delivers the same quality of experience as software finely-tuned for a specific platform.

What would you say best demonstrates Qt?

C.

Naturally that is true. Sort of Windows Vs. MacOS type of thing, but with a wider target OS selection.

Like I said, I'm no developer. That's the only example I knew of at the moment.

Or maybe one and the same app on iPhone and Qt?

Wouldn't that be a matter of the compiler rather than the higher level APIs? Or am I totally lost?

Sorry, I don't know what would be a "good" example (as I don't know what makes one good). I do know that for example Google Earth , Skype, VLC and Opera use it and Opera for example is pretty good at performance. How much of it is Qt, I've got no idea. But would be interesting to understand more.

Regs, Jarkko

The purpose of Cocoa is not to provide a single programming interface across differing devices. It is simply, as far as I know, to accelerate the development of software. For instance, Cocoa Touch apps don't work on Mac OS X or vice versa.

The purpose of QT, as far as I can tell, is to offer a single development surface, which targets all manner of different devices.

Apple are markedly hostile to such tools. There's a philosophical belief that the software has to be engineered for the device. Hence the seemingly arbitrary ban on interpreters and multi-platform tools.


I don't know any, but there must be some.


I would not think so. Programmers using Cocoa, for example, will get their scrolling handled by a graphics system which exploits the GPU in the phone. This is why the iPhone scrolling is so fast and smooth. The GPU is doing all the heavy lifting. This is for free. The programmer does not have to do anything to make use of it. The handling of keyboard input, error correction, auto-capitalisation, cut and paste - all come for free when using the Cocoa user interface elements. The programmer gets a lot of this, just by dragging the Cocoa widget onto a screen in Interface Builder.


I agree. A fair test would be finding a programmer who has invested a similar amount of time in a Cocoa Touch app - and a QT app. And then comparing the performance and usability of both applications. Of course we'd need a programmer who was equally proficient in both technologies.

In the past, I have heard some tales of woe from Symbian developers, who had to cope with variations in screen-size, variations in input method, and variations in Symbian's OS.
Perhaps QT solves those issues.

C.

Symbian is a steaming pile...

The only reason they have not got rid of it, was the existing app ecosystem.

Having Qt and a half-decent browser on Symbian now should pave the way to finally put it down and switch to a Unix-based OS, which they already have in place..

So, crappy Symbian has some apps, Maemo (superb IMHO) has hardly any. I hope three years would be enough to make the switch.

AFAIK, Symbian is mostly used on their business phones, so they can't be flexible about the OS there, until the problems are solved



Dan

UI wise, OS wise or development wise? Most of the complaints I've seen are about the app development environment (fixed with Qt) and UI (fixed with ^3 and ^4). What's wrong with the actual OS (here I am truly ignorant and thus asking)? It's had multitasking for I guess a decade, supports all current phone tech (including touch nowdays) and many (possibly falsely) claim that it's the best mobile OS. It's just that I haven't seen any proper comparison on the matter (other than UI or App development related). Nokia is not going to ditch Symbian quite yet.

Maemo (now meego) on the other hand is still a beta version. Nokia didn't believe their "geek toy" N900 would sell so well and did hardly any marketing. It was never meant as a volume device for the masses, mainly just a tech test platform for geeks and Nokia themselves. They've been public about this plan for a long time. They have a 5 step plan with increasing feature sets per version. N900 is the 4th Maemo device. The 5th device (this year) has been planned as the 1st mass-market device and after that a normal mass-market roadmap and support map.

With your other points, I agree.

Regs, Jarkko

P.S. I do not work for Nokia, never have. All this data is from public sources.

Still desperate attempts to use semantics to try to obfuscate the point. I don't need to give a list for us to know its true from perusing the tech blogs (not Nokia fan sites). The N900 is half baked, E72 is mired in early 2008, the N8 looks to be off to a bad start... I could go on.


I was never talking about consumers, just the viability of Apple and Nokia as companies. Again you try to change the debate because answering directly is impossible without conceding the point.
Anyway to your wandering point, consumers don't pay the $600 ASP since most phones are subsidized by carriers. Since most Nokia phones aren't even on US carriers, the irony is that many Nokia models are more expensive in cash terms than subsidized iPhones (starting at $99).

I don't debate Nokia's role in the market, or right to exist, just its relative economic weakness despite the posturing of Nokia management. Let Nokia make cheap phones just don't pretend they yet truly compete in the economically and technologically important end of the market.

^3 does not seem to be "fixed" according to early reviews and certainly not against the future competing OS that will be released and on devices before ^3 devices ever see the light of day (Q3). iPhone 4.0, Android 2.2 Froyo (maybe even BB6.0) all seem to do a better job of UI than ^3. By the time ^4 arrives, it may be terminal for Symbian.

We'll see about Meego - it truly is Nokia's last chance before it becomes an OS purchaser (Palm) or a licensee (Android). All their competition either has lower costs because Google or MS do all the work or do OS dev and support better (Apple). That sounds like a rock and a hard place to me.

Was that the early review of a pre-released "misplaced" phone?

I wouldn't really take that "review" of the N8 at face value.




I didn't change the debate, I stated an opinion, and opinion that just happens to be correct. Apple may be more profitable, do I care, no, I don't own shares in them, so my point of view is that of a consumer.


Oh yes, the "I don't pay for the phone" thought, it must be nice that AT&T doesn't make you pay a monthly fee, or fix you into a termed agreement...

As I don't live in the US, the fact that Nokia phones are not on the US carriers doesn't concern me one bit, if you wanted one they are very easy to come by.

And I am confused by your statement that "many" Nokia phones are more expensive than an iPhone, yet on this site we are constantly told that most of Nokia's phones are "throwaway", so which is it? Or are you comparing the full price of one phone to the subsidised price of another?


ok...

I live in the UK, and here Nokia phones are available alongside iPhones.
The high-end N-series are comparably priced.

If you look at Nokia's own numbers the picture is clear. They are selling a lot of low-end smartphones. (and that number is increasing all the time driving up the marketshare number)

But the N-series phones ( the ones pitched in the same market as the iPhone) are collapsing in sales.

It's this problem that people are picking up on. Nokia does not commercially seem to be offering a competitive product in this segment of the market. Repeatedly Nokia's management have made broad swipes at the iPhone, and have suggesting that they would soon introduce some change which would allow them to recapture this market sector.

But there's a difference between words and actions.

C.

That's a nice speech, probably all true, but I'm not sure how it relates to my statement that Nokia phones are available to people in the US if they wished to purchase one.

They certainly are available.
And people certainly don't seem to wish to purchase them.

C.

So you are saying Nokia has zero sales in the high end market?

This graph is interesting.
It shows Nokia's robust performance with converged devices (aka-Smartphones)



But look at the N-Series line.

C.

No one is debating that graph, it is your "people certainly don't seem to wish to purchase them" statement that I have the issue with, if you look at your graph the N series number isn't sitting at 0.

Symbian introduces GPU acceleration for the GUI in ^3 and Meego should have that as well. Qt also has an interface builder and should be able to utilise pretty much the same stuff GUI-wise (acceleration etc.) as the Cocoa side does (again with my non-programmer disclaimer).

http://www.forum.nokia.com/Tools_Doc.../Nokia_Qt_SDK/

The development can also be done on OS X, Windows or Linux, thus adding to the flexibility.

Like I said, I'm really curious to understand is there anything significantly different/better in the Cocoa environment vs. Qt. Qt:s broader development environment support and target environment support is a plus. What are Cocoa's true (as in not just marketing) benefits vs. Qt? Since if there isn't anything significant, then it's a matter of device, mindshare and ecosystem differences only. Qt quickly improves the ecosystem part, N8 shows that the HW is exceeding Apple's by a margin and the price is significantly lower.

I hear a lot of bashing about Symbian, but it really seems centered on the UI, which is actually not Symbian, it's the manufacturer's choice.

It seems that at least three additional things need to happen for Nokia to recapture Apple's lead in the high-end mindset especially in the US: a) Sexy UX + sexy PR (apparently not yet in ^3 for the UI) b) Get into the US operator controlled market and bend over for the operators (U.S. consumer doesn't seem to like price transparency and free choice) c) change the mindset of the people in the tech-blog industry (predominantly north-american) that Nokia is dead. Tall order I'd say.

Regs, Jarkko

The N-Series phone sales have dramatically fallen from the heady days of the N-95. From 12M units down to 4M-ish. That's pretty severe.

In the US people *don't* seem to want to buy them. I'd be surprised if the total sales of N-series in the US this year is more than 100K.

So we have the world's leading cellphone brand, and their top-of-the-line handsets, utterly failing in the world's most important cellphone market. That is a very surprising set of circumstances.

When this is pointed out, Nokia execs just seem to dismiss the American market as a glitch.

C.

That all sounds very positive.


I am interested too.
Cocoa is quite mature now. It has had many years of development (15?) - So there's a ton of development that has gone into it.

I know nothing about QT - but the cross-platform aspect sounds worrying. If a programmer is supposed to write the same code for really different platforms, I am doubtful how can it work well on any of them.

The proof of the pudding is in the eating. The only valid way to compare these technologies is evaluate them in light of the output. We should ask...How great is the interface? How expensive was it to create?


Are you comparing the unreleased N8 with the unreleased 4thGen iPhone?


I have also heard programmers complaining also about the rather bizarre memory management tricks they have to play to get Symbian apps to work.


Although I am doing a lot of criticising of Nokia, I would like to see them succeed.
I think Nokia's current high end devices are confusing for the market. Consumers don't know about or care about the back-room technical details.

I think they should focus on a MeeGo device and work night and day to make it flexible, easy to use and reliable. They need a product that is better device for the average person than the iPhone. Not a better device in the opinion of an engineer. I think they should take a long hard look about what features are important to customers and which features are never used.

I think they should stop talking altogether about future strategies, future products and roadmaps.

I think they should dump that terrible Nokia font, that looks like the screen font from an AtariST.

And yes, whoever does Nokia's marketing should be sacked. The website, the messages and the brands are (to me at least) really confusing.

C.

Lots of people have, as shown by Nokia's desperate backpedaling from a guy who seems to always get the first leaked hardware but doesn't usually pan it...


Yes you did. You did it by stating your random opinion. If you don't want to try and change the debate, don't reply to my comments with your non-sequiturs. Put them in another post where they are not irrelevant to the original post.


Most US plans are roughly the same due to a general lack on competition, 2 different hardware standards, AT&T vs. T-Mob 3G incompatibility and a weak/expensive PAYG market. There is little to no benefit of buying unlocked. Your lack of concern is as irrelevant to the argument as most of your comments.


It is quite simple. I was comparing the cash outlay for an unsubsidized Nokia from that of a subsidized iPhone. But that isn't fair... well it actually is in the US given that there is little plan competition so the potential benefits of paying full price and then saving on the plan is largely moot. Sprint and T-Mob offer cheaper all-in plans but most Nokias won't work with those networks so you are stuck paying more but with no real break on the plan cost

No. The yesterday released N8 to the Released 3GS. Nothing except the form factor of the 4th Gen iPhone is known. The N8 has some nice things that if the UI is reasonable, it should win some hearts.

Catch-up department (not exhaustive list):
- Multitouch is there,
- Kinetic scrolling is there,
- cover flow is there etc.
- downloadable TV series and movies

In addition things like (not exhaustive list):
- Exceptional 12Mpix camera with HD recording
- mini-HDMI out with 5.1 Audio
- Free worldwide offline navigation
- geotagging of pictures
- direct upload of photos to facebook and the sorts.
- Removable memory, support for USB storage

Sure many are "features", but many are things that people want not just hardware and many are things Apple has declined to offer (USB storage, memory cards, HDMI).

It is catching up and surpassing by a margin in many places and lagging behind in many important ones (mindshare at least). About UX, it's difficult to say before the first reviews of the shipping product come out in Q3. Eldar's rant didn't talk too much about the UI. The videos published do speak a bit more.

Regs, Jarkko

I would personally be happy with 2 good megapixels, rather than 12 noisy ones.
But the video quality of the N8 does look exceptionally good.

C.

Couldn't agree more. With the N8 having a larger sensor than most point-and-shoot's with a Zeiss lens in front of it, it is plausible that the noise on this is not too bad.

Regs, Jarkko

To be fair, there is nothing released about the N8 (only announced) and Eldar dissed Symbian^3 pretty badly though not very specifically.

It is almost certain that the iPhone HD will actually be released for sale before the N8. We don't know for sure about the HD but better camera (not as good as the N8), front facing camera, iChat, double res screen, faster, more memory, bigger battery and all the known and unknown benefits of OS 4.0 are all pretty obvious from the leaks. The biggest deal is that whatever it is, it seems very likely to beat the N8 to market handily which is critical to drowning out the N8's arrival in all iPhone markets.

Of your features, most are unexceptional/available in existing phones or irrelevant to most users (how many people really play HD video off their phone to a TV via HDMI?). The camera does seem quite awesome but Nokia N-series have always had awesome cameras and sales have still fallen off a cliff (down by 2007-9 66%). Camera doesn't seem to be a critical purchase criterion.

Are you trying to say that the US is the worlds most important cellphone market?

Are you sure about that? The general feeling is that guy doesn't like Nokia very much at all.


I forgot that you were put in charge.


Yet still you don't seem to be placing an arguement forward yourself. The US is a small market, it is not the top market by any length, and will never be the top market.


Again, why compare the failings of the US market to the entire international market, it doesn't make any sense at all.

I thought the demo pictures looked quite good, although some ones taken at night would be good as well

Care to back that up? I am a European but only a fool would deny that the US is a very large market for SMARTPHONES (expensive phones that the largest unit sales markets don't buy many of). It is the same false logic that pretends that Nokia selling loads of cheap phone in China/India matters to the trends in the top end of the market and where the overall market is going. It's not like the developed world will be trading down to dumbphones nor will the developing world not be trading up to smartphones as populations get richer. North America (mostly US) is over 30% of the total global smartphone market. Its share will fall as Asia Pac grows but it is obviously has been and continues to be very significant for now. At least a large as Western Europe.


I didn't compare the US to the world, just explaining Nokia's non-position in one of the most important (and largest single) smartphone markets.

Look, we are so far from the original points and your usual attempts to derail things with semantically driven responses is rendering any further debate futile. We'll just keep our eyes on the market stats, see what the N8 does and you can tell me I told you so.

Purely a development standpoint... There are some memory management issues from what i can see, and according to the programmers i've spoken with, the OS itself is pretty arcane. Nobody *wants* to work with Symbian unless they are compensated well...you get what i mean..

But as much as i'm removed from that as a Web developer, i still have to deal with the memory issue, when it comes to the "write once, run everywhere" web apps. Webkit on Symbian is probably the worst port of Webkit all around. It has some issues with JS closure memory. When you need to store a lot of information, that really impacts the responsiveness of a device, whereas Safari on the original iPhone, has no issues.



As for the N900, i own one ...love it!
Superb thumb-typing keyboard, all around nice hardware, except for the resistive (singe touch) touchscreen - a big turn-off in itself for a lot of consumers.


And i can explain why it is not selling.


1. As you have said, it's a trial product rather than a mass-market device. (..the linux teminal in the apps menu speaks for itself )

2. It has no presence in carrier kiosks.

3. It sells unsubsidized. Bought mine at Amazon for $520 USD. Most customers in the US on the other hand, expect half-off up front, and then to get screwed with a $60+ monthly bill for two years.

4. It ONLY works on the T-mobile band. T-mobile sucks. Period...
...I'm with Verizon...

5. The most important thing, is that there is no real app ecosystem. Sure, there is Ovi maps, built-in Skype (very convenient), but if you want apps that do what you want, you have to write them yourself.

So that should generally cover the state of their N line....

The N900 is the best IMHO. The other offerings are a bit aged, and not a good comparison to today's devices, like the new HTC Incredible or the iPhone.

OS fragmentation is definitely an issue with Nokia, along with letting the iPhone blossom with no real competition (even as of right now). Once an iPhone, always an iPhone IMHO.



Dan

I replied to the above message, see how they said "cellphone", that is what I replied to, they didn't say smartphone, they said cellphone.

Now, in saying that, you say that the US is the most important smartphone market, but Nokia sells 40% of the worlds smartphones, yet we are told that virtually none of these are sold in the US. So are you using a strange metric (say adMob for example), or are you only referring to the expensive smartphones, or just iPhones? The US is a large market, sure they have a large population, important market, that is another question.

I am confused by your thoughts of the market moving to the top end, people here like to tell us that Nokia is dropping sales in the top end, and people are moving to iPhones, so is that end of the market really growing, or is the market just shifting.

Nokia is releasing smartphones that retail, unsubsidised, for 90EUR, these units are full featured smartphones, how do you convince people that the iPhone is worth 6 times as much as these types of units. This is where the market will go, remember the majority of the world cannot afford an iPhone, or a similar phone from the another manufacturer, the majority of the people fall in the middle of the market. Apple will continue to make large profits from people purchasing at the top end of the market, and Nokia will continue to make large profits selling phones to the entire market


Also, can you provide a link for your 30%, there doesn't seem to be many search results that provide regional statistics.


When you have nothing to counter, you make you usual comment that I move the argument, maybe you should make some valid and correct points for once...

But I can tell you one thing, I won't come back and say anything about market stats with the N8, I don't really care how it sells (although the pricing is attractive and alot cheaper than an iPhone), I will just continue to correct the mistakes you seem to like to make.

The elephant in the room is that Apple makes more profit from its single high-end modest-selling handset, than the whole of Nokia does with it's many lines, many OSes and large volumes.

This is the clearest possible indicator that the top end of the market are where profits are being made.

Which is why the industry is unimpressed with Nokia's declining share of this part of the market.

The use of the blanket-term "smartphone" is unhelpful in this case.

C.

As I have said a number of times, as a consumer the last thing on my mind when I purchase something is how much profit is the manufacturer going to get


No, I think you will find that Nokia makes profits across all of their phones.


Again as a consumer, your point is?


So what you are saying is, you would like to change the definition to suit yourself?

And things will continue to get worse in that regard, as phones like the Kin come out. With a high resolution camera, touchscreen and a reasonably powerful processor, a lot of these "smartphones" will just take place of the feature phone category.

Closed, non-Linux phones with a limited set of apps are a logical upgrade to a feature phone, esp for those who aren't capable of using anything with too many options....



Dan

Is this a consumer discussion? The thread is called Nokia's earnings disappoint.


True, I think the average is about $30 per handset.


I think the definition is so broad, it allows people to conceal what is going on. Whether people want to have the details hidden from them is a matter for personal preference.

C.

Remembering that Nokia sells around 1.2 million phones per day