Nokia CEO to step down as company still struggles to combat iPhone - Page 3

I shed a tear for Kallasvuo, as he floats gently down to earth in his golden parachute.

The easy solution is of course to copy Apple. It takes no imagination, and will probably net quick returns.

I am confused - I thought market share did not matter.

What does his stepping down has to do with apple?
This article is BS.

I for one welcome Newtron's new-found high standards for being allowed to have an opinion.

I trust that in the future he will refrain from second guessing Apple's product decisions or strategies, as he has presumably never conceived of, designed, tested, brought to market and supported any piece of consumer electronics or software.

I also trust that the rest of us can remind him of the new criteria should he forget.

With your other points I agree, but this last one I have a harder time with.

I believe most analyst say that Nokia's failures in the US have a lot to do with the fact that they didn't bend as much to carriers at the carriers would have liked. In fact Nokia phones are sold globally via carriers and street corners (where iPhones are generally not).

So I believe it's the other way around. Apple shifted more power to the carriers and less to the consumers as in many many countries the consumer cannot select their carrier if they want the iPhone. With Nokia it's the other way around. Also Nokia devices are more open and tailorable (no need for App store, swappable memory cards etc.etc.) than iPhone so how was it again that the power has shifted to the consumer thanks to Apple?

If you're talking about Apple pushing the drive towards flat rate internet access and web-based services then I'll agree.

Regs, Jarkko

I actually wanted there tablets to succeed being the first to market and running open source Linux. Even after iPod Touch came out they still didn't grasp what people wanted in hardware and software. Touch blew the Nokia N series tablets away, especially after Touch got the basic apps from iPhone.

The sad part here was Nokias seeming unwillingness to invest resources into the product and the constant shift in stradegy. They relied way to much on outside development for key technology. For reasons of integration and acceptance there are key apps that a device needs to come with and work well. Sales of the Touch really took off after Apple started shipping them with apps from the iPhone. In the end it looked like Nokia was expecting a free ride from the Linux / open source community.

That is software then we have the hardware issues. At least Apple focused on having enough resources to implement key technologies like video well.

In a nut shell Nokia, in my mind, developed a reputation for half (quarter) baked goods. Lets face it they are the kings of crap products further fouled up by Verizon customization. For a company that is supposededly as big as it is they did nothing to innovate.

Frankly the best thing Apple, Google and Motorola could do is to pool resources to buy the company and shut them down. Then put their patents into a pool so that the silly law suits go away. It would actually be better for competition.

What I am suggesting is that the majority of mobile phone customers initially selected a carrier and then picked a handset that the carrier offered. This worked well for Nokia. Their products were well represented with all carriers.

iPhone disrupted this.

With iPhone, the consumer selected the device, and picked whichever carrier that went with it. Even if that meant moving carrier.

There's a good write-up in last month's Wired about Apple's relationship with AT&T. Basically Apple rejected all of the standard carrier crap. They just made a device and marketed it to consumers. The consumer has a brand loyalty with the device manufacturer. The carriers were just a necessary evil who charged for airtime and patchy reception.

"Nokia devices are more open and tailorable"? Hmmm. You'll have to explain that one.
I think if Nokia devices offered any tangible advantages over iPhone, they would not be seeing the collapse in confidence we are seeing now.

C.

Nope. I never said anything like that. I have no way of knowing which strategy is best. I think I said that over and over and over again.

2009:

# Reported net sales of EUR 40 984 million
# Reported operating profit of EUR 1 197 million
# Reported operating margin of 2.9%
# Reported earnings per share (diluted) of EUR 0.24

I agree. I hate it when people put words in my mouth.

Market share dies not matter to Apple.

Except WRT the iPod. Then large market share means that the iPod is the best device.

That's profitable.
But by the smallest imaginable margin.
They will make a loss in 2011.

C.

Oh. Ok. So in 2011 you will be in a position to say that they need to return to profitability.

Ok.

Right now, they need to return to a level of profitability commensurate with a company with the world's largest market share rather than a level of profitability comparable to an Alaskan Koran salesman.

That's rather a mouthful.

So I prefer the more economical - "they need to return to profitability."

C.

Shows how much you know fool, people pay to get on boards, back handed deals. i dont need to be on the board to figure out that was a bad idea getting anyone from microsoft to run that train wreck

I thought market share did not count?

Newtron, will you STFU - you are polluting this site with your ignorant rants. Chill out and get a life.

I didn't say that they are necessarily tangible for the average consumer (or maybe they would be if marketed well enough), but even the US consumer is becoming more aware of limitations that iPhone enforces on the consumer. If the User experience and App availability become "close enough", then they may become important.

But the things that I meant are stuff like customisable ringtones for all incoming stuff (SMS, Voice, Video, IP telephony etc.), free choice off apps, open source OS (next in line), almost full customisability of the UI appearance (not behaviour), widgets, removable storage, USBOTG, USB storage mode, FM transmitter, WLAN AP functionality etc.

The closedness and huge price (900 Euros for iPhone 4) if you don't take a ball and chain from a carrier I don't want is the reason I haven't gone the iPhone route despite owning several other Apple products and propably continuing to purchase more.

That's what I meant with "more open" and with restricting consumer choice. You see, I cannot choose my operator if I want an iPhone. I don't like to be artificially restricted and limited competition leads to higher prices -> not good.

Regs, Jarkko

Isn't that precicely providing less choice to the consumer? If phone A is available at one operator, then the user has no choice if he wants that phone. If phone B is available everywhere and the user wants that phone, then the consumer has more choice of operator and thereby pricing and serivices. No?

Also you get more competition and better pricing because the consumer has choice. The operator has to compete on services, coverage and pricing. If phone A is the sexiest thing on earth, the consumer has to pay whatever that single carrier chooses to offer.

And as you said, Apple didn't care what AT&T wanted, they just made a phone. Nokia's been doing that in the US for years. They've been refusing to restrict the features and functionality on most of their phones based on US carrier likes and dislikes. That's why they haven't been succesful in the US. Nokia has been pro consumer in that regard. In some others, not necessarily as much.

Regs, Jarkko

Profitability matters, and popular opinion has it that having a large market share is one way of achieving that goal.

Nokia has the largest market share, but weak profitability. That is actually embarrassing. Because although Nokia's unit sales are increasing, its profitability is falling.

One way of describing this is that Nokia's products are becoming commodities.
Another way is saying Nokia have lost the ability to add value.

To "save" Nokia, the trend of lower profit-per-handset has to be reversed.

C.

No.

It's the choices of consumers that now drives the market. Not the choices forced on consumers by carriers.

More precisely...
Pre iPhone, select a carrier, then select a device offered.
Post iPhone, select device, then pick carrier.

Consumers are now prepared to switch networks to get the handset they want. The ability of carriers to determine what are successful handsets has collapsed. Their influence has diminished.

This is quite a fundamental change in the way the market works.

In the UK, now all carriers now carry iPhone.
In the US, AT&T realised that customers would switch networks to get the phone.

C.

Put it this way. I'll agree with you when the iPhone is available on all operators that carry the same tech in the same way that all Samsungs, Nokias, LGs and HTCs are now available. You see I fail to see how the fact that you phone selection determines your carrier adds to consumer choice. That's just silly.

Your premise is that carrier's choice of phones limited consumer choice. This may be the case in the U.S. and some other countries, but in quite many countries the phone and subscription (thus selection of carrier) are two different things. That's power to the consumer. Personally I think all subsidised phones should be banned and phones should be sold separately from subscriptions. That would improve price transparency, competition and consumer choice. That's what Nokia has been advocating for and Apple in practice against.

Regs, Jarkko

That's not at all what I was suggesting.

I am saying that the consumers choice of handset now drives the market instead of the consumers choice of carrier.
Nokia's strength was their relationship with carriers. This suddenly became much less valuable.

C.

It means Nokia's iPhone killer has not arrived, will not arrive, for at least a year, if any. I remember when the N-somethingorother was all the rage and that was competing with the iPhone and iPhone 3G. How times have changed so quickly.


We'll have to keep an eye on him, that's for sure.


Ummm.... smell those operating margins. 2.9%.


Fair enough. I agree too, 41 billion Euros (not dollars!) in sales and only 1 billion in profits? Dicey. Sure, 1 billion Euros is a nice bunch of money but the above also meant they burned through 40 billion or so in 2009.

Fine.

But given that that they never left, it is hard for me to understand how it is possible for them to return. I guess we use words in different ways.

I would have said that they need to increase profits, but I imagine that too would have resulted in some sort of weird misunderstanding.

I will not report this sort of thing. I ignore it instead.

<plonk>

That is because in the old days, many more locations had only one choice of strong-signal carrier. Nowadays, many more locations have a choice of good carriers.

The iPhone did NOT change the landscape in that regard. Given the choice of equivalent carriers, it is natural that consumers might choose the carrier based upon their available phones.

Such a phenomenon started long before the iPhone. And Apple's long-standing artificial restriction of US carriers hurts consumers by lessening competition.

I'm not sure network acess has really changed much. At least not in Europe where Nokia was dominant.

Nokia relied upon carriers reselling their handsets. They had great commercial ties with the carriers and Nokias handsets were just as good (bad) as everyone elses.

After iPhone this changed.

Consumers changed network to get iPhone. Nokias strategy continued to work at the low end. But at the top end, sales collapsed as consumers voted with their feet.

Nokia fundamentally didn't recognise this problem. They continued to act as though Nokias main customers were the carriers. Not end consumers.

That error is costing them dearly.

C..

This I can agree with to some extent. Not necessarily the fixation with carrier, but the attitude "we know better than the consumer what they want". That I'll agree with. Funny how that attitude comes with success (first signs being show by Apple as well).

Samsungs, LGs and HTCs have been far more accomodating to the carriers than Nokia (just witness the US market as proof). Nokia failed to see and react to the consumer trends/desires brought to the fore by the iPhone quickly enough.

Next year is going to be interesting as it's the first time that Nokia has a truly revamped OS and phone lineup. Before that it has just been their old roadmap in progress. The N97 for example was not a reaction to the iPhone, it was already in the works when iPhone was released. The fact that it was brought out in beta quality was maybe due to the iPhone. N8, N9, E7 etc. will be interesting to watch as they are the first products of a rethough roadmap after the iPhone.

Regs, Jarkko

Bull, that is pure rubbish and you know it. If you live in country with purely GSM networks, to which you do, you could choose a phone, and then choose a network. This was the case before the iPhone, and is still the case now.

Android should do fairly well in emerging markets with cheap hardware and no licensing costs.


Verizon would represent a nice uptick for Apple but honestly most of the rest of the world (like China) simply can afford the iPhone.


They spent lots of money on the console market and have now beat Sony. The unit is now profitable and they have a presence in the living room they didn't have before. They can't afford to lose the mobile computing market without a fight and MS has the money to fight. WP7 should be a very solid competitor.

They don't need to make the hardware for phones if they can get back to reasonable market share.


MS didn't instantly start with 90% share. MS doesn't have a monopoly in consoles. MS doesn't have a monopoly in IPTV but is making pretty good progress in that market with MediaRoom with 3M customers and is number 1 globally.

http://connectedplanetonline.com/vid...on-users-0420/

Dismissing MS as only successful as a software company when they already have 90% share is really naive. They had several bad years when they were unable to execute on nearly anything but counting them out is like counting out Intel when AMD was eating their lunch over the P4 fiasco.

With them past their Vista fiasco and Win7 on the right track, the 360 as the number 2 console (arguably the #1 hard core console) and a distinct advantage over Android for mobile gaming MS can take significant share in the smartphone market.

I'm assuming you meant to say "can't" afford the iPhone. In which case you are dead, dead wrong. The iPhone4 and iPad has hardly launched beyond 10 or so countries. The international demand is massive. China can't afford the iPhone? Sure not all 1 billion of them, but even a fraction of the new middle/upper class is a huge market.

Korea and Taiwan did over 100,000 pre-orders recently. They had to stop because they wouldn't be able to get more stock from Apple for the initial launch.

Asia, South America, Middle East... If you thought iPhone 3GS was selling well here just wait until iPhone4 is released fully in at least 70 countries on those multiple carriers. Just wait until iPad reaches the same distribution coverage as Macs do now, and wider coverage through telcos.

Anyone that thinks "demand is dying down, iOS growth is unsustainable, Verizon will be Apple's next best hope" has no clue what is going on outside the US.

Right now the fact is Apple is simply trying to make as many iPhone4 and iPads as possible. They are ramping to 4 million iPhone4 and 3 million iPads per month. That's going to be, assuming also about 3 million iPod touch per month, over 100 million iOS devices in 2011. Sure, Android may do 200 million devices in 2011. But the cream of the profits and demand of iOS devices is still huge over the coming holiday season, and not least in 2011.

Even in the US alone, how can iPhone4 be "near saturation" when ship times still show 3 weeks for the Apple US online store?

Why wouldn't they? That's Apple's formula for success, or you didn't know that?

Nice try.

Yes, thank you that's a typo


Android smartphones will likely cost much less the iOS devices and will gain share more quickly in China. Remember the assertion by melgoss is that the days of Android marketshare leaps are over. That's what we're discussing here. Not whether or not China will be very profitable for Apple. I assume it will be and iOS devices will sell well.

http://economictimes.indiatimes.com/...ow/6474944.cms

http://online.wsj.com/article/SB1000...047883520.html

All of these android makers are gearing up for China. Cost is a factor in adoption in developing countries. While these are mostly 5000 RMB phones there's going to be a lot of cheap android phones.

814M phones makes for huge potential numbers as folks move from feature phones to smart phones.


If the Chinese market goes 50% smart phones in the near future as the overly optimistic estimates predict what percentage of the 400M smartphone market do you really think Apple can serve? Or wants to serve? Sure, if you only compare 5000 RMB ($700-$800) phones I bet Apple share is dominant. How about 500 ($70-80) RMB phones?

http://www.sinodefenceforum.com/memb...atek-5038.html

This is pretty representative of the cheapo phones being made and most of those will be Android because...it's free and easily available. It's simply a market Apple would never pursue.

Same for tablets.

"Price is of course one of the key drivers behind the rapid growth in sales of Android tablets at Huaqiangbei, not to mention the iPad halo effect on the overall category. But there are also other factors at play including the increasing popularity of Android itself in China and the growing number of Chinese language apps available on the platform."

http://www.shanzai.com/index.php/mar...-tablet-market

That last is key. The cost for developing on Android is a windows machine. The cost for developing on iPhone is a Mac. Which will have more chinese apps?

People tended to stick to the same network when they upgraded their phones. Because the carriers offered loyalty upgrade deals. When updating the phone you went to your carrier and saw what was on offer.

With the iPhone exclusive to O2 in the UK (at launch) and exclusive to AT&T at launch - it was suddenly possible to measure just how many people switched network to get hold of the device.

A *lot* of people switched. Both AT&T and O2 captured a lot of new subscribers because of the willingness of customers to jump network. This was new. And allowed consumers send a powerful signal. "We care more about the device than we care about the carrier."

That was new.

C.

That has nothing to do with what you stated.


No it wasn't. Phone exclusive deals were done before the iPhone, the concept was nothing new.

The concept was not new.

The extent to which consumers switched networks was. No other device has triggered such a mass migration of subscribers. These were not just any subscribers, but the ones spending the most per month.
This is why the entire industry sat up and noticed.

C.

Okay, so looks like we are talking about Android then. Well, Apple is only one company. In 2011 they look to deliver about 100 million iOS devices. Android could do 200 to 400 million devices. It could start to be used for the next generation of cheap smart phones. Here in Malaysia I played with a terrible, terrible iPad clone at 7" that cost $200 USD.

What will 2011 bring? Hard to say. Android could very well outpace iOS but be more and more common on lower-performance/lower-price phones. However, once Windowsphone7 comes into the picture, maybe that will bite Android a little, given Android is free, but the manufacturer gets *paid* for Windowsphone7, at least initially.

As for Android iPad-killers though, I don't think we will see anything significant until maybe middle of next year.

At worst I see iOS at 25% marketshare globally by the end of 2011. But remember this will be a nice premium-cream 25% of the mobile and tablet market.

What confounds me about the fandroids is that Apple is somehow doomed as Android becomes more widespread. That's as ridiculous as saying, well, the iPhone 3G was doomed because you had BBerry, Symbian, WindowsMobile, etc, and whatever OS all the major non-smart phones ran on.