A 2.2% Market Target? Wrong! ... Absolutely and unequivocally wrong and repetitive ...
<< The problem is that the market Nokia is targeting to get a share of is just 2.2% >>
Syl,
Your flogging that horse to death in highly repetitive fashion. Please tighten it up in posts to this board. A few less posts, each with more substance would be great. Quality over quantity. TIA
The market that Nokia is targeting to eventually regain a substantial share of is 100% of the growing smartphone market as WWW correctly noted further on. They'll accomplish that by eventually covering all price points of that market, not just its upper tiers. They'll move both upstream and downstream. They are implementing (have implemented) a focus strategy that will allow them to significantly differentiate themselves from its allied competitors also delivering Windows Phones while minimizing the fragmentation that helped kill Symbian and threatens the Android ecosystem and those participating in the OHA.
You are an investor in Nokia (in NOK ADSs) so one would have to assume that at the relatively recently time you invested or initiated a trade to the magnitude you did -- 1.6 million shares (with an average cost were they not options of $5.9 million I believe you last stated, but please correct me if I'm wrong) that you had done sufficient DD to understand the rationale and justification behind the 3 pillars of Nokia's strategy, their strategic intent and their 3 year vision. You also knew or should have known that Nokia's only 'Plan B' was to learn from any mistakes in executing Plan A.
Google had the same target (i.e. a substantial share of the total smartphone market) when they introduced Android. Surely you remember how long it took for Android to gain meaningful traction, as well as how rapidly the achieved momentum once they did.
Samsung also had the same target when they finally introduced their 1st Android products in competition within the Android ecosystem with some 40 other device manufacturing members of OHA. They have executed that strategy exceptionally well with Android devices, less well with Windows Phone, or with their bada quasi-smartphone / or 'smarter feature phone' platform.
As of Q1 end, Nokia's sharply reduced consensus unit sell-in share of the market they are targeting to win back share in is ~9%, sharply down from ~16% for CY2011, and their Symbian smartphone volumes are declining more rapidly than their Windows Phone volumes are increasing despite the fact that Anna and Belle greatly improve the Symbian UI and UX. The UI is now very comparable to Android's skinned or unskinned UI and the OS itself is extremely robust and efficient but without question Symbian is in the sunset of its life -- may it rest in peace -- and Nokia's overall smartphone market share will definitely head further south before it starts its uphill climb with primarily a Windows Phone range as their smartphone platform by the end of next year. if not earlier
After last years decline in the volume and market share for Microsoft's 2 mobile OSs (WinMob and WinPhone) WinPhone volumes and share are on the increase, contrary to what you have repeatedly stated. [More on this in a separate post to you.]
Edit: After looking ahead I've noted that as a somewhat related thread rapidly evolved today into a discussion of whether or not NOK/NOK1V or AAPL make a more sensible investment or trading vehicle at this time. ... Michal has sensibly suggested.
" ... you may want to take this discussion to where it belongs, if you wish to follow it some more: NOK at $3.12 or AAPL at $565? Which is a buy? | Stock Discussion Forums"
Thanks Michal for that contribution..
Edit2: In re your post #7380 you stated ...
"Nokia only is targeting the Windows Phone market. Windows phone has a 2.2% market share (based on the recent IDC numbers) and it is not even keeping up with smartphone growth (so it will lose even more market share next quarter). Nokia has no other products for the 97.8% of the market. Nokia's symbian smartphones are imploding. Nokia's feature phones are imploding. What you are referring to is that the Windows Phone OS is targeting the whole smartphone market but it is failing to make even the slightest dent in it. So all intents and purposes, Nokia with Lumia is targeting 2.2% of the market share Windows Phone currently has. And that is truly pathetic. Nokia's made the wrong decision more than a year ago. And that decision should have cost Elop his job already... what is the board waiting for? For Nokia to become a penny stock?... sheesh...."
That's enough of that. I've listened to too much of that same lyric from you on too many other boards and the paragraph is filled with inaccuracies. Please take further castigation of Elop to the 'Tankwatch' board, your 'NOK at $3.12 or AAPL at $565' board, or the (until recently unmoderated) original Nokia board which you departed a week or so ago should you care to vent further.
Discussion or criticism of Elop's and his Leadership Team's Nokia Board backed strategy and its execution is certainly not off topic here, but it will be done intelligently and unemotionally, or not at all. You or I or anyone else that posts here is simply not qualified to call for Elop's ouster this early in the game, one short year after Nokia and Microsoft formalized their strategic partnership.
Nokia's 1st Windows Phone began to ship commercially in 6 European countries 6 months after the agreement was signed, several months ahead of its initially anticipated ship date, and it delivered on a locked in chassis spec with requirements that Nokia had no input into defining as they most definitely will have with Apollo. They have since delivered 3 additional Lumia WinPhone devices with several variants of each one (including CDMA and FauxG LTE variants) and greatly expanded WinPhone's geographic reach, reentering the USA and cracking into China. All things considered, while not perfectly executed that was excellent execution from a company that executed very poorly in the 3+ preceding years.
Edit3: [This thread is evolving quicker than I can read or type. <ggg>] In re Samsung and other WP OEM Licensees
" .. considering that Samsung is also in the Windows phone market, what makes you think that if the WP market share rose to 20% that Samsung can't bring the same Android hardware over to WP and do the same thing that you are saying they are doing to other Android manufacturers???"
Samsung (or HTC) can bring the same hardware, but they can't bring the same application software and services or the same degree of deep integration that Nokia can. By virtue of the strategic partnership agreement between Nokia and Microsoft, Nokia has access to WinPhone source code and the capability to modify it. No other WinPhone OEM licensee does and in reality none really have the competency in software and services development that Nokia does. THAT is how Nokia will differentiate themselves from other allied but competitive OEM members of the evolving but still relatively nascent WinPhone ecosystem. Make no mistake about it, if Nokia and Microsoft's strategic objective is to 'jointly build' a viable 3rd mobile smartphone and MID ecosystem is to succeed they need Samsung, HTC, ZTE and Huawei as participating and delivering OEMs (along with a handful of others: e.g. LG, Sony, Asus, Acer, Dell, and possibly HP). They do not need anywhere close to the 40 or so that are fighting for profitability within the Android ecosystem which benefits Google to a much greater degree than any OEMs.
Edit 4: The 1st statement below is not accurate. Either sentence. If you are going to continue to hold NOK best to understand why they are inaccurate and you also need to understand why Nokia has no 'Plan B' for smartphones other than to learn and apply to improve their WinPhones and why preparing to deliver Android devices and eventually doing so would be extremely counterproductive if not downright suicidal. There is no business case, and if they start to consider delivering Androids (which they can't deliver in just a few months -- 6 months minimum with little r no differentiation) they'll destroy the focus of their development teams, and they will strengthen a competing ecosystem making it damned near impossible to jointly build a viable 3rd ecosystem with Microsoft. What about services? Will Google abandon Google Maps and substitute Nokia Drive. Of course they won't. There is no question but that Google and their OEMs could benefit from Nokia's outstanding music services which are highly competitive with Apples (and Microsoft's) but again Nokia would be simply strengthening a competitive ecosystem.
"It's like people think Windows Phones live in a vacuum and they are forgetting that there is no difference between Android and WP other than market share. They are both open for everyone to join and compete. Nokia and Samsung and HTC and LG compete just the same in WP as they do in Android."
In addition ...
"I fail to see where that would leave Nokia in the WP market, especially if you are saying that they can't compete with the top guns in the Android market. Either Nokia can compete or they can't. And if they can compete, it is a hell of a lot better to compete for 62.2% of the market rather than 2.2% ... "
Several intelligent mobile wireless-wise and investment-wise individuals here have attempted to point out to you that Nokia is not competing for 2.2% of the smartphone market or 62.2% of it. They are after a big chunk of 100% and slowly but surely thy are making progress to close the wide gap between their WinPhone selves and Apple's iOS and Google's Android. It would be wise to consider the fact that iOS is the single most powerful ecosystem today and as a consequence Apple has become the largest and most profitable producer of not just smartphones and MIDS but of mobile wireless handsets and/or tablet devices, They also have the single most loyal user device of any branded OEM delivering mobile devices. They are formidable competition for Samsung, Nokia, HTC, RIM, and LG. They ain't going away and you can't wish 'em away, or pretend they are going away. They simply ain't.
NokiaSoft and WinPhone aren't going away either. A lot of strategic partnerships fail. Nokia's and Intel's several strategic partnerships did. Personally I can't think of 2 more suitable strategic partners than Nokia and Microsoft. The two's strengths complement the other's weaknesses and both have exceptional but different core competencies. While Samsung and Intel both have exceptional core competencies as well and while Tizen can't be overlooked their Tizen partnership lacks the synergy that Microsoft and Nokia enjoy.
While bada will likely fade into oblivion and (I don't see TizenTouchWiz as a relatively near term viable 3rd ecosystem we also can't rule out BlackBerry 10 or the rumored mobile Linux Meltemi 'smarter phones' with the Qt run time and development environment from Nokia. Then ... there's also the next big thing, whatever the next big thing from whomever might be.
Edit 5: In re Nokia's multiple OSs ...
"NOK put all its bets with ONE OS company instead of putting them like Samsung with TWO OS companies to maximize the market that their phones can sell to. What I'm trying to say in far too many words is that Nok picking ONLY WP is killing them... and only Elop can not see that."
Samsung currently is supporting and/or developing 4 OSs (Android, WinPhone. their own inplementation of Mentor Graphics Nucleus RTOS for feature phones, and bada (also using the Nucleus kernel but now layered with their TouchWiz UI).
Nokia is currently supporting two OSs and likely developing a 3rd: Microsoft's evolving WinPhone which is being migrated both upstream and downstream as well as their own Series 40 which is getting smarter each month as the Asha range evolves, Apparently they are also developing Meltemi mobile Linux evolved from their pre MeeGo Maemo initiative using the evolved Qt runtime and development framework with the Swype UI used in the N9. That may replace S40 in the Asha range or supplement it. In edition they still support their own S30 for low end SoC powered phones but S40 as it currently exists may replace that.
Your in good company, or what used to be good company. Tomi T Ahonen would certainly agree with you that Elop is killing Nokia and he has and he did long before you. He's kind of gone off the deep end however and as industry wise as he once was he's become something of a dinosaur living in the SMS world and thinking Symbian was and would continue to be the holy grail of smartphones.
"What I'm trying to say in far too many words is that Nok picking ONLY WP" is that they did not pick "only WP" for their broad mobile device range, picking WP is not killing them. Not investing in Series 40 evolution, picking Intel as their MeeGo Moblin partner, and their poor execution in evolving Symbian to the touch enabled world, and not evolving the Qt cross-platform development environment from desktop to mobile more expediently wounded them seriously. Failing to execute on those initiatives was OPKs responsibility, but the real issue was that Nokia got too big and too inefficient too fast and they built up layers of bureaucratic fat. Jorma was always paranoid about the possibility of that happening ... and it did. We've all seen a lot of that. Elop has 'em on a diet and a fitness program, and he is attempting to change a complacent mindset to a challenger's mindset. It's a little early to judge him but it appears that he is making progress. I can't imagine Nokia breaking in a new CEO at this juncture.
That's enough edits. I apologize for the length of this post. As it evolved it became almost as long as some of Tomi T. Ahonen's shorter blog posts. I do have a post in progress in response to your post 7369 here (we are now up to 7402) that begins with the statement "No freaking way can Nokia make any headway with 2.2% market share." I interrupted it to ramble on here on the same subject and a few others. I'll post that response in progress here within the next 24 to 48 hours after some further fact searching and double checking. Tomorrow I'll be power boating with friends on the upper Chesapeake and snapping photos with both my Symbian N8 and my Canon superzoom digicam.
There have been some very good post from several individuals today. Thanks all,
I hope you and all others that participated here today have a grand Memorial Day weekend. Officially summer is not here yet but this weekend marks the beginning of the dog days of summer for investors when share prices traditionally drop. The great part of that is that out about late July and August we should be seeing some seasonal lows on some quality tech stocks making it a good time to make some adds to the port.
Cheers,
- Eric - |
