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The announcement today by {complink 3847|Nokia Corp.}, that it will eliminate one of every five jobs in its mobile handset division and remove three senior executives didn't impress investors. (See: Nokia to Cut 10,000 Jobs, Divest Assets.)
They promptly dumped the stock, driving down the company's market value by more than 15 percent in intraday trading.
CEO Stephen Elop might have meant to signal resolute leadership during an ongoing crisis at the wireless handset vendor, but nothing in today's announcement offers clarity about what the future holds for the company or whether it can right the ship. Investors have seen reorganizations like this before at other endangered companies, and they know where it's leading Nokia. By the end of this year, Nokia will be a much smaller company on a revenue and stock valuation basis, and its future will be even more in doubt, the modest success of its Lumia phone notwithstanding.
There's some disheartening history behind this tough assessment. Nokia's actions are eerily similar to steps taken by other enterprises that slowly diminished after dominating their market sectors. Nokia is unlikely to fall into technology's historical bin, but the job cuts, management changes, and other strategic initiatives implemented so far by Elop remind me of actions taken by Palm Inc., Motorola Inc., Nortel Networks, Lucent Technologies, and many other former tech giants that misread their markets and tumbled into oblivion. {complink 4644|Research In Motion Ltd. (RIM)} is in a similar funk, and its reorganization efforts have not paid off as expected.
If this assessment appears harsh, don't just follow the Nokia sales trajectory. Look more closely at more important factors — why the company is where it is today, what is happening at its rivals (Apple, Samsung, HTC), the monumental changes occurring in its market, and what could make it competitive again. Also, consider the fact that, as Nokia cuts jobs and reorganizes operations (necessary actions if it is to survive), it is also demoralizing employees and sending mixed signals about its future to contractors, suppliers, and other third-party support companies it requires for future growth.
For instance, Nokia suppliers in the communications IC market recall how their profitability and long-term viability were horribly threatened as companies like Motorola declined. They know by now that they've got to pull up the stakes and throw operational and product support behind Nokia's rivals.
As the company totters, members of its ecosystem are feeling the heat and rushing for the exit. This means critical engineering employees will be firing off resumes to other companies. Application developers the company needs to support the rollout of services for the Lumia and other devices will devote more resources to rivals. The effect is already being felt at companies in the extended supply chain. The DSP chip vendor Ceva Inc. recently slashed its 2012 sales and earnings estimates because of declining sales at Nokia. What many suppliers see now is the possibility of getting crushed under the tottering giant.
Nokia is a fast fading shadow of its former self, and no amount of employee retrenchment and management reshuffling will send the market a different message. Today's announcement confirmed that the company is burning more money than it is making. It said in a press statement that it expects the “non-IFRS Devices & Services operating margin in the second quarter 2012 to be below the first quarter 2012 level of negative 3.0%. This compares to the previous outlook of similar to or below the first quarter level of negative 3.0%.” The company also said it “expects competitive industry dynamics to continue to negatively impact Devices & Services in the third quarter 2012.”
It should have added that the situation won't improve that much for the rest of the year. Before today's announcement, analysts had reduced their average revenue estimate for Nokia this year to €39 billion, or about $49.2 billion. (I think sales will be even lower.) The company posted €42 billion of sales for 2011 and €50.7 billion for 2008.
The job cuts will reduce the breakeven revenue target and relieve pressure on the balance sheet at a time when cash conservation is becoming a major priority. They won't cure what really ails Nokia: an inability to catch up with Apple and Samsung, combined with the unwise decision to abruptly terminate Symbian operating system-based products in favor of Windows OS. That move stopped Nokia cold, and for that Elop himself deserves the axe.
It is sad story. This is very fast downgrade of an organization. Is there novel way it can be revived?
Yes Bolaji, today I had read in EE news about Nokia's plan for cut nearly 10000 jobs worldwide. According to the news they have also plans for shut down its R&D centre at Germany and Canada along with the only manufacturing unit in Finland. This will help Nokia to save annually around 1.6 billion Euros. In general perspective, they are in a wind up stage.
Bolaji, Nokia have only one manufacturing unit and planning to shut down it. So according to your analysis, what would be the future of Nokia? With only R&D centers whether they are able to survive or they are paving the way for a natural death. Whether they have any plan to diversify the shut down facility for a last minute breath with windows based phones & tablets. As a well wisher of Nokia, we would like to know about it.
I thought in between Nokia would pick up with few products they launched and may be move to a better state . Now this comes as a shock how time can change a big organisation to this state. There was a time when consumers use to wait for launches from Nokia and buy them.
Some folks have suggested they have no other options but to cut their way out. I believe more important than cost-cutting is having a growth story. What's Nokia's growth plan? The CEO talked about seeking ways to reduce operating cost but he didn't outline how to increase sales. That's what the market needs to hear.
“Whether they have any plan to diversify the shut down facility for a last minute breath with windows based phones & tablets.”
Windows based mobile devices? Marketability of this platform i have not seen it. May be they should ditch it for Android or better still Symbia. Windows cant battle it out in mobile market.
Wale, The fact that Nokia is allowing itself to be used to test and market an unproven operating system is deplorable. Windows may overtake everyone else in two or 5 years but that's not helping Nokia now. I've read extensively reports from analysts, media and consumers about Nokia's strategy and the consensus seems to be that people think Nokia should embrace Android OS or at least include it in its offering. Is anybody listening over in Finland?
After much boasting, Lumia 900 is not able to make a big difference in the market. People are losing trust in Nokia.
@t.alex what do you think could be the reasons for Nokia's Lumia failing to pull more sales for the company? I stated it here sometime – “is mega picture elements (pixel) of Lumia phone” key that would make it compete well with the likes of iPhone and Samsung?
Trust – i have to agree with you on that. Also think short publicity and lack of indepth market campaign are contributing factors to Lumia poor sales.
t.alex, technically Lumia 900 is a good device with lots of features, but lack of sales support and advertisement made the sales down. I think another reason may be the windows OS, where most people's have a craze about Android flavors and iOS.
@saranyati, you are right on that, if Nokia eventually crash out, many mufacturers will flood the market with their products that people don,t give consideration to befor now. Are you all aware of Techno phones? This is a major competitor Nokia has in my area
Techno phones have no clue about them. what all segments they cater to.
Hello! I am tesing if this is working!
Hello, Junko. I am testing, too.
Hi, Susan!
Lovely to have you here, Junko. And the chat works perfectly. 🙂
Here, from Nokia's homeland of Finland I am looking forward to this chat-presentation. And well, the feeling is that Nokia is not dead yet.
So, you are in Finland?! Far out.
@Susan-r u back from Greece?
@Susan-Yes ur perspective on this issue will be most critical.
@Susan-Have the job cuts annouced by Nokia over the last few months affected unemployment/mood in Finland today?
@Juko: Yes, I am in Finland. Celebrating Midsummer and the Midnight Sun starting tomorrow until Sunday. 🙂 24 hours of light, non-stop.
@Tech4… (why you always choose long user names? :p ) That trip didn't happen yet, it's for Oct or Nov. I am back from Sweden, though.
@Susan-wow! u r lucky 24 hours of non-stop Sun! Amazing!!
This is Bolaji Ojo, editor in chief of EBN. We will begin our Live Chat with Junko Yoshida, chief of international correspondents at EE Times and former editor in chief of the publication in five minutes. Please standby.
@Tech4…But you know what I think: Where there is still life, there is hope.
Good morning, afternoon, evening everybody
Hi Everyone!
@Tech4…: Well, yes. Finland has not been indifferent to the latest news. There is some gloomy mood here and there. But still, Finns say: “Nokia is not dead yet!”, despite there is more pesimism than times before, you see.
Good afternoo ( here)
Hi everyone! 🙂
Hi everyone. This is Barb, and Bolaji will get things rolling in one minute. Bolaji?
@Tech4… And yes, the Midnight Sun is amazing, very, very beautiful. I wrote about Midsummer as part of one of my blogs, I believe.
Welcome to today's Live Chat. First, a few words of introduction about Junko.
Hello Everyone
Hi, all. I am happy to be here.
Hello, Bolaji, Barbara, Taimoor, Wale, Prabhakar, Dave, and everyone else about to eneter the chat
Junko Yoshida has been covering the electronics industry for more than 20 years and spent a major part of that period reporting on the consumer electronics industry. She has been reporting on the companies that manufacture the products as well as their components suppliers. She was until recently editor in chief for print and online at EE Times and has recently assumed the position of chief of international correspondents for the publication. Junko is well positioned to comment on the industry.
@Susan-Very true.Where there is Life there is Hope!Nokia is far from dead!
I have been covering consumer electronics for a while; and Nokia is in fact especially near and dear to my heart
As usual, Junko will start with some introductory remarks. Please hold off on your questions until we give the go-ahead.
Hello, everyone!
hello everyone.
Glad to be here, it has been a while now!
OK. As some of you on this chat already mentioned, I think the death of Nokia is greatly exaggerated
I will also chime in with some comments.
I was really confused about the date 🙂
Hi, SF!
Welcome @HH
And yet, I think it's worrying to all of us — we all want to know what went wrong and what is next
Welcome Susan – you are right there – in Finland- on the spot where the problem is!
@Junko why do you think its exaggerated, Nokias stocks are trading at life time low
My last hello to @HH, and @anandvy. Let's wait until Bolaji gives us green light to jump into the floor. 🙂
@Junko, very correct!
Please hold your comments and questions until we give the go-ahead.
Hi Junko–can you share your views as to why not?
You too, @Wale Baker!
OK. Let me start. Why Nokia is not dead
As many of you already know, Nokia is one company that has reinvented itself so many times
Of course, we will @Bolaji
Hi all
If I remember correclty, the company was in the paper business originally. Correct, Susan?
Correct. It used to be in the wood and papermill business. That was its root from the 19th Century, I believe.
Anyway, what I am saying is that Nokia doesn't have to stick to what it has been doing in the last couple of decades
it can re-invent itself again
But of course, for the purpose of this LIVE CHAT, let's stick to the mobile business Nokia is in for now
@Junko: From what I know Nokia was into rubber business.
To back up that point, I would like to note Nokia is still a very BIG company and what happens to the company will impact many of the companies in its ecosystem.
We used to import 29″ picture rubes from Nokia in 90's
ah, good point
Anyway, if I may, I would like to start this chat, talking about what went wrong with Nokia
OK. Clearly, mobile is challenging–RIM is also struggling. Where should Nokia look for its next reinvention?
Because that may give us some clues what Nokia must do next
Just some background. In 2011, Nokia had more than $50 billion in annual sales and its costs of goods sold is still an impressive $35 billion.
I was talking to one of my sources yesterday… a company that makes a ton of mobile chips for mobile handsets today
What this means is that a lot of companies' bread and butter hangs on what Nokia does next.
they are based in Taiwan
I would like to see the Microsoft-Nokia partnership succeed and provide more options in the mobile space. The Lumina devices look nice…but Microsoft is releasing it's new Phone 8 platform in the Fall of this year. The upgrade is so dramatic that the new Lumina devices that are out now will not be able to utlize the Microsoft OS.
@JUnko: Before being a paper business, Nokia manufactured rubber boots, that was the very start of Nokia. As you said very well, Nokia has reinvented itself many, many, many times; and it might do it again. (Sorry, Bolaji, I had to reply to her Q)
Susan, That's fine.
good point
Anyway, let me finish what I started saying
Dave, We'll do a separate Live Chat on Microsoft. For now, we'll stick to Nokia.
A lot of people equate Nokia's downfall to the company's inability to catch up wiht the smartphone business…but I think that's missing the point
I meant Lumia…not Lumina..sorry
Where Nokia truly failed is in its bread and butter business — feature phones
especially in China
Dave, I apologize. That's related. Let's wait, though, for Junko to finish her point.
As my Taiwan source was saying, Nokia was a victim of its own process
How's that Junko? How did the failure in the feature phone market wound Nokia?
Nokia is a big company, it does a ton of processes, and it does it well
but it is not exactly the fastest company to respond to what may appear to be small changes on the surface
@Junko-Sorry to interrupt but by Feature Phones do u mean Basic Phones or Advanced Smartphones?
Take an example of double SIM cards trend in feature phones in China
I suspect you are referring to its ability to retain the leading market share it had n the basic phones market.
in this context, I am talking about basic phones
Dave, Correct. Feature phone is industry speak for basic phones.
yes
Junko what exactly do you mean by victim of its own process?
The double SIM trend hasn't spread widely in the West but it is a part of daily life for many people in emerging economies.
anyway, there are a few reasons. First, Nokia didn't think much of dual SIM cards trend. they thought they knew this feature phone market better than anyone else
I am a fan of basic phones…what's the double SIMM and how did Nokia stumble?
Meanwhile, Nika was mired in the development of so-called feature phone experience — both hardware and software included
These are basically phones that have slots for dual SIM cards, enabling the owner to have two different phone lines and number on the same device.
@Bolaji you are right, many people here prefer double SIM, They maintain different SIm for messaging and for making calls.
It's a lot to take on — for a handset company; but Nokia did everything from defining the spec, developing software, selecting chips, integrating software and hardware…
are you saying Nokia going into double sims was a mistake
no, Nokia was LATE in getting into the double SIM card phone
@ junko, I agree with you on that
Anyway, if you are a much smaller company, spot a trend, you are more likely to respond to small changes in the market much more quickly
What Junko is saying is that Nokia didn't see the dual SIM cards phones as a rival until too late.
without a long conference call, delayed decision making, etc.
@barbara-see what happens typically is people like to switch operators(depending on who gives them the best deal).for this they use dual sim phones on one device(very common in India and China today)
@Adeniji i think you need to wait a bit…
But Junko do feel the the biggest mistake of Nokia was not adopting Android ?
Nokia missed the boat
Junko, Does this have anything to do with where Nokia is located and the decision making process where everything is referred first to the headquarters?
okay, i,m sorry for that
OK. Strike one. Did they improve on the trend one they got it?
No, that comes much later
Nokia was already losing control over its bread and butter feature phone market
Okay, please go on.
But do iPhones have double SIM capability?
That's my main point. They lost control of procuremtn of the most cost effective chips, the most cost effective software, the most cost effective designs
I will answer or try to answer any questions posed to Junko until she's finished making her points.
@houngbo-No Iphones dont have dual sim capability-Samsung and LG are the market leaders here.
Because they wanted to do all that on their own terms through their own processes
Please hold your questions for her unless it is directed to EBN editors.
Where in smartphone market do you think Nokia phone is pulling
more sales than its rivals?
Junko, As Barbara was asking, what else did they do wrong?
I have a question for Junko/Bolaji (and everyone of course…): aparte Apple, it seems market leadership is currently for vendors which are focusing on products instead of products+OS; is it a possible key for explaining good position achieved by Samsung in front of Nokia difficulties a much effort from them spent in products and OS?
Hi everyone
We are talking about procurement here, right? I think the fact that Nokia was trying to develop everything on their own terms is the biggest mistake
@Wale-thats a tough sell today-Nokia is very good in super-cheap and High Quality phones.only issue is margins are very slim there.
someone like MediaTek or Mstar came along — they are both from Taiwan
It's really important for this discussion for participants to hold questions and all comments unless absolutely necessary until we've opened the floor. I would like to do this in about 10 minutes but Junko has to set the stage with her introductory remarks. Please hold all questions and comments for now. Thank you.
and develop their own hardware and software package — a turnkey solution — and give it to any OEMs in China, they can make feature phones a lot cheaper than Nokia
@ Junko
can u please elaborate on that ? was it not taking into account consumers or supply chain ?
Junko: got it. Make vs. buy. So they could have developed more efficient, less costly phones had they worked with suppliers?
there is very little that Nokia can add in terms of value — excetp for its own brand
Okay, Junko. But they are not that integrated. Nokia does not make its own chipsets and it is now outsourcing manufacturing.
Wouldn't you contribute the lack of a well defined App Store use and developer experience as part of Nokia's issue…Apple had the iTunes platform to leverage and provided a revenue stream for developers and a easy, simple, but powerful App platform??
@ Junko
Oh ok. I got it. Its true that if everyone is taking advantage of cheap raw material, Nokia shouldnt lag behind
Remember? Nokia didn't let go of their own ASIC teams until mid 2000
PLEASE HOLD ALL QUESTIONS UNTIL I GIVE THE GO-AHEAD. THANK YOU.
it's not just raw material
Most consumers look for cost. They can compromise a bit on quality. I mean most. Not all
I don't think hardware features were the issues. Nokia made some innovative devices and were full of features.
I am talking about the integrated hardware and software. Nokia thought they can do it better than anyone else; but MediaTek pretty much ate their lunch
Junko: Nokia still seems to have strong brand identity, but I get the feeling users are waiting for the next great thing. Is that an innovation or product?
Hello to all ,
exactly, Dave. I am not simply talking about hardware
@barbara, it's both innovation and product
Sorry for the latency ,I was confused with the time
honestly speaking, even had Nokia moved to Android, I don't think they had much chance
@WaqasAltaf: you are right, as consequence people have decided to buy products from FarEast, for example and cheaper smartphone, despite the quality; I am wondering if this is an additional cause for putting Nokia in trouble.
Actually, I happen to think Nokia's Windows phone is not bad
Apple had iTunes and touch screen…that's it… all the others device manufacturers sat by and waiting to see…then it was too late…until Android…and now hopefully Microsoft
Junko, I have to open this up to our readers in a few minutes but I want to ask two key questions in the meantime. First, what does the current situation at Nokia mean for its suppliers and contractors and second, what does/can Nokia do to get back on track?
I think we all need to think of the global market … of course when we don't live in Asia, it's hard to do…but think about it, ChinaMobile alone has 660 million subscribers! 660 million!
apparently, Nokia trouble is mostly due the market shift they haven't been able to predict
@All: Winphone is not bad, but have you ever experienced how poor is APIsets comparing for example Symbian or Android for developers? Any thoughts about?
both are good questions, Bolaji. I don't think anybody can fix the current situation for suppliers
Could Nokia leap ahead, then, with a better OS? Wasn't Symbian their original offering?
In other words, purely bad news for suppliers?
Symbian is much more complicated to use for developers compared to what is being used today.
First, what does the current situation at Nokia mean for its suppliers and contractors
I think many suppliers would be scared to keep long term agreements with Nokia as its future isnt bright. Distributors wont like to buy too much stock and would prefer something sort of just in time
But if you happen to be a supplier, it may be high time to think about bringing a set of really innovative — and cost effective — turnkey solutions to Nokia's attention
Is this post getting through. Website not responsive.
Wagas Hold your Question for a while
@Junko do you think it was wrong strategy by Nokia not to adopt Android OS ?
Thank you all for your patience. Please send in your questions as well as comments. Junko will try to answer as many as she can and EBN editors will also chime in. We also welcome your own viewpoints as well.
Junko, My questions are
1. Can you say that Nokia and RIM are in the same sinking boat today?
2. Can the suppliers adopt the same policy of “Share of business” as the buyers to spread thin their business risk when one of their buyers suddenly goes bust?
3. Is Nokia's survival as a company is solely dependent on its continued sucess in Mobile business or there are some other supporting businesses?
@Junko, where is marekt strenght for Double sim-card phone presently?
And i think those markets for dual-sim already crowded with phones from
China. How do you think Nokia could compete with them?
Produce a very lower cost ordinary phone?
@anandvy, that's a tough question
Thanks, @Junko, and @Bolaji.
@Dave: I agree with you and in my opinion this is one of the key for explaining Android successfull…
had Nokia adopted Android, they may have been swallowed by other Android same old same old OEMs…but that said, Nokia could have been the NUMBER ONE quality Androdi phone vendor
By not adopting Android Nokia helped both Samsung an LG to conquer smartphone market…
@Junko, Can you forecast what will come next for Nokia ?
that would have been awesome
that is correct @anandvy
Junko–great point about suppliers and turnkey solutions. Can you cite an example?
I would go back to something Junko said earlier about how Nokia has reinvented itself several times in the past. We should note that Apple did the same. The company is not merely a PC vendor anymore. It has changed dramatically into a consumer electronics company. If Apple can do it, perhaps so can Nokia. The question, though, is which market should it be looking at.
I think the turning point in the case of Nokia was the fact that they were too complacent with their products and did not want to have out of the box innovative products. This applies to touch screens, dual sims etc..
@Prabhakar: I don't believe Nokia and RIm are in the same sinking boat.
@Susan, Why?
@nemos, boy, that's a tough question. I think they need to seriously look beyond handsets. I am actually very disappointed that they weren't asked by Microsoft to go with the tablet
Nokia will merge or breakup.
@Wale, Good question.
Double sims are really sell like hot cake in the south band most of the developing countries but its a lot of competition between Nokia and the so -called china phones especially Techno phones
@Junko what do you think about the recently launched 41MP camera based mobile phone ? Do you think with this release Nokia will capture the market ?
@Barbara: exactly, it was their original offer, but following steps made didn't have a good strategy, they have tried to replace Symbian by WinOS and now it seems their doing a step back…and QT…any comments about?
This is the first time I have heard that not having dual SIMs was a major contributor to Nokia's current problems.
@Suzan I agree with you, two different situations , two different companies
Both have lagged behind in the samrtphones and have given leeway to Samsung and LG to surge ahead
@Susan, is Nokia pulling better than RIM or in the opposite case?
@taimoorZ, I think there is some truth to that… but again, I have to go back to my original theory. They were too slow to see the emerging trend in the feature phone market. period.
The bottom line of the current situation it seems is that suppliers to Nokia are going to get hammered for the next few years. As Nokia's sales have been falling so have the fortunes of these companies. That's going to remain the case for the companies that stick with Nokia through all these.
Unfortunately, that's the truth…but what do you think Nokia can do next?
@Adeniji, thanks. market is getting hotter in those places unless someone come out with extremly low cost and top quality to compete well
@Bolaji: Aren't these suppliers also working with other OEMs? They shouldn't be dependent on just one principal.
Junko: I agree–looking beyond handsets makes sense. Is the hybrid small/tablet big/smartphone and area in whihc Nokia could prosper?
@Junko what do you think about Nokias new release Nokia 808…do you think 41MP camera will attract buyers ?
@All-As far as Apps go,its all a question of incentives.as an app developer I dont see enough incentives to develop an app for Symbian phones today.Atleast wid Apple and Android u have a HUge market to target.
@Junko, do you think some Nokia phone having app to be able to ping with blackberry a good idea and what could be the effect of this on sales of nokia phones
@ Bolaji
And this supplier dilemma will make things difficult for Nokia in its journey to the way up
@Bolaji: it seems the picture looks very bad for the whole Nokia ecosystem. Could suppliers try to move their business by making agreement with other vendors as Samsung or LG? Is it feasible?
I love Nokia 808 — but I don't think one single advanced feature would save Nokia
It can reinvent itself as you pointed out but I also think that the market is too dynamic for the kind of cost-cutting reorganization it is doing. That won't be enough to help it regain market share. It didn't work for Motorola Mobility.
@Junko – Can you please tell us, would nokia continue with
produce of mobile phone? If yes, what strategy do they have
on that? Take into consideration -raw material and also
21st century network devices compatibility with low cost phone
@Taimoor-Good points.Most OEMs are not tied to any one Vendor.So I don't see how Nokia's demise will affect them much(after all its not like ppl are gonna stop buying phones).
I keep thinking what other strength Nokia has that it can use to its advantage
I agree with you on that Wale, the question of quality is really big one in this matter
Microsoft has started building its own hardware, will it impact Nokia too ?
@Bolaji-Yeah what happened to Motorla Mobility? Is it still in the handset business? No clue.Honestly.
@Junko: I mostly agree with your viewpoints. I also like your thinking. I share the view that Nokia might reinvent itself, as so many times before. My idea of the fall of Nokia points at the actual leadership, most precisely at Elop. I truly believe if Elop would be the one leaving Nokia, the company would revive like a Phoenix. What do you think of this?
you know, one thing we are forgetting is this: Nokia's biggest strength is its relationship with operators
@all, I am totally convinced that if Nokia look at the past will find the solution it needed for a successful future
@Junko
in what other area do you think Nokia can re-invest itself
Any global operators, if given a choice, would like to work with Nokia and buy their phones over other non-brand name Android phones
Junko: there are advantages to vertical integration. Even though Nokia missed the double-SIM trend, that capability must have some value
“Nokia's biggest strength is its relationship with operators”, isnt the same case with Apple also ?
@tech4people: I agree without, this is another good point to highlight, for example contexts for Symbian are really rare, then why people have to develop by using that platform?
@Junko: Don't all handset manufacturers now have good relationships with the carriers? I don't see how Nokia is standing out in that..
@Susan-I am not so sure,its something u can blame just at ELOP.He's not that bad.
Will that Microsift-Nokia alliance still hold?
@adeniji…so if operators want to get into the business of tablet, or any IOT (internet of things) devices, Nokia would be a trusted partner
@ Susan
Hmm. You have a point. Leadership can turn fortunes for organizations.
Tough times ahead – Microsoft planning its own hardware.
Junko, If I look at the landscape and wonder what Nokia should do next, I would say it is time for it to do one of two things as a short-term measure: First, embrace Android. Second, consider being acquired by Microsoft (bad idea.) The third possibility is for the company to not follow the leader and break out like Apple into some other areas.
@Barbara I think we are heading for the triple SIM trend….
@Junko-What are the chances that Microsoft decides to buy out the Entire Nokia Handset business to enforce greater control over the whole process& experience?
@Nemos: right now, have them right people for looking at the past? New people especially at executive level have replaced key managers.
@taimoorZ, i beg to differ
Of course, you may be talking about tier one handset vendors… but when it comes to the interoperability within networks, etc. Nokia still rules
@Bolaji @Wale: Because Nokia and RIM are two different issues, two different companies. Saying they are in the same sinking boat is like saying two kids who are not doing well at some point at school will both be failures for the rest of their lives. Things can always change, in humans, or in companies.
@Susan-do u feel There will be a backlash in Finland if Microsoft decides to buy out Nokia's handset business entirely?
@tech4people, actually, i love the idea. Why not?
@Nemos, triple SIM trend ? Is it true, i havent seen any such mobiles ?
@Bolaji “ First, embrace Android.” Indeed indeed 🙂
In today's world the roles are changing so rapidly that todays operators will become tomorrows manufacturers. That puts the real old age manufacturers like Nokia in trouble
Microsoft doesn't know anything about connected mobile device…all they know is the PC model
@Nemos
there is already a triple sim phone here but not in Nokia brands
@Tech4… he's not good either, not for Nokia.
@Bolaji/@Junko: is the future towards multi-SIM mobile handset or single-SIM mobile handset by running an innovative OS doable to hang any mobile networks?
Does that Microsift-Nokia alliance still mean anything?
@Junko, Correct.
@Anandy :LG's triple SIM A290
I am not sure what Micorsoft will be buying from Nokia…old handsets that are not companitible with their OS??
@Junko-Yes My sentiments exactly.I think it will be a good strategic fit.
@mfbertozzi, I don't know the answer to that
@Nemos to Bolaji: I trust you…
@ Junko
Its true. Microsoft is still young in smartphone OS industry and its competitors are too big.
@Junko,
is double sim phone a good idea in the west?
@Waqas: Exactly. I don't see Elop being a good leader. He doesn't have what it takes to lead Nokia at least.
@Junko, do you still believe Nokia provides one of the best hardware features ?
@Dave-The Brand name+Relationships with Hardware Vendors.
@adeniji, I am not sure…but it could be…for example, on one SIM card, you do all your business calls, and you can use another SIm for your personal calls
One of the drawbacks to the Surface has to do with cellular capability. Does Nokia bring anything to the party there?
@Adenji-its unlikely dual sims will fly in the west simply because most users have post-paid plans and competition is not half as fierce in Asia today.
Folks, are we therefore writing off all Nokia suppliers and telling them to bail out on the company?
I know a lot of people carrying two phones… but they don't have to do that
I ask because that's what I want us to focus on in this discussion.
@Tech4: For a company to buy something there has to be something for sale. Nokia is not for sale.
Has anyone noticed how Samsung has stepped up in the mobile phone market and has surpassed Nokia in terms of innovation? Nokia was always ahead of Samsung in the mobile phone market three or four years back..
The one thing Nokia has going for it is that it is still considered a leading mobile player (outside the US) and may still have siginificant brand loyalty. If the company can hang on to that and rollout innovative Win-Nok devices, it may be able to regain its foothold…but it will be tough to compete in the high-end smartphone market
@bolaji, I think we first need to hear from Nokia what their future holds
Well good news to supply chain – Microsoft is spreading its tentacle to hardware sector.
@Bolaji yes I think so
If you supply semiconductors to Nokia right now, should you even be spending R&D funds developing products for the company?
@Bolaji, I think so
@Junko
what could be the alternative for the people carrying two phones
@Susan-I understand that but it makes the most practical sense today.
Bolaji: As long as there are legacy systems, suppliers should hang tight. Plus, there are few companies that can afford to abandon even their struggling OEMs. I think it depends on whether they will havet o invest in new capabilities to support Nokia
@dave sasson, wtih all due respect, Nokia is even losing on that end of the battle..
@Junko, So far what Nokia has said is that it will devote resources to feature phones and then compete (with lower pricing) against Android in smartphones.
@adeniji. use the dual SIM card phone!
@Bolaji: imo, it depends on suppliers, I believe yes for hw suppliers and for sw suppliers could be a little bit stronger to accept.
@Bolaji-regarding the funds question I feel most companies will probably scale back R&D funding dramatically unless they are incentivized by Nokia.
@Bolaji: If the R&D is specific to Nokia products then suppliers need to be skeptical about it..or may be request Nokia to fund the research to be on the safe side
@bolaji… well, in fact, now that more and more smartphones are coming downstream, that does make sense
I worry if Nokia goes down the lower pricing route.
@Junko, I agree…they are playing against time
@all which move do you think will lead Nokia or RIM out of the Market ?
@flyingscot, I don't think they will. they have already lost in that battle
Even the samrtphone prices are crashing making them a low margin business
Increasingly, companies like Apple are differentiating themselves not just on the look and feel of the products but also in the hardware inside. Apple has its own inhouse chip design teams and even in displays it makes sure it can differentiate itself. If a supplier cannot be assured of sales specific to Nokia, for instance, it would not vote capex for that program.
@TaimoorZ: Yes, I have, in my opinion it happened because Samsung has focused only on hw and has adopted Android spending limited effort in OS, against Nokia.
@Nemos: I don't think there's a single move that can do the trick..it has to be many things they need to do
@all…one saving grace is this. I recently came back from China. I heard a lot of people complaining about the quality of their Android phones
@Tech4: Not everything what it seems to make sense is what it is to do. There is more in a decision that pure logic. And also, what makes sense to some, doesn't make sense to others.
Regarding suppliers, I think the bigger casualties will be EMS. Winding down handset manufacturing and moving toward something else is big bucks, lots of capex
@ flyingscot
Unfortunately, I see it the only way Nokia can take the share of the cake. By lowering down prices otherwise Iphone and other android products are just too attractive to users and they wont like experimenting with Nokia at similar prices
@Junko , I agree with you. In India companies like Micromax and Carbonn mobile are competing with Nokia in low-end phones .
So they need to compete in smartphones and are so far behind it will take a miracle to catch up unless they merge. They could use their manf prowess but need a design partner
Chinese do love android phones…they are good looking, they don't necessarily look cheap, Chinese love feature-rich phones
@Junko, Won't they instead then migrate towards iPhone rather than another untested Nokia program.
@Bolaji: Even Samsung has gone for vertical integration. I think this may be a good reason behind success.
@Bolaji: what about a merge involving Nokia and RIM? Maybe this step could interest several suppliers and several endusers.
Both RIM and Nokia has to create some new market may be not in mobile phones but may be in the uptapped huge internet of things market
but truth to be told, a lot of those good looking android phones'quality is less than optimal. some even said, if they had to buy the third phone (because the first two smart phones didn't work well) they should have bought iPhone in the first place
@anandvy: What do you think would make Nokia go back to its position in India and China?
So, i definitely think there is room for Nokia to be really a quality leader in the android market
@mfbertozzi, how possible do you think of that?
Nokia and RIM merge….none have the correct design so it could be a disaster.
I am trying to see a bright light here for suppliers to Nokia and haven't come up with one. Perhaps Microsoft will be a new market for them as it debuts the tablet PC, the Surface.
@Junko-what were the key complaints Chinese users had wid their android phones? Too much choice? poor responses(touch)???
@prabhakar: “Both RIM and Nokia has to create some new market “, easier said than done
@p_d: are you meaning a merge involving these companies does make sense?
@Flying Scot-Nokia+RIM=DOUBLE DISASTER!!!
How is the MS Surface being received? anyone know?
@tech4people, no…some of the android phones just don't work. the quality sucks
I am not saying merge. They have enough resources to work independently
@junko,
in summery, what do you think Nokia can do to really have a good standing all over again
@Susan, I think it would be very tough for Nokia go back to its position in India and China. I think one of the option is to bring android based phones, because people here prefer android based phones.
@All please have in mind that before 3 years Nokia was at the Leading position in the Mobile Market
How can Nokia leverage its vertical integration? What would make feature phones better?
@JUnko-But then for that u cant blame Android-Its the Hardware that sucks!Hope the chinese realize that!!
@Junko: I agree. Android does have quality issues. I think at some point Google will have to put a restriction on what handsets Android can run. It can give a bad name to Android if the phone performance is very bad.
@anadvy: You mean Nokia-Android phones?
@mfbertozzi, A Nokia-RIM merger won't make a difference to both companies and could even be problematic. I don't see it happening.
@Adeniji good point.
@All-I have seen some really amazing Android phones from Samsung and LG on the market today-The SIII is phenomenal!
@WB: both companies need to increase business and are not in overlap of the market, currently they have quite complementary products, so a marge could automatically increase biz and new frontiers for suppliers too. They are only my thoughts….
@adeniji Kayode, first embrace Android; do a real quality mobile phone leader — especially in coutnries like China
@Susan exactly.
Okay, as we get to the end of this Live Chat, I would like to see if Junko has some concluding remarks related to the central question of this session: What impact will further deterioration in Nokia's market position mean for its suppliers and contractors?
Nokia should not try to follow . It should lead from the front with a totally new revolutionary idea , noy just follow Android. Create something different
Thank you Junko
@tech4people, the reality is that I also saw a lot of high-tech executives in China carry g=Samsung Galaxy for web surfacing and another android phone for talking
@Junko, China is a big market but the country has so many phone makers. Any other targeting market for Nokia?
@Bolaji: I see, thx, but I don't see other possibilities as well, by leaving each one alone.
@Prabhar-Now surviving is the bigger issue.
@Prabhakar its very difficult to innovate now…most of the innovation is factored in all the mobile handsets…
@wale…any BRIC countries would be great. seriously.
@tech4people achieving that remains a big challenge.
Hi folks, I'd like to reiterate any closing remanks from Junko?
@Junko
how do you think Nokia can really lead in china when china already has lots of phones not only within but every part of the world
The way Apple transformed itself by siiting in the backgorund after trailing in PC market
@junko-the BRICS hhv their own problems.I prefer taking on US market aggresively today.
@mfbertozzi, My feeling is that RIM is looking at the end of the road. May not happen immediately but it will eventually.
My concluding remarks would be…unfortuatnely I don't see much bright side for suppliers…but I think if and when Nokia decides to move its business beyond conventional phones, that would be very interesting to watch…remember a lot of consumer devices we see on the market will inevitably be connected to Internet…
We are getting down to the wire. Readers, please contiue your discussions. I'd like to thank Junko on behalf of EBN.
@tech but most of the consumption power is still not explored in BRIC nation
I am not saying that Nokia should be doing all this by itself…it shoud find a good partner
Thank you Junko for the informative chat…
Thank you Junko.Bolaji,Barbara for all the informations , Thank you all for the questions
thnx for sharing ur awesome wisdom wid us Junko!!
@Junko: I agree with the remarks. However, if Nokia movies it's business to a new dimension, it may also have to engage new suppliers..that would be interesting
Thank you, Junko!
You are welcome. Boy this is really a high energy group!
@tech4people you are right but US market only not enough. BRIC has major role to play in world economy today
@Barbara/@Junko: final question – will Nokia suppliers impacted “flat” or suppliers from some specific region will be more impacted?
Junko, You've been wonderful as usual. I hope we can invite you for some comments in the near future on the Microsoft Surface tablet. We would appreciate your insight into what it might mean for the company and its suppliers.
Thank you Junko.Bolaji,Barbara, as always very informative
Junko–thanks, and we will continue to follow you at EETimes
Thank you Junko, Bolaji and Barbara
See you eveyone on the message board
@all, thanks for the invite. and it was truly fun.
Thanks Junko and everyone. Bye!
@mfbertozzi, The pain is being spread across its supply chain. Companies like Texas Instruments have taken their body blows and others are bracing.
@Junko: Thanks you very much being here with us. I really enjoyed reading your thought. 🙂 I hope you will come here again.
Readers, with that, I'll thank you all for your participation.
Thank you all and look forward to seeing you again on our next Live Chat.
@Bolaji, and @Barbara: Thanks to you both, too.
Had a great discussion. Thank you for the insights, Junko!
Thank you Junko,Bolaji and barbara.
bye for now
thanks everyone
Thanks Junko/Bolaji/Barbara and thank you all. Looking fwd.
Bye everyone…see you soon in next chat.
🙂
Bye Bye, everyone. 🙂 Have a lovely weekend.
Hey, Nemos, still waiting your email
Wale I have tried Lumia 900. It is quite simple to use and quite elegant. Perhaps the price and the apps are not comparable to Android.