Nokia's next challenge: Weathering Symbian's quick demise

Nokia's next challenge: Weathering Symbian's quick demise

Summary: Can Nokia significantly boost Lumia sales given that sales of Symbian devices are falling off a cliff? Probably not.

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Nokia's fourth quarter was a mixed bag as it sold 1 million Lumia devices---below consensus estimates and above worst-case scenarios---but a bigger challenge looms. Can the company significantly boost Lumia sales given that sales of Symbian devices are falling off a cliff?

Stephen Elop, CEO of Nokia, put the Lumia vs. Symbian race in context. He touted Lumia sales and noted that Nokia's plan was to gain traction country by country. Elop noted in Nokia's earnings release:

In the war of ecosystems, clearly there are some strong contenders already on the field. And with Lumia, we have demonstrated that we belong on the field. Our specific intent has been to establish a beachhead in this war of ecosystems, and country by country that is what we are now accomplishing. To date we have sold well over 1 million Lumia devices. From this beachhead of more than 1 million Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful. We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012.

The catch?

Changing market conditions are putting increased pressure on Symbian. In certain markets, there has been an acceleration of the anticipated trend towards lower-priced smartphones with specifications that are different from Symbian's traditional strengths. As a result of the changing market conditions, combined with our increased focus on Lumia, we now believe that we will sell fewer Symbian devices than we previously anticipated.

In other words, Lumia has to offset falling Symbian sales just for Nokia to tread water. No pressure there Mr. Elop right?

That Symbian pressure is partially why Nokia's outlook isn't so great. Nokia projected first quarter sales that were below the usual seasonal trends and break even for the devices unit. In other words, Nokia really has no visibility into its business.

Barclays Capital analysts said in a research note:

Nokia has sold more than 1.0 million Lumia devices. We consider this a solid metric compared to consensus of 1.3mn and worst case fears of only 500,000. Nokia's global Lumia rollout continues in 1H12, but under more duress as Symbian demand is declining more rapidly than expected.

If Lumia and Windows Phone devices can't offset Symbian Nokia will have more pain ahead. There's already a lot of sales headed in the wrong direction. Here's the earnings report for Nokia. The table is in Euro.

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Topics: Enterprise Software, Nokia

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  • TEST

    TEST
    paul.travers
  • The odd thing is Symbian's strength in Africa.

    It hold 80-90% of that market and is actually growing.
    Bruizer
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @Bruizer
      I don't see what is odd.
      i guess that you are neither african nor you live in Africa, right ?
      As an african i can tell you that it is perfectly normal that Nokia Symbian smartphones are still doing great.
      Most of us do not have good internet connections and we are not that much interestered by all this apps craziness. Thus smartphones with great out of the box functionnalities seem to be quite a great deal for many here. Not forgetting that Nokia are still among the most durable phones available.
      I am personnaly considering getting a Nokia E7 myself.
      timiteh
      • RE: Nokia's next challenge: Weathering Symbian's quick demise

        @timiteh Nokia's strength has always been the durability of the phones. I dropped a 5150 in 4 inches of water and after opening and drying it overnight continued to use it for 3 years. Most people sneeze over the phone and it stops working.
        techrepublic@...
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @Bruizer

      Where do you think your old phones go ?
      Alan Smithie
  • RE: Nokia's next challenge: Weathering Symbian's quick demise

    Not a problem. Just do a one for one swap from Symbian to WP7. That was easy, I should be a CEO of a company.
    Loverock Davidson-
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @Loverock Davidson-
      One for one swap is not possible, since ecosystem __can not__ transit. (while it could transit to MeeGo easily thanks to common particle called Qt)
      przemoli
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @Loverock Davidson-

      Yeah Enron.
      Alan Smithie
  • When Nokia says they "sold" one million Luminas,

    does that mean they sold the devices to consumers who activated them, or does that mean they manufactured and shipped one million devices to phone stores and Best Buy, where they may languish for a long time, and wind up in the bargain bin with leftover Zunes?
    HollywoodDog
    • Overseas where it was released, sold means to the consumers

      @HollywoodDog
      as they do it differently over there. They sell them to consumers who then can chose their provider.
      William Farrel
      • RE: Nokia's next challenge: Weathering Symbian's quick demise

        @William Farrel - nope, they sell to retailers who sell them to customers. Channel fill was part of that 1 million.
        rbgaynor
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @HollywoodDog
      Excellent questions. If Customers, good news. If phone stores then they are sitting on shelves waiting to be sold (which may happen). If it doesn't then you have phone stores unhappy and likely to want their money back.
      jkohut
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @HollywoodDog - it includes channel fill (i.e. it is sell in). Figure 4 weeks of average sales, minimum, is needed to fill the channel, so roughly 40% of the total is channel fill, 60% went to customers (I think it's fair to say they had very good sell-through on that 60% since stocks didn't appear to languish in stores).
      rbgaynor
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @HollywoodDog
      If there is a bargain bin for leftover Zunes let me know where it is cause I would like to get another one for my boat? They are hard to find on the internet so I think most have been sold out at this point.
      OhTheHumanity
      • RE: Nokia's next challenge: Weathering Symbian's quick demise

        @OhTheHumanity 100% agreement here!
        xplorer1959
    • I doubt that.

      @HollywoodDog
      I understand: yes we get it, you do not like Microsoft. But don't let that force you into making statemenst that paint you in a childish light.

      Yes they sold one million phones, not to channel partners, and they are not languishing in a bin somewhere, much to your chagrin.
      John Zern
      • RE: Nokia's next challenge: Weathering Symbian's quick demise

        @John Zern- 100% agreement here! HollywoodDog, Robert Hahn, SJVN... are they actually the same person? It's hard to see any difference in their comments, and I see Robert Hahn's anti-microsoft ANYTHING rants all over the internet! It's actually a bit sickening...
        xplorer1959
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @HollywoodDog
      With the "what's in the hand test"...

      In the UK have seen no-one with a Nokia Lumia phone, and only know of one person who has ever had a WP7 device (HTC), and they ditched that for a Samsung Galaxy S 2.

      iPhone's, Samsung Galaxy's, Blackberry's are what people have.
      neil.postlethwaite
  • Open Source Symbian

    Nokia should open source Symbian so others can pick it up release their own distributions for mobile devices, tablets and computers.
    thezorch@...
    • RE: Nokia's next challenge: Weathering Symbian's quick demise

      @thezorch@...
      Been there done it.
      It have not cough up.
      And why should it? We have many ppl familiar with making "linux", which is not true about "Symbian". Putting Symbian on PC would mean direct competition with Linux over resources (human resources mostly).
      przemoli