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Friday, March 9

Nokia's depressing yearly SEC report -_-

I guess we all saw this coming, after the infamous "burning platform" speech back in February 2011, but its different when you actually hear it from the horses' mouth.

During its annual report to the Securities and Exchange Commission (SEC), Nokia had to give a "State of the Union" kind of speech as required by all publicly traded companies and boy was it depressing.

First off, they recorded a loss of €1.4b, compared to €1.3 last year.
Net sales amounted to €38.6b (€42.4b last year)
Though they sold 339.8m units of feature phones, it's a decline from 349.2m sold the previous year, the smartphone division got an even harder hit (as expected!), as it sold a mere 77.5m which is a steep 25% drop from last year's 103.6m.

Nokia states they anticipated these losses as they transition to WinPho7 and attributes these losses different factors from steep competition from rivals to waning interest in symbian platform (set to be terminated in 2016).

A saviour?

And it gets worse, if you read the report, which is available HERE, you just might get goosebumps, read starting from page 13 (Risk factors), you will see (what to me is) the first time Nokia has expressed concerns about windows Phones and the risks factors involved.
here are some excerpts:

Our success in the smartphone market depends on our ability to introduce and bring to market
quantities of attractive, competitively priced Nokia products with Windows Phone that are
positively differentiated from our competitors’ products, both outside and within the Windows
Phone ecosystem, and receive broad market acceptance.

  •  • Our strategy for Nokia products with Windows Phone may not enable us to achieve in a timely
    manner the necessary scale, product breadth, geographical reach and localization to be
    sufficiently competitive in the smartphone market.
    • The Windows Phone platform is a more recent addition to the market focused on high-end
    smartphones. While adoption is increasing and consumer awareness growing, it is still much
    less widely used than the Android and iOS platforms. As with any new platform, we may not
    succeed in developing it into a sufficiently attractive and competitive smartphone platform.
    • The Windows Phone ecosystem may not attract developers who will contribute content and
    applications, thus making our Nokia products with Windows Phone less appealing to
    • The Microsoft Windows Phone platform may not support the hardware configurations required
    to succeed in becoming a sufficiently price competitive platform and may limit our ability to
    develop a price competitive smartphone portfolio of products.
    • We may not be able to introduce a compelling portfolio of Nokia products with Windows
    Phone that include new hardware and design innovations. Additionally, we may not be able to
    introduce functionalities such as location-based services and entertainment or otherwise
    customize our Nokia products with Windows Phone in order to positively differentiate our
    products from competitors’ products, both outside and within the Windows Phone ecosystem.
    • We may face delays in bringing our Nokia products with Windows Phone to various markets
    due to, for instance, manufacturing difficulties, delays in software and/or hardware
    development or product or sales package customization to accommodate various markets or
    operator requests.
    • We may face issues in selecting, engaging or securing support from leading operators and
    retailers for the initial launches and sales ramp-up of our Nokia products with Windows Phone
    due to, for instance, inadequate sales incentives, training of sales personnel, marketing
    support and experience in generating interest for a new and relatively unfamiliar Windows
    Phone platform in an otherwise highly competitive market. Delayed or non-optimal initial
    launches and sales ramp-up could result in diminished support from leading operators and
    retailers and low consumer interest for subsequent launches of our Nokia products with
    Windows Phone and may also adversely affect our Nokia brand generally and sales of our
    other Nokia mobile products.
    • Consumers may not prefer the Windows Phone user experience, interface or software
There's really a lot to read from this and of course these are just risk factors, things that could happen (and they haven't), but nevertheless show a bumpy road ahead for the Nokia + Microsoft partnership as they try to compete with the heavyweights.

You can read the full article HERE (the interesting bit starts from page 13), it's a long read (I'm still on page 27) though and honestly, reading it just makes me feel like Nokia's on a "road to perdition".

There's a part that talks about the possibility of Microsoft not living up to expectation and how it would be difficult for Nokia to bounce back from that.

can 808 sustain symbian till Lumia can stand on its own?

There's also talk on how they (Nokia) will have to sustain Symbian until the WinPho7 transition is complete, though I don't know how that's possible as Symbian sales reduced by almost half in the space of just one year. though the Nokia 808 could provide some boost (just like the N8 did).

All in all, I'm going to bed with my face like this -_-
There are so many risk factors involved, I now liken Nokia's situation to getting prescribed for anti-depressant pills and one of the side effects is suicidal thoughts (oh the irony).

In conclusion, I do think the future is bright, so bright it's blinding, as Nokia gave a loong list in its risk factors, what about the bright factors: let's factor in the introduction of Windows 8, WP8 Apollo and the ever appealing Nokia hardware, I guess we will have to see then!

source: Engadget

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  1. what do we expect about symbian sales? Elop prematurely announced its death, scared away users and most of all developers

    and then they didnt release any compelling devices in all of 2011 and 2012 looks like its only going to have the 808 pureview not to mention there's no real advertising campaign for these devices compared to competitors even the in-house ones

    Nokia & Elop created a doomsday scenario for itself, instead of coming up with a proper plan of attack with a stable defense they gutted their defenses and attacked with weapons that aren't even ready yet