Tag Archives: windows phone

Results for Nokia’s last quarter with Windows Phone: slightly worse than flat? Over to you Microsoft

Nokia has released its fourth quarter results for 2013. They make odd reading because of the division into “Continuing operations” and “Discontinued operations”, the latter including the mobile phone business which has been acquired by Microsoft. This tends to cloud the key point of interest for some of us, which is how Windows Phone is faring in the market.

The answer seems to be that sales slightly declined, though it is not clear. Here is what we know.

Mobile phone revenue overall declined by 29% year on year and by 5% quarter on quarter, for the quarter ending December 2013.

Nokia states in its report:

The year-on-year decline in discontinued operations net sales in the fourth quarter 2013 was primarily due to lower Mobile Phones net sales and, to a lesser extent, lower Smart Devices net sales. Our Mobile Phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. Our Smart Devices net sales were affected by competitive industry dynamics including the strong momentum of competing smartphone platforms, as well as our portfolio transition from Symbian products to Lumia products.

Disappointing; though in mitigation Lumia (ie Windows Phone) sales volume in 2013 overall is said to be double that in 2012.

We do know that much of Lumia’s success is thanks to the introduction of low-end devices such as the Lumia 520. That has been good for building market share, but not so good for app sales or mind share – on the assumption that that purchasers of high-end devices are more likely to spend on apps, and that aspirational devices have a greater influence on mind share than cheap ones.

That does mean though that units might have gone up even though revenue has fallen.

Still, the results do put a dampener on the theory that Windows Phone is taking off at last.

This is a moment of transition following the Microsoft acquisition. Microsoft has not got a good track record with acquisitions, and the Danger/Kin disaster is hard to forget, but Nokia comes with an influential executive (Stephen Elop) and common sense would suggest that the team which created excellent devices like the Lumia 1020, and which was able to engineer strong budget offerings like the 520, should be kept together as far as possible. Or will it be dragged into the mire of Microsoft’s notorious internal politics? Over to you Microsoft.

Update: it is now reported that Lumia sold 8.2m devices in Q4, down from 8.8m in Q3 but up from 4.4m in the same quarter 2012.

Nokia 925: smart camera and metal band design continues Windows Phone 8 and Lumia effort

Nokia has announced the Lumia 925, a high-end Windows Phone which will go on sale in Europe in June from Vodafone and others. The price is around €469 + VAT, presumably without a contract. Vodafone customers will be offered an “exclusive 32GB version” according to the press release.

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So what’s special about the 925? It sports a 4.5″ AMOLED 1280 x 768 display, which is decent, along with 1GB RAM and 16GB storage. Battery life is a claimed 440 hrs standby and 12.8 hrs talk time. No SD card slot, presumably for the same reason as for the 920: it would have “defiled it” according to Nokia VP Kevin Shields.

A big attraction is the camera, or rather cameras, including the main 8.7 MP PureView which also offers 1080p 30fps HD video, and the front-facing 1.2MP wide angle camera. The magic is said to be both in the lens and the software, especially the Smart Camera update (coming shortly after the launch) which enables the camera to take ten images in one shot, giving the user options for which one to keep (sounds similar to Microsoft’s Blink app which is already available for Windows Phone).

There is also Nokia’s HERE mapping suite which the company says offers “the world’s only fully integrated and true offline maps experience.”

Another Lumia innovation is the metal frame which is for “antenna functionality, appeal and robustness”. Presumably Nokia has ensured that it does not kill the signal when touched in the wrong place, as happened with the metal band for Apple’s iPhone 4.

Seemingly every mention of a Nokia phone has to ask the big questions. Can Windows Phone succeed against iPhone and Android? Can Nokia survive?

Whatever is the answer to those questions, this phone is unlikely to change it.

I will say that after a shaky start with the 800 (nice phone, terrible battery life and unfortunate bugs) the Lumia range has evolved into something excellent, that spans from good budget smartphones like the 620 to devices like the 820 and 920 which are a pleasure to use.

A good quarter for Nokia, but Lumia still has far to go

Some good news from Nokia at last. The company reports sales ahead of expectations along with “underlying profitability” in the fourth quarter of 2012.

Success for Windows Phone? It is a positive sign, but short of a breakthrough. Here are the details. I am showing three quarters for comparison: fourth quarter 2011, third quarter 2012, and fourth quarter 2012.

  Q4 2011 Q3 2012 Q4 2012
Mobile phone units, millions 113.5 77 79.6
Smartphone units, millions (Lumia in brackets) 19.6 (?) 6.3 (2.9) 6.6 (4.4)

Looking in more detail at the Smartphone units, the Q4 2011 smartphones were mostly Symbian. Lumia (Windows Phone) was launched in October 2011 but with only two models and limited territories (it also sold short of expectations, and rumour has it, with a high rate of returns).

Lumia units increased by 51% over Q3, but considering that Q3 was a bad quarter as customers waited for Windows Phone 8 that is a decent but not stunning improvement. Lumia units exceeded Symbian units, but remain far short of what Nokia used to achieve with Symbian.

There is also a warning about Q1 2013:

Seasonality and competitive environment are expected to have a negative impact on the first quarter 2013 underlying profitability for Devices & Services, compared to the fourth quarter 2012.

That said, here is what Nokia said in the Q3 release:

Nokia expects the fourth quarter 2012 to be a challenging quarter in Smart Devices, with a lower-than-normal benefit from seasonality in volumes, primarily due to product transitions and our ramp up plan for our new devices.

It looks as if the company prefers to be cautious in its financial statements.

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Nokia forms 71% of Windows Phone market according to AdDuplex research

These figures from AdDuplex, which runs an ad network for Windows Phone, surprised me. The company studies its stats for a random day in November, the 30th, and reports that 71% of the Windows Phone devices contacting its servers were from Nokia. The Lumia 710 leads with 24%, followed by Lumia 800 at 18%, and the Lumia 900 at 7%.

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The obvious conclusion is that Nokia dominates the Windows Phone market. Bad news for HTC, which seems to be making a real effort with its 8X release (the 20th most popular device according to the stats).

Dominating the market may sound good for Nokia, but unfortunately the entire market is relatively small. The risk for the platform is that it becomes in effect a Nokia-only OS with all the other OEMs focused on Android.

Windows Phone 8 launches: is it enough?

Microsoft has launched Windows Phone 8 at a press event in San Francisco, streamed around the world. Joe Belfiore presented the new features in his usual enthusiastic style (complete with kids on stage to show Kids Corner), and the phone was endorsed by CEO Steve Ballmer and celebrity Jessica Alba.

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Key new features:

  • Built on Windows 8 kernel rather than Windows CE
  • Data Sense is for optimizing (ie reducing) mobile data usage and offers visibility about which apps are using data and how much, as well as a data compression feature that enables up to 45% more web browsing for the same amount of data transfer. The compression feature requires operator support and some details are not yet clear.
  • People hub has “Rooms” which let you group contacts, a feature that seems close to what Google+ offers with circles, though Microsoft also has a limited sharing feature that lets trusted contacts see a Room schedule on an iPhone.
  • New Skype app which runs in the background in an efficient manner – you wonder how popular this will be with operators
  • Kids Corner lets you create a kind of secondary login for children, with apps, games and music that you select. Your normal Start screen is protected by a password, so no embarrassing calls or tweets.

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  • Apps can now display content on the lock screen and integrate into hubs and with Windows Phone Wallet.
  • More apps are coming, and Belfiore told us that 46 of the 50 most popular apps across all platforms are available for Windows Phone 8. Pandora, Urbanspoon and Temple Run got a mention.
  • There is an iTunes import feature which will copy unprotected music from iTunes to SkyDrive for use on the phone and with Xbox Music.
  • 7GB SkyDrive cloud storage comes for free.
  • OneNote has a new voice transcription feature.
  • Now support for 50 languages, with apps in 191 countries

This was not an event for developers, though we did learn that the SDK will be made available to everyone from tomorrow 30th October.

Phones themselves will be available from this weekend in Europe and from November 14th in the USA.

I got a quick look at the HTX 8x, and was struck by how slim it is, with a 720X1280 4.3″ screen.

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It is curved at the back and has a quality feel, though I am not sure HTC quite matches Nokia for hardware design.

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I like Windows Phone and there are some tempting new features here. Will this improve Microsoft’s market share and Nokia’s fortunes? This may sound like ducking this issue, but I do not think the fortunes of Windows Phone depend on its features or even the quality of the phones. It is all about operator and retail partnerships, and what customers get told when they walk in to buy a phone and a contract. Windows Phone launched to near-invisibility on the high street. Matters have improved a little since then, especially after Nokia came out with the Lumia (Ballmer said that Nokia sells more Windows Phones than any other vendor), but Microsoft’s phone was still an also-ran after iOS and Android. How does Microsoft get into those in-store conversations, yet alone win them?

I also think Windows 8 is a factor here. If devices like Surface RT are popular, then Live Tiles and other elements of Windows Phone 8 will become familiar. On the other hand if Windows 8 users rush to install substitute Start menus and ignore the new app platform, not much will have been achieved.

Common sense on non-upgradeable Windows 7 Phones

Poor old Microsoft. It announces a strong set of features for the next generation of Windows Phones, which I have covered in some detail here, including the news that it will be built on the full Windows 8 kernel, not the cut-down Windows CE as before. So how do people react? Not so much with acclaim for these features, but rather with shock and disappointment at the dreadful news: existing Windows Phone 7.x handsets cannot be upgraded to Windows Phone 8. This must be the end of Nokia, the argument goes, as sales will now stop dead until the new one is on sale.

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Of course it would be better if Microsoft had managed to stay compatible with current hardware, but I think the fuss is overdone. Here is why.

  • First, we have seen this coming. It has been known for ages that Windows Phone would move from Windows CE to Windows 8. I first posted about it in March 2011 and it was fully confirmed about in February this year.
  • Second, it was never likely that Windows Phone 8 would run on Windows Phone 7 hardware. Perhaps it could be made to run, but of course you would not get multi-core, and it would probably not run well. A change of operating system is hard to accommodate.
  • Third, upgradability of smartphones is always an uncertain business. Operators do not like firmware upgrades, since it only causes them hassle. Some users like them, but mostly the vocal minority of tech enthusiasts, rather than the less vocal majority who simply want their phones to keep on working.
  • Fourth, Microsoft is in fact upgrading Windows Phone 7.x devices, with the most visible aspect of the upgrade, the new start screen. It is not ideal, but it is substantial; and there will be other new features in Windows Phone 7.8.

I doubt therefore that Windows Phone 7 sales will stop dead because of this.

Microsoft’s bigger problem, of course, is that the thing is not selling that well anyway. At this stage, it makes sense for the company to go all-out with the best possible features in Windows Phone 8, rather than compromising for the sake of the relatively small number of 7.x owners.

Another question: is Nokia damaged by this? My view is simple. Nokia, for better or worse, has tied its fortunes closely to those of Microsoft. In other words, what is good for Microsoft is good for Nokia. Nokia is the number one hardware partner for Windows Phone, and the prototype shown at the Windows Summit yesterday was a Nokia device. If Windows Phone 8 is a winner, Nokia wins too.

Microsoft puts carriers before users in new Windows Phone update which you might not get

Microsoft has posted a new update for Windows Phone, update 7.10.8107.79. The list of fixes is here, not huge, but including one fix for an issue that has irritated many users:

On-screen keyboard. Fixes an issue to prevent the keyboard from disappearing during typing

But will you get the fix? The real news in Microsoft’s blog post announcing the release is this:

The update, available to all carriers that request it …

Microsoft is also discontinuing its Where’s My Phone update site:

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Why? Microsoft General Manager Eric Hautala is blaming growth in the number of model, country and carrier variations. That makes the site more work to keep up to date, but no less useful for users.

So what is going on? When Microsoft ditched Windows Mobile for Windows Phone, it sought to learn a lesson from Apple and to provide consistency in user experience, hardware and software. One important part of that is to control updates, so that users do not have to wait for carriers to authorise updates (or not to bother), but get them in a timely manner. This is a potentially a selling point against Android, where users have difficulty getting updates, especially on older devices.

In March last year, Hautala said:

There’s one more thing I want to clear up. I’ve seen a lot of speculation on blogs and forums lately about whether carriers can “block” an update. We work closely with carriers to test and schedule updates. They may ask us for a specific date to start an update. They may ask for updates to be bundled together. But you should ultimately receive all the updates we send out [emphasis mine].

Microsoft now seems to be back-tracking on this commitment, though we need clarification. It is possible that all devices will eventually get the fixes, though not necessarily in this release but in a future roll-up. Check the comments though: users fear the worst.

For background, I recommend you read my piece from February 2010, before the launch of Windows Phone, where Microsoft’s Steve Ballmer, Joe Belfiore and Andy Lees discuss the partner problem.

One further thought: if Microsoft is losing control over its partners, this represents an opportunity for specific partners to make the commitments that Microsoft is backing away from. How about it Nokia?

Update: Microsoft’s Joe Belfiore tweets:

ps – on updates, pls don’t overreact, our focus is on users first! As greg said “nothing has changed” in how we work w carriers on updates.

Greg is Greg Sullivan, Senior Product Manager on Windows Phone.

This still strikes me as a worrying development for users though. The disappearing keyboard bug is troublesome. How can a user find out when they will get the fix? “Ask your carrier” is all very well, but many find carriers unresponsive on this kind of issue.

What will it take to make Windows Phone a success?

Microsoft made a splash in New York City yesterday with a giant Windows Phone in Herald Square.

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The idea I guess was to show how each “Live tile” is a window into a feature of the device, with a special emphasis on “people” – the way Windows Phone aggregates Facebook, Twitter, LinkedIn, Windows Live and more into a single feed and tile.

This is the kind of stunt you get when a huge corporation with a lot of money to spend is trying to muscle its way into a market.

Is it enough? It does feel as if Microsoft has managed the re-launch of Windows Phone better than its first effort around a year ago – the first devices went on sale in October 2010. The operating system has been tweaked, the new devices are more imaginative, and partner support seems better. I actually saw some window displays for Windows Phone in my local small town though they were gone a few days later.

It still feels as if Microsoft is fighting an uphill battle. There is not much wrong with the phones now, but what is the killer feature that will sell it alongside Android and iPhone? Personally I like the SharePoint integration, but Microsoft is still primarily going after consumers rather than business users.

There is also the matter of the tiles. They work well, but look at the photo above: are they beautiful? Not really; and it is unfortunate in some ways that all the Windows Phones look like this.

That said, I enjoyed my few minutes with an HTC Titan; it has an exceptionally large display and a great camera but does not feel too bulky, and I can see it doing well if the marketing is right. Nokia’s Lumia 800 looks good too.

Microsoft came late into this market though, persevering with its old Windows Mobile for too long, and it is not going to be easy to catch up.

Something has changed for Windows Phone

When Windows Phone 7 launched last year, it was obvious that it could not succeed since it was all-but invisible to most people. In my local small town centre, which has several mobile phone shops, it was nowhere to be seen.

I went out to post a letter just now and was astonished to see this poster in the window of Phones4u:

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I went in and discovered only a dummy of the Radar and Titan on display. I asked to see a Titan and they got one out for me to see.

The Nokia Lumia 800 was also on display, this one a working model.

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The Titan has a gorgeous large screen, but while it is slightly bulky it is slim and does not feel heavy to hold. I put it alongside the Lumia; the Titan screen does look larger and better. Unfortunately I could not see the Lumia out of its clip. The Lumia does benefit from Nokia Drive (not working because no internet connection) and seems to be around £100 cheaper than the Titan. The Lumia also has the free British Airways app pre-installed.

I asked the assistant what she thought of Windows Phone and she said she had not tried it. I said I had an HTC Desire (true) and she seemed slightly puzzled about why I would want a Windows Phone though she thought it would be good for work because of Office.

Still, Microsoft’s device has visibility at last, though this seems to be more because of moves by Nokia and HTC than from Microsoft itself. If it can win the support and enthusiasm of some of those influential retail assistants we may see significant growth in market share.

Nokia results: demonstrating the Osborne effect?

Here’s Wikipedia:

The Osborne effect is a term referring to the unintended consequence of the announcement of a future product ahead of its availability and its impact upon the sales of the current product.

The reference is to Osborne Computer Corporation, a pioneer of early personal computers, which announced the next generation of its range long before it was available. Sales of the current model immediately dived, and the company went bankrupt.

In February this year, Nokia announced that it was abandoning its Linux-based MeeGo smartphone OS, then in development, and that Symbian would be reserved for low-end phones. Its future smartphone strategy will be based on Windows Phone.

Now here come the results:

The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011.

says the release, which report an 11% decline in sales quarter-on-quarter and an operating loss:

In the period from January to June 2011, net financial expense was EUR 74 million (EUR 141 million). Loss before tax was EUR 141 million (profit before tax EUR 632 million). Loss was EUR 261 million (profit EUR 279 million), based on a loss of EUR 24 million (profit of EUR 576 million) attributable to equity holders of the parent and a loss of EUR 237 million (loss of EUR 297 million) attributable to non-controlling interests. Earnings per share was EUR -0.01 (basic) and EUR -0.01 (diluted), compared with EUR 0.16 (basic) and EUR 0.16 (diluted) in January-June 2010.

Would these results have been better, if Nokia had not bet its business on Microsoft’s mobile OS back in February? My guess is that they would. Nokia in effect announced the obsolescence of all its current Smartphone range. Smart device sales are down 32% year on year.

Still, even the Osborne effect does not account for the decline in its sales of feature phones, down 20% year on year and 25% quarter on quarter. This is what Nokia says:

The year-on-year and sequential declines in our Mobile Phones volumes were driven by distributors and operators purchasing fewer of our mobile phones during the second quarter 2011 as they reduced their inventories of those devices which were slightly above normal levels at the end of the first quarter 2011. In addition, our lack of Dual SIM phones, a growing part of the market, until late in the second quarter 2011 adversely impacted our Mobile Phones volumes during that quarter. Mobile Phones volumes were also adversely affected by continued pressure from a variety of price aggressive competitors.

Despite the grim figures though, it is too early to pronounce the failure of CEO Stephen Elop’s strategy. After all, no Nokia Windows Phones are yet on sale. The company must be hoping to hang on until it has a decent range of Windows Phones, and for Microsoft to grow its mobile market share dramatically above what it is currently.

Should Nokia have chosen Android rather than Windows Phone? Android’s extraordinary growth suggests that it should; yet there are signs of significant copyright and patent trouble for Android, and by attaching to Android Nokia would have been a me-too behind more established vendors such as Samsung, HTC, and nearly everyone else.

Should Nokia have persevered with MeeGo and Symbian? Although early MeeGo devices are winning praise, I doubt that the OS would have challenged Android and iOS; but that is open to speculation.

The problem for Nokia is that if it was going to make a radical platform shift, some degree of Osborne effect was inevitable. Adopting Windows Phone could not have been done in secret.

That said, perhaps the company could have been smarter. Rather than laying all its cards on the table, could it have announced a Windows Phone strategy alongside MeeGo and Symbian, adopting a more gradual approach to avoid shocking the market?

It is also worth noting that Nokia’s problems started long before the arrival of the new CEO. What we are seeing now is the playing out of old mistakes, not just the impact of what may be new ones.

However you spin it though, the new Nokia is a lesser thing than the Nokia of old, which commanded rather than followed the mobile market.