Paul Thurott: Nokia is circling the drain. Surface Phone only hope.

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ohgood

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In this article: http://winsupersite.com/windows-8/five-surface-devices-microsoft-should-make-2013 Paul Thurott says:



I disagree that Nokia is circling the drain what with their shares going up and up and just today the news that the 920's in China sold out in 2 hours. They are hands down the best built phones around I've found and support their products better than any other company I've found. I'm not against him other comments though. Any thoughts?

the real question is, how many sold out?
2?
2 million?
200 million?
 

tebugg

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In this article: http://winsupersite.com/windows-8/five-surface-devices-microsoft-should-make-2013 Paul Thurott says:



I disagree that Nokia is circling the drain what with their shares going up and up and just today the news that the 920's in China sold out in 2 hours. They are hands down the best built phones around I've found and support their products better than any other company I've found. I'm not against him other comments though. Any thoughts?

i don't think the author of this article is right. Often lost in the mobile phone discussions, because so much emphasis is put on do-it-all smartphones, is the fact that Nokia dominates in several international markets, generating significant sales of its entry-level touch phones, like the Asha line, and the new Lumia 620. Nokia's 82.3 million phones sold in Q3 was second only to Samsung's 98 million - and that ain't bad. Plus, the recent deal with China Mobile to supply its 700 million customers with Nokia's first TD-SCDMA compliant Windows Phone in the country won't hurt.

Nokia naysayers are quick to point out that its dividend, which currently stands at a whopping 6.6% yield, is at risk, and has been for some time. The problem, they say, is that Nokia's bleeding cash in every quarter as it ramps up Lumia smartphone sales, putting its industry-leading dividend yield on the chopping block. Nothing could be further from the truth. Nokia's Q3 ready cash is down from the prior quarter, true; but with over $12 billion still in reserve, the death of Nokia's dividend has been greatly exaggerated.

On the growth side of the Nokia opportunity, there's still its 10,000 patents, estimated to be worth a cool $6 billion, and currently generating $650 million a year in revenue. And Nokia's patent revenue is likely to go up, thanks to the recent lawsuit claiming that RIM infringed on its WLAN (WiFi) technologies. Add in a profitable Siemens division (now a bit leaner after the sale of the fiber optics unit), world class mobile maps, and the fact that the company is netting $222 million with the recent sale/leaseback of its Finland headquarters, and Elop is quickly transforming Nokia into a lean, smartphone-making machine.

As many a fool has commented in prior articles, the sum of Nokia's parts is greater than the whole -- the whole, in this instance, being its current share price. Now, throw in a 6.6% dividend yield on top of what remains an outstanding growth opportunity. That's the recipe for one of the best growth and income additions you can make to your portfolio -- and heading into 2013, that's exactly what Nokia is.

Nokia is going nowhere and is now trending upward from Q4 perceived sales. I expect to see that Nokia sold around 7 million phones in Q4 when nokia announces the numbers on January 24, 2013.
 

brmiller1976

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Not to be Donnie Downer again, but Commodore was consistently announcing "sell-outs" of inventory in 1993 and 1994 too. Turned out that they didn't have enough cash left (due to mismanagement) to buy parts and build product in sufficient quantities to generate cash flow and pay debt. As a result, they imploded.

I'm not saying that will happen in this case, just urging you to take "sold-out products" with a huge grain of salt. There are only two numbers that matter -- quantity and margin per sale. Everything else is less-than-conclusive.
 

AngryNil

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Not true. As anybody who has owned both will tell you, the 8X is a totally different ownership and user experience in terms of hardware aesthetics. It feels thinner, lighter, more pocketable and lighter weight.
And as measurements will tell you, the 8X is thick. Period. It's thick compared to 2012 devices, so if you care so much about the progress of shrinking phone thickness, go rip into HTC while you're at it. On Windows Phone, only Samsung has "succeeded" to meet 2012 "standards" with the Ativ S.

So anybody who wear's women's jeans -- such as women -- shouldn't buy a Lumia 920? That's excluding 50.2% of the general population right there. You're off to a great start. /eyeroll
Oh, the literal interpretations. The 920 is not so thick that it is a hindrance. Can you still hold it comfortably? Yes, you are perfectly able to comfortably hold a 200g slab. Your hand was also able to hold the 11mm thick iPhone 3GS, and it has not changed dramatically over the past few years. Can you put it in your pocket without a problem? Yes, your wallet is probably twice as thick as it. It will not impact you in any big way, it's fuss over about an aspect that doesn't have a meaningful effect on the device's usability or your workflow. Fine, you want a thin phone. That doesn't mean the 920 is pathetic, backwards or ridiculous, it means it doesn't suit your specific desires in a phone.

there's still a demand for physical keyboards
Keyboard phones from RIM alone are outselling Windows Phones this year, 4:1.
There is no mainstream demand for physical keyboards on smartphones and that is why HTC axed the slider form factor from its line-up, despite being what I would consider the best slider smartphone manufacturer. No one except for RIM is selling a bunch of phones with hardware keyboards, doesn't that make you think that it isn't (just) the hardware keyboard that is succeeding? Moreover, the traditional BlackBerry form factor is not well suited to modern smartphone platforms and capabilities - as I've pointed out, RIM's future with BB10 debuts on an all-touch device! I'd venture to say current Blackberries are almost a completely different market segment. And brmiller, how about this for a comparison - how are keyboard smartphones selling relative to slab smartphones?
 

Daniel Ratcliffe

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There is no mainstream demand for physical keyboards and that is why HTC axed the slider form factor from its line-up, despite being what I would consider the best slider smartphone manufacturer. Making a niche product doesn't win you relevance nor cash.

If it's a niche product and nice products don't win you relevance or cash, why would ANY company make them? RIM still do it (although admittedly they are launching with an all-touch), it's their bread and butter. I do still believe there is a strong demand for keyboard phones, although it is probably dying out.
 

AngryNil

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If it's a niche product and nice products don't win you relevance or cash, why would ANY company make them? RIM still do it (although admittedly they are launching with an all-touch), it's their bread and butter. I do still believe there is a strong demand for keyboard phones, although it is probably dying out.
Read the rest of my paragraph there. If it isn't a niche form factor, why is every manufacturer apart from RIM distancing themselves from it? I personally think RIM is a special case and BlackBerries sales represent the business user, or legacy user who isn't willing to try something new. I know many who carry BlackBerries because of their work, then also carry an iPhone or similar for use as an actual smartphone.
 

tebugg

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Not to be Donnie Downer again, but Commodore was consistently announcing "sell-outs" of inventory in 1993 and 1994 too. Turned out that they didn't have enough cash left (due to mismanagement) to buy parts and build product in sufficient quantities to generate cash flow and pay debt. As a result, they imploded.

I'm not saying that will happen in this case, just urging you to take "sold-out products" with a huge grain of salt. There are only two numbers that matter -- quantity and margin per sale. Everything else is less-than-conclusive.

i dont think commodore's issue has anything to do with nokia. they're not even in the same genre. you're trying to correlate apple's and oranges with no actual numbers to back it up. which is why this post's article is flawed.
 
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Lumis90

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Nokia is holding 80percent of marketshare when it was only WP7 I think with WP8 they're holding about 85percent. Suface phone can be like LG nexus 4 - not flagship that everyone buys, but it would be something, cause the main competitor is still Lumia 920 and I don't think that Nokia gonna give it's all technology to Microsoft.
 

brmiller1976

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i dont think commodore's issue has anything to do with nokia. they're not even in the same genre. you're trying to correlate apple's and oranges with no actual numbers to back it up. which is why this post's article is flawed.

No, I am pointing out that "we sold out of inventory" means absolutely nothing without numbers. Commodore excited shareholders (and saw shares shoot up) several times during its death throes by announcing "we sold every Amiga we had in inventory, sales are overwhelming our ability to supply the market." But they weren't supplying the market adequately to break even.

Whenever any tech company (including Microsoft and Nokia) starts blowing smoke up my derriere with word games like "four times better sales than a year ago" or "we've totally sold out" while refusing to provide actual sales numbers, it takes me back to my high school days watching Commodore melt-down (which culminated in being there during an internship in my freshman year in college in 1994, when the company actually shut down).

A company that is performing well doesn't need to say "we're selling at 16 times the rate of 25% of the sales rate of four quarters ago." They say "we shipped 7 million devices, sales are strong."

I'd love to be proven wrong, but I'm steeling myself for the worst, so I don't get caught off guard the way all the Amiga people did when Commodore posted huge losses. "What happened, the Amiga 1200 was selling out, they had such strong demand they couldn't meet it, how could the company lose $177 million in one quarter?!?"
 

brmiller1976

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And as measurements will tell you, the 8X is thick. Period. It's thick compared to 2012 devices

Here's a mission. Grab a 920, and grab an 8X. Take them to a user, ask them which they'd rather use every day. Most will choose the 8X.

if you care so much about the progress of shrinking phone thickness, go rip into HTC while you're at it. On Windows Phone, only Samsung has "succeeded" to meet 2012 "standards" with the Ativ S.

Meh, the 8X is thick in only a small spot. Most of the phone is thin, and it's light and "holdable," not heavy.

As for Samsung being the only WP vendor to release a fully-thin-and-light phone, that's a problem, too. Windows Phones need to be competitive.

Oh, the literal interpretations. The 920 is not so thick that it is a hindrance. Can you still hold it comfortably?

For typing, not really. The balance was off.

Your hand was also able to hold the 11mm thick iPhone 3GS
,

Sure, and my Atari STacy luggable that I bought refurbed in 1994 was usable as a portable PC in college as well, but I wouldn't want that form factor today.

Can you put it in your pocket without a problem? Yes, your wallet is probably twice as thick as it.

I don't take my wallet out to hold for an extended period to type on or talk on.

Again, you're listing an entire set of excuses as to why "the user is wrong." While everyone else is rushing to provide the user with what he wants.

The same thing was done with large-screen phones. "Oh, you don't need that. It's too big. You'll look stupid. Blah blah blah." And Samsung ran away with the Galaxy Note series. They've sold more Galaxy Note and Note II devices this year than Nokia will sell Windows Phones (of all varieties).

It will not impact you in any big way

There's a new standard of excellence. "It's inconvenient, but it won't impact you in a big way."

There is no mainstream demand for physical keyboards on smartphones

Other than RIM, who sold more phones the first three quarters of this year than Windows Phones have been sold in all time, and who will likely sell more phones for the entire year than Windows Phones and Windows Mobile phones have been sold, put together.

RIM's future with BB10 debuts on an all-touch device!

Followed up closely by a keyboard device.

You see, lots of us use our phones for real work... especially e-mail. And I absolutely loathe those typo-riddled e-mails I get from colleagues with Android and iOS devices that have incorrect words in them due to autocorrect failures, with a signature that says "don't blame me for the typos, sent this from my cell phone." I want accuracy.

And while the WP onscreen keyboard is much better than the Android or iOS ones, it's still a compromise. A poor experience.

Remember -- user experience is king. For those of us who use our phone as a tool for work, we want accuracy, always.

how are keyboard smartphones selling relative to slab smartphones?

How are Windows Phones selling relative to non-Windows Phones? See, nobody wants a Windows Phone! (Bad logic leads to really bad logic).
 

tebugg

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No, I am pointing out that "we sold out of inventory" means absolutely nothing without numbers. Commodore excited shareholders (and saw shares shoot up) several times during its death throes by announcing "we sold every Amiga we had in inventory, sales are overwhelming our ability to supply the market." But they weren't supplying the market adequately to break even.

Whenever any tech company (including Microsoft and Nokia) starts blowing smoke up my derriere with word games like "four times better sales than a year ago" or "we've totally sold out" while refusing to provide actual sales numbers, it takes me back to my high school days watching Commodore melt-down (which culminated in being there during an internship in my freshman year in college in 1994, when the company actually shut down).

A company that is performing well doesn't need to say "we're selling at 16 times the rate of 25% of the sales rate of four quarters ago." They say "we shipped 7 million devices, sales are strong."

I'd love to be proven wrong, but I'm steeling myself for the worst, so I don't get caught off guard the way all the Amiga people did when Commodore posted huge losses. "What happened, the Amiga 1200 was selling out, they had such strong demand they couldn't meet it, how could the company lose $177 million in one quarter?!?"

thats cool you know about commodore and all, but what does that have to do with nokia? if a store only gets 100 units of a phone and sells out of it, it's still "we sold out of inventory" whether you like it or not. if windows phone only sold 3 million phones last quarter and this quarter they are at 12 million phones, they still have 4 times the sales, whether you like it or not. you dont know the numbers of sales and neither do i, so to act like they are lying about what they say doesnt speak well about yourself. lets wait for the numbers.
 
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Laura Knotek

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You see, lots of us use our phones for real work... especially e-mail. And I absolutely loathe those typo-riddled e-mails I get from colleagues with Android and iOS devices that have incorrect words in them due to autocorrect failures, with a signature that says "don't blame me for the typos, sent this from my cell phone." I want accuracy.

And while the WP onscreen keyboard is much better than the Android or iOS ones, it's still a compromise. A poor experience.

Remember -- user experience is king. For those of us who use our phone as a tool for work, we want accuracy, always.
Yes, it is true that many people use smartphones for work. Many people also use computers for work.

However, I believe that the smartphone (and tablet) are getting to the point where the PC already has gotten. Most people do not use smartphones/tablets/PCs for work. Content consumption is more popular than content creation. Games and social media are more popular than productivity apps. This report is 2 years old. Even back in 2010, productivity was low on the list. Here is another report from 2011.
 

brmiller1976

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Content consumption is more popular than content creation. Games and social media are more popular than productivity apps.

True. Most people want to be entertained, not communicate.

But that doesn't mean that there's "no market" for productivity phones, or indeed, phones with keyboards.

Frankly, if the industry believes that productivity is low on the list and an irrelevant application, they should remove all Exchange, PDF view and document edit functions from their devices, and sell them purely as Netflix/Facebook/Xbox phones. (And the first vendor to do that will be slaughtered).

Secondly, most people who work in an office or professional environment have a no-compromises "will this phone work with our e-mail at work" requirement.

Thirdly, Nielsen asks people what they intend to do with their devices, not necessarily what applications will become the most important. In 2007, the idea of smartphones as a device for consuming content and not getting work done would have been absurd under such a methodology.

Finally, as Windows Phone World, we're in last place in the smartphone race. We should approach the market with humility and win by offering the most flexible product lineup. Microsoft didn't win in PCs by telling people that Windows is "only for productivity" or "only for games" or "only for desktops." They won by making it good at EVERYTHING. The current trend in Windows Phone World towards apologizing for things like thickness, heaviness, no removable SD storage, no hardware keyboards, etc. violates that tradition and does us no favors as the last-place contender.
 

AKA Preluva

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The only people that DON'T believe Nokia is on it's way out the door are those that like them! The entire Lumia line is lame and they continue to put far too much emphasis on the camera, as if the masses care about that small feature. Now if MS (or even Nokia) was smart they would get on making a Surface Phon-let! ;)
 
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