RIM and Nokia decided to cross-license standards-necessary patents in 2003. Afterwards it was changed in 2008. But three years later Nokia announced the Canadian manufacturer had disputed the patents referring to WLAN technologies. Of course, the companies headed to court arbitration. The lawsuit was filed in the US, UK and Canada, and yesterday, on November 28 the judgment ruled that RIM will have to pay royalties for handsets.
Besides the financial part RIM is not allowed to manufacture or sell WLAN devices until a royalty agreement is reached. Though there aren’t many BlackBerry devices with WLAN technologies in major markets, it’s very important for Nokia to feel it’s still afloat.
Of course, Nokia Corporation is pleased with the verdict given by the judge, while RIM has made no comment on the case. On the other hand, RIM is not among the main rivals of the Finnish manufacturer, and it shouldn’t be glad. I mean there are Apple, Samsung, and other monsters Nokia should overcome.
While many analysts and bloggers will blame on Nokia saying it isn’t performing well, I want to look at the financial data of the Finnish company from another viewpoint. Yes, the manufacturer still shows $754 million (576 million euros) net loss but compared with the previous data it’s better. Nokia has revealed the financial results of Q3, 2012, so let’s take a glance to find out whether everything is as bad as the numbers show.
According to data, Nokia has sold 2.9 million Lumia phones in Q3, which has declined in comparison with the previous quarter’s 4 million. The overall sales make up 6.3 million meaning Nokia is still selling Symbian smartphones in number of 3.4 million, which by the way, outsells Windows Phone. At the same time, the company has sold 76.6 million feature phones, 6.5 million of which are full touch Asha line handsets. Though this number is up 4% consequentially, it is down 15% compared to the same period last year. Anyway, the feature phones continue keeping the manufacturer afloat.
As for the average sales price (ASP), it has grown to 155 euros, up from 151 in the previous quarter, though the ASP of Lumias is now 160 euros. For example, the Lumia ASP was 220 euros in Q1, and 186 euros in Q2, but Nokia’s “evil plan” to re-enter the US has not been implanted and the company has to run such a policy. On this occasion, Stephen Elop, Nokia CEO said, “Q3 was a difficult quarter in our Devices & Services business,” and we have to believe his words, because only 300,000 units were sold in North America including the US.
Finally, Nokia’s net sales stood at around $9.48 billion (7.24 billion euros). The company’s net cash was $4.7 billion (3.56 billion euros), down from $5.5 billion in Q2 2012, which is slightly more than projected. But we hope Nokia will show off in Q4 because its Lumia 920 and 820 are very popular even not launched yet.
As always Nielsen has published interesting statistics for the US smartphone market for Q2, 2012. According to it, there are only 0.3% Nokia Windows Phone smartphone users. So if we consider the fact that during this time period there were about 110 million smartphone users in the country, it means Nokia Lumia owners count for only 330,000.
As Nokia has only two Lumia handsets launched in the US via carriers, the number should be split between the Nokia Lumia 710 T-Mobile and Nokia Lumia 900 AT&T. in short, it means Nokia has sold fewer than 300.000 Lumia 900 devices in the States.
The survey also shows only 1.3% of US smartphone users own a handset that runs Windows Phone OS, thus, there are 1.43 million Windows Phone users, which is a bit higher than the January’s data, 1.2 million.
As to WP platform generally, the last NPD numbers showed this OS has a market share of 1.7% in Q1, 2012. It’s not bad because in Q4, 2011 this indicator was only 1.3%. Nevertheless, we tend to think something is wrong with NPD’s numbers because the Lumia 900’s launch has affected positively rather than negatively, as the source shows.
Over a couple of months ago Nokia filed lawsuits against RIM, HTC and ViewSonic. Major events took place in Germany but this patent war enlarged its geography reaching the US borders. But unlike the last two companies, which have to fight in two forefronts, Canadian RIM was in the most beneficial situation as Nokia was accusing it of infringing only seven patents – two in Düsseldorf, two in Mannheim, and three in Munich. At the moment, the number of Munich patents has doubled as Nokia has filed three new patents in the infringement actions against RIM with the Munich I Regional Court.
As to the patents, they are:
- EP1474750 on a “method and system for storing and transferring multimedia tags,”
- EP08040461 on a “method and apparatus for updating the software of a mobile terminal using the air interface,”
- EP1148681 on a “method for transferring resource information.”
Of course, Nokia’s patent portfolio is way stronger than that of RIM’s but the BlackBerry maker will beyond doubt counter-sue if it loses this deal. But honestly, Nokia will win this sooner or later.
When Nokia was switching to Windows Phone operating system from its native Symbian, many doubted the decision’s being right because Symbian was falling while Windows Phone was a platform that seemed to have no future. That’s why Stephen Elop was asked whether there is Plan B if WP fails. The answer was thoroughgoing as Nokia’s newly-appointed chief was refusing the existence of any contingency plan. Now the same question rises for Windows Phone 8 because with the coming of this OS Nokia and other hardware makers will start a new era.
Nokia chairman Risto Siilasmaa spoke on this occasion in a Finland-based TV show saying they have a contingency plan in case something goes wrong with Windows Phone 8. This said, it should be also noted that Siilasmaa is sure this platform will succeed.
Unfortunately, Nokia chairman didn’t specify what he meant with a contingency plan. When asked about the initial decision to switch to Windows Phone, he said, “Symbian’s market share has come down close to zero.” This simply means there is no probability that Nokia will return to Symbian ever.
I know many geeks will start playing with this idea saying Nokia will turn to Android if Windows Phone 8 fails. But on the whole, who said it can’t happen?
Yesterday morning during an investor conference call Nokia uncovered many of its plans. It firstly refers to the new price policy they will use for upcoming Windows Phone handsets. Stephen Elop mentioned they will set prices more aggressively in order to compete with cheap Android devices. Nokia CEO said it can be implemented due to Microsoft’s support. He probably implied Windows Phone 7.5 Tango, which is able to work with weak hardware.
Secondly, Nokia announced it is going to buy Scalado, an imaging technology company specializing in mobile applications. Apps made by this company can be found on millions of devices across many platforms, for example, recently Scalado was mentioned behind the impressive camera technology in RIM’s BlackBerry 10 OS. As to Nokia, it has been working with this company for over ten years, thus it is in many of Nokia’s imaging applications. Nokia will purchase all intellectual properties of Scalado with its entire development staff and technology patents. Though the deal details remain unknown, it will be over in Q3.
Thirdly, Stephen Elop said the company was ending work on some unnamed development projects. Some sources like All Things D have taken it seriously and are sure his words referred to Meltemi, a Linux-based operating system that should replace Series 40 OS on its low-end devices. It had to provide low-end handsets with many of smartphone capabilities but it should work on less powerful hardware. Now that Nokia the Asha 305, 306, and 311 full touchscreen handsets are already out, Meltemi seems to be out of game.
Finally, Nokia announced some leadership changes, a revised financial outlook for the second quarter of 2012, and the worst it can do — 10,000 layoffs. Nokia considers its Smart Devices division are to blame for “competitive industry dynamics.” Besides the attitude towards this division, there will be many replacements such as Juha Putkiranta as executive vice president of operations; Timo Toikkanen as executive vice president of Mobile Phones, Chris Weber as executive vice president of sales and marketing; Tuula Rytila as senior vice president and chief marketing officer; and Susan Sheehan as senior vice president of communications. Those layoffs will mainly come from reductions in its Devices & Services division, and as a result, the company expects its Devices & Services operating margin to be lower than in Q1. Lastly, Nokia will close facilities in Germany and Canada and a plant in Salo, Finland.
Nokia is trying to remove all unnecessary circumstances. Vertu is one of them because people are more interested in affordable smartphones than high-valued phones that actually don’t do much. So it’s no surprise Nokia was looking for buyers ready to free the company from the appendix. At the moment, the Finnish company seems to have found out to whom it can sell Vertu.
According to Reuters, Nokia is in talks with EQT, a private equity group in an attempt to sell Vertu. As this independent subsidiary is specialized in making ultra-luxury phones with stainless steel, ceramics, carbon fiber, sapphires and rubies, its price is too high – around €200 million (~$249 million).
No matter how attractive this brand sounds it has already yielded its positions to other similar companies like Ulysse Nardin. It means its actual cost has been dropping for several years, and if Nokia had tried to sell it off some time ago, say when Apple had not launched its popular iPhone smartphone, Vertu would bring more benefit than now.
Three Nokia Lumia handsets are already available in China. No doubt the latest Lumia will later join them as well. Those three handsets in face of the Lumia 800c, 710c and 610c ensure good sales volumes for the company. These are not just words. Statcounter and Wang Jingqiu, the company’s Beijing-based spokesperson, prove what I say.
As China Daily reports, “sales have been brisk in all possible channels.” While this might seem thunderous words and only, Statcounter confirms the growing sales in the market with the help of graphs. The source shows the market share of the handset has rapidly risen from the low 0.16% registered in the beginning of the year to 0.4% now. As a result, BlackBerry is completely ignored though it has never been much accepted in China.
Probably the main reason for such results is the aggressively set price policy, which is reduced from time to time. On the other hand, it’s something required as Chinese consumers can’t boast of high-paid jobs but this country has the biggest smartphone market in the world, thus, every smartphone maker would like to offer its products there. Simply recall the case with Apple, which has started selling the iPhone 4S in the country and which has succeeded.
Just a week ago Nokia reported it had sold 2 million Lumia Windows Phone smartphones in the first quarter. As for now, the manufacturer reveals more info. It’s not what we were waiting for but it shows what a step the company has made in this transition phase. Firstly, the company announced it sold only 600.000 phones
Continue reading »
A few days ago Nokia announced its financial results for Q1, 2012. The report bears dual nature. Firstly, it shows the company is transitioning from feature phones to smartphones, and secondly, it depicts the superiority of Windows Phone over Symbian.
According to the report, Nokia has totally sold 83 million phones out of which the 71 million are feature phones and only the 12 million are smartphones. But the 17 percent of all smartphones are Lumias. Of course, the Lumia 900 is not included in the list and the numbers refer only to the Lumia 800 and the 710 handsets. Thus, the same indicator for the second quarter of this year will be better for the company, because besides the Lumia 900, the Lumia 610 will also be released.
Nokia’s sales made up 4.2 billion Euros in the quarter but still, the company lost money. In this sense, Nokia’s result shouldn’t be better the this quarter because the highest-end Lumia line smartphone, the 900 has some data connection problems and Nokia is spending a huge amount of money to keep the consumers at it.