Nokia Conference call details on Q2 2012 results
I believe this has just finished. Stefan Constantinescu previously from intomobile (and Ex Nokian and ex nokia blogger – RingNokia) was tweeting from @whatthebit details of the Nokia Conference call and Q&A regarding the Q2 2012 results. Some bits may be reiteration from Q2 2012 report or previous interviews with Elop.
- Nokia effectively not paying royalties to use WP
- SOLD 4M not shipped
- Windows 8 will have halo effect on Lumia.
- Impact expected due to WP8 announcement (urgh, MS, why)
- “Our aim to become the “where” company, like Facebook is the “who” company, and Google is the “what” company.” (I’m sure Google will eventually be all of that if they’re not already)
- “Lumia 610 and 900 volumes increasing, Lumia 710 and 800 volumes decreasing.
- Timo (Nokia CFO) calls Q3 a ‘TRANSITION QUARTER’. Next 3 months to be VERY important.
- Elop “We’ll be selling existing Lumia devices quite a while after Windows Phone 8 handsets launch.” 60% of Android devices being sold are using a version of Android that’s three versions old. There’s still volume there
- More cheap smartphones coming to China
- The catalyst for us will be the next wave of Lumia devices. We’ll be launching more expensive models
- Current gen will still be sold long after WP8
- Both WP8 and WP7.8 to be used in lower end devices. (Hmmm)
- The next wave and the wave after that (of Lumia phones) will have more differentiation.
- NSN being configured to be ‘more independent’ to give Nokia more options.
Source: @whatthebit via @whatleydude
Category: Nokia
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The platform support fee from MS is paying it off for now. But when Nokia sells more or when the MS platform support payment deal ends, Nokia will start paying MS and may soon cover all the costs of developing & marketing of Wp for MS.
Nokia was the “which” company for the mobile phones, so I guess they are going to leave that for Samsung & just concentrate on the locations side(interesting division to focus from Elop – the one MS was very poor compared to others).
Just as I expected. MS & WP has officially entered the world of fragmentation..
Will be on for sale soon.
Would be stupid to sell NSN “soon”. First it must be strongly profitable, then Nokia can sell it.
Within year there is no possibilities to get good price for that. And future is LTE and NSN has that side covered really well. So maybe two years, and then about 10billion price tag (from Nokias 50%).
Not really. NSN has been bleeding a lot of money since like forever and is losing lot of business to ZTE & Huawei.. Also, Nokia can’t keep on losing money on both mobile division & NSN to stay alive. So, losing one on them (generates cash for the other) makes sense. They sold off Vertu even though it was making a tidy profit every year. Moreover, the current strategy doesn’t need NSN.
I can expect it to be sold by the end of this year or early next year..
It was losing money because of restructuring. Thats done and now it can start profiting and its shown this quarter. This should continue next quarter and offset some of the losses in devices but probably not all.
Its also not losing a lot of business to Huawei and Ericsson and others, but is definitely losing it but not a lot. It does appear to be stabilising now, marketshare wise.
The biggest question though is who would buy it.
It was losing money even before the restructuring. NSN has been known as Nokia’s money pit for the last few years and the profits Nokia made from the mobile division kept it alive..
ZTE & Huawei are taking over lot of NSN’s businesses in Asian & African countries (which are currently growing) due to lower costs.. NSN is trying hard to lower their costs with the restructuring to be more competitive but is finding it hard to adjust to the competition. Even Ericsson is finding it hard now.
ZTE & Huawei may buy NSN to increase their share. They have the cash for it & have been very aggressive in the last year in this segment.
ZTE is already bleeding money at an astoundishing rate, and Huawei saw their profitability decrease by around 50% Y-on-Y in 2011, so NSN is definitely holding up quite well in comparison.
NSN is also numero uno when it comes to LTE.
Actually NSN contributed tot he top line in this quarter, so ti does not cost anything for Nokia – why to sell it now? Pökö is right, after one-two years it will worth a lot more than now.
Of course if Nokia would need money at any price that is a different situation…
hey whats nsn
Nokia Siemens Network
Nokia Siemens Network
where does all that hate come from?
what did nokia do to you?
The old versions of Android are pegged at very low price. Will WP7.8 be able to do so?
“Both WP8 and WP7.8 to be used in lower end devices.”
Does this mean snapdragon s4 is not the min chipset requirement of wp8.??
For what on earth they will be selling 7.8 along with wp8 low end.wp 7.x already dead.
I guess “low end” could well conceivably mean anything from $100 (if not lower) to $250 (if not higher). That’s a big range and the older hardware in the current low end WP 7.5 phones could be used to cover the lower part of that range.
No S4 is not the min spec for WP8, but there are other hw-specific requirements like secure boot, encrypting, and perhaps minimum gpu requirements.
Nokia only sold 330000 Lumia phones 710+900 on USA
After 200 million campaign ..!!! sad
http://www.phonearena.com/news/Nokia-confirms-330k-Lumia-sales-in-the-US-vindicates-comScore-and-Nielsen-numbers_id32451
200 000 – (330 000 * 186) = -61 180 000
MS Lumia campaign expenditure – (units sold * ASP) = gain/loss
My bad, misread the figures above.
(330,000*186) – 200,000,000 = – 138,620,000
(units sold * ASP) – MS Lumia campaign expenditure = gain/loss
And I guess even if that figure includes how many they gave Lumia for free and the $100 rebate for Lumia, etc.,
Sounds like they’re considering selling the most profitable part of their company – NSN
No Elop, NO
Bad Elop, sit and stay and don’t speak.
“the most profitable part of their company – NSN” – actually it is true NOW.
“Good’ achievement by NSN – not even Nokia Networks were EVER be able to be more profitable than Nokia Phones…
Poor Nokia, what happened to you…
Not true. Location and services made more profit (Eur 41 vs. 23 million) this quarter (and possibly the mobile phones division made even more profit; smartphones seem to be dragging the devices division overall result down more). And NSN profits were still miniscule compared to its turnover. Its results must improve further, and significantly.
A-S-D, well, they have been considering selling NSN on and off for a long time. If it does indeed become solidly profitable witha a sustainable business plan and strategy going forward, I would tend to agree though: why sell it?
Also, will WP8 support lower resolutions than WVGA? If not, there is no way Nokia can compete effectively in the sub-$200 smartphone market. Furthermore, what happened to Nokia’s plans for using ST-Ericsson chipsets?. Will they come later or did Microsoft say that they will not support them despite Nokia’s pleas?
By confining Nokia exclusively to WP, he killed that possibility. No way to be relevant with location business on ~2 % ecosystem.
And that even doesn’t consider the question how much is it worth in actual revenues and profits to be the “where” company. The comparison with Facebook is spot on.
Navteq’s business is not just restricted to the WP ecosystem. WP ecosystem is a just a drop in the ocean for Navteq. When MS finally integrates the entire Windows ecosystem into one, that would be a sizable one for Navteq.
My guess is Elop will focus Navteq to be the provider for maps in many of the location & navigation markets (one of the few things I like about Elop)
wasnt that the plan already prior tje new strategy? Now they are more consentrated, that is true.
The old strategy was to use Navteq as an USP for the the devices Nokia sells. It never went beyond that.
Navteq business was to license maps to anyone who wanted them and Nokia certainly continued with that practice, like with the deal to use the maps in Bing. The fact that they are strong in maps in cars really isn’t due to Elop’s strategy.
The problem is that growth and possibilities for monetization is going to be in handheld devices. Things like maps in cars is just selling data licenses and waiting for the inevitable moment when people start using navigation in their smartphone for everything.
Maybe they will be able to retain some niche applications (but I doubt it, they wont have the money to maintain the maps), but in the grand scheme of things they will be irrelevant.
My gut feeling is that the number of in-built navigation systems in car is increasing very rapidly right now. Big screens, many with touch, are becoming a must have in many mid-range cars already, and that will continue to trickle down to cheaper models. A phone or a tablet as a navigator is fine but an in built system is usually even better.
So would not write of cars as a big growth opportunity for Navteq for years to come.
And my gut feeling is it wont go very far and will be taken over by handsets, be it in raw unit numbers or in revenues. Actually it isn’t just my gut feeling, the often repeated reason for choosing WP instead of Android is the maps. They wouldn’t plan to waste billions on unproven WP and risk driving the company over the cliff if they didn’t believe phones is where the real deal is going to be, right?
I disagree.
You are thinking too small. Cars are moving towards knowing about their surroundings (Audi already uses Nokia mapping to determine what kind of light-patterns their latest cars use while on the road, they have a weird Nokia/Google Earth navigation combo too).
In the future cars will communicate with each other and their surroundings automatically – and knowing about “where” will be paramount to them.
And somebody will be the Where Company. Nokia tries to.
You are dreaming about things that are away not even years, but decades. So it’s beside the point.
And I actually think Nokia’s cumbersome efforts to build these traffic and other location data by hand are in real danger of becoming pointless. When everyone has smartphone with meter precision GPS in pocket and you have access to half of them, lots of things can be inferred just from analysing their positions and movements.
Audi already uses mapping data from Nokia to guide lights and adaptive cruise control and breaking systems of their high-end models since 2010. The car adjusts itself depending on where it is, e.g. on motorway, in a crossing, leaving motorway. And the number of cars with this is getting bigger all the time. Expect others to follow suit, if not already.
Here are a few tokens just from Nokia’s Q2 report:
- The Nokia Location Platform continued to be adopted by more partners, including Microsoft’s Bing Maps, which is also now using Location & Commerce traffic information and geocoding algorithms, and Ford, whose research organization is using the platform to advance innovation for smart and connected vehicles.
- Nokia entered into an agreement with the Audi Urban Intelligence Assist (AUIA) project aimed at developing connected car technologies that help reduce congestion and improve safety supported by the use of NAVTEQ map data.
This is their big play. This is why they didn’t go Android. They are betting on “where” becoming the next big thing and going Android would have supported their competition (Google) too much, where as going Windows Phone meant Microsoft agreed to adopt Nokia’s platform.
First, drawing connection between the WP vs. Android choice and these car technologies is absurd. Navteq was licensing maps long before the deal was signed and would continue to do so regardless of what smartphone OS Nokia uses. Even Bing used Navteq maps before Elop entered Nokia HQ. If Google received any support, it was when Nokia voluntarily abandoned vast areas of smartphone market by locking up itself in WP.
Otherwise, I think I already pointed out that handsets will dwarf other usages like cars be it by raw installed numbers or by ability to generate additional money to licensing. I’m pretty sure Google and Apple will be very happy to claim the phone market and left cars to Nokia.
Most of these technologies are just in research state and would require massive investment from states and cities. Even with things that can be found in top end cars today, it’s long long way before it will be in any sizeable number of all new cars sold, let alone cars in existence. And again, I think in the end cars will be using real-time sensors and harnessing smartphones rather than rely on possibly outdated and error ridden database for anything more than supporting function.
I am not claiming that mobile device mapping want be significant and likely bigger. I am just questioning your notion that there is no/only insignificant monetization and/or growth potential in car navigation.
It’s not necessarily either or.
I understand what you are trying to say, but still don’t see how it could happen. According to wiki Navteq has 85 % of the car market and still no sign of huge profits.
I don’t know why in future average car buyer would pay hundredths of euros for little computer with navigation when he already has one in pocket hooked to credit card, connected to the net and with full ecosystem of apps and services that can bring more advantages?
Well, the computer, big screen and internet connection will be there in any case, probably GPS as well, since it’s getting harder and harder to find a mobile broadband chipset that doesn’t come with GPS as well.
Adding maps to that is a minor detail.
Yeah, as demonstrated by their recent mapping/location deals with Yahoo and Flickr.. no, wait…
See how the Nokia Location Platform is gaining more prominence in their communications as the new strategy becomes more and more public? Expect more of this.
Stefan’s a funny character. A few years ago, he was bragging about working at Nokia. Then, he was terminated or something — maybe because he was being Eldar-esque? Intomobile used to be where I go for tech news..
I wasn’t aware that Stefan tweeted yesterday he’s no longer with intomobile either. I still remember Stefan and the good old Nokia days. His site was one of many but one of the main ones to go to for fresh Nokia news. It was cool to see someone so passionate about Nokia that they’d sell up and fly to Finland and even try to get a job there.
I believe the termination was related to releasing N86 pictures apparently. A little bit hazy on the subject. Shame though. He was very passionate about Nokia.
I think he’s now looking for something new to do.
Nokia will be the “where” company:
Where did Nokia go?
Where did it all go wrong for Nokia?
Where is Elop now hiding?
Oh where-o-where-o-where?
i think they’re more the WTF company. WTF Nokia. It’s sad that as fans we’ve been moaning pretty much since 2006/2007 for Nokia to get their act together. Those who are still fans must have the biggest patience/loyalty/amnesia. We love holding onto hope that they’ll get things right eventually.
Make that 2002/2003, that was the year Nokia stopped being the trend creator and wouldn’t accept to be a follower and thus just did some crazy stuff which in the end led to the position they were in at the time of the 5800/N97.
“Elop “We’ll be selling existing Lumia devices quite a while after Windows Phone 8 handsets launch.” 60% of Android devices being sold are using a version of Android that’s three versions old. There’s still volume there”
Just as they “sold” those 150 Million Symbian devices?
And wasn’t one of the advantages of WP that there won’t be such a fragmentation?
They won’t sell quite a while after wp8 launch. They did not even sell well before wp8 was announced.
no one will be buying wp7.8 devices maybe they should dicontinue 800 and 900 and sell 710 and 610 for price of galaxy ace and galaxy y respectively.
Don’t be so sure about that, there is still a whole load unknown about 7.8 and WP8. The scenario I see is 7.8 will be the Tango of tomorrow.
It uses lower cost materials and thus can be sold cheaper. The downside is that you can’t have all the apps that WP8 gets. But is that any problem? I doubt it, as long as the devices with WP7.8 will be cheap enough.
If the apps will be made primarily tp WP8 so that they are incompatible, who will make apps to 7.8 with miniscule installed base?
It is not so miniscule an installed base when you consider many apps can easily be written to support both WP7 and WP8. Unless you need something that only WP8 provides, why shut out the two-figure millions of WP7 devices out there from your target market when you could target both at the same time. I expect WP7 app support for some time for productivity apps. Games obviously will be a different case and can be expected to transition over faster.
Exactly. For the vast majority of the cases the will be no benefit in targeting WP8 only, just disadvantages. Games and some legacy stuff written in native code are the only reasonable use cases for targeting WP8 alone as far as I can tell.
We can say that both android&WP will have fragmentation. But it think “app compatibility” will be much important than the OS version numbers for both. This is what the consumers will feel the most. (or perhaps even more the developers?)
The question is, “How is the app compatibility on WP7+ and WP8 vs Froyo/GB/ICS/GB?”
*edit : *Jellybean not GB =_=
“How is the app compatibility on WP7+ and WP8 vs Froyo/GB/ICS/GB?”
Similar, i.e. the newer support the older but not the other way around.
Is anyone watching? Nokia’s shares are up 6.94% which is very surprising
Finnish stock market ended the day +11.96% for Nokia. It was a better than expected result.
But obviously over the next days it will steady down a bit. It always does this when it raises after results.
Best selling iphone last Dec.2011 was the 3. Nokia is right to keep selling current lumia through next Spring. Those who can afford the new 8 will, but those who can’t will still help drive brand growth.
We’ll be selling existing Lumia devices quite a while after Windows Phone 8 handsets launch.” 60% of Android devices being sold are using a version of Android that’s three versions old. There’s still volume there
Only possible bec. its ummm ANDROID. Same with the iPhone 3gs and 4 and eventually the 4s!
Elop’s forgetting that Lumia phones doesn’t have the recognition, popularity and following that those 2 OS have.
Also WP8 is a major major update! So would they be updating WP8? You have Android and iOS evolving every year with major updates while WP8 may remain at 8 for a loooong timeeee. The transition is just too dramatic wasting all efforts given to 7.
very good news,
this here could be the turning point for nokia, its lowest lows,
now time for the 2-3 years climb back to the top,
“Our aim to become the “where” company, like Facebook is the “who” company, and Google is the “what” company.”
Hmmm…. AFAIK, location hasn’t been a big thing despite multiple attempts by different entities. Sometimes I get the feeling that Elop is just throwing different strategies to the wall to see which one sticks. Perhaps Tim Berners-Lee was right about his lack of vision.
Aside from that, 4 Million Lumias sound good. Hopefully WP8 will let Nokia release some pretty powerful hardware to go along.
I told you so.
/humor
Henry Tirri talked about that already a while ago
I wish that they have done more profound analysis than only figuring out where – who – what -frame. As someone has pointed earlier, where is very much a part of what. Google search gives you locations to places. Doesnt Siri also give you addresses etc? Linking search both to ‘things’ and locations. Has there been any mention, if Iphone5 will have nfc? If Android crashes for some reason, then Nokia will have their chance.
http://www.phonearena.com/news/Nokia-confirms-330k-Lumia-sales-in-the-US-vindicates-comScore-and-Nielsen-numbers_id32451
http://www.phonearena.com/news/Nokia-shipped-4-million-Lumia-smartphones-in-Q2-2012_id32440
Contradicting reports on “shipped” and “sold”
I have requested this on another site, I will request this here again.
Good day boss! Can you please make a separate article highlighting the better news that out of 10.2 Million smartphones shipped, 4 Million are Microsoft Lumia, 6 Million are Nokia Symbian devices?
Just would like the people to know that despite ZERO promotion, Nokia Symbian devices are still the cash generating smartphones for Nokia.
Thank you so much for your kind consideration. More power!
“Just would like the people to know that despite ZERO promotion, Nokia Symbian devices are still the cash generating smartphones for Nokia.”
4 000 000 Lumias x ASP ~200 EUR
6 000 000 “others” x ASP ~130 EUR
Pretty much even, I’d say. Q3 will probably see this change in favor of the Lumias.
Lumia’s ASP is 186 €, not 200 €.
So we can count the sales for Lumia and others. Total sales for Smart Devices was 1541M EUR. Total number of devices was 10.2M, of which 4M was Lumias and the rest 6.2M was others.
Lumia sales: 4M x 186 EUR = 744M EUR
Others sales: 1541M – 744M = 797M EUR
So the others made 53 million EUR more money than Lumias. Plus Lumia’s marketing was very costly unlike the others.
In Q3 we will see a big drop in Lumia sales. The number of units sold will drop a lot, as people don’t want to buy obsolete WP7 units and will instead wait for WP8 devices or iPhone 5, or just buy an Android now. The ASP will drop too as we’ve already seen Lumia price cuts and Elop will have to make even more drastic price cuts if he wants to sell even some of those “Osborned” WP7 phones.
I would not bet on a big drop in Q3 Lumia volumes yet, as Lumias are now available in more and more markets (afaik 50+) and 610 is rolling out more widely. ASP will go down, yes, due to, again, the 610 but also price cuts in the other models.
The good news regarding Symbian was that its margins are at the same level to Lumias at about 16% – at least to some extent thanks to the 808 of course, I would guess in other models the margins are fairly thin.
That we hope, of course.
I think you’ll find that the 53 million is within the margin of error in those figures, so yes, pretty much even like I said.
Q3 sales numbers for Lumia are increasing week-on-week as we speak. Where is this “big drop” coming from that you mention?
The ASP will probably decline somewhat as the focus will likely shift towards the 610.
As for obsolete WP7 phones, I have no clue what the heck you are yapping. My Lumia 800 works as fine as it did the day I got it, and it will just keep getting better with future updates, WP7.8 being the next huge improvement.
Zipa:
They are? If they are then the increased global availability and better availability of 610 and 900 must be the contributing factor – and contributing more than even I expected.
Any insight as to what makes you think week-on-week sales of Lumia are increasing?
I agree that the “big drop” is speculation on a massive scale, but there is also logic behind it. I wouldn’t be surprised to see a big drop. On the other hand, if Nokia can manage 4-6 million Lumias sold in Q3, that would be a great stepping stone to reach that 10 million ballpark for Lumia in Q4 I’ve been thinking they should show to solidify the trajectory.
Just checking up on this myself, at least here Elop is quoted as saying that while Nokia is expecting some hit from the WP8 announcement – none has happened yet, instead Lumia sales have kept growing in Q3 so far.
Interesting, obviously the increasing regional and price-range availability of Lumia is still resonating. Like I’ve been saying, Q3 is the first full quarter of near global Lumia availability. It might count for something.
But of course it is still early days, we’ll see what happens closer to WP8 release.
Finnish source:
http://www.taloussanomat.fi/yritykset/2012/07/19/nokian-elop-windows-phone-8-kovien-odotusten-kohteena/201233925/12
I can’t see how nokia can compete google as the “where” company. google knows everything, everybody is sharing, offices, restaurants, hotels, with reviews, pictures, tons of information. when i search restaurants on google maps, there are about 30 in my town, nokia maps knows about 7. nokia has to get people share their information to collect more POI’s.
That is a challenge obviously, but Nokia has had long-term partnerships with both Bing and Yahoo! – maybe they will work to fill out such holes.
If someone would understand the results (limitated to the mobile division), I share with you a personal analysis made by 4 simple charts that summarize the Nokia situation.
Let’s see http://www.themobilestats.info/2012/07/19/nokia-financial-results-q22012/ and feel free to use them where you want!
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