Samsung Undercuts Nokia: Debuts First Windows 8 Smartphone

by Holly Shoemaker

After the verdict in California, a Samsung attorney said the company had already put plans in motion to differentiate its products from iPhones and iPads. At the IFA trade show in Berlin today, Samsung did just that. In a move that undercuts Nokia, Samsung announced that in Q4 2012, it will offer its first Windows 8 Phone, the ATIV S. Nokia is expected to announce its new Lumia Windows 8 smartphones on September 5, 2012 in New York.

Overview of ATIV S

While the ATIV S is not the first Windows-based phone, it is the first Windows 8 one. It will feature a 4.8-inch HD display, HSPA+ support, a 1.9 megapixel front-facing camera and a 1.5 gigahertz dual-core processor. At this time, the price has not been released and the phone lacks LTE connectivity, which has analysts speculating that T-Mobile will become the first carrier to sell the phone. In January, T-Mobile started selling the Lumia 710.

Concluding Thoughts 

While I discussed in June how the rumor of Samsung buying Nokia lacked rationale, perhaps more news will follow if Nokia fails to gain traction when its releases its Windows 8 phone. One thing remains certain - Samsung shows no signs of losing its number one spot as the world's largest handset manufacturer; the company dethroned Nokia to gain that honor.

Digitimes Research Shows Growing Android Market; New Players in Chinese Market

by Holly Shoemaker

Digitimes Research reported on Friday that Android smartphone shipments will continue to dominate the market.

Overview of Findings
By the end of the year, the research indicates that the Android Market should garner 70 percent of the market share. For Q 2 2012, the research compared to IDC findings. IDC reported that the Android Market held 68 percent of the global smartphone market share in Q 2012, compared to Digitimes figure of approximately 60 percent. The IDC report attributed the growth to Samsung. Despite the current U.S. ruling against Samsung, it is likely that Samsung will continue to gain consumers as the ruling does not affect the popular Galaxy S
III.

Nokia should finally garner some attention with its Lumia phones.  The research shows that shipments of Windows Phones should double from last year to 21 million units.

Digitimes expects Apple shipments to surpass 125 million units. However, the growth is expected to be lower than the previous two years.

The Continuing China Factor

China continues to factor into the growing Android Market. Another Digitimes Research study estimated that China handset shipments will make up 430 million units in 2012. Smartphones should account for approximately 32 percent of the Chinese market, which is equivalent to 143 million handsets. There is also a growing number of entry-level handsets expected to debut in the China market.

Nokia Ups the Map App War and Partners with Groupon

by Holly Shoemaker

New map app features, or new partnerships to promote apps, have garnered much attention over the months. Now, Nokia has announced that it will promote Groupon deals on phones that run Nokia Maps. As part of the update, Nokia also introduced an “advanced route setting” that allows users to get and save directions to their screens. Nokia Maps is compatible on the Lumia 610, 710, 800 and 900.

Nokia's s Focus on Updating Maps

Nokia has focused much energy on its map feature. The company released an update to its map feature in March. In June, the company once again updated the feature to sync with favorites so users could view photos and reviews.

By continually updating the map app, and by partnering with a well-known company, Nokia has shown it understands the need to capitalize on the news garnered by Google and Apple with their maps. 

Targeting Late-Adoption Smartphone Users

The challenge for Nokia is that the company remains more popular among those who do not use a smartphone. The latest announcement shows the company understands the need to target later-adoption smartphone users. While it may seem like a slight reversal from its beta test campaign ads, it appears the company may be shifting away from those ads. That could work for Nokia because it gets the company closer to public opinion. People who do not own a smartphone have a more favorable view of Nokia, and consumers who have yet to purchase a smartphone may still use Groupon. Those looking for an alternative map device and shopping for deals on Groupon may find that a Windows Phone brings together two complementary parts.

Samsung to Buy Nokia? Rumor Lacks Rationale

by Holly Shoemaker

On Friday, June 8, 2012, shares of Nokia’s stock rose six percent amid rumors that Samsung Electronics may buy the declining Finnish mobile device company. Analysts will not confirm that Samsung will in fact acquire Nokia, and the companies have failed to issue any

statements.

Pure Speculation

This latest smartphone rumor lacks rationale as Samsung does not have to improve its market position. The company has already overtaken Nokia to become the world's largest device maker. Its Galaxy line of phones have also connected more with customers than the Lumia 700 and 900, which Nokia hoped would help the company once again compete in the North American market.

While it is clear Google will gain many patents through its acquisition of Motorola Mobility, some analysts suggests that any patents Samsung would gain from Nokia, would not equal the costs of integrating the two companies.

The rumor also fails to address the Microsoft aspect, seeing as Nokia partnered with Microsoft on its Lumia line of phones. At this point, Microsoft appears a more logical buyer, unless the company has put its hopes of generating more revenue with Barnes & Noble and the tablet market. Stay tuned...

Fitch Ratings Downgrades Nokia's Debt Status

by Holly Shoemaker

After failing to meet analysts’ expectations last week, Fitch Ratings downgraded Nokia’s debt status to junk on Tuesday, April 24, 2012.

Fitch Ratings lowered the company to a BB+ rating; the lowest rating is a BBB-. The agency also gave Nokia a “negative” long-term outlook, which means the company could have its debt rating lowered again.

In addition to Nokia’s disappointing numbers last week, Fitch also downgraded the company based on the following:

• The company’s decreasing number of devices and services. 
• Fitch cited concerns that Nokia would post bigger operating losses the next quarter. To avoid further downgrade, Nokia must show “substantial improvements” in Q3 and Q4 2012 and during 2013, including keeping sales consistent and earning profits on smartphones like the Lumia 900.

Despite this news, Nokia’s stock increased slightly on Tuesday.

Concluding Thoughts

Nokia’s fate will come down to the Lumia line.  The company has increased its advertising and will have to convince consumers that the Windows-based smartphone provides a solid alternative to Android or iPhone devices. While Nokia certainly faces hurdles, I am not ready to call Nokia the Finnish Research in Motion (RIM).

Nokia Posts Losses: Restructuring Ahead

by Holly Shoemaker

As expected, Nokia announced profits that fell short of Q1 2012 expectations on Thursday, April 19, 2012. 

Numbers at a Glance 

• The company reported a loss of $1.2 billion, or 929 million euros. 
• When compared to the last 12 months, sales fell by 30 percent to 7.354 billion euros. The figure was in line with analysts' expectations.
• In China, a growing market for Nokia, sales fell 70 percent when compared to last year’s figures.

Nokia's Response

In its conference call with shareholders, Nokia acknowledged the decline in sales, and attributed the numbers to restructuring changes. In Feb. 2011, Stepen Elop, Nokia’s CEO, spearheaded the campaign to reinvent Nokia by switching to a Microsoft Windows-based system, the Lumia line of phones. 

During the call, Elop confirmed that Colin Giles, Nokia’s head of sales, will exit the company in June 2012. The company also plans to decrease its operating costs. Elop said these moves are needed so the company may compete. In particular, the company needs to worry about Samsung. Samsung will likely dethrone Nokia and become the world's largest handset manufacturer.

Concluding Thoughts

Nokia has made significant changes and no one should overlook that the company has differentiated itself from other smartphone manufacturers. With the wide range of Android Market phones available in North America, introducing a Windows 7 phone seemed like a logical way to re-enter the North American market.

Nokia shipped two million Lumia devices in Q1, and analysts have pointed out that it took time for the Android Market to take off. The same could hold true for Nokia.

Ultimately, numbers speak louder than words, and Elop will need to prove that partnering with Microsoft was the correct choice over going with an Android smartphone. In Q4 2012, we will better know if Nokia's partnership with Microsoft pays off.

Nokia’s Quick Lumia 900 Fix Shows Commitment to Customers

by Holly Shoemaker

On Wednesday, April 11, 2012, Nokia announced a “memory management issue” affecting the Lumia 900. The company stated the issue was unrelated to hardware or the network. On Friday, Nokia announced it fixed the data connectivity glitch that it attributed to a bug within the phone's software.

Those who paid $99.99 for the phone, available from AT&T, will receive a call credit for $100. Nokia is offering the credit through April 21, which essentially makes the phone free. Customers may download the update from Zune or the Windows 7 Connector.

The fix came earlier than expected as Nokia planned to announce it on Monday, April 16, 2012. Resolving the bug early was a needed step for Nokia. The company announced this week that it will not meet analysts’ expectations for Q1 2012. The company is likely to fall three percentage points short of expectations.

To date, the company has sold 12 million smartphones in Q1 2012, down from the 19.6 million sold in Q4 2011.

Concluding Thoughts
 

I am surprised that Nokia found a software bug as the Lumia 900 appeared to go through rigorous testing. However, Nokia acted quickly to resolve the issue. The company's honesty is also refreshing and shows a focus on customer service. Some may count Nokia out at this point, but it is too soon to tell - the Lumia 900 has been on sale for less than a week. The company has some time to see how the United States responds to its latest phone, the brand still has international appeal, and Nokia has yet to approach the frustration level that plagues Research in Motion (RIM).

More to follow next week when Nokia officially publishes its numbers…

Nokia’s Lumia 800C Headed to China

by Holly Shoemaker

One of my blog’s last week discussed how China gained the number one spot in app sessions and activations. Now, Nokia has announced it will start selling smartphones that use Microsoft software in China come April.

Chinese consumers will have the ability to purchase the Lumia 800C without a contract for 3,599 yuan, approximately $573 dollars, in April. Nokia also plans to launch the 610C, a cheaper priced model, in the second quarter. This move also helps China Telecom, the country’s third-largest carrier. Nokia has said it hopes to market all four of its Windows smartphones using the company’s wireless technology. Eventually, all Nokia Windows phones will become available on all three of China’s mobile networks.

Concluding Thoughts

Nokia has already taken steps to win back North American consumers. It makes sense the company is now positioning itself in China. The timing also coincides with Apple’s CEO, Tim Cook, making an appearance in China this week to discuss labor violations and the trademark dispute.

As I previously mentioned with the Lumia release in the United States, Nokia and Microsoft have a lot at stake. Despite the ongoing issues with Apple in China, Nokia needs to compete. It also has to win back some market share from Samsung. In Q4 of 2011, Samsung overtook Nokia to become the number one mobile handset seller in China. Samsung had 24.3 percent of the market while Nokia captured 19.6 percent.