[Ben]

http://news.bbc.co.uk/1/hi/business/8308652.stm

Nokia has reported a loss for the July to September quarter after sales sank by almost a fifth.

The company made a pre-tax loss of 469m euros ($700m; £431m) for the period, compared with a profit of 1.41bn euros for the same quarter last year.
Net sales fell to 9.8bn euros compared with 12.2bn euros a year ago.

Nokia has suffered as other mobile phone makers, such as Apple, have stolen a march with more sophisticated smartphones, analysts say.
A massive swing into a loss-making position for the worlds largest handset maker, though perhaps not entirely surprising given the recession. What's worrying, however, is how the company will return to profitability in the face of such extreme competition from rivals new and old.

[Hands0n]

It is only to be expected. Nokia are suffering on two fronts, in my opinion. One is that the competition grew by two (iPhone and Android series). The other is that Nokia's software quality is beginning to show up badly against its opposition.

Whereas previously Nokia was pretty much all you had by way of Smartphone (at least), with only truly Windows Mobile to compete, there is now much more in the way of polished OS-based handsets around. Both the iPhone's OS X and Android's Cupcake and recent Donut OS are quite refined by comparison. And to top it all, Nokia have recently shown how they continue to put out heavily buggy OS in the form of their flagship N97 that has drawn shed-loads of critique, and rightly so.

Nokia are in no danger of disappearing overnight. But I do think that they can no longer rest on their own laurels. Not, that is, if they wish to remain a prominent figure in the Smartphone market.

[The Mullet of G]

Nokia have had a frankly terrible year. The 5800 seemed like a success at first, but it was a disaster in the making. If Nokia had avoided the touch screen it might have gotten away with it, but releasing the 5800 gave people something to compare against other competing touch screen offerings, and the 5800 was pretty mediocre in comparison and somewhat stale, I should know I own one.

Then the much hyped N97 eventually arrived, and it was like getting dressed up for a party in your finest clobber, only to arrive at said party and realise a decade had elapsed during the journey, and people are now calling you granddad and making disparaging comments about your aging attire. When it was first announced the N97 sounded impressive, but was very much dead on arrival. The final nail in its coffin was the 5800 getting a CPU speed boost to match the N97's, a flagship device running on the same hardware as a mid range music phone and its bunch of low end spin offs, was simply too much for most people to swallow.

But I think the single biggest problem Nokia have is like Hands0n pointed out, they have serious software issues. And its not just the buggy OS, its the buggy firmware updates, which for some users depending on network take months to arrive. And just the general way they have been treating customers, you can't sell someone a mediocre product, then repeatedly slap them in the face with equally mediocre firmware updates and service, then expect that person to buy another phone from you. :)

[Ben]

Pretty accurate accounts of the downfall of a giant there, I feel. Obviously it aint over until the fat lady sings, but we're all capable of identifying Nokia's current weaknesses and can but hope they address them in the near future.

I think we've long accepted the Nokia way as the best way. Probably because it was. I mean, personally, I don't think any of the NSeries has been strong at all. ESeries has been better, but even there I think the OS struggles. But a lack of innovation has allowed the competition to leapfrog Nokia and leave them playing catchup, which at the moment they seem wholly incapable of doing.

[The Mullet of G]

I think that Nokia were caught napping, or otherwise being their usual arrogant selves. Apple spent a lot of time and money developing iPhone and its OS, they poured a lot of time and money into a single product, and that shows in the product they released. The Nokia business model is to bring out a shed load of phones, none of which has seen much time or effort, and they lack that attention to detail and overall slick feeling of quality.

Apple set the bar pretty high, and others have tried to raise their game to that level, most recently Android 2 on Motorola's Droid, but Nokia opted to try and limbo under that bar and aren't even close to touching it, the price for sitting on your hands is you get left behind. And they didn't really act until their market share started to take a dent, by that time it was much too late and their phones looked prehistoric compared to what else was available.

Sadly Nokia seem unable to find a response to the current competition, their only hope is the N900, but they are stuck in a catch 22, they wont get behind it fully and support it as a flagship model, it'll have to play 2nd fiddle to the N97, so in some ways its already doomed. Also if they couldn't sort out the problems with Symbian in the time they've had, then what chance do they have with a newer more complex OS?

I feel that Nokia's past market strategy of never bringing out the one phone that does it all, instead choosing to spread those features across multiple handsets, simply wont work any more. They need to focus a lot of time and effort into bringing out an impressive product with a stable and shiny OS, once they have achieved this then they can build on that, much like the model Apple is using. But again Nokia have chosen the X Series, which are again pretty mediocre and more of the same, the flagship runs on the core 5800 hardware.....sigh. :confused:

[Hands0n]

Nokia's arrogance is legendary. They really have managed to convince themselves that it is only they who truly know what the mobile experience is all about.

No one can take it away from Nokia - they were in at the beginning and have been responsible for shiploads of mobile handsets. Their dominance of the world market in mobile phones is unquestionable.

But Time and the Tide do not stop moving. While Nokia seemed to just continue meandering along with their so-called "computer in your pocket" smartphones, the competition was hotting up. Nokia have, frankly, been caught with their pants down.

I did a quick bit of digging around to see what Nokia thought about these new upstarts ...

Nokia on Android

According to Niklas Savander, executive vice president of services and software at Nokia, Google Android isn’t yet ready for Nokia to make an assessment on. “A platform has three to four million lines of code” Savander told SFGate.com. “When Android has that many lines, we’ll make an assessment. Until then it’s just an announcement”.
Source: http://conversations.nokia.com/2008/05/23/google-android-is-not-for-us-yet/

Now, to tell the truth I really do no know how many lines of code go to make up the Android OS that is running on my HTC Magic. Nor do I care one single jot. What I do care about is how well it works, is it reliable, does it do what I want it to do. And I can with all honesty tell you that the Android OS does work so very much better than any Symbian OS handset I have ever laid hands on, up to and including the Nokia N97. Android on the HTC Magic blows away Symbian on the N97 - even with the latest release of Symbian that has just acquired scrolling!!

Nokia on Apple
Google it and all you'll find is that Nokia are suing Apple after two plus years of the iPhone's existence. Why now? You may very well ask... http://www.google.co.uk/search?hl=en&safe=off&q=nokia+on+Apple&start=0&sa=N

Nokia sat back and watched scornfully. They really didn't see the potential on the original iPhone, nor what the 3G did for the make. As Apple developed their OS X to deliver more functionality and address all of the shortcomings Nokia still did not move. Then just in time for the 3GS Nokia dropped the N97 as its "flagship" handset - and what was that like? Dreadful, in a word.

I believe that it will take a considerable time, still, for Nokia to even begin to understand where they are going wrong. They really still do not get it. And until they do, their demise in the smartphone market is virtually assured. Even their position in non-smartphone sales is not guaranteed - especially in the face of their new competition from the likes of Huawei and other Chinese entrants.

If Nokia do not wake up and smell this particular brand of coffee we may well be alive long enough to witness it disappear up its own orifice! Smugly no doubt.