I think it has come time to fully go through Tomi Ahonen’s post about Nokia Market Share Projection. [1] I quoted him already in my latest post saying “”I mostly do not comment on forecasts, as forecasts are guesses and your guess is often as good as mine.“” [2]
I totally plan to keep that line. I already commented on the visible methods used in order to create the accurate forecasts he has given, so this is for all the other stuff (fillers) we have in his article. Once again I’ll hand you the FUDless (only the news) version in the end. Scroll there if the process of how to get FUD removed does not interest you.

Revised Nokia 2012 Market Share Projections, Revenues, Profits ASPs by Quarter

So I promised to do the update/revision (ie downgrade) of Nokia’s smartphone market shares for the year 2012, based on the Nokia profit warning announcements and the Microsoft Windows 8 etc announcements. This is that blog. Yes, this is going to be painful.

TOMI HISTORY FORECASTING WITH NOKIA UNDER ELOP

Tomi is telling his skills. I already went through this in “most accurate forecaster” so I’ll skip it.
Then we have once again the operator boycott – known to be FUD.
And then he (as I mentioned in my previous post) claims his July forecast was most accurate prediction of 2012 Q1. Well, at the time being I suppose it was. And since for that single quarter he actually had only one “alive” prediction, I’m going to give him the credit for it. (Read my post of the “most accurate forecaster” if you want to know why he loses all capability to take credit for prediction of Q4 2011 results at the same time.)
That projection had Nokia Q1 of 2012 sales hitting 11M smartphones (down from 24.2M as the latest published numbers by Nokia at the time, again the fall would be historical and record-setting if this happened in only 9 months). Nobody else projected such a low level of 11M Nokia smartphones to sell, using Lumia, Symbian smartphones and Nokia’s new MeeGo OS based smartphones all combined. How was Q1 of 2012? Nokia sold 11.9 Million smartphones.

THE CURRENT (TO BE REPLACED) FORECAST

It’s the forecast you can see in my previous post. As it is also the “going out” version, I skipped the figures to make this a bit shorter. But here’s a link to his original post if you want to read the numbers too.
Next Tomi says Nokia “had a profitable smartphone unit that was growing sales when Elop took over, in Q4 of 2010“. True – but only a half-truth.
But then he talks about Nokia’s Market share, finally:
it is 8% today, one year later. I had projected it to fall even further to just 3% by Q4 of this year 2012, and for the full year for Nokia to end with 5% of all smartphones sold this year. Lumia based smartphones sold have sold 7 million units in the fourth quarter and 19 million overall this year. This would have been a world record failure for any market share leader. Unfortunately, the situation will be worse still.

NOKIA REVISED (DOWNGRADED) FORECAST BY TOMI AHONEN IN JUNE 2012:

2010 Q4 . . . 28.3 M units . . . 29% market share
2011 Q1 . . . 24.2 M units . . . 24%
2011 Q2 . . . 16.7 M units . . . 15%
2011 Q3 . . . 16.8 M units . . . 14%
2011 Q4 . . . 19.6 M units . . . 13% . . . Lumia 600,000  
2012 Q1 . . . 11.9 M units . . . 8% . . . . Lumia 2.0 M
 
2012 Q2*  . .   8.4 M units . . . 5% . . . . Lumia 4.0 M
2012 Q3*  . .   5.2 M units . . . 3% . . . . Lumia 3.1 M
2012 Q4** . .   5.3 M units . . . 2% . . . . Lumia 5.0 M**
* forecast, all others actual
** Nokia Q4 2012 forecast for Lumia sales increase assumes at least 2 new Lumia smartphones released by November that run on Windows Phone 8
Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting June 27, 2012
The above may be freely shared”

Oh, it’s the Lumia sales! Other is his best guess and other is downgrade from Nokia’s “over 2 million Lumias”. I’m skipping both in FUDless version.

This is now my revised forecast, based on the latest news that Nokia is not finding market traction currently (as Elop told us in his Profit Warning two weeks ago) and then that the Lumia series is now Osborned by Microsoft – and we find that some operators have quit selling Lumia totally like T-Mobile the biggest operator of Germany and in markets where Lumia sells, it is now discounted as low as the flagship Lumia 900 that launched less than 3 months ago, is slashed to a price of 1 US Cent ($0.01) as on Amazon in the USA.

STOP THE PRESS!
T-Mobile Germany sells Lumia 800 and Lumia 710 [3], according to T-Mobile official statement they did “portfolio decision” not to include Lumia 900 too. Read my comments on his previous post.
WAIT – STOP THE PRESS ONCE MORE!
Lumia 900 is selling by price of 1 US cent subsidized by AT&T [4]. It’s going to cost you 575.99 US dollars unsubsidized [5]. AT&T has increased its efforts to sell Nokia phone and Tomi sees this as bad thing?!?
In contrast, T-Mobile Germany sells Samsung Galaxy S III by the price of 1 euro. [6] Since Galaxy S III only launched few weeks ago, I assume Samsung is in deeper trouble than Nokia then?
(Thanks to CN for the last point)

So I project Nokia smartphones to fall from the current 8% market share to 5% in Q2, then 3% by Q3 and down to 2% by Q4. I am assuming that Nokia will launch at least two Windows 8 based Lumia smartphones for Christmas, and release them by November, else this 2% level in Q4 cannot be met. The transition from Symbian (and MeeGo) will be almost complete by Q4 and total Lumia sales peak by Q4 will be 5.0 million units only…

…as Tomi is returning to both Operator Boycott and year 2010 Profitable Nokia. Skipped.

For the full year, the revised forecast now looks like this:
Full year 2010  . . 100.3 M units . . . 34%
Full year 2011  . .   77.3 M units . . . 16% . . Lumia 600,000 total 2011 shipments
Full year 2012* . . . 30.8 M units . . .   4% . . Lumia 14.1 M total 2012 shipments  
* forecast, all others actual
Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting June 27, 2012
The above may be freely shared
 
The fall is far FAR worse than that rapid collapse which killed Siemens, and that which killed Palm, and that which killed Motorola in mobile phones. This level of disaster will result far more layoffs at Nokia still to come. Nokia has already shut down many factories and started to retreat from markets and reduce sales. Those all will accelerate as these problems add up.

I should probably note that last section is “how bad it would be if this would actually take place”, not “how bad it is in reality”. It’s speculation of future if reality meets Tomi’s forecast so I’ll drop it from final version.

As to Nokia revenues, average sales prices and profits, here is my revised ASP and revenue projection for Nokia smartphones (excluding Microsoft’s marketing contribution).
2010 Q4 . . . 28.3 M units . . . 155 euro ASP . . . . 4.4 B Euro revenues
2011 Q1 . . . 24.2 M units . . . 146 euro ASP . . . . 3.5 B Euro revenues
2011 Q2 . . . 16.7 M units . . . 141 euro ASP . . . . 2.4 B Euro revenues
2011 Q3 . . . 16.8 M units . . . 131 euro ASP . . . . 2.2 B Euro revenues
2011 Q4 . . . 19.6 M units . . . 131 euro ASP*** . . 2.6 B Euro revenues
2012 Q1 . . . 11.9 M units . . . 127 euro ASP*** . . 1.5 B Euro revenues
 
2012 Q2*  . .   8.4 M units . . . 136 euro ASP*** . . 1.3 B Euro revenues
2012 Q3*  . .   5.2 M units . . . 152 euro ASP*** . . 1.0 B Euro revenues
2012 Q4** . .   5.3 M units . . . 140 euro ASP*** . . 1.0 B Euro revenues
* forecast, all others actual
** Nokia Q4 2012 forecast for Lumia sales increase assumes at least 2 new Lumia smartphones released by November that run on Windows Phone 8
*** ASP in Euro, excluding Microsoft marketing contribution of 250 million US dollars per quarter
Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting June 27, 2012
The above may be freely shared

We have some Elop Effect next. Skipped.

The Nokia smartphone unit went from profits to losses last summer and has not recovered since. We just heard in Nokia’s latest profit warning that the smartphone unit will generate losses at least through Q3. I am certain with these numbers that the losses in the smartphone unit continue through Q4 (and that all of Nokia corporation cannot recover to zero profitability for Christmas either).

THE COMEBACK STARTS FROM 2%

There were utterly ridiculous forecasts that promised over 20% markets shares for the Nokia-Microsoft partenship in Windows Phone from spring of 2011. There were completely baseless projections that somehow Nokia and Microsoft would pass the iPhone and become second biggest smartphone providers. And both Nokia and Microsoft have been pushing the fantasy of Windows Phone somehow being able to become ‘the third ecosystem’. No. That won’t happen. If there is a Nokia still alive by the end of this year (and I don’t think that is likely) then the market share ‘comeback’ does not start from 12% or 8% or even 5% market shares. It starts from 2% for Nokia, running on Windows Phone with the severely damaged Lumia brand.  
And for the ‘other’ Windows 8 so-called ‘partners’ – Samsung will be pushing its Tizen out this year plus selling its smartphones primarly on Android and bada, not Windows Phone. HTC will not prioritize Windows Phone over Android and neither will Huawei. All current Windows 7.5 based smartphones became obsolete this past week, so their sales are tumbling. If these three other manufacturers are really nice to Microsoft, they might release one Windows 8 based smartphone this year. Maybe. More likely not. But even if they do, their total combined sales will not make a difference, and Microsoft’s total combined market share in Q4 will still be only 2%, with Nokia Lumia and Samsung, HTC and Huawei all added together. Samsung’s bada alone will outsell them all as per usual, not to mention Samsung and Intel’s new Tizen OS that launches also this Autumn. How strong is this position for Microsoft? Well, when it last Osborned its smartphone platform, Windows Mobile, and Windows Phone finally launched, Microsoft walked into that situation with nearly a dozen Windows Phone handset partners and a 3% market share. Twelve months later, when half the partners had quit and Microsoft’s Ballmer said Windows Phone was selling at ‘below expectation’ levels, just before Nokia started selling Lumia smartphones – Windows combined market share globally of Windows Mobile and Windows Phone was down to .. 1.3%. Don’t hold your breath that Micrsosoft has some magic that wins in smartphones.

Small thing to point out, he starts from the expectation that WP7.5 (actually WP7.8) is obsolete. Not true. Unfortunately it’ll take to Q4 2012 results (released in January 2013) to know if he is right.

If you are an optimist, perhaps Microsoft and Nokia can grow by half their market share in one year, 2013. That would bring them up from 2% market share to.. 3%. Maybe you are a super-optimist and think they can double their sales, inspite of all the reluctance of carriers, the damaged carrier relationships, the depleted sales and marketing forces, the spent and wasted Lumia marketing (I mean, how many Xboxes can you give out, if the original Lumia launch with free Xbox 360s thrown in did not produce market success?), this partnership is not exactly loved by the industry and retail. So yeah, if you really REALLY want to believe in fairy tales, maybe in 2013 they might hit 4% market share doubling their performance from the end of this year. I don’t see that happening. Far more likely is that Nokia is sold, split, and the new owners of Nokia end the silly Microsoft misadventure and bring Nokia’s smartphone unit to the Android family. The Windows 8 platform sells well on the PC side but Microsoft quietly shuts down the Windows Phone experiment as another failure along the lines of the Zune music player and the Micrsosoft Kin phone series. But don’t ever think this can be salvaged into a ‘third ecosystem’. That won’t happen.

Well… This is all starting from 2% market share, which is only his prediction. So skipping that too in the final version.
Next we have operator boycott, obsolete Windows Phones, and profitable Nokia of 2010. I think I covered those already.

I will of course return to report by Quarter as the numbers come in, to see how close (or not) we hit the forecast(s). Everything in this blog may be openly referenced.

Thank you, Tomi. I did reference to quite many things.
(There was also some marketing of his books here, skipped those as they’re irrelevant to the FUDless version).
End of post.

FUDLESS VERSION:

Revised Nokia 2012 Market Share Projections, Revenues, Profits ASPs by Quarter

So I promised to do the update/revision (ie downgrade) of Nokia’s smartphone market shares for the year 2012, based on the Nokia profit warning announcements and the Microsoft Windows 8 etc announcements. This is that blog. Yes, this is going to be painful.

TOMI HISTORY FORECASTING WITH NOKIA UNDER ELOP

That projection had Nokia Q1 of 2012 sales hitting 11M smartphones (down from 24.2M as the latest published numbers by Nokia at the time, again the fall would be historical and record-setting if this happened in only 9 months). Nobody else projected such a low level of 11M Nokia smartphones to sell, using Lumia, Symbian smartphones and Nokia’s new MeeGo OS based smartphones all combined. How was Q1 of 2012? Nokia sold 11.9 Million smartphones.

THE CURRENT (TO BE REPLACED) FORECAST

it is 8% today, one year later. I had projected it to fall even further to just 3% by Q4 of this year 2012, and for the full year for Nokia to end with 5% of all smartphones sold this year. Lumia based smartphones sold have sold 7 million units in the fourth quarter and 19 million overall this year. This would have been a world record failure for any market share leader. Unfortunately, the situation will be worse still.

NOKIA REVISED (DOWNGRADED) FORECAST BY TOMI AHONEN IN JUNE 2012:

2010 Q4 . . . 28.3 M units . . . 29% market share
2011 Q1 . . . 24.2 M units . . . 24%
2011 Q2 . . . 16.7 M units . . . 15%
2011 Q3 . . . 16.8 M units . . . 14%
2011 Q4 . . . 19.6 M units . . . 13%  
2012 Q1 . . . 11.9 M units . . . 8%
 
2012 Q2*  . .   8.4 M units . . . 5% . . . . Lumia 4.0 M
2012 Q3*  . .   5.2 M units . . . 3% . . . . Lumia 3.1 M
2012 Q4** . .   5.3 M units . . . 2% . . . . Lumia 5.0 M**
* forecast, all others actual
** Nokia Q4 2012 forecast for Lumia sales increase assumes at least 2 new Lumia smartphones released by November that run on Windows Phone 8
Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting June 27, 2012
The above may be freely shared
 
So I project Nokia smartphones to fall from the current 8% market share to 5% in Q2, then 3% by Q3 and down to 2% by Q4. I am assuming that Nokia will launch at least two Windows 8 based Lumia smartphones for Christmas, and release them by November, else this 2% level in Q4 cannot be met. The transition from Symbian (and MeeGo) will be almost complete by Q4 and total Lumia sales peak by Q4 will be 5.0 million units only…

For the full year, the revised forecast now looks like this:
Full year 2010  . . 100.3 M units . . . 34%
Full year 2011  . .   77.3 M units . . . 16% . . Lumia 600,000 total 2011 shipments
Full year 2012* . . . 30.8 M units . . .   4% . . Lumia 14.1 M total 2012 shipments  
* forecast, all others actual
Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting June 27, 2012
The above may be freely shared

As to Nokia revenues, average sales prices and profits, here is my revised ASP and revenue projection for Nokia smartphones (excluding Microsoft’s marketing contribution).
2010 Q4 . . . 28.3 M units . . . 155 euro ASP . . . . 4.4 B Euro revenues
2011 Q1 . . . 24.2 M units . . . 146 euro ASP . . . . 3.5 B Euro revenues
2011 Q2 . . . 16.7 M units . . . 141 euro ASP . . . . 2.4 B Euro revenues
2011 Q3 . . . 16.8 M units . . . 131 euro ASP . . . . 2.2 B Euro revenues
2011 Q4 . . . 19.6 M units . . . 131 euro ASP*** . . 2.6 B Euro revenues
2012 Q1 . . . 11.9 M units . . . 127 euro ASP*** . . 1.5 B Euro revenues
 
2012 Q2*  . .   8.4 M units . . . 136 euro ASP*** . . 1.3 B Euro revenues
2012 Q3*  . .   5.2 M units . . . 152 euro ASP*** . . 1.0 B Euro revenues
2012 Q4** . .   5.3 M units . . . 140 euro ASP*** . . 1.0 B Euro revenues
* forecast, all others actual
** Nokia Q4 2012 forecast for Lumia sales increase assumes at least 2 new Lumia smartphones released by November that run on Windows Phone 8
*** ASP in Euro, excluding Microsoft marketing contribution of 250 million US dollars per quarter
Above data actual Nokia through Q1 2012, rest are forecast by TomiAhonen Consulting June 27, 2012
The above may be freely shared

The Nokia smartphone unit went from profits to losses last summer and has not recovered since. We just heard in Nokia’s latest profit warning that the smartphone unit will generate losses at least through Q3. I am certain with these numbers that the losses in the smartphone unit continue through Q4 (and that all of Nokia corporation cannot recover to zero profitability for Christmas either).

THE COMEBACK STARTS FROM 2%

If there is a Nokia still alive by the end of this year (and I don’t think that is likely) then the market share ‘comeback’ does not start from 12% or 8% or even 5% market shares. It starts from 2% for Nokia, running on Windows Phone with the severely damaged Lumia brand.  
And for the ‘other’ Windows 8 so-called ‘partners’ – Samsung will be pushing its Tizen out this year plus selling its smartphones primarly on Android and bada, not Windows Phone. HTC will not prioritize Windows Phone over Android and neither will Huawei. All current Windows 7.5 based smartphones became obsolete this past week, so their sales are tumbling. If these three other manufacturers are really nice to Microsoft, they might release one Windows 8 based smartphone this year. Maybe. More likely not. But even if they do, their total combined sales will not make a difference, and Microsoft’s total combined market share in Q4 will still be only 2%, with Nokia Lumia and Samsung, HTC and Huawei all added together. Samsung’s bada alone will outsell them all as per usual, not to mention Samsung and Intel’s new Tizen OS that launches also this Autumn. How strong is this position for Microsoft? Well, when it last Osborned its smartphone platform, Windows Mobile, and Windows Phone finally launched, Microsoft walked into that situation with nearly a dozen Windows Phone handset partners and a 3% market share. Twelve months later, when half the partners had quit and Microsoft’s Ballmer said Windows Phone was selling at ‘below expectation’ levels, just before Nokia started selling Lumia smartphones – Windows combined market share globally of Windows Mobile and Windows Phone was down to .. 1.3%. Don’t hold your breath that Micrsosoft has some magic that wins in smartphones.

I will of course return to report by Quarter as the numbers come in, to see how close (or not) we hit the forecast(s). Everything in this blog may be openly referenced.

Way to go, Tomi! This post actually has some news in it!
(Waiting eagerly to see how well your forecast goes in few weeks.)

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2012/06/revised-nokia-2012-market-share-projections-revenues-profits-asps-by-quarter.html

[2] http://communities-dominate.blogs.com/brands/2012/06/paging-stats-police-no-idc-not-even-close-no-windows-phone-will-not-pass-iphone-by-2016.html

[3] T-Mobile Germany list of subsidized Nokia phones
http://www.t-mobile.de/shop/allehandys/0,22732,10189-_3-0-1-0-10-,00.html

[4] Nokia Lumia 900 black
http://wireless.amazon.com/Nokia-Lumia-Windows-Phone-Black/dp/B007P5NHJO/ref=sh_br_ph_1?ie=UTF8&transaction=INDIVIDUAL_NEW&sr=1-1-entd&qid=1340786662957

[5] Nokia Lumia 900 black unlocked
http://www.amazon.com/NOKIA-LUMIA-BLACK-UNLOCKED-GENUINE/dp/B007TH66UA/ref=sr_1_45?s=wireless&ie=UTF8&qid=1340786794&sr=1-45

[6] Samsung Galaxy S III
http://www.t-mobile.de/samsung-galaxy-s-iii/0,23578,27057-_,00.html?WT.svl=00

Guideline for commenting: I hate the way Tomi Ahonen deletes criticizing comments from his blog. However, I plan to follow three of his principles: I’ll delete comments that are

  1. Personal insults to someone
  2. Duplicates
  3. Spam

In addition, if you wish to challenge my previous posts, please comment to those.

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