I think I should look a bit back at my forecast on Nokia Q3 results. My forecast was:

5.2 M shipped Lumia devices
5.3 M shipped other smartphones (Asha line not included in 5.3 M)
Market share 6.0%” [1]

Now Nokia’s results from today:

2.9 M shipped Lumia devices
3.4 M shipped other smartphones
(Asha line not included, but full-touch Ashas sold 6.5 million units – more than Symbian, Lumia and MeeGo combined!)

Business analytics will look at overall results and say that Nokia Group achieves operating profitability and go buy some stock. Naturally this should be credited to Nokia Siemens Networks that actually brought in the money.
But I’m gadget geek, I want to know what happens to handsets. So let’s see how I got to my conclusion. I based it on:

  • Previous Nokia market share being 6,7%.
  • Nokia being unlikely to gain market share.
  • Kantar survey showing growth in Europe. (Nokia results matched this close enough)
  • No new profit warning. (Nokia group turned profitable, why would have there been?)
  • No expectation of dramatic Symbian sales collapse. (Well, Symbian oversold Lumias. Still fits to picture.)

These seem to have matched. Except for my China sales assumption (I assumed that China sales would have increased, actually they decreased). Now how can this be so much off?

I’ll tell you my secret now: going from 6.7% market share to 3% suggested by Tomi would have meant 55% drop of market share in one quarter! In Q2 2011 when Elop effect hit with its full strength, Nokia lost only 33% of its market share. World record at that.
There were no such damaging events preceding this quarter (blahblah old Lumias Osborned blah).

So 33% is possible, but reaching maximum limits. How much market share is 33% less than Q2? It’s 4.5% – still more than current estimation of todays figures. Something is not adding up here. Did I miss something?
Hmmm… I think I had one more expectation:

QoQ growth of industry can be expected to be around 15%. (Rough average for past two years.)
Now this is a huge variable. In Q1 2011 Industry growth dropped to 0 and Nokia’s unit sales collapsed. Similar thing could happen again and it would destroy my unit sales estimate, but not market share estimate.” [1]

Whoops.

Do we have any signs of industry growth slowing down? Are unit sales still up?

  • Apple has not given their results, but since iPhone 5 started selling September 21st, it is likely they did not do so good this quarter.
  • HTC did not report unit sales, but their profits are down. Unit sales probably are down too. [2]
  • RIM shipped 7.4 million BlackBerrys compared to 7.8 million on previous quarter. So its down. [3]
  • No news of Huawei, as far as I can tell.
  • ZTE issued a profit warning. Yikes! [4]
  • Samsung does not give unit sales and has been skyrocketing no matter what rest of industry does so we cannot really make decisions based on that.

These are largest players. No direct sign of increasing sales so far. It could be that industry growth has indeed stopped. Therefore Nokias unit sales to China would have been lower. Therefore Kantar survey (measures market shares) would still be valid, but the unit sales behind it just were lower.

Now I said already when I made my prediction that market share will be available later as all major analyst houses release their estimates and Tomi Ahonen does average of those. So let’s see then if my analysis is totally off. Meanwhile I’ll just go pointing out mistakes of Tomi Ahonen as usual. 😛

REFERENCES:

[1] https://dominiescommunicate.wordpress.com/2012/10/15/guesses-on-nokia-q3-2012-results/

[2] http://www.maati.tv/2012/10/11/htc-announces-q3-2012-financial-results-profits-still-down/

[3] http://techcrunch.com/2012/09/27/rims-fiscal-q2-2013-results-net-loss-of-235-million-on-2-9-billion-in-revenue-7-4-million-blackberrys-shipped/

[4] http://usa.chinadaily.com.cn/business/2012-10/15/content_15817001.htm

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