As my readers should know by now, I point out the ridiculous claims of Tomi Ahonen in this blog. This time I want to start with a graph:

forecast_nonsense

I know I need to explain it a bit and I will. This is what we get if we use correct numbers to produce graph from Tomi Ahonen. His version of the same graph looked like this:

forecast_ahonen_units

[1]

So why the difference? First of all, because Tomi Ahonen uses half-year numbers to even out the graph (it’s okay, I just wanted to keep the quarterly fluctuation there so people see Q1 2011 – it is crucial here). And then there’s the fact that Tomi Ahonen does not use the numbers he claims he uses. And that I’m now going through here.
In Tomi’s words what we see is “Expert Consensus Forecast in Nokia 2010 Growth Pattern”. And where does that “consensus” come from? In his words:

Every published mobile industry expert organization who made a Nokia-related forecast during 2010 was convinced that Nokia would continue as the world’s largest smartphone maker into year 2011 and 2012 – that ws the consensus view, not one dissent! And every one of those industry experts, when considering Nokia using Symbian and MeeGo based smartphones, projected strong GROWTH in Nokia smartphones through 2011 and 2012. Every one of those experts was convinced that still today at the end of 2012/start of 2013, Nokia would be safely the world’s largest smartphone maker. (that is the blue dotted line in the diagram)” [1]

Quite reliable sounding text, right? He has explained those numbers before:

This is what the big independent handset industry analyst houses – all of them except Strategy Analytics – said about Symbian or Nokia. Four of them had a forecast about Symbian in 2010:

Abi Research said in February 2010 that Symbian would remain the biggest smartphone OS through year 2013.

Gartner said in September 2010 that Symbian would remain the biggest smartphone OS through year 2014 and would have 30.2% market share that year challenged by Android.

IDC said in September 2010 that Symbian would remain the biggest smartphone OS through year 2014 and would have 32.9% market share that year challenged by Android.

iSuppy said in August 2010 that Symbian would remain on top for at least 5 years.

And what of Canalys? They did not forecast Symbian but they commented on Nokia (which is only part of Symbian sales so its share is smaller than Symbian). Canalys said in November 2010 that Nokia would continue as the world’s biggest smartphone maker in 2011.” [2]

So those analyst houses gave Symbian market share predictions, not Nokia unit sales predictions. But Nokia held pretty stable 90% of Symbian sales in 2010, so 0.9 x prediction should transform into Nokia prediction in short term. Long term it depends on how many manufacturers drop Symbian (pretty much only one left was NTT DoCoMo, Samsung, Sony etc. had discontinued Symbian in 2010 already).
Now I have gone through this before, but since Tomi wanted to go to unit sales, I created the graph we saw at first. So how do we get to unit sales? If it would be January 2011, we couldn’t. But in January 2013 we can look back the reported global smartphone sales. If those forecasts had been true, Nokia would have had the forecasted % of the sales, which will be the unit sales we searched for. So take quarterly global sales, multiply those with market share prediction and bam – you get unit sales as they would have been if forecast had been valid. (Those are the red and green lines.)
Tomi’s “Expert Consensus Forecast” is supposed to be average of those two. That is the dotted blue line. His math skills are indeed beyond anything I have ever seen if he can get that result when doing average from those predictions.

So in brief the reason why Tomi’s graph is one big lie:

  • Gartner and IDC made forecasts starting from Q2 2010 numbers, not from Q4 2010 numbers. Tomi connects his “consensus” to totally wrong half of a year.
  • In terms of Market share, Tomi Ahonen reports Symbian had 32% market share at end of 2010. This is fact he admits, no denial there. IDC prediction was that Symbian would slowly decline to 32.9% by end of 2014. Symbian was below expected 2014 value already at end of 2010.
  • In terms of unit sales, Nokia was lagging behind those predictions in Q3 2010 and Q4 2010 already, by 3.7M units and 7.0M units respectively. That means Nokia should have sold 25% more phones during Q4 in order to catch up. It is safe to say that Gartner and IDC forecasts were out of date by end of 2010 already.
  • Even if not so, that “Expert consensus” would not indicate linear growth of sales. Global smartphone market growth was practically zero in Q1 2011. Since both Gartner and IDC forecasted declining market share for Symbian, even Gartner prediction gives decline in Nokia unit sales for Q1 2011. (IDC forecast goes slightly up, average of those two would be flat.)
  • There has never been “Strategy promise of 1-to-1 conversion from Symbian to Windows” communicated by Nokia. Ever. (Click on this link for details on how ridiculous that part of Tomi’s graph is.)
  • Bonus: See Q4 2011? Nokia unit sales grow there. Tomi has titled it “N9 MeeGo Bounce“. In reality global sales grew at that point (visible in trough IDC and Gartner predictions), so even with its market share decline Nokia was able to increase unit sales. (Tomi is usually quite quiet about that being Christmas sales quarter.)

So Tomi uses numbers that are 25% off by end of 2010 where he says Nokia was doing great. Not a small mistake by any measurement. And he has to use half-year values to hide the fact that even his “Expert Consensus Forecast” would not have grown in Q1 2011 which he says was ruined by Elop Effect. I hate to watch Tomi Ahonen waste the last bits of his credibility to – with all due respect – bullshit like this.

SECOND BONUS – MARKET SHARE GRAPH!

As said before, the original forecasts were in terms of market share. I’m copy-pasting a bit from my older post. To understand better how bad lie this whole graph is, it is good to see the origins. Here is the same data put to form of market shares (click on image to enlarge):

NokiaMarketSharePredictionGartnerIDC

Please note that at the date when IDC and Gartner forecasts were made, Q3 2010 results were not out yet. The forecasts made huge sense based on Q2 2010 numbers but not two months later, far less five months later.
In this graph we can’t even see Elop Effect taking place before Q2 2011. And now that we have Tomi’s “Expert Consensus Forecast in Nokia 2010 Growth Pattern” on its original place, please answer these riddles:

  • Do you think those predictions from Gartner and IDC are in any way valid for predicting Nokia’s market share from February 11th 2011 onwards?
  • Do you think Tomi’s line is “clearly consensus view by the leading expert analyst houses“?
  • How about Tomi’s line being “totally consistent with the average of the two analyst houses who gave a specific Symbian market share forecast“?
    (Gosh I love that “totally consistent” part. 😀 )
  • Do you think Tomi’s “Expert consensus” is continuing Nokia’s market share development of 2010?
    And most of all:
  • Do you think “any monkey” could steer Nokia’s market share to that trajectory, like Tomi claims?

Thought you wouldn’t. (All the previous quotes of Tomi can be found in his original post about this. [2])

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2013/01/picture-tells-it-better-first-in-series-of-nokia-strategy-analysis-diagrams-how-nokia-smartphone-sal.html

[2] http://communities-dominate.blogs.com/brands/2012/06/the-final-reckoning-of-burning-platforms-memo-damaged-nokia-by-wiping-out-13b-in-revenues-and-destro.html

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