I just had to pick this from the book of Jorma Ollila I recently wrote about. These are diagrams at end of book, sources are mentioned below each graph (Nokia, ETLA, Gartner or some combination of two or three).

NokiaNumbers
(I’m very sorry about the poor image quality, it is a photo of the opening of the book)
Translations:
Nokian taloudellisia tunnuslukuja = Nokia financial key metrics
Nokian markkinaosuus matkapuhelimissa ja matkapuhelinverkoissa = Nokia’s market share in mobile phones and mobile networks
Prosenttia = percent
verkot = networks
matkapuhelimet = mobile phones
Lähde = source
Nokian matkapuhelinten myynti = Nokia mobile phone sales
miljoonaa kpl = millions of units
Nokian liikevaihto = Nokia revenue
muut = others
matkapuhelinverkot = mobile networks
Nokian pörssikurssi = Nokia stock price
Nokian osuus Suomen bruttokansantuotteesta = Nokia’s share of Finnish GDP
Nokian henkilöstömäärä = Nokia personnel count
Ulkomailla = abroad
Suomessa = in Finland
(that long text in last graph) = Nokia Siemens Networks caused increase of personnel count from year 2007 onwards.

I suppose everyone already guessed it: I do this because of Tomi Ahonen. His analysis on Nokia (just few picks as there are lots of them and they’re aligned):

Nokia invented the smarpthone so it started with 100% market share. It is predictable that Nokia would see market share erosion, gradually, over time, as the market drew new competitors, as happens with any new market.” [1]
Nokia 2009 market share was 39% and in 2010 that declined the normal level to 34%, there was no ‘collapse’ happening during 2010.” [2]

Now let’s remember that Tomi talks about smartphones. We’ll get back to that in a moment. But first how about these graphs picked by Nokia’s former Chairman and CEO, graphs that come from three renowned sources?
Nokia’s market share in all mobile phones DO suffer a collapse in 2010. It does not drop “normal level”, it falls eight points of percentage (that is almost a quarter of entire market share of 2009). But this is just acceleration, the drop of market share starts from peak of year 2006 and there is no visible recovery in the trend.
Now this was all phones. It is not the “new market” Tomi talks about. It is mobile phone market Nokia did not invent and where Nokia never started with 100% market share. Total market therefore cannot have “normal erosion”. I have written countless times in the past how Nokia lost over a quarter of its market share in smartphones in second half of 2010. All handsets drop in almost the same during the full year 2010.
I feel that all phones is far more significant metric than smartphones if we consider that world was moving from feature phones to smartphones. If Nokia was to keep market share steady, it would have needed to both keep selling feature phones at same rate as feature phone market moved and at same time increase its smartphone sales in the pace of consumer transition to smartphones. Nokia was unable to do either and this is prior to Windows Phone strategy.

But Tomi mentions also unit sales:
Note one more important thing. In 2010, when Elop took over the company – all metrics were GROWING. Nokia was growing smartphone sales (on Symbian), and growing revenues in the smartphone unit, the average price for Nokia phones was increasing – customers loved Nokia and were willing to pay more – and Nokia said openly, by Q4 the demand was so big, they could not keep up. The profits were up, the profitablity was up.
Also the dumbphones unit (featurephones) produced increasing unit sales, increasing revenues, increasing profits and increasing profitability (while its average prices were indeed falling). Nokia towered over its rivals” [3]

And back to those graphs:
Nokia’s unit sales peaked in 2008. More general we can say it remained more or less flat (between 432M and 468M phones) since 2007. There is slight growth from 2009 to 2010 but nothing like growth of years 2005-2007 (or even from 2007 to 2008). And – as said – market share dropped nevertheless which means the competition increased their sales even MORE. It is hard to “tower over your rivals” if the constantly gain market share from you.

Nokia’s share of Finnish GDP was 4% at its peak. I’ve seen this being mentioned few times recently, usually in context of “Elop killed Nokia that was Finland crown jewel”. It’s interesting that the mentioned 4% peak is year 2000 – 10 years before Mr. Elop took charge. During years 2009 and 2010 Nokia’s share of Finnish GDP was down at 1.2% (still a lot for a single company). However it is hard to blame Elop for being reason of a drop that mostly took place before he came into picture.

Another often heard anecdote is the Nokia’s personnel count in Finland. Usual story is that Elop came and caused masses of unemployed ex-Nokians to emerge. He definitely cut down more headcount than OPK ever, but what comes to big trends preceding him, Nokia headcount in Finland was highest in year 2007 and was already decreasing year on year ever since.

As said, I just had to share this.

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2013/01/the-seven-biggest-collapses-in-mobile-handset-or-smartphone-history-this-is-part-3-in-the-nokia-disa.html

[2] http://communities-dominate.blogs.com/brands/2013/01/the-seven-biggest-collapses-in-mobile-handset-or-smartphone-history-this-is-part-3-in-the-nokia-disa/comments/page/2/#comments

[3] http://communities-dominate.blogs.com/brands/2012/10/the-there-pillars-of-nokia-strategy-have-all-failed-why-nokia-must-fire-ceo-elop-now.html

Advertisements