The Need for Nokian's Requisite 'Challenger Mindset' ...
... that Stephen Elop refered to in Thursday's Q1 2011 earnings conference call as his internal call to action.
While Nokia is still comfortably the leader in unit sales of both total global mobile phones and smartphones they are seriously challenged by their two principal competitors - Apple (high end smartphones only) and broad range supplier Samsung who in 2010 developed a very successful smartphone strategy baaed on Android OS and their own proprietary Bada OS) while also launching initial WinPhones. Apple became the smartphone revenue leader in 2010 as well as the overall mobile phone profit leader and Samsung is challenging Nokia in total handst revenue and profit as well ...
CY 2010 Sell-In Revenue, ASP, and Operating Profit for the Top Branded OEMs (b = Billions in USD)
Smartphones Only Net Sales (USD) ¦¦ Total Handsets Net Sales (USD)
================================ ¦¦ ====================================
CY2010: Strategy Analytics ¦¦ Vendor Reported Revenue
=============================== ¦¦ ====================================
# OEM Net Sales Share ASP ¦¦ # OEM Net Sales ASP Op Profit
= ====== ========= ===== ===== ¦¦ = ======= ========= ===== =========
1. Apple $28,7b 29% $604 ¦¦ 1. Nokia $38.6b $85 $4,371b
2. Nokia $15,8b 16% $202 ¦¦ 2. Samsung $33.6b $120 $3.790b
3. RIM $14,9b 15% $305 ¦¦ 3. Apple² $28,7b $604 ? High
4. Samsung $9,0b 9% ? ¦¦ 4. RIM³ $19,9b $305 $3,411b
Others $26,7b 27% ? ¦¦ 5. LG $11.3b $97 -$0.580b
--------- ---- ---- ¦¦ 6. HTC $9.5b $360 $1.340b
Total $99,0b 100% $338 ¦¦ 7. S Ericsson $8,3b $193 $0.211b
¦¦ 8. Motorola $7.8b $209 -$0.198b
·
¹ Strategy Analytics' (See URL below) reported % of net sales only. Revenue is calculated
² Apple provides insufficient data to calculate handset profit but ranks #1 in profitability.
³ RIM reported results are for their Fiscal Year 2011 ending February 26, 20111, not CY 2011.
http://www.strategyanalytics.com/default.aspx?mod=pressreleaseviewer&a0=5025
In Q1 2011 Apple became the revenue leader in total handset salea as well as martphone sales, outselling Nokia by a whopping $2.5 Billion USD in total handsets ...
Global Handset Units Sold & Wholesale Revenues in Q1 2011 (Strategy Analytics)
Apple ¦¦ Nokia
Metric Q1 '10 Q1 '11 ¦¦ Q1 '10 Q1 '11
================================================ ======== ======== ¦¦ ======== ========
Global Handset Shipments (Millions of Units) 8.8m 18.6m ¦¦ 107.8m 108.5m
Global Handset Wholesale ASP (USD) $606 $638 ¦¦ $83 $87
Global Handset Wholesale Revenues (USD Billions) $5.3b $11.9b ¦¦ $8.9b $9.4b
============================================================================================
>> STRATEGY ANALYTICS: Apple Becomes World's Largest Handset Vendor by Revenue in Q1 2011
Strategy Analytics Press Release
April 21, 2011
http://www.sys-con.com/node/1802442
According to the latest research from Strategy Analytics, Apple overtook Nokia to become the world’s largest handset vendor in revenue terms during Q1 2011. In revenue terms, Apple is now the world’s largest handset vendor, smartphone vendor and tablet vendor. ... <snip rest> ###
Samsung, LG, HTC, and Motorola report later this week. Samsung could overtake Nokia in handset revenue and/or profit in Q1, but if they don't probability is high that they could do so in Q2.
Global Handset Units Sold & Wholesale Revenues in Q1 2011 (Strategy Analytics)
Smartphones Only Net Sales (USD) ¦¦ Total Handsets Net Sales (USD)
======================================= ¦¦ ============================================
Q1 2011: Strategy Analytics ¦¦ Q1 2010 Vendor Reported Revenue
======================================= ¦¦ ============================================
# OEM Units Net Sales Share ASP ¦¦ # OEM Units Net Sales ASP Op Profit
= ====== ===== ========= ===== ===== ¦¦ = ====== ======= ========= ===== =========
1. Apple 18.6m $11.9b - $640 ¦¦ 1. Apple² 18.6m $11.9b $640 High
2. Nokia 24.2m $5,0b - $207 ¦¦ Nokia² 108.5m $9,9b $91 $978m
3. RIM¹ 14.9m $4.5b - $304 ¦¦ Samsung - - - -
4. Samsung ? ? - ? ¦¦ RIM¹ 14.9m $4.5b $304 $934m
Others ? - ? ¦¦ LG - - - -
--------- ---- ---- ¦¦ HTC - - - -
Total ¦¦ S Ericsson 8.1m $1.614b $199 $21m
¦¦ Motorola - - - -
·
¹ RIM: $4.5b is devices revenue only (81% of $5.5b total sales). Services was 16%,and
Software/Other was 3%. Operating profit of $934 billion is based on total rrevenue sales
of $5.5 billion.
² Apple provides insufficient data to calculate handset profit but ranks #1 in profitability.
² Nokia: $9.991 billion includes $297 million Services Revenue (9.694 billion w/o).
Elop on Nokia's Transition in Progress:
To say that it will be a challenging two years for Nokia as they transition is an understatemnt. Stephen Elop adressed the challenge and the requisite new mindset in the Q1 earnings CC:
>> "Q1 of 2011 has been a remarkable quarter for Nokia. It was during this quarter that we articulated the serious nature of Nokia's challenges in a manner that served as a quality arms for our employees. We also constructed and announced Nokia's new strategy for the years ahead. And now, we have shifted our purpose from defining our new strategy to taking the first important steps to realization.
During this time the fiercely competitive environment continue to increase and affect our business. Yet with our new strategy, we have more clarity around future direction and a stronger recognition for the work we must accomplish in order to improve our financial results.
In Q1, we took immediate steps to mobilize the company around three new business objectives, which are, regaining our leadership in smart devices with Microsoft as a partner; growing our leadership in mobile phones, as we bring the internet to the next billion; and also investing in future disruptions.
To accomplish these objectives, we are focusing on key differentiators, including signature user experiences, iconic hardware, differentiated software, and supporting an eco-system of services that consumers' demand. We are also taking advantage of our global reach, powerful supply networks and the strength of our brand. With all of this transformation, we also recognized that we must change the way we work in order to achieve our new objectives.
First, we are focused on improving the product competitiveness of our smart devices. This begins with being laser-focused on our Symbian results, ... During the quarter, we took deliberate action in an effort to support Symbian sales during the transition to the Windows Phone platform, including work, to enhance the ongoing competitiveness of the Symbian range of products. ... Additionally, we started shifting our smartphone business from Symbian to the Windows Phone platform, through our work with Microsoft and various industry partners. ... Hundreds of people already are engaging on joint engineering efforts, collaborating on a portfolio of new Nokia devices, porting key applications and services to operate on the Windows Phone platform and reaching out to third-party application developers.
We are making progress with our objective of investing in future disruptions. This is not an area on which we will provide regular operational updates. However, we have begun the process of pursuing the next generation of platforms, devices and user experiences that we believe will define some of the future disruptions in our market.
We need unquestionably accelerate our pace, which means changing how we operate. While we are still in the early days, we are undergoing changes to adjust our workforce to a challenger mindset. Over the last few weeks we have implemented new organizational efforts including being very deliberate in defining the behaviors, the attitudes and the environment that we believe must be present to drive great results.
Additionally, we are shifting to more localized empowerment, so the teams in the field, who are closest to our partners and customers, can respond to local market conditions more quickly. And we are increasing accountability across the organization by clarifying senior leadership roles, being unambiguous about decision-making rights and designing measures to tie compensation incentives more closely to performance metrics." ###
- Eric -
AI
