Why did Nokia Symbian smartphone sales crash this year? Infographic

Staska  By on 22 Jul 11

Nokia reported results for the second quarter of 2011, and they are terrible. As expected.

Did you expect anything better? You shouldn’t. It is perfectly clear now that Nokia has been disrupted by Android and iPhone, and there’s not much they can do this year to make things any better.

Competition knows about weakness in Nokia Symbian portfolio, and the inability of the platform itself to compete on anything else but price. If rivals could match Symbian handsets on price, with  good enough, similarly featured Android devices – 9 customers out of 10 will leave the shop with new Android device in their pocket.

And, as of this spring,  competitors like Samsung and HTC are matching Nokia Symbian device price points aggressively. Take a look at this Infographic (price data from Amazon.de):

Things were over for Nokia Symbian smartphones in the second half of last year, when Android phones got good enough and cheap enough for most of the former Nokia smartphone buyers.

A year ago Nokia started losing market share by 5-6% (of the total) a quarter. It went down from 39% to 33%  in Q3 2010, then another 5% – from 33% to 28% in Christmas quarter. In Q4 2010 Nokia managed to slow the decline a bit with a boost from from the novelty and pent-up demand for terribly delayed Symbian 3. In Q1 2011 they floated on air by stuffing Nokia distribution channels in China and Europe to the hilt. Unfortunately, distributors can take and move only so much of old crappy phones, and with nothing interesting to stimulate the demand, Nokia is now paying the price. With smartphone market growing by leaps and bounds, Nokia sold 8.5 million less then they did last quarter. Nokia sales in China dropped by 53%, in Europe by 21%.

Of course, some Nokia/Symbian fans and analysts who consider Stephen Elop, the strategy shift to Windows Phone, and “Burning Platforms” memo to be the root of all Nokia troubles, where quick declare  that they have been proven right, and that Nokia Q2 results show that all of this is happening only because of February 11th.

Sorry to disappoint you, guys. Nokia’s current state of affairs has little to do with Feb 11th, and everything to do the mistakes/failure to react to disruption by former management. Symbian is just not good enough to compete with the latest versions of Android, and it’s improvement is way too slow. It was way too slow 3 years ago, it was way too slow last year, and it is way too slow today. February 11th, or not.

Symbian’s efficiency was a big competitive advantage when processing power in a phone was scarce and expensive. The key selling point for most of Symbian devices these past few years was the price. Unfortunately Moore’s law works almost just as well in mobile, as it did in PCs. Computing power got cheap and plenty enough this year, and Symbian lost the only competitive advantage it had.

Nokia N8 and other Symbian devices were positioned to compete on price with Android flagships like Samsung Galaxy S and HTC Desire. Unfortunately, Nokia’s competitors introduced next generations of their flagships this year, and slashed their last year model prices significantly. While Nokia launched X7 and mostly cosmetic S^3 make-over that is Symbian Anna.

Right now, Nokia rivals have several Android handsets, that are cheaper and, in many cases, better then anything Nokia has to offer in the same price range. The only feature that Android vendors arguably could not match yet – is camera. But very few customers will chose a phone simply because it can take better pictures.

It’s simple – if offered to pick between Nokia N8 and cheaper Samsung Galaxy SL, or X7 and Galaxy S that costs 20% less – the choice is obvious. For consumer and the sales guy in the shop. It’s Galaxy S. You do not need to invent some imaginary Nokia boycotts caused by Nokia’s February announcement, to understand why almost nobody wants to buy Finnish smartphones anymore.

Nokia will continue to bleed market share, and, most likely, lose unit volumes for the rest of this year. It is very likely that they will end 2011 with the market share in a single digits. But it does not matter much in the long run. What’s done is done, and Nokia has to pay the price for it’s hubris of the last 3 years.

What matters – is whether Nokia’s bet on Windows Phone pays off or not. We should know that by this time next year.

 

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  • http://twitter.com/rodrigottr Rodrigo Arantes

    “16% YoY is a decline – but it’s not that much bigger then what happened in Q4 2010 and I would not call it a crash”

    You just can’t be serious, Staska. You are so good on talking s%&$ that is impossible to me to keep myself quiet. Every time you drop me a pearl like this beauty up here.

    But now I think I understand… you like so much Elop’s stile of management because that is exactly the same brilliant kind of management you would use if you where a manager!!

    So… I really wish you that little decline of 16% on your monthly salary and that you don’t feel it as a crash because is not. In fact. You should enjoy it. =D

  • symbianlover

    nice article, however, we miss your comment @tomiahonen ‘s blog ;-)

  • http://tamilhindimovies.com/ Watchtamilmovies

    i take phone build quality and camera quality as priority.. android is pretty decent but it is spoiling its name.. take a look at xperia x10 mini.. it has very bad memory management and the phone goes on a loop restart when skype is loaded. i’ve used windows mobile back in 2003.. it was very reliable and supported many codecs via tcmp player. im sure microsoft will dominate in another 5 years time.

  • Guest

    Symbian isn’t a bad OS – more mature and full-featured out-of-box than Android.  And it has lower system requirements – meaning that Nokia could dominate the low to mid-range sector.  But it also has limitations – which is where the bells and whistles replacement to Symbian should come in for the higher-end phones.  Which would probably be Meego.

    Instead of that sound strategy and continuing to develop the popular Symbian system while evolving away from it in the long term, Nokia ditched Symbian and moved to WP7, which will make it undifferentiated from other handset makers.  Nokia’s present failure has everything to do with Feb 11.

  • Guest

    Microsoft mobile phone OS is not quality.  Nokia has always had hardware and software quality – at least until recently – and that has been key to its success.  Quality on both counts.

  • Guest

    “What is more, he is tying Nokia to the Windows mobile platform in a do
    or die bid, without exclusivity. Even if Elop manages the impossible and
    actually does manage to sell Windows phones, they will face competition
    from others jumping in with rival Windows phones.”

    It’s a typical MS deal.  Nokia is finished.

  • Anonymous

    Hi Staska.  New to this site, and let me just say that I find your insight about Nokia to be very objective, sensible, and balanced!  As a matter of fact, I’ve read quite a few blogs/posts and they typically lean towards ‘it’s all Elop’s fault’.  But the evidence is there, as you’ve pointed out in this piece (and a few others that you’ve written), that Nokia was ‘hittin’ the skids’ long before Stephen Elop came aboard.  I really appreciate your pov, as it is very refreshing amidst all of the misery, and knashing of teeth by those who simply will not come to terms with Nokia’s choice of WP as their primary OS.

    The current WP device makers (HTC, LG, Samsung) basically gave WP their sloppy seconds with regards to phones/hardware – the devices are uninspiring, boring, have no aesthetic deferentiation, etc.  I’ve been aware of WP7 since July 2010 and as of today, I still have not purchased one as a result of the piss poor offerings of the current crop of devices.  That Nokia has committed to release at least 12 WP devices in 2012 plus 1 this year is wonderful!  Nokia will release more WP devices in 2012 than all of the other oems released in 2010 combined! 

    Personally, I am excited about the WP offerings that Nokia will bring to the market and will definitely purchase one from Nokia only.  Not saying that WP will be Nokia’s savior, but I don’t think that WP will be Nokia’s undoing either.

    Nokia has my support.

  • http://www.procompare.com/ Laptop Computers

    Your comparison just shows how nokia deals with the market beats.. just this is because of some other best apps in smart phones..

  • Anonymous

    Side note: the “Osbourne Effect” is highly debatable. Plenty of people contend that the it was the eventual release of an inferior model that was the real problem.

    That said, rarely are well-executing companies pre-announcing platform shifts so far in advance with nothing in the pipeline. It is because they are floundering and lack the current lineup to compete. Such acts are usually desperate. Nokia was not doing fine before February 11th. Pre-announcing was a symptom of their problems, not the cause.

    For people on this forum, Elop’s announcement was suicide. They end-of-lifed all products shipping this year. Even worse, for loyal Nokia customers, the platform shift raises the question: Perhaps I should now evaluate other platforms, since I’ll be changing platforms anyways?

    For the average consumer, however, it’s not so clear. Did the average consumer even know about this announcement on February 11th? The general public knows Nokia but has no idea what Symbian or MeeGo are. They want the phone that’s fun to swipe and has apps. For these people, price matters. The quality of the software matters. What they see their friends doing with their phones matters. Android and Apple have the buzz, and Android is even cheaper? Sign me up.

  • http://drgeorge.org/ ricegf

    Actually, the Osborne Effect may be driven more by the sales channels than end user demand. Seeing that a new model will be coming out that the company is already touting, distributors may cancel or defer current orders and focus on selling products that aren’t being dissed by their own manufacturers. This doesn’t require an attentive consumer base, just attentive business partners.

    Still, it takes a pretty significant leap of faith to look at the discontinuous Symbian sales curve / cliff and claim the average consumer was blissfully ignorant of the announcement, and the sudden sales drop’s temporal alignment with it was purely coincidental. But do you really intend to deny that the halving of the stock price isn’t related to the announcement? Investors who simply buy and sell stock without considering the long-term implications of a company’s strategy don’t have money to invest and affect stock prices for very long. That the stock price was *rising* in the weeks prior to the announcement and dropped *immediately* thereafter is strongly indicative that investors expected a very different announcement, and like me have little confidence that this unexpected direction will be successful.

    That said, Nokia’s problems are certainly long-term and systemic. Mr. Elop has failed to address them.  I would readily contend that announcing the addition of Android to Nokia’s existing lineup, with formal support for Qt apps for all Android phones (maintaining a consistent portfolio and rewarding the developers they had been courting for so long), would have been better for short-term cash flow, more likely to succeed long-term, and far less likely to crater the stock than putting all of Nokia’s eggs in a Windows Phone basket that has grown its share from “very small to very small”, as Microsoft’s CEO stated recently.

  • http://www.facebook.com/people/Quintus-Murray/1469036783 Quintus Murray

    before that ppl were already fed up with shitty symbian!!!!!!!!!!!! what really killed nokia was NOT feb 11th but was Nokia taking symbian all to itself away from more capable phone makers samsung always beasted nokia when they made symbian devices. The nokia N97 was SO BAD nokia gained a STIGMA and reputation of making garbage phones. ALL PHONES AFTER N95 WERE FAILURES!!!!!!!! understand this simple concept brainless fanboy!!!!!! ppl aren’t waiting for the goodstuff they are getting it now from HTC and samsung with android.

  • http://www.facebook.com/people/Quintus-Murray/1469036783 Quintus Murray

    best post so far ur logical and non bias ur name is a biit contrary to ur intelligence lovenokia

  • http://www.facebook.com/people/Quintus-Murray/1469036783 Quintus Murray

    true but it was shitty phones like N97 and other fails that killed symbian!!!!!!!!!! If nokia didn’t give itself an unfair advantage over samsung for making symbian phones. samsung would still be making symbian phones that don’t suck!!!!! and then ending symbian instead of making symbian phones THAT CAN COMPETE they copped out with wp7. Symbian had much potential but was killed by shitty phone after shitty phone if they actually took high-end market seriously and maximised symbian’s full abilities they won’t be in the shit they are in. Can you imagine a galaxy s2 symbian variant or HTC it would expose symbian’s true abilities as its flexing on fast hardware showing off its speed. supporting dual core is one thing actually releasing a phone with dual core is another. symbian can use tegra 2 but didn’t

  • http://www.facebook.com/people/Quintus-Murray/1469036783 Quintus Murray

    cause WP7 fell behind on cutting edge hardware thats why!!!!!!!! If they kept up with dual-core and the infamous xda folk plus their feel and look they would utterly obliterate android. The biggest mistake nokia did to symbian was kill symbian competition then release shitty phones further destroying the OS. If they put in an atom chip with symbian they could have stayed as #1. WP7 appears to be mimicking nokia’s symbian failures by realeasing inferior hardware to compete against superior android devices.

  • http://www.facebook.com/people/Quintus-Murray/1469036783 Quintus Murray

    you are right on the money couldn’t say it better myself the low end phones killed symbian. Lack of good phones were the real problem elop isn’t addressing that problem

  • http://www.facebook.com/people/Quintus-Murray/1469036783 Quintus Murray

    no one is interested in WP7 beacause it runs on low end hardware when compared with the superphones running android. But wp7 devices are still better than midrange androids. What killed symbian is slowly killing WP7!!!!!! Make no mistake the HTC HD2 was a champion at time of release. Still no true successor has been released!!!!!

  • http://drgeorge.org/ ricegf

    Since I’ve noted several times that I’ve never owned a Symbian phone, it would appear it is not me who is brainless or a fanboy. Your unnatural love for Android and problems with capitalization and punctuation may require some professional help, though…  ;-)

  • Luis Lugo

    nokia, need to change to wp7 , because the future is there , going to be great mobile software, really.windows 7 sell 100,000.00 new license you can imaging, sky drive music and documents, you can acess every where not need to charge your phone with this. xbox live playing agame and control game with you cel, is only biggener , check windows 8 coming, check this future. going to cel phone 2 in couple years.

  • Majorquaresma

    I bought the N8 and I like Symbian^3. That Elop guy has EVERYTHING to do with the disaster. In a desperate attempt to please the american market, that has historically and sistematically ignored Symbian and Nokia, the stupid guy tells THE WHOLE WORLD that the very same OS that they had just released is a big pile of shit, that their products are shit and that “we´ll have good products… say… 14 or maybe 18 months from now”. American never bought Symbian devices and could not possibly care LESS about that stupid memo. The rest of the world, from where Nokia’s money would come, simply decided they should go Android since one stupid person had, overnight, killed Symbian^3, Symbian^4, Qt, Meego and all Nokia’s previous promisses. It’s such a stupid move. How can one single stupid person do that… and BE PAID to do it!!!

  • Majorquaresma

    I bought the N8 and I like Symbian^3. That Elop guy has EVERYTHING to do with the disaster. In a desperate attempt to please the american market, that has historically and sistematically ignored Symbian and Nokia, the stupid guy tells THE WHOLE WORLD that the very same OS that they had just released is a big pile of shit, that their products are shit and that “we´ll have good products… say… 14 or maybe 18 months from now”. American never bought Symbian devices and could not possibly care LESS about that stupid memo. The rest of the world, from where Nokia’s money would come, simply decided they should go Android since one stupid person had, overnight, killed Symbian^3, Symbian^4, Qt, Meego and all Nokia’s previous promisses. It’s such a stupid move. How can one single stupid person do that… and BE PAID to do it!!!

  • Anonymous

    Not only did compertitors outprice Nokia, they also out-featured Nokia in speed, battery-life and in almost everything except camera (N8) and free offline Navigation (ex Ovi Maps, current Nokia maps).

    Nokia hardware is painfully slow at ARM 11 680Mhz.

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