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Nokia shares dropped over 16 per cent on the Helsinki Stock exchange today after it cut its profit forecast for the first quarter. The Finnish phone firm said that it now thought its operating margin for the first three months of this year was around -3 per cent, instead of a previously expected break-even range of plus or minus …

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Translation

"competitive industry dynamics" and "gross margin declines, particularly in the smart devices business unit"

means

"nobody wants our Windows phones even if we practically give them away"

Way to get off your 'burning platform'

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Anonymous Coward

Re: Translation

I think the phrases Nokia came out with, have multiple possible meanings. To your suggestions for translations, I'd add "it's all the fault of that ex-Microsoft fool Elop, who Osborne-d our smartphone range months before we had anything to replace it with"...

I still wouldn't be surprised if Microsoft Borg-s what remains of Nokia, and by the looks of this, perhaps sooner rather than later. After all, Nokia still has some decent R&D going on (even now), and even better from Redmond's perspective, is sitting on a nice fat juicy portfolio of patents. Don't tell me the idea hasn't even crossed the Windows behemoth's mind...

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JC_

Re: Translation

"sold two million Lumia... in the first quarter" on the page turns into nobody wants our Windows phones in your head?

The Reg hive mind clearly loathes Elop, but in 2011 the schedule for Meego was to have three phones shipping by 2014. That's still two years from today, assuming no delays, compared with the three WP7 phones Nokia already have on the market and selling in the millions.

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Anonymous Coward

Re: Translation - Millions ?

It must be hard for you to put a positive spin on this so you have all my sympathy.

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JC_

Positive Spin?

No spin (and no interest to disclose, either) because it's worth understanding why Elop made the decision to go with WP7. The whole Trojan Horse conspiracy is stupid and much less interesting than the facts.

Imagine joining Nokia as the boss and having to come up with a strategy when Symbian is a dead-end and MeeGo - the great hope - won't come out for another three years. Everyday Nokia is getting eaten alive, Google won't offer any help and time is fast running out.

Business Week has a good article, check it out.

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Silver badge

@jc

2mil units *shipped* in 3 months vs 850K Android activations *per day* (end of Feb stat)... yes, "nobody wants our phones" seems pretty accurate.

Even by their own prelaunch forecasts of 2mil in the 1st quarter of release, they're several months behind schedule. With more markets covered, more devices shipping that's a disappointing 'momentum' for the product. Factor in Nokias claim to dominate WP7 sales, the apparent cannibalisation of HTC and others sales, that's not a healthy WP7 market.

Nokias bigger problem is pricing. No longer able to afford to build devices themselves and fighting a price war doesn't leave much room for profit and a lot of unemployed locals. Nokia didn't just sell their future to Microsoft, they hocked it to far east manufacturing as well.

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Silver badge

@jc: Google won't offer any help

Apparently you forget Nokias own admission that they wouldn't go with Android because they couldn't *replace* Google Maps with Nokias service and still have the apps package.

Was their map service really more important than having a phone business? Maybe they should just get out of mobile and move to services and software, instead of hooking up with the biggest shark in the pool.

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JC_

@Paul

2 million Lumias sold (I'm going with 'sold' because that's what the article states, FWIW) is a lot better than no sales of nothing. HTC are competition so they can hardly be cannabilised by Nokia.

Name any mobile manufacturer which makes its phones outside Asia. Apple has done very well with slapping "Designed in California" on the back of Foxconn's efforts; if Nokia were to keep production in Finland then it would be going into the fight of its life with one hand tied behind its back. </cliches ;) >

Nokia didn't sell its future to Microsoft, they're MS's immediate hope in mobile and that's why MS paid so much for them to sign up. Each needs the other now, but there's nothing stopping Nokia from switching down the line, and who knows, they might just do so.

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JC_

Re: @jc: Google won't offer any help

Apparently you forget Nokias own admission that they wouldn't go with Android because they couldn't *replace* Google Maps with Nokias service and still have the apps package.

There was a lot more to it than maps, but consider it from Nokia's point of view: they spent billions on buying out Navteq so that they could use the maps & navigation as a unique selling point. Go with android and throw that away, or leverage it on another platform? Which would you choose?

On a Lumia you get worldwide (pretty much) offline navigation. The interface needs improvement, but it's a compelling feature for a lot of punters.

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Silver badge

Re: Positive Spin?

From the article:

...Microsoft was trying to get Nokia to make a line of phones using Windows Mobile, and in return would make a version of Office to run on Symbian devices. Nokia wanted more; it asked Microsoft to use its Navteq mapping service and share revenues on ads that would appear with the maps. Unable to get the larger deal, the companies announced one to get Office onto some of Nokia's Symbian models...

As Office for Symbian has recently been announced it seems that this is what came to pass. Nokia has made an impressive turnaround and delivered Windows phones faster than I think many expected. This is indicative of the possible synergies between the two companies. In the same time it has also delivered some nice updates to Symbian but managed to throw market share away. All in all, maybe not that impressive.

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Silver badge

Re: Translation

> the schedule for Meego

There is the N9 and the N950. The latter was stopped though it was said to be ready for production. Whether a third Meego device was being readied is not known.

It is likely that the 2 million 'sold' actually means 'shipped', especially the 900. It is probable that the N9 is still outselling the WP7 phones, they had sold 1.3 million of those 3 months ago when WP7 had only managed a total of 1million.

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Anonymous Coward

Re: Translation

When you say selling, you of course mean "selling" (as is giving away as replacements, review units or press and developer freebies).

I doubt they have SOLD millions, infact I don't know anyone stupid enough to own one.

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Re: Positive Spin?

and so the obvious answer is to go with Microsoft and their Windows CE based phone OS? A platform which not only was/is crashing and burning at v6.5 but they planned on a redesigned UI(WP7) with no market share and that'll be followed shortly by another OS upgrade(WP8).

yes, that was their only choice and a the right one. Is there an evil Kirk in your universe?

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Re: @Paul

do you really think Microsoft didn't make them sign something which ties them to Windows Phone OS for years _exclusively_? Nokia's blood will be all gone by the time that symbiotic relationship is over.

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Holmes

Re: Translation

Are you sure, you were not under the rock all this time? :-O

You might want to check the link below:

http://www.gsmarena.com/nokia_n9-3398.php

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Paris Hilton

Re: Positive Spin?

Please, check your facts about Meego:

http://www.gsmarena.com/nokia_n9-3398.php

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JC_

@Alex

Yep, I'm aware of the N9, but it isn't actually running MeeGo. It's OS - Harmattan - is based on Maemo.

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Bronze badge
Windows

"The Reg hive mind clearly loathes Elop"

Erm, well, I must've been excluded from the hive/borg/whatever.

After the article I read on Bloomberg, thanks to a previous poster's link (Which I can't find), my attitude to him has changed. Basically, he's got a shit job. A bit like a sewerage worker, whose only chance of success is to shine every turd.

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Windows

I found the article...

http://www.businessweek.com/print/magazine/content/11_24/b4232056703101.htm

Thanks to whoever posted it.

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Bronze badge

What does this mean?

"around -3 per cent, instead of a previously expected break-even range of plus or minus two percentage points."

Does it mean they expected somewhere between a 2% loss and a 2% profit?

Presumably *around* -3% means 3.5% so they are doing over 5% worse than they hoped.

However, it seems they are doing pretty well given they killed the biggest best established platform.

Does this include the big bung they were given by MS to take up WiPho?

http://www.theregister.co.uk/2011/03/08/nokia_microsoft_deal/

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Re: What does this mean?

If I remember correctly, a percentage point is a tenth of a percent - so it would be -0.2% to +0.2%....

However I don't remember basic economics, so I might be wrong....

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Silver badge

Re: What does this mean?

You are wrong.

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Thumb Down

Rock Bottom

share price, but I don't think it would be wise to invest. I think they are more likely to be a fatal casualty than a recovery.

After seeing them put all their eggs in the Windows Phone basket, - "I'm out"....

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Anonymous Coward

2 millions units in a quarter?

So, that's nearly half of what Apple sold over the weekend when the 4S was launched. Still got a way to go then...

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Anonymous Coward

Re: 2 millions units in a quarter?

1.5m units are buried in a deep pit under a frozen lake outside Oulu. They couldn't bury any more phones without owners without everyone getting suspicious over their made up numbers.

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Can anybody tell me how to 'sell Nokia shares short'?

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Anonymous Coward

Forget about it!

Just sell them quickly while you still can.

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Stop

You really want to risk that?

I mean chances are tomorrows figures will be even worse once they discover that big hole in the group full of unsold Windows Phone models.

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Devil

You're looking for the "long put option"

Read about it on Wikipedia: http://en.wikipedia.org/wiki/Option_%28finance%29

Here's how to do it:

1. Get a brokerage account with no minimum transactions and low fees. Usually you have to put down $3-5,000 cash deposit.

2. Buy an option to sell the stock (a "put" option") at some future date (the strike date) and price (strike price) you feel the stock will decline. These are sold in lots of 100 stocks to a contract. For example the 1/18/2014 put option for Nokia at $3 costs $0.62 today, so 100 contracts would cost you $6,200.00 plus fees and cover 10,000 shares. Track your progress here: http://www.google.com/finance/option_chain?q=NYSE:NOK or on your brokerage website.

3. If before 1/18/2014 the price of Nokia stock falls fast enough, the option will increase in value and you can sell it at a profit. If it falls below $3.00, the option is "in the money" and from then on tends to increase in step with the stock price. If Nokia recovers from their stumble, you're out the whole $6,200 plus fees but you don't have to buy the stock at that daily rate - the option just expires unused. If Nokia goes bankrupt and the stock price falls to a penny on the strike date, buy the 10,000 shares of stock for $100.00 and exercise your option to sell them at the $3.00 price: you net $29,900, less fees, or over $23,000 profit.

As you might imagine this game was a lot more fun when Nokia was selling for $35 in 2008 because people didn't expect the stock to fall so quickly, and the put options were much cheaper, and it had much further to fall. If you see a company getting suicidal you can get the options for just a few pennies before anybody catches on and really clean up. There are currently 968 contracts open at the $15.00 price expiring on 1/19/2013 - those folks are going to do really well as those options could be worth over a million and might have been bought for a couple thousand dollars.

If you see a company headed the other way you do the same deal, only it's called a "long call option" because you're buying the option to buy the shares at a future date. I don't see many companies getting inescapably brilliant as I do ones that appear stupidly self-destructive though.

The real "short call option" is only for real heavy-hitters. It involves taking the other side of the countrary option ("call option") to this bet you would use if you thought the stock was going to go up. Since there's no limit to how high a stock can go, there's no limit to the risk - which is why "selling short" is the ultimate expression of no-confidence in a stock.

This is all gambling - don't bet more than you can afford to lose. I'm not an investment advisor and I'm definitely not yours. The above information is for entertainment value only, and should not be taken as a recommendation for any course of action. It may be inaccurate, and your mileage may vary.

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Anonymous Coward

Correction

"Nokia blamed its changed forecast on "competitive industry dynamics" and "gross margin declines, particularly in the smart devices business unit"."

Nokia blamed its changed forcast on the decision to dump a highly anticipated product and replace it with a dead horse suffering from three broken legs and and a serious bowel disorder.

Until they dump Elop (and preferably sue his in the process) noikia stock is worth less than used toilet paper.

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Anonymous Coward

Silly, Nokia,

you didn't notice what happened to Yahoo, did you ?

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FAIL

Re: Silly, Nokia,

Not just Elop though - Nokias board should walk for their cowardice and inability to see what the decision to go with the least popular phone OS meant. Cannibalising patents and things like the ad revenue stream have also occurred in Q1 so the numbers are worse than they appear anyway.

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WTF?

Where's the awesome hardware?

The one thing many of us were really hoping for when we heard about Nokia's move to WP was the awesome hardware creations of Nokia coupled with the smooth, user-friendly and oh-so-handy Windows Phone (wheee - waiting for the downvotes for this comment!).

But the one thing we haven't seen is the amazing hardware. Where's the N95 equivalent? Where's my hardware keyboard, solidly constructed over-spec'd dream device? I'm still waiting for it. Sure, the Lumia series so far is mildly pretty and stylish, but it hasn't yet made me say 'oh, yes...f-ing wow' - like I did with the N95.

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Silver badge

Re: Where's the awesome hardware?

Nokia didn't have time to design awesome hardware. So they've pulled off the neat trick of taking existing hardware and putting new software in it.

Be fair though. The Lumia's *are* brightly coloured.

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Anonymous Coward

2m in this market is poor

In the same period even Motorola sold more phones. Motorola! And Sony. And HTC. And Samsung. And LG. Oh, and don't forget Huawei.

Nokia's smartphone market share in Q1 2012 is around 8%. It was 12% last year, 24% the year before and a whopping 40% three years ago. They also sold FIVE times as many Symbian devices as WP ones in Q1 2012. Amazing.

And to top it off it appears they are losing money on their WP7 handsets.

But I'm sure WP8 will turn the tide eh?

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Anonymous Coward

Re: 2m in this market is poor

Turning the tide... that's what Microsoft said when WP7 was first released in 2010 and nobody cared.

"Wait for WP 7.5 (Mango), it'll be awesome!"

Instead of waiting for Microsoft's next hyped up product, I'd rather get something that works now.

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Anonymous Coward

The start of a beautiful friendship

2 million units sold proves that nobody wants siloed applications with a red number above them, it proves that people want live tiles that only Windows Phone 7.5 can offer.

Once the word of mouth spreads the already impressive numbers can only keep on rising and the amazing cutting edge designs of Nokia coupled with the fantastic codebase of Windows Phone 8 with it's amazing range of apps will be lapped up by the people

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Thumb Up

Re: The start of a beautiful friendship

Two people (so far) have missed the subtle irony in your post.

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Silver badge

competitive industry dynamics

Translation: all the other phone makers were supposed to stand still while we caught up to 2010 with these phones we threw together. They cheated by bringing out phones with features that Microsoft prohibits us to match, such as high screen resolution, dual core, replaceable SD cards, working data connections, ..

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Thumb Up

Re: competitive industry dynamics

Luv it! And don't forget syncing options as well.

Oh and missing out on something that was original and simple to sell like the swipe interface of the N9.

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Anonymous Coward

Best time to buy

With shares dropping 14% there has never been a better time to buy Nokia shares.

At the end of the day they are betting the farm on Windows Phone and at the end of the day Microsoft have enough money to throw at Windows Phone until it's successful. You name it giving developers 'incentives' giving phone companies 'incentives' astroturfing, smear campaigns against opposition they have the money and time to do it all and they will and in five years they'll be the only major player in the game and the status quo will resume. Everything else Apple, Android they'll end up with similar market shares to OS X & Linux distros

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Re: Best time to buy

Like they had enough money to make Zune successful? With some things all the money in the world is not enough.

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So what was so bad...

.... about Symbian?

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Anonymous Coward

How sad

It's sad to see the once-mighty Nokia reduced to a little OEM bitch of Microsoft.

With Captain 'ex-Microsoftie Trojan Horse' Stephen Elop at the helm and dragging Nokia down to hell with the 'turd ecosystem', it's hard to watch. Especially if you grew up with Nokia phones and have an emotional connection to the Finnish company.

To add insult to injury, Nokia (a phone company, in case you need to be reminded) is most likely going to be pushed by Microsoft/Elop into making a Windows 8 TABLET. That'll be a new low in Nokia's history. Making paper and rubber aren't as demeaning as compared to making 'Metro, Metro, Metro' tablets.

Nokia, I sincerely wish you all the best with my kindest intentions and affections. Perhaps one day you'll wake up and muster enough courage and foresight to sack Elop.

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Key point

Will Lumia 800/900 update to WP8? Microsoft and Nokia have been very quiet on on whether Lumia WP7 customers are going to be trapped in WP7 or if, like Apple and iOS, an update to the new release is part of the deal.

If owners of the Nokia 900 have their phones obsoleted this autumn by WP8, could be game over for the Nokia marketing strategy. Odd nothing has been said so far.

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Anonymous Coward

Re: Key point

It's not going to happen.

Upgrading WP7 to WP8 is a technical impossibility.

When Microsoft is very quiet, very coy about a certain topic, you know the answer is negative.

And can you blame it? A marketing blitz for WP7 devices, only to be followed by a public confession that customers are buying a phone that is not future-proof on the software front, and will be obsolete in 6 months time.

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Anonymous Coward

Re: Key point

"Obsolete in 6 months time"? I'd almost agree, except I'm not sure WP7 devices aren't obsolete *now*...

All the on-screen eye-candy they can muster, can't disguise the features WP7 is lacking, that even the supposedly "obsolete/dead/outdated/yadayada" Symbian was packing in 2010 - to name but three: USB OTG (host) support, full multitasking (and not a kludgy workround), and the ability to play most common video formats natively (without having to spend ages converting them on a desktop machine first).

I hope the PureView 808 is launched in the UK in time for my next phone upgrade, otherwise I'll be running my N8 into the ground, and then it's an Android for me. Well done, Elop - you can now join the pantheon along with Osborne (the computing one) and Ratner...

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