Analysts: Nokia On Trac...

The Facebook IPO is expected to usher in a day of massive trading volumes on the markets, and some believe that might translate to a lift for some tech stocks . But one that could really use some help has just been served another course of bad press: Nokia is apparently burning through its cash reserves — fast. The company, for years the biggest mobile phone maker in the world, has fallen on very tough times, as competition from companies like Samsung, Apple and a barrage of inexpensive device makers, have translated into declines in sales, market share and profitability. That’s now translating into what has been identified as another issue: the burning of the cash pile. In the last five quarters, Nokia has burned through €2.1 billion ($2.7 billion) from its cash reserves. Analysts polled by Reuters on average believe that at the rate Nokia is going, it will go through another €2 billion ($2.5 billion) in the next three quarters, with the total current cash pile of €4.9 billion ($6 billion) gone within two years. To put that in some context, in 2007 Nokia had cash reserves of €10 billion in 2007 ($12.7 billion). That points to its cash pile burn accelerating — a result of the fact that the company has been trying to transform its business, which requires investment, while at the same time seeing massive sales drops: In the company’s last quarterly earnings , reported April 18, Nokia reported that overall revenues were down by $4 billion (€3.4 billion) to $9.7 billion (€7.4 billion). Smartphones, the core of Nokia’s fightback strategy, declined by more than 50 percent both in revenues and unit sales, and the company saw a 40 percent drop in revenues from devices, its biggest business, with sales in those now at €4.2 billion. Nokia also swung to an operating loss of $1.7 billion, blaming the double-whammy of competition from Apple/Google as well as restructuring costs, as the company has pushed to put a stronger emphasis on its new line of smartphones in a race to gain back its rapidly disappearing market share in the higher-margin end of the smartphone market. That market share has been slipping for some time now, but it was in the last quarter that it finally slipped enough to put Nokia into number-two behind Samsung. According to Q1 figures out earlier this week from Gartner , Nokia now has 19.8 percent of the mobile market to Samsung’s 20.7 percent. While Samsung’s sales have been rising, up to 86.6 million units from 68.8 million in the quarter a year ago, Nokia’s have been going in the reverse direction: now at 83.1 million units compared to 107.6 million a year ago. Nokia currently has two tranches of credit bonds outstanding: bonds of €1.25 billion euros at 5.5 percent maturing in 2014 and €500 million of notes at 6.75 percent due in 2019. These have now reached the lowest investment grade status at S&P , Fitch and Moody’s  with negative outlook. “I would not rule out the possibility of Nokia being downgraded further,” Nancy Utterback, a credit strategist at Aviva Investors, told Reuters. “The company is in a negative spiral that will be hard to reverse.” Reuters does also point out some bright spots. The company is expected to sell 20 million of its new Windows Phone-based smartphones this year, and 46 million next year. And if the company continues on its cost-reducing course, it could end 2012 with €2.8 billion ($3.6 billion) in net cash this year. And there is another possibility that we will likely see raised more and more: a “white knight” in the form of a Microsoft acquisition. The software company  is already heavily entwined with Nokia over the use of the Windows Phone OS — paying Nokia $1 billion annually for this — a relationship that could well deepen if Nokia’s problems continue to grow.  [Image: Images of Money, Flickr ]

Gartner: Q1 2012 Phone ...

Sign of a maturing marketing flattening out, a lack of compelling devices, or a contraction in the economy? Gartner today released figures that note that worldwide sales of mobile phones were actually down by two percent this quarter, to reach a total of 419.1 million units — the first time the market has declined since the second quarter of 2009, the analysts say. Gartner’s explanation is a slowdown in demand from Asia-Pacific, because of a lack of compelling new devices getting launched in the period: users are simply holding out until something better comes along. Nevertheless, of the vendors that are doing well, Samsung is riding at the top of the list, with 20.7 percent of all mobile sales globally, and among smartphones, it is the only Android vendor to have more than 10 percent market share — with Android now accounting for 56 percent of all smartphone sales in the quarter. This will be the quarter that people remember as the one when Samsung swapped places with Nokia, with others like Strategy Analytics also showing a similar shift. In Gartner’s calculations of mobile sales, Nokia has now slipped down to second position with 19.8 percent of all mobile sales to Samsung’s 20.7 percent, equivalent to 86.6 million units. Nokia, Gartner notes, had been in the number-one position since 1998 — but from the looks of its earnings for the last few quarters, it doesn’t appear that Nokia will be regaining the lead any time soon. (Don’t rule it out yet, though. Nokia just yesterday launched two more low-cost, souped up feature phones that play to the developing markets where it has continued to do alright, despite its market share losses in more advanced countries.) Among the other trends that Gartner noted, it pointed out that white-box vendors — the long tail of device makers that fill in the “others” category seemed to have been hit the hardest. It notes that while companies like Nokia may have been selling in less at the retail level, white-box vendors have a supply issue in that they overproduced and now have a build-up of inventory. That will mean very cheap devices will be hitting stores in the next couple of quarters as they try to shift their stock for the next generation of devices. (This by the way was a similar problem Nokia had in Q2 2011 , when Gartner suspected this might have made Nokia appear to have a bigger share of sales than it actually had.) Overall, Samsung and Apple were the only two vendors in the top 1o mobile rankings to have gained market share: the rest all declined, as you can see from the list below. Together, Samsung and Apple now represent 49.3 percent of all smartphones sold — a sure sign of the consolidation being that a year ago the pair only accounted for 29.3 percent. Nokia’s smartphone share is down to 9.2 percent, Gartner says. Gartner says that Samsung also managed to wrest the leading smartphone maker crown from Apple this quarter: it sold 38 million units to Apple’s 33 million. Among android makers, Samsung is also proving once again that it is the brand to beat: it accounted for 40 percent of all Android smartphone sales. (In that respect, Google’s Motorola buy seems less and less like a device play, or that it can realistically be one.) Smartphone sales accounted for just over one-quarter of all mobile sales: they stood at 144.4 million units, out of total mobile sales of 428 million units. That represented growth in smartphone sales of 44.7 percent, Gartner says. Samsung’s Galaxy S III, the follow up to its best-selling Galaxy S II, was launched only last month and is now gradually getting rolled out worldwide — although it has seen mixed reviews and so it remains to be seen whether it will prove to be a similar blockbuster for the Korean company. In the meantime, we all continue to guess when Apple might release its next iPhone — with many suspecting it will not be until the later half of this year.

This Is What Developing...

You know how all Android developers complain about fragmentation? Yeah, this is what fragmentation looks like. Animoca, a Hong Kong mobile app developer that has seen more than 70 million downloads, says it does quality assurance testing with about 400 Android devices. Again, that’s testing with  four hundred different phones and tablets for every app they ship! The photo above is just a sampling of Animoca’s fleet of Android test units. Yat Siu, who is CEO of Animoca’s parent company Outblaze, snapped and posted it from Outblaze’s headquarters today. In total, Siu says their studio has detected about 600 unique Android devices on their network. “We haven’t managed to track down all of those devices because, in large part, they are no longer available for sale,” he says. Sad cakes! On top of that, Siu said that the number of handsets from the lower-end Asian manufacturers is also growing rapidly. These are the phone makers that Nokia chief executive Stephen Elop was probably talking about in his famous “burning platform” memo  when he said that are Chinese OEMs were “cranking out a device much faster than, as one Nokia employee said only partially in jest, ‘the time that it takes us to polish a PowerPoint presentation.’” If you take those out, the actual number of devices you need to test for is much lower. But if you want to break into Asian markets, these phones matter and make it especially challenging for Android developers to ensure their apps work on every single Android device. Android fragmentation is a huge issue because developers have to check their work on dozens of devices. Animoca happens to be backed by Intel Capital and IDG-Accel, so it has the resources to buy all of these devices for testing and pay employees to use them. But imagine the long-tail of developers! Imagine the people who make the more the roughly 500,000 apps in the Google Play store. Total nightmare. It puts a real dent in Eric Schmidt’s prediction from six months ago that developers might start going Android first within six months. His deadline is up now and there aren’t signs of this happening. Appcelerator did a survey of 2,100 of its developer clients in March and found that, if anything, interest in Android development is stagnating . Siu is nonplussed though. He’s told me in the past that thorough QA testing makes Animoca’s apps retain users better because so many other Android developers do a bad job at it. Unlike iOS users who throw up their hands in frustration, write bad reviews and just leave, Android users tend to be delighted when they find apps that actually work flawlessly. He adds, “We like fragmentation as users prefer choice. We are not big believers that one size fits all.”

A Dreamy Look At A Woul...

This Nokia Lumia 850 is not real. It’s just a concept. But I would be proud to carry that phone in my pocket if it was real. The concept comes by way of The Nokia Blog , a fan site that found the concept made by Luxembourgish designer, BrianMFB. The 850, that once again is just a mockup, shows a slimmed down Lumia 800 that still regains a lot of the original character. The backside has tappered edges and flush mounted side buttons. The screen is a modest 3.8-inch as a 950 would likely have a larger screen. Nokia hit the 800 and 900 out of the park. Even Siri points out that the 900 is current the best cell phone on the market. Nokia will need an equally impressive showing to succeed the current lineup. However, if Nokia is smart, and yesterday’s rap video speaks against that thought , the company would let the current generation sit on the market for awhile. The 800/900 are amazing phones and do not need replacing anytime soon. Nokia’s money would be better spent in stronger marketing and bringing the phone to other carriers like Verizon.

Presenting The Worst Th...

No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. *Deep breath* No. No. No. No. No. No. No. No. No.No. No. No. No. No. No. What the hell is this mess? Nokia, a company struggling to rebrand its image to survive in the iPhone world, should not turn to hip-hop parodies for help. I mean, I’m always up for a good chuckle. My wife tells me I’m a fun guy. But this thing makes me want to retract every nice thing I’ve written about Nokia. The story goes that this video was shot in a Nokia Boston office in a desperate plea for viral attention for Nokia’s developer conference . I guess it worked. It will no doubt enter the Internet halls of shame and flanked by Rebecca Black and Chocolate Rain. However, this video, The Nokia Lumia Rap, truly challenges the timeless adage of there is no such thing as bad publicity — even Gizmodo thinks it’s bad. Update : They pulled the video, which is probably for the best for humanity and Nokia alike. It must be somewhere online. Checking.