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February 26, 2012

Average quarter for Windows Phone; Nokia becomes largest manufacturer

According to a research by Strategy Analytics, Nokia has become the largest Windows smartphone supplier in Q4 2011, replacing others device manufacturers including HTC. Overall Windows based smartphones sales grew 35% QoQ to 2.7mn in Q4 2011 from 2.0mn in Q3 2011.
While the numbers might seem good overall, it is disappointing that sales from other vendors actually declined QoQ by 10% to 1.8mn units.

Nokia the bright spot for Windows in Q4...
For Microsoft and Nokia, the only encouraging part, if the data is to be believed, is that Windows on Nokia is finding at least initial acceptability.

Nokia's share in the Windows pie is already 33% and could rise well above 50% in Q1/Q2 2012 as Lumia is available for a full quarter and Nokia launches additional models.

Forgettable 2011
Overall 2011 was very poor for Nokia as its market share in smartphones declined more than half to 15.8% while shipments also declined by a quarter to 77.3mn, even though the smartphone market grew 63.1% YoY to 488.5mn units.

Worse for Nokia was that, even non smartphones volumes declined YoY by 2.7% to 339.8mn. Overall handset sales volume dropped by 7.9% in 2011 to reach 417.1mn units.

Most of the financial indicators also registered a decline with revenues dropping 17.8% and operating profit declining by a massive 75.0% YoY.

What next?
The next two quarters are going to be crucial for both, Nokia and Windows Phones, especially with Nokia rumoured to be launching new models. If Nokia can get a good foothold, than it may be able to ride with the soon-to-be-launched Windows 8, stem its recent decline and again become major player in the mobile phones market.

Remember people typically change handsets every 2-3 years, sooner in many countries. So while, Nokia seems to be on the down and declining, fortunes can easily change. The rise of Android and IOS and fall of Blackberry and Windows over the last few years indicate that major, disruptive changes are possible and do happen.

But the the margin of error is declining and certain things like app stores make switchover difficult and expensive, so Nokia will have to make the next two quarters count.
 Here's hoping we write a completely different post about Nokia in 2013.

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