The very last question on Nokia’ s Q3 earnings call for the quarter ending September 30th 2009, was about whether the handset manufacturer would consider launching handsets with the Android platform – the answer to which gives us an idea of how the battle lines have been drawn:
Nokia CEO Olli-Pekka Kallasvuo first put forth the view that Nokia isn’t just a one platf0rm company: “We don’t believe in only one operating system. The N900 will have Maemo, based on Linux. We continue to invest in Symbian ,which we see as our mass smart phone platform. We’re investing in S40 on the product side. We are launching a booklet using Windows 7. We are pragmatic. At the same time, the thinking is based on openness as well.”
And then, the specific answer to the question: “Would we consider Android? We don’t really have that thinking right now. There’s a lot of work remaining with Symbian: the user experience needs to improve. There’s so much in the pipeline there, where we can combine the positive telecom legacy, power consumtption, language version the openness: that will be extremely competitive in the future. There’s so much in the pipeline here.”
On the other hand, during Google’s earnings conference call just a few hours later, the company focused on how successful the Android has been – Google CEO Eric Schmidt said that Android adoption is about the explode, with vendors and distributors now ready. Google has seen 30 percent growth in Mobile, and the Android is now on 12 devices, in 25 countries, and with 32 carriers, and 10,000 applications available. (Ed: More from the Google conference call later today)
More notes from the conference call (details of Nokia’s Q3-09 results here):
Bullish About Q4
It’s important to remember that Q4 is usually the strongest quarter of the year for Nokia, due to the festive season. Nokia expects Q4 to be the best quarter of the year, in terms of net sales, volumes and margins. Rick Simonson, EVP & CFO of Nokia said he expects operating margins in devices and services to be up 100 basis points in Q4, because of more high end devices coming in. OpEx will be higher, but as a percentage of net sales will be flat.
The company expects to start shipping 4 other touchscreen phones in Q4 – Maemo based N900 in Q4, the N97 mini, the capacitive X6,and the 5230, which is launching at the un-subsidised retail price of EUR 149.
In Q3, demand improved better than anticipated in some markets, and the company said that there are signs on recovery, though uncertainty in end-consumer demand remains. The sequential increase in the devices business was due to seasonality, and improved consumer demand, but the nature of the price competition was robust.
Ovi Mail & Nokia Messaging
Ovi Mail took half the time for the 2nd million, than it did for the 1st. Nokia messaging has tied up with 35 operators
Smart Phone Performance
— The sequential decline in smart phones volumes was primarily due to older models; The absolute level of gross margins from smart phones increased.
— The N97: Nokia is pleased with demand for the N97: in Q3, the company shipped 1.87 million N97, and it was their highest net sales and gross margin generating product.
— The 5800 continued its strong performance, and was their second highest net sales and gross margins generating product.
— Touch Screen Phones: In Q3, Nokia had 3 touch screen devices – the N97, 5800 and 5530 XPressMusic, which shipped 5.7 million units. The touch screen devices delivered 35% unit growth and 42% net sales growth.
— E-Series: The decline in ESeries was due to a decline in E71. We’ll start shipping E72 in Q4. The Nokia E63 continued to gain momentum in emerging markets.
During the latter half of the last year and first half of this year, suppliers reduced capacity, and though they’ve added capacity now, there have been, at times, constraints for Nokia and other players. “We would have sold more devices and smartphones in Q3 without the capacity constraints. The constraints hit the smartphones part of the business more. One component is the camera modules used more in the higher end. Nokia currently has 5-6 weeks of inventory.