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Nokia Sales Continue to Fall

July 18, 2013 by Leave a Comment

The company, based in Espoo, Finland, on Thursday announced a 24 percent decline in its second-quarter sales, to 5.7 billion euros, though it narrowed its second-quarter losses to 227 million euros, or $298 million, compared with a loss of 1.4 billion euros a year earlier.

The losses were lower than analysts’ estimates, but it is the eighth time in the last 10 quarters that Nokia has reported a net loss. The company saw a glimmer of light in the doubling of sales of its Lumia smartphone line. But Nokia, once the world’s largest cellphone maker, now ranks third behind Samsung and Apple and faces mounting competition from cheap devices made in emerging markets like China and India.

“When you are going through a difficult transition, you have to stay focused,” Nokia’s chief executive, Stephen A. Elop, said in an interview. “It’s hard work, but we’ve got a lot of positive things happening.”

Investors, however, disagreed, sending the company’s share price down 2.7 percent in trading in Europe on Thursday.

While Nokia still remains one of the world’s largest manufacturers of cellphones, the company now relies heavily on its cheaper, low-end models, which are primarily sold in developing economies.

These devices represented almost 88 percent of the 61.1 million handsets that Nokia sold in the second quarter, and have fewer features than high-end smartphones, which are much more profitable to sell. Growing competition from rivals in emerging markets, many of which use Google’s Android software, is eating into Nokia’s earnings.

In total, the company’s non-smartphone division reported a 27 percent drop in the number of units sold, to 53.7 million, compared with the same period last year. The figure is almost half of the total sales that Nokia reported at the end of 2011, and it said on Thursday that it would cut up to 440 additional jobs from the division.

In countries like China, where a growing middle-class population is clamoring for new phones, the number of devices sold by Nokia fell almost 50 percent versus the second quarter of 2012.

“There’s no good news at the lower end of the market,” said Roberta Cozza, a research director at Gartner in London. “The problem is that there are so many local emerging market players looking to build up market share.”

Faced with cutthroat rivals for its cheaper phones, Nokia also is trying to gain traction in the high-end smartphone market through its partnership with Microsoft. The strategy is proving difficult.

Smartphones running Windows software hold less than a 4 percent market share, compared with 74 percent that use the Android operating system, according to Gartner.

Yet, in a sign of some growing customer interest, Nokia reported sales of its Lumia line of smartphones almost doubled to 7.4 million units during the three months through June 30 compared with the same period last year.

The figure represents the largest number of Lumia phones ever sold in a quarter by Nokia since their introduction in 2011Last week, the company announced a new Lumia phone with a camera that has a 41-megapixel sensor.

Analysts welcomed the rising number of Lumia sales. But they raised concerns that the average price of Nokia’s smartphones fell almost 18 percent, to 157 euros, in the second quarter.

“The market would have liked to see more phones sold, but it’s a strong figure for smartphones,” said Janardan Menon, an analyst at Liberum Capital in London. “The more worrying trend is around Nokia’s average phone price. They have to bring that figure up.”

The main cause for the reduction was related to consumers’ continued preference for the company’s less advanced smartphone options, instead of its top-of-the-range devices.

Nokia said that it expected its third-quarter phone sales to outpace those for period just ended.

Article source: http://www.nytimes.com/2013/07/19/technology/nokia-sales-continue-to-fall.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Cellphone Thefts Grow, but the Industry Looks the Other Way

May 1, 2013 by Leave a Comment

Ms. Cha’s phone was entered in a new nationwide database for stolen cellphones, which tracks a phone’s unique identifying number to prevent it from being activated, theoretically discouraging thefts. But police officials say the database has not helped stanch the ever-rising numbers of phone thefts, in part because many stolen phones end up overseas, out of the database’s reach, and in part because the identifiers are easily modified.

Some law enforcement authorities, though, say there is a bigger issue — that carriers and handset makers have little incentive to fix the problem.

“The carriers are not innocent in this whole game. They are making profit off this,” said Cathy L. Lanier, chief of the police department of the District of Columbia, where a record 1,829 cellphones were taken in robberies last year.

George Gascón, San Francisco’s district attorney, says handset makers like Apple should be exploring new technologies that could help prevent theft. In March, he said, he met with an Apple executive, Michael Foulkes, who handles its government relations, to discuss how the company could improve its antitheft technology. But he left the meeting, he said, with no promise that Apple was working to do so.

He added, “Unlike other types of crimes, this is a crime that could be easily fixed with a technological solution.”

Apple declined to comment.

The cellphone market is hugely lucrative, with the sale of handsets bringing in $69 billion in the United States last year, according to IDC, the research firm. Yet, thefts of smartphones keep increasing, and victims keep replacing them.

In San Francisco last year, nearly half of all robberies involved a cellphone, up from 36 percent the year before; in Washington, cellphones were taken in 42 percent of robberies, a record. In New York, theft of iPhones and iPads last year accounted for 14 percent of all crimes.

Some compare the epidemic of phone theft to car theft, which was a rampant problem more than a decade ago until auto manufacturers improved antitheft technology.

“If you look at auto theft, it has really plummeted in this country because technology has advanced so much and the manufacturers recognize the importance of it,” said Chuck Wexler, the executive director of the Police Executive Research Forum, a nonprofit group focused on improving police techniques. “The cellphone industry has for the most part been in denial. For whatever reasons, it has been slow to move.”

Carriers say they have faith in the database, which they created with police departments across the country. They also say they are taking independent steps as well to address the problem. Verizon, for instance, says it has its own stolen phone database, making it impossible for devices reported as stolen to be reactivated on its network.

“We do care very deeply about this,” said Jason Young, T-Mobile’s vice president of product management. “If you’ve ever lost a phone or had one stolen, it’s a scary thing, it’s a painful thing and it’s a costly thing.”

Apple provides some assistance in locating lost or stolen phones with its free software, Find My iPhone, which can find a missing iPhone or remotely erase its data. But the service does not work once the phone is turned off or disconnected from the Internet. To locate an iPhone, an Apple customer can log in to iCloud.com with a Web browser and see a map of its approximate location, and can then hit a button to erase its information. 

Google does not include any software in its Android operating system to help people locate a missing phone, although some third-party Android apps offer the feature. Mr. Gascón of San Francisco said that was not enough. “What I’m talking about is creating a kill switch so that when the phone gets reported stolen, it can be rendered inoperable in any configuration or carrier,” he said.

Some security experts say such solutions are possible. One is software to prevent a phone from working after it is reported stolen, said Kevin Mahaffey, chief technology officer of Lookout, a mobile security firm. There would be ways to work around that, he said, but if companies made it time-consuming and expensive to reactivate a stolen cellphone, then people would stop stealing them so much.

Representative Eliot Engel, Democrat of New York, has proposed a legislative solution. A week ago, he introduced legislation that would make it illegal to modify a phone’s identifier, among other preventive measures. In Britain, it is illegal already.

Article source: http://www.nytimes.com/2013/05/02/technology/cellphone-thefts-grow-but-the-industry-looks-the-other-way.html?partner=rss&emc=rss

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BlackBerry Logs Quarterly Profit, 2013 Loss

March 28, 2013 by Leave a Comment

The financial report provided a mix of positive and worrying news, leaving some analysts without a clear picture of the once powerful, but now struggling, company’s long-term future.

“It is encouraging that they’ve stabilized the company and they’re not bleeding to death,” said Edward Snyder, an analyst with Charter Equity Research. “But they still have a long ways to go.”

The annual loss, which was reduced from an operating loss of $1.2 billion because of tax benefits, compared with net earnings of $1.16 billion a year earlier.

In the latest quarter, the fourth of the 2013 fiscal year, which ended March 2, the company lost $18 million from operations. But the recovery of income taxes transformed that into a profit of $98 million, or 19 cents a share.

BlackBerry has struggled with declining sales, and that trend continued. Revenue in the latest quarter was $2.67 billion, compared with $2.72 billion in the same period a year ago. Annual revenue fell to $11 billion, from $18.4 billion a year earlier.

For about one month of the quarter, the first of the company’s new phones, the BlackBerry Z10, was on sale in Canada, Britain and some other markets, but not the United States. BlackBerry said that it shipped about a million of the handsets during that time, which was in line with several analysts’ estimates.

“It has not been easy, but the BlackBerry team is delivering,” Thorsten Heins, the chief executive, told analysts in a conference call.

In contrast with many new handsets from other companies, however, the BlackBerry Z10 has been far from a sellout.

Mr. Heins said that since its introduction, only about two-thirds to three-quarters of the touch-screen-based Z10s that were shipped were ultimately sold at retail.

Shaw Wu, an analyst with Sterne Agee, said the sales data suggested that “The BlackBerry Z10 is not firing on all cylinders.”

He said the slower sales may have been a result of current BlackBerry owners awaiting the release in April of the Q10, another high-end phone with a touch screen and a physical keyboard — the keyboard long being a hallmark of the brand.

Mr. Heins said that another new phone using the BlackBerry 10 operating system, with a lower price than the Z10 and Q10, would be released this year. For ATT subscribers in the United States, the Z10 costs $200 with a two-year contract or $550 without a contract.

BlackBerry reported having 76 million subscribers worldwide at the end of the period, a loss of about three million. Until the third quarter of the fiscal year, BlackBerry had consistently gained subscribers.

In an unanticipated move, the company also announced that Mike Lazaridis, one of its co-founders, would retire and cut all formal ties to BlackBerry in May.

In an interview, Mr. Lazaridis said that the company’s directors initially opposed his proposal in January 2012 that he and Jim Balsillie step down as co-chairmen and co-chief executives in favor of Mr. Heins as the top executive. The two men were widely criticized at the time for not responding more rapidly to competition from Apple’s iPhone and phones using Google’s Android operating system.

Mr. Lazaridis said he agreed to remain vice chairman until the introduction of BlackBerry 10. Mr. Lazaridis said that in the last year, he guided BlackBerry on the product introduction, and helped Mr. Heins with longer-term plans.

“Having fulfilled the commitment I made, it’s time to move onto my next adventure,” Mr. Lazaridis said. Last week, he announced plans to start an investment fund focused on companies working on computers based on principles from quantum physics.

Mr. Heins said that he expected BlackBerry, formerly Research in Motion, to break even in the current quarter despite doubling its spending on marketing to promote the Z10.

ATT became the first American carrier to offer the new phone last week. But visits to several wireless stores on Wednesday found striking differences in sales support for the product that BlackBerry, which is based in Waterloo, Ontario, hopes will revive its diminished fortunes.

At several locations, including an ATT store on Fifth Avenue in New York and another near Union Square in San Francisco, the Z10 was lumped in with other phones, some two years old, while signs and promotional material were absent. But at an ATT store in New York’s busy Union Square, the Z10 was heavily promoted. A salesman who identified himself as a BlackBerry specialist gave a thorough demonstration of the device, including its ability to switch between corporate and personal apps.

The unevenness of presentation was also apparent at T-Mobile USA stores, which this week began selling the Z10, as well as the Apple iPhone 5 and Samsung Galaxy S 4, for $100 down and 24 monthly payments of $20. Verizon Wireless, which has a long association with BlackBerry, began selling the Z10 on Thursday and prominently featured the device on its home page.

Brian X. Chen contributed reporting from New York and Quentin Hardy from San Francisco.

Article source: http://www.nytimes.com/2013/03/29/technology/a-profit-though-slim-for-blackberry.html?partner=rss&emc=rss

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Bits Blog: Why Nobody Will Play Nice With Windows Phone 7

December 27, 2011 by Leave a Comment

Nokia's Lumia 800 runs Windows Phone 7.Paul Hackett/ReutersNokia’s Lumia 800 runs Windows Phone 7.

Microsoft’s Windows Phone 7 software has a unique, modern design that many say is superior to Android’s more rugged, computery look. But a former Microsoft employee says looks alone are not enough to make Windows Phone succeed.

Microsoft introduced Windows Phone 7 in November 2010, and has since formed a major partnership with Nokia in hopes of gaining a foothold in a mobile market that is increasingly dominated by Apple and Google. Despite the company’s best efforts, sales of Windows Phone 7 handsets are still tiny.

Charlie Kindel, an entrepreneur who recently left Microsoft’s Windows Phone team to start his own company, wrote a blog post Monday on why the software still hasn’t taken off. He breaks down what each party in the cellphone business wants — most notably, the carrier and the hardware maker.

The carrier wants to control the customer experience, and the manufacturer wants to own that and the hardware design as well. This is precisely why Windows Phone 7 faces hurdles, Mr. Kindel says.

To explain, Mr. Kindel analyzes Apple’s approach with the iPhone and Google’s approach with Android. With the iPhone, Apple controls the design of the software and additional transactions through the App Store, and it controls its own destiny with hardware because it makes the iPhone itself.

With Android, Google licenses the software to any manufacturer that wishes to use it, and allows the carriers to distribute Android software updates whenever they want. Many hardware makers and carriers are willing to play ball with Android, because it “bows down” to them.

With Windows Phone 7, Microsoft tells the carriers when they must issue software updates, and tells manufacturers how they must design the phones in order to run the operating system. This ensures a consistent experience among different devices.

And that is why Windows Phone faces so much difficulty gaining traction in the market, Mr. Kindel says. It creates friction among Microsoft, the carriers and the manufacturers.

“WP says ‘here’s the hardware spec you shalt use’ (to the device manufacturers). And it says ‘Here’s how it will be updated’ (to the carriers). Thus both of those sides of the market are reluctant,” Mr. Kindel writes.

That could explain why carriers do not immediately support every new Windows handset that hits the market. The brand-new Windows phone made by Nokia, the Lumia 710, for example, will initially be available on T-Mobile, while the bigger carriers ATT and Verizon have not announced plans to offer it.

Mr. Kindel’s post has stirred debate among technology pundits, like Robert Scoble, who criticized him for neglecting to highlight the importance of apps.

“I had dozens of people here for several events this weekend. Phones came up in nearly every conversation. Not a single person brought up Windows Phone 7,” Mr. Scoble wrote. “While watching TV I was reminded again of why: it’s all about apps.”

Mr. Scoble said that all people talk about today is what they can do with their phones using apps, and that businesses are constantly chattering about the apps they create to connect with customers. Therefore, apps act as a “lever” for the operating system maker to overpower the carrier, he argued.

Just where is Microsoft’s opportunity? Mark Winther, a telecommunications analyst at the research firm IDC, says Microsoft should focus on business customers.

“Social, cloud and mobile: It’s a marriage made in heaven that a lot of enterprises want,” Mr. Winther said in an interview. “So what is a huge enterprise environment today? It’s Microsoft, which is all over communications and collaboration tool sets.”

Mr. Winther explained that if Windows Phone 7 gracefully integrated with desktops and business software like Exchange and SharePoint, then it would gain a major advantage over iOS, the Apple mobile operating system.

He acknowledged that business customers are a smaller market than consumers, but said this niche still presents an opening for Windows Phone 7 to compete.

“Clearly the consumer individual is the gigantic market, and enterprise is small compared to that, but I think this is an opportunity,” Mr. Winther said.

Article source: http://feeds.nytimes.com/click.phdo?i=418afb1921a3468f39b544d2e0de97f0

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