Wednesday, April 27, 2011

Nokia Needs To Move Fast

Just heard that RIM acquired Tungle (after recently acquiring Gist). I said in my prescription post that Nokia needed to get out there and acquire companies in the contacts, calendar and social space. I think Nokia need to move fast.

Tuesday, April 19, 2011

On Running The Marathon

"The first half felt quite slow and then suddenly I felt awful ... People hard warned me that after 18 miles your legs will suddenly feel terrible and they were right ... I know I have a lot to learn but hopefully I can build from here. I found it hard to judge what pace I would be able to sustain ... I've learned so much from it"


Sentiments shared and perhaps expressed by many of the 37,000 marathon finishers on Sunday.


These words, though, were uttered by Jo Pavey who finished in 2:28:24, finishing 19th.

Saturday, April 16, 2011

How Is Nokia Doing?

In the 6 or so months since Stephen Elop was announced as CEO of Nokia the stock is about flat.


That's not to say that the stock hasn't actually budged - from the day of his appointment until the announcement of the partnership with Microsoft around Windows Mobile, it was actually up about 40%, to about $11.75. It's now at $8.66, although it's been under $8 as recently as the end of March. Nokia is down 16% year to date, 21% in the last 3 months and 42% in the last year.

Mr. Elop is already taking, or considering taking additional steps:

The Economic Times said yesterday that Nokia is considering selling a controlling stake in its money-losing JV with Siemens (my Prescription on March 26th suggested that they sell the whole thing). The Wall Street Journal reported the same story suggesting that one of the blockers will be an outstanding pension obligation. Nokia's FD is quoted in the WSL as saying the story is "untrue".

The Gulf Times reports today that as many as 6,000 Nokia employees are at risk of being made redundant, with a significant reduction expected in R&D staff as I suggested in the same Prescription.

This week Nokia announced its latest Symbian phone (v3.0, known as Anna I gather, of the operating system), the X7. Apparently it will soon be replaced by an equivalent Windows Phone, cleverly named as the W7. I suggested that Nokia come up with a new naming convention - I'm already baffled by the E6 (a business related phone apparently - e for Enterprise?), the X7, the W7, the C7 and the C6-01 not to mention the N-series. Another site promoted the rumour that there would be at least 12 Nokia/Windows devices in 2012.

IDC announced at the end of March that Windows phone would have the number 2 share of the mobile operating system market by 2015 (Android would have 45%, Windows 20%, iPhone 15%). This would all be driven by the Nokia partnership. No mention is made of tablets, revenues or, importantly, profitability.

Meanwhile a customer satisfaction survey by JD Power showed Nokia coming 4th behind Apple, HTC and Motorola with its best score on battery life - always a strong point of Nokia and something that it may perhaps struggled to maintain with Windows as its operating system.

Digital Trends floated the rumour that LG and China mobile may adopt Meego - an apparently dead end platform as far as Nokia is concerned. Meego is open source so they would, in theory, be free to do that (Digia bought the library on which much of MeeGo and Symbian are built in March).

Nokia publishes its interim Q1 report on 21st April so we will find out whether the announcement of the Windows move deterred any customers from buying phones.

Goldman Sachs thinks Nokia is a buy with a target above $12, Moody's downgraded its long and short-term debt, Nomura thinks the stock will fall 30% or more from where it is today, HTC's new Sensation phone looks to outperform Nokia's X7 and the median stock price target is about $9.25 - above where it is now plainly, but not likely to be a stellar performance.

I'd like to see Nokia unveil a clearer plan - perhaps like my prescription or an entirely different one. Waiting until 2012 before we see Windows phones doesn't seem like a good idea - and in the interim the only headlines will relate to lay-offs, budget cuts, sales of units and other negatives, all of which will drive away customers and so put the stock in negative territory. Mr Elop has a big job ahead of him. Let's hope he's not like the CEO of Microfocus who departed after less than a year on the job this week, with the stock price having fallen 41%. Instead he'll be hoping he's more like Bart Brecht who say the shares of Reckitt Benckheiser lose $2bn in value upon the announcement of his departure.

London Marathon 2011

Tomorrow is London Marathon day. Over the last few weeks I've watched runners pounding the roads working their programmes. This year I've probably seen more people running to and from work than ever before. I won't be running and I always feel a bit down when I don't run a big race - that I'm somehow missing out on something. I am, of course.

Some people run for charity, some run for departed friends or loved ones, some run for themselves, some run for t-shirts or medal and still others run because they can and perhaps once they couldn't.

If you're running tomorrow, whatever the reason, good luck, enjoy the celebration that the London Marathon represents - the crowds, the cheering and, at the end, that incredible sense of accomplishment you'll get as you cross the line. There is very little that can beat that.

Tuesday, April 05, 2011

Where Does HMV go from here?

As HMV issues its third profit warning in a year - revising its profit forecast last given only a month ago from £38m to £30m (£8m profits lost in only 4 weeks?) - I wonder where it goes from here. Apart from into the dust.

I'm doubtless one of the causes of its slow-motion demise. Years ago I would regularly visit HMV to buy CDs, DVDs and video games. Years ago.

I hadn't been in an HMV (or any equivalent store) in at least 5 years, probably nearer 7, until last week when I needed to buy a DVD box set for a friend who wasn't well. HMV had one copy - a 7 year old TV series - priced at £60. Amazon had the same item at £12.95. I asked at the cash desk if there was some kind of mistake - they told me that if I came back next Monday (it was Wednesday), there would be a sale on and I'd be able to buy it for only £25. Needless to say, I bought what I needed from Amazon whilst standing in the store, and got delivery the next day. Happy me, happy friend who tells me he has already raced through the first series and is on to the next boxed set.

HMV doesn't have a model. Nor do Dixons or PC World (Dixons shares are 90% lower since December 2007 when the current CEO took over). They look like they're going to zero. They didn't move aggressively enough into online media when they had the chance and so their online brands rank far below those of Amazon and others. The change to Channel Islands VAT might give them a brief boost perhaps but it will be that of a dead cat.

They're going the way of the corner store, milk deliveries and the fax machine.

Dell on Apple

Michael Dell, talking about Apple, in October 1997:

"What would I do? I'd shut it down and give the money back to the shareholders."

Andy Lark, CIO of Dell, talking about the Apple and specifically the iPad in March 2011:

"Apple is great if you've got a lot of money and live on an island. It's not so great if you have to exist in a diverse, open, connected enterprise; simple things become quite complex."

"[for] an iPad with a keyboard, a mouse and a case you'll be at $1500 or $1600; that's double of what you're paying."

I believe he's talking Australian dollars, not US dollars but his pricing is still wrong ... and who knows why he thinks you need a mouse for an iPad (I'm not convinced you need a keyboard either but I don't have sales figures for those from Apple). I think I like living on the island I'm apparently on.

Mr Lark goes on:

“…Our strategy is multi-OS," Lark said. "We will do Windows 7 coupled with Android Honeycomb, and we’re really excited. We think that giving people that choice is very important.”

It will be interesting to watch Dell's tablet strategy unfold. This is a stock price comparison chart showing Dell versus Apple. Dell is the set of volatile black and red bars, Apple is the brown line along the bottom. Dell have been right before, but not very right, very recently.