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January 25, 2012

Nokia announced earlier this morning that it sold its 1.5 billionth Nokia Series 40 phone in San Paulo, Brazil. The smartphone, an Asha model 303, was sold to 21-year-old Mayara Rodrigues, who wants to use the device to keep in touch with friends and family through social networks, the handset maker said.

The Asha 303 device boasts a touch screen and Qwerty keyboard and comes preinstalled with Angry Birds Lite. The mobile handset is a far cry from the first Series 40 phone Nokia launched back in 1999.

Called the Nokia 7110, the device had a spring-loaded cover over a standard numeric keypad. "Send" and "End" buttons above the keypad were just below two input buttons to interact with the device's software.

The software came with a Wireless Application Protocol (WAP) browser and messaging features. Nokia is expected to release its quarterly earnings tomorrow.

This announcement might be designed to offer a glimmer of hope to shareholders who watch, with envy, as Apple posted huge results yesterday.

Apple sold a record-breaking 37.04 million iPhones globally during the fourth quarter. Even with 1.5 billion Series 40 phones sold, there's no denying Nokia is losing its grip on the mobile market.

In 2010, Nokia sold 450 million mobile handsets worldwide. But after announcing a steep shipment decline last year, the company said it would no longer provide sales forecasts. Nokia's earnings call tomorrow, however, is expected to shed more light on how many phones it shipped in 2011.

If Nokia can't turn things around, it might become the second-place handset seller this year, just behind Samsung. Earlier this month, Samsung CEO Choi Sung said he believes his company's sales will outpace Nokia's in 2012, reaching 374 million units.

Nokia, meanwhile, is hoping that its transition to Windows Phone 7 will help jump-start its ailing business. Bloomberg yesterday reported that 1.3 million Nokia Lumia handsets with Windows Phone had shipped through the end of 2011.

However, as Nokia's sales in San Paulo shows, the company has a strong presence globally. The company said today that each day, 1.3 billion people worldwide use a Nokia device.

In other mobile news

Apple just had a blowout first quarter and the company posted its results yesterday.

If purchases of the Amazon Kindle Fire tablet took a small bite into iPad sales during the busy holiday season, Apple CEO Tim Cook sure didn't see it, and said that the Kindle Fire barely made a small dent in iPad sales.

"I looked at the numbers, particularly in the U.S. and on a weekly basis, after Amazon launched its Kindle Fire tablet, and in my view there wasn't an obvious effect on the iPad sales numbers," Cook told analysts and reporters during an earnings call after Apple announced its impressive first-quarter financial results yesterday.

When one analyst asked him if he had heard the speculation that some customers had looked at the $199 Fire, found it wanting, then moved up the cost ladder to the $499-to-$829 iPad, Cook said that, yes, he had heard that theory, but he discounted it.

"Whether that's happening on a very, very large basis, I don't know," he said. "Again, my own view is – looking at our data in the U.S., there was no obvious change."

But if Apple's iPad didn't tempt prospective purchasers away from lower-priced tablets, it did have an effect on the sales of another of Apple's offerings-- the Mac computer. And some wireless industry analysts had already expected that.

"To a certain degree, there was a bit of cannibalization of the Mac by the iPad," Cook admitted, although with 5.2 million Macs sold during the quarter, representing a 26 percent increase over the year-ago quarter, that effect was hardly fatal to Apple's Mac OS X units.

Cook then added that Apple still believes that if anyone is suffering from the iPad's success, it's PC manufacturers. "And there's many more of them to cannibalize," he said, "and so we love that trend. We think it's great for Apple."

To be sure, the iPad is making more and more inroads into traditionally strong Mac markets. For instance, in K-12 education circles, Cook said that Apple sold twice as many iPads as Mac computers, although he didn't provide any time frame.

"But generally speaking, education adopts new technologies fairly slowly, so that's somewhat surprising," Cook was quick to point out.

Overall, Cook characterized as "remarkable" the sale of over 55 million iPads since the "magical and revolutionary" tablet shipped in early April 2010.

And iPad sales will continue to grow and accelerate, Cook said. "I clearly believe, and many others in the company believe, that there will come a day when the tablet market, in units, will be larger than the personal computer market," citing IDC's recent research that reveiled tablet sales have already exceeded desktop-PC sales in the United States.

And just to be clear, when Cook talks about a tablet, he means the iPad, and not "limited-function tablets or e-readers" that he relegated into a different category altogether. "There's clearly customers that will buy those," he said, "and I think they'll sell a fair number of units, but I don't think that people who want an iPad will settle for a limited-function device."

And as for competition from full-function tablets such as the Motolola Xoom or the Samsung Galaxy Tab, Cook was sanguine. "You know, 2011 was supposed to be the year of the tablet," he said. "I think most people would agree that it was the year of the iPad-– for the second year in a row. End of the story."

But when he was asked if the tablet market was simply a "two-horse race" between the iPad and Android-based devices, Cook did admit that not all important players had joined that race yet, and that time will tell what will happen over the next few quarters.

"There's a horse in Redmond that always suits up, and always runs, and will keep running. But no matter how many horses there will eventually be in that race, we just want to stay ahead and be the lead one," added Cook.

In other Apple news

Apple published its results yesterday, and it has seen its revenues grow at 73 percent and its earnings more than doubled. Soon after Apple CEO Steve Jobs died, its fourth quarter results that so disappointed investors in October were inlikely.

Apple is now a $400 billion company, and is about to replace Exxon-Mobil as the most valuable company in the world. Yesterday's results also revealed another important item-- the shellacking that a team of independent analysts suffered in October at the hands of Wall Street analysts with some of the worst track records in the business.

And even if the most bullish wireless industry analysts were surprised by the strength of Apple's first quarter 2012 results, at least this time they were closer in their earnings and sales estimates.

Nevertheless, Apple is now an American icon, and it has millions of fans all over the globe. And these are not just stock investors, but real customers that use the iPod Touch, the iPhone, the iPad tablet, the iBook and Mac computers. And they love their sleek and user-friendly Apple devices.

After the close of the markets yesterday, and as soon as the numbers started trickling in, Apple shares soared to a record of $457.20 a share in after-market trading, as the company blew way past the most optimistic sales expectations and profit results for its first quarter.

Apple posted record quarterly revenue of $46.33 billion and quarterly net profits of $13.06 billion, or $13.87 per share. The numbers, which compare to year-ago revenue of $26.74 billion and net quarterly profit of $6 billion, were driven largely by strong iPhone and iPad sales.

Apple sold no less than 37.04 million iPhones in the quarter, representing a 128 percent unit growth over the year-ago quarter. Apple's new CEO Tim Cook said that the company placed a bold bet when it figured expectations for first quarter iPhone sales and still managed to come up short on inventory, with a backlog of orders for the device still pending.

"I think if you'd have known what we were thinking when we came up with those numbers, you'd have been suprised as well," Cook said during an earnings conference broadcast on the company's website.

Total iPads sold reached 15.43 million during the quarter, a 111 percent unit increase over the year-ago quarter. Peter Oppenheimer, Apple's chief financial officer, said that the tablet market will continue to grow, representing a "huge opportunity" for Apple.

"2011 was supposed to be the year of the tablet, and I think most people will agree it was the year of the iPad," Oppenheimer said.

Across the board, Apple's gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter, while international sales accounted for about 58 percent of the quarter’s revenue.

Cook said that Japan and the United States were especially strong markets for the quarter, but added that given the late introduction of the iPhone 4S in China and the corresponding sales of that device, the company expects to be China to be a strong market going forward.

"China is an extremely important market for us," Cook said, "and we continue to look at how to grow it further." It also said that there are other rapidly growing countries as well such as Brazil, India, and to a lesser extent, Russia.

Apple's average cash flow also increased by $17 billion for the quarter, which places the company's total cash position at a staggering $97.5 billion. Neither Cook nor Oppenheimer would say what the company plans to do with all that cash, beyond saying that Apple is "actively discussing" various uses for its cash, suggesting that there could potentially be one or two acquisitions in the works.

In other mobile news

After many months that company shareholders wanted to kick out the two co-CEOs at Research In Motion (RIM), Jim Balsillie and Mike Lazaridis have finally agreed to step down from the company, but many wireless industry analysts are still wondering if that will even make a small dent in the company's day-to-day operations, given the dismal short-term outlook the company faces.

As things stand now, Lazaridis still hangs on, at least for now, as vice-chairmain and gets control of a new Innovation Committee within the company, while Balsillie has to accept a lower board position. This time, the new and *single* CEO is former COO Thorsten Heins, as he takes over the helm of the struggling company.

RIM sales are now down significantly, and shareholders are calling for many changes, but while the company has a new leader, the thoughts inside it look very similar to those it just replaced, and anyone expecting a change of direction will be sadly disappointed, some say.

That may be simply because Heins was chosen by those he succeeded, but speaking to reporters late yesterday, Heins repeatedly emphasised the decisions made by those he was replacing, to the point where one might wonder why they were being replaced in the first place.

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Source: Nokia.

    This article was featured on Business 5.0 and on Tech Blog.