Nokia's Lumia brand strategy for the US

Last July I asked the question “How many Lumia phones were shipped in the US?”

My answer was 630k through the first half of this year.

I revisit this question following Nokia’s latest quarterly report.

As a quick review, Nokia reported the following performance for its mobile phones operations:

 

The most worrying thing of all however is that Nokia’s smartphone performance has collapsed. With only 6.3 million units shipped, the company may be the worst performer among eight competitors I track. They were below RIM’s shipment total. Continue reading “Nokia's Lumia brand strategy for the US”

iOS portfolio price distribution

With the iPad mini launch imminent, it’s time to think about the expanding iOS portfolio. We don’t know how much the “mini” will cost or what variants will be available but I took some rumors as a basis to form a hypothesis.

The idea is that there will be 24 variants which have three dimensions:

  • 2 colors
  • 4 capacities
  • 3 radio chipsets

The starting point would be $250 for an 8 Gb WiFi only model and increases of $100 for each doubling of capacity and $130 for the addition of cellular chipsets.

The results would slot into an increasingly broad price spectrum. I included all the models of iPod touch, iPhone and iPad that we already have available and built the following graph.

 

Continue reading “iOS portfolio price distribution”

The omnivorous app

Marc Andreessen famously coined the phrase “software is eating the world.” It’s an apt observation. If you look back on the history of computing you’re likely to measure computers sold or devices sold or users harvested or productivity gained. These things are measured because they can be measured. But the greatest cause of value created and captured has been the development of software. An ephemeral product whose value is often ignored in analytical discourse.

Software is not easily measured and it’s not easily valued due to its intractable nature. Firstly, because businesses that make software tend to have weird cost structures–absurdly high fixed costs and operating margins: They operate without income for years and then suddenly are massively profitable with a minimal set of resources. They have a non-linear, “big bang” trajectory.

Secondly, software companies tend to capture revenues from something other than the direct sale of the good. Software is rarely sold. Services sometimes are sold on the basis of software but more likely audiences for services are sold to a set of bidders, or revenue is obtained in even more circuitous ways.

Thirdly, because there are curious multi-sided markets for software platforms. Charlie Kindel hints strongly at how difficult it is to understand the dynamics of software platforms. There is the prospect of lock-in of users and data. There are relationships to nurture with developers and there’s the principle of an ecosystem that creates network effects. The virtuous/vicious cycles are non-linear and unpredictable even for the experts who have been at it for decades (e.g. Microsoft).

Continue reading “The omnivorous app”

5by5 | The Critical Path #59: Gut-level Affection, An interview with Jean-Louis Gassée

I talk to Jean-Louis Gassée about the early years of personal computing. The conversation spans from 1968 to 1991 and covers his roles at HP, Exxon Office Systems and his years at Apple. The story takes us back to a time and place that seems so distant and yet so familiar.

via 5by5 | The Critical Path #59: Gut-level Affection, An interview with Jean-Louis Gassée.

My talk at Tampere Goes Agile

Steve Jobs once joked that engineers think Hollywood writers do their work by drinking beer and telling jokes and Hollywood thinks building software is as easy as writing a check for the tech. In reality creating software and creating art are more similar than they are different. The phenomenon of mass market software in the form of entertainment has blurred the lines even further–making software has become more like making movies than making machines. There are lessons to be learned by all developers.

Developer as Artist

File Size 14.9MB, Talk duration about 30 min. Requires iPad.

What is Apple's Realized P/E ratio?

The Price/Earnings ratio is a very simple measure of the “value” a company has. The Price is the current share price and the Earnings is usually the sum of the last 12 months’ earnings per share. In other words it measures how many of the last year’s earnings are built into the share price. Put yet another way it’s the answer to the question “If earnings don’t change, how many years will I have to wait before I’m paid back for my share purchase with retained earnings.”

So a company with a P/E of 10 implies that if nothing changes, in 10 years a share owner would “earn” back the price they paid for the share. Any earnings after 10 years would be “profit” for the share owner. You can imagine it even more simply as buying not shares but an actual small business of your own. You pay up front for it and then wait until it pays you back. After getting paid back for the initial purchase you then make money that you can set aside.

Obviously this figure of P/E is very sensitive to growth in earnings. Consider paying $100 for a share of a company having just earned $10/share last year. It would have a P/E of 10. If earnings stayed at $10/yr for 10 years, you’d “get your money back” in 10 years. However if earnings grow at 20% then next year the earnings would be $12 then 14.4 then 17.3 then 20.7 etc. Adding these up means you’d get your $100 back in five years, not 10.

So with a company growing at 20% the “realized P/E” is 5. You realized the price of $100 in five years’ worth of earnings. In the scenario above you paid expecting to wait 10 years but you got paid in five. If that’s your retirement plan then you can retire five years early. Not bad.

Let’s then look at what Apple gave investors as “realized P/E.” Continue reading “What is Apple's Realized P/E ratio?”

5by5 | The Critical Path #58: Going Commando

We discuss composing presentations on an iPad while on the road and, at long last, the completion of the Critical Path book. We examine Apple’s honing technique in design, and how it contributes to forging products that are as uniquely experiential as the traditional samurai sword.

What job is there for the iPad mini to do? How do we stay focused on fundamentals when it comes to analyzing Apple’s stock price?

via 5by5 | The Critical Path #58: Going Commando.

Why are tablets and smartphones insulated from tough economic conditions?

The iPad launched in April (i.e. Q2) 2010. Since then the PC industry (excluding Macs) has seen a decline in growth. The following graph illustrates global shipments as reported by Gartner:

Note that the growth rate has been negative for 4 out of the eight quarters since. The latest data shows a decline in shipments of over 9% bringing yearly growth to negative territory for the first time since the recession of 11 years ago. Continue reading “Why are tablets and smartphones insulated from tough economic conditions?”

What are books hired to do?

My talk at the TOC Frankfurt is available as a free Perspective download.

What are books hired to do?

[Originally presented October 9th, 2012 in Frankfurt Germany.]

I spoke about what books and other media are really hired to do. The basic needs of users are met by story tellers but the products of commerce often chase user attributes rather than their needs.

A talk on Manufacturing Miracles

My talk at the Tribute to Pike Powers is available as a free Perspective download.

Manufacturing Miracles.

[Originally presented October 8th, 2012 in Austin Texas.]

I present a short history of manufacturing ramps during World War II and the effects on the outcome of the war. A comparison is also made of value created vs. modern smartphone production.

Asymco

Asymmetric Competition

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