Nokia Bonds Are Junk

Nokia’s declining fortunes lead to it’s bonds being rated as junk, after falling to No 2 mobile phone maker, behind Samsung:

S.&P. Downgrades Nokia’s Bonds to Junk - Brian X Chen via NYTimes.com

S.& P.’s announcement came as Samsung dethroned Nokia as the world’s No. 1 maker of mobile phones, which includes traditional cellphones and smartphones. Samsung sold 92 million phones over the last quarter, and Nokia sold 83 million, according to estimates by IHS iSuppli, the research firm. It is the first time since 1998 that Nokia is not the No. 1 phone maker in the world.

In the smartphone category, Nokia slips to third place behind Apple, the leader with 35 million phones shipped, and Samsung, with 32 million devices, according to iSuppli. In that category, Nokia is slipping faster than Research in Motion, the maker of the BlackBerry. The smartphone segment is the only part of the handset market that is showing any growth.

Nokia’s long-term rating was dropped to a noninvestment rating, BB+, from the investment-grade rating BBB–, with a negative outlook, S.& P. said. Its short-term rating dropped to B from A-3, S.& P. said.

Nokia has been struggling to reverse its declining fortunes with its Lumia smartphones, which include Microsoft’s newer operating system, Windows Phone 7. In the United States, AT&T and Nokia have been aggressively promoting the Lumia 900, a $100 smartphone that has been a strong seller on Amazon.com.

Trying to be the world’s leading maker of Windows mobile phones is like being the world’s tallest midget.

Stymiest Looks to Be "a Lock" for RIM Chair - John Paczkowski via AllThingsD

Looks like RIM’s board is (finally) pushing out the co-founder co-CEOs, a move that is so overdue it is laughable. But the new chair is a Royal Bank of Canada exec, which makes it sound like a sale is planned, not a turnaround:

John Paczkowski via AllThingsD

Research In Motion’s 2011 was about as ugly as they come. And with few indications that 2012 will be much better, the company is preparing to make some significant management changes.

Sources close to the company say that co-founders Mike Lazaridis and Jim Balsillie will soon relinquish their titles as co-chairmen of the board, officially ceding that position to board member and Royal Bank of Canada exec Barbara Stymiest.

“Stymiest is a lock for chairwoman,” one source told AllThingsD. “The only thing that’s unclear right now is the timeline for her appointment.”

[…]

But RIM’s gruesome downward spiral was caused by a string of foolish missteps and disappointments that will not be easily reversed, particularly not with a simple board chair swap. While Stymiest’s background is impressive — executive positions at the Royal Bank of Canada and Toronto Stock Exchange parent TMX — it is largely financial. She seems to have little background in consumer electronics. Presumably, some experience in that area would be helpful.

I predict that some major IT player will a/ buy RIM for peanuts, b/ throw away (‘transition’) the hardware side, and c/ reposition the Blackberry Messenger service as a software service on several platforms, especially iOS and Android. It would be an obvious purchase for Apple, Microsoft, or Google.

BlackBerry Picked the Wrong Day to Die

Brian Barrett via Gizmodo

[…] for those worried about the company’s future, the fact that this was a systemic failure and not third-party havoc should be positively chilling. They don’t know what happened. They don’t know how to fix it. They just know that it’s their own fault.

Meanwhile: Apple. There’s been plenty written here and elsewhere about iOS 5, which is clean and user-friendly and functional. The iPhone 4S will be here in two days. And when you’re abandoned in a data-less desert, there’s no more tempting oasis than Apple’s. Your shit’s broken, iTunes calls out. Ours is shiny and new. Yes, iCloud could well unravel into another MobileMe. But that doesn’t mean the grass on its side is any less green today.

Oh, man. Sell RIM, buy Apple.

applerim

Twitter: The Social Kernel For iOS 5 

[Update: I pulled a section of this out, as I was corrected about iMessage being the next version of Messages:

Project via comments

Actually, iMessage and the SMS app in iOS5 are one and the same thing. If the person you are sending a message to doesn’t have an iOS device, it sends it as an SMS.  If the person does, it recognises it in the To field and sends it as an iMessage.  In effect, Apple are embracing and extending the SMS protocol with this service. It is a huge move.

I stand corrected.]

Yesterday’s announcements from Apple included the new iMessage: an iOS-only messaging system, which is apparently intended to remove the last rationale that BlackBerry users might have to not adopt iPhones:

Darrell Etherington, iMessage: Biting RIM’s style and sticking it to network operators

BBM is one of the few remaining advantages RIM’s aging platform has over its younger competition in the smartphone market. (Check out this tweet representative of reaction toiMessage’s announcement if you don’t believe me.) People appreciated the way it integrates tightly to your device, and its delivery and read receipts let you know your messages aren’t getting lost in the ether. It’s been a life raft for RIM in the violent sea of the ongoing mobile battle BlackBerry faces with iOS and Android.

However, iMessage brings a lot of what’s good about BBM not only to the iPhone, which just passed RIM in terms of U.S. smartphone ownership trentds, but also to all iOS devices. With iPad and iPod touch users factored in, the potential audience for iMessage is huge, and it should cause at least some BBM-faithful to flee RIM’s platform for greener pastures.

Apple’s move also pushes the mobile carriers down in the stack, allowing iOS users to bypass SMS or proprietary messaging solutions. This is a painful but inevitable evolution.

iMessage is just a tactical play targeting BBM: a old-school pre-social, buddylist-style proprietary messaging system. It’s not strategic, really.

In the long run, it looks like Apple is planning to use Twitter as the platform for social communication, building Twitter into iOS instead of building protocols on which Twitter and other networks could run.

As reported by Marshall Kirkpatrick, Twitter on iOS 5 will be a platform for social apps:

My summary, in a sentence: iOS apps will look like, feel like, read from and publish to Twitter like never before. And they’ll do that in many cases instead of using Facebook.

[Jason] Costa [the newly hired Twitter Developer Relations leader] summarizes thusly.

“There is single sign-on, which allows you to retrieve a user’s identity, avatar, and other profile data.” That sounds like Facebook Connect, but I’m going to guess that Twitter will not prohibit developers from caching that data for time-shifted, aggregate, offline or other interesting types of analysis. Letting users skip having to create an account with every new app they download and instead click to log-in with their Twitter accounts is going to make many users very happy and encourage every iOS owner to get a Twitter account if they don’t have one already. App developers will get more and better populated user accounts, faster.

“There’s also a frictionless core signing service, allowing you to make and sign any call to the Twitter API.” To be honest, I’m not really sure what this means. Perhaps it means that parts of the Twitter API that require user authentication will be accessible via the same single sign-on feature discussed above.

“There is follow graph synchronization, which enables you to bootstrap a user’s social graph for your app.” In other words, apps will be able to offer users to find their Twitter friends who are also using a new app they’ve installed, and connect with them there too. That’s the kind of solution to the user-level “cold start problem” that Facebook Connect has been so helpful with for web apps.

“Furthermore, there is the tweet sheet feature, giving your app distribution and reach across Twitter.” Again, like Facebook Connect, this is a feature that appears to make it easy for apps to publish user activity and promotional messages out into the Twitter streams of a user’s friends. Facebook has a complicated algorithm that determines how often an app is allowed to publish messages out into the Newsfeed of a user’s friends, based on how much interactions messages from that app have received in the past. That’s a spam control mechanism that I’m going to guess Twitter will not replicate, at least at first.

It looks like Apple is going to give Twitter this deep and central role in its social OS plans, and allow the smaller more agile company to manage the building of an ecology of social apps on top of the paired architecture.

If even remotely successful, Apple will want to acquire Twitter, and Twitter will want to be acquired. These two will become as inseparable as NeXT was to Apple, when they regrooved Mac OS to be built upon the Mach Unix kernel. Here though, Apple will be making Twitter — and the open follower model Twitter resides on — the social kernel for iOS going forward.

This is a grand land grab by Apple and Twitter, an effort to block a Google/Facebook coalition on Android, or a Microsoft/Facebook partnership on Windows 8.

What about the competition? I predict Facebook will be too reluctant to partner with anyone, and may be at work on plans to launch its own hardware. Google is too slow on the social network side (the most expensive error of all time?), so they are stuck in the water. Microsoft is making credible efforts with Windows 7 and 8, but have no social network story. Microsoft is far enough behind the curve to possibly cede the social sphere to Facebook, too. RIM is falling like a stone, and would probably like to be bought, and either Google or Microsoft might bite, but that’s just tactics. None of these players has a strategic answer to the Apple move with Twitter.

What I don’t understand, though, is why iMessage isn’t written as a social app on top of Twitter. That would be the right path, and would simplify the Venn diagram tremendously. But Apple is opting to run both worlds — the pre-social and the social — in parallel, at least for a time, instead of doubling down on its social push with Twitter.

related

Eldar Murtazin: Microsoft will enter negotiations to buy Nokia's mobile division next week -- Engadget

A rumor, but one that makes sense. I suggested at the time that Nokia announced it was dropping Symbian that it should be acquired by Microsoft if it was going that way. Actually could increase the value of the Skype deal, and vice versa.

Note that Microsoft is retrenching into a (enterprise) mobile communications business, since it lost its way in so many other places. Why doesn’t it buy RIM, too?

Why Microsoft should buy RIM: to take on Apple - The Globe and Mail

Fabrice Taylor agrees with my suggestion:

Let’s start with RIM. It pretty much invented the smart phone and had the market all to itself for almost a decade. But it didn’t take Apple long to surpass our technological crown jewel in both sales and consumer appeal. RIM should have had a big lead; instead it’s playing catch-up, with phones and tablets.

And that’s a tough fight. RIM, with a market value of $24-billion (U.S.), is a bantamweight trying to avoid a knockout punch from heavyweight Apple, with its market cap of $320-billion. That’s not a winning proposition, especially when the heavyweight is not only far bigger, but also faster and more nimble.

[…]

Microsoft’s problem is similar to RIM’s. It’s not exactly a hotbed of innovation. When is the last time it invented anything? It spent billions on music players, smart phones, the Xbox and other things, with results ranging from complete failure (in most cases) to questionable success in others (notably Xbox).

None of this really mattered because Microsoft could always rely on its two cash cows – Windows and Office – to churn out profits.

But just as computing moved from the desktop to the laptop, which didn’t hurt Microsoft, it’s now moving from the computer to the smart phone and tablet, which will hurt because Mr. Ballmer’s company has come up short in both areas. The race is over, and Microsoft was never really a contender.

It’s obvious. Just a matter of when.

RIM makes a play for its future

fredericguarino:

The Canadian technology icon has bet a lot on its new device – the PlayBook tablet. Failure could make the company a historical footnote.

The PlayBook is a part of the blueprint for taking RIM deeper into the consumer market, as well as finding growth in its traditional base of government and corporate clients. It’s an audacious strategy. If it succeeds, RIM just might regain the ground it has lost in the smart phone market, while finding new sources of revenue. And one day the PlayBook may come to replace the universal remote control, as the tablet already has done in Mr. Lazaridis’s own living room.
But if the strategy fails, then arguably so does RIM. At the very least, it would relegate it to No. 3 status for a long time to come, a poor cousin to Apple and Google – two companies that five years ago were not even in RIM’s business of wireless communications. It would also damage Canada’s prospects for a more innovative economy.

I am betting that RIM’s PlayBook will be a huge bomb, and will crater the company’s future as an independent. I could see Microsoft buying them for a nickel afterward, and making RIM just some software that works on Microsoft — and Mokia — phones.