Archive for April, 2012

Nokia Death

April 29, 2012

April 29, 2012
Analysis: Even in Emerging Markets, Nokia’s Star Is Fading
NEW DELHI/HELSINKI (Reuters) – Nokia phones once took pride of place in Manish Khatri’s Mumbai store, but now models made by Samsung Electronics get the limelight.

He has nothing against Nokia, he says, but it’s better for business to push the more popular models.

That simple calculation is being made in thousands of stores across India and similar emerging markets, where Nokia’s rivals used to be relative minnows.

For 14 years the world’s biggest seller of mobile phones, it was overtaken by Korea’s Samsung in the first quarter of this year, having already watched both Apple and Samsung leapfrog its lead in the lucrative smartphone segment last year.

In the popular narrative of Nokia’s eclipse, it is Apple’s iPhone that steals the light, but the company is also losing its shine in the basic phone market, which had been a reliable generator of profits and carried the promise of years of strong growth in emerging markets.

No more.

Its basic phone sales fell 16 percent in the first three months of 2012, and have fallen in four of the last five quarters, while competitors like China’s ZTE and Huawei have been growing fast.

In India, the world’s second-biggest mobile phone market, with more than 900 million subscribers, Nokia’s market share has halved in the three years to 2011, when it sold 31 percent of the total 183 million handsets sold, according to Indian researcher CyberMedia.

Analysts say it has failed to keep up with the changing tastes of the growing middle class, and, in a country where the thin-margin network operators don’t tend to subsidize phones, is losing storeowners like Khatri, who influence buyers’ choices.

“For dealers like us, we face a lot of problems from Nokia for getting even the basic (demonstration phone) dummies to show to the customer,” he said. “There is no push from the company.”

He said his store, which sells around 500 phones a month, is probably not a priority for Nokia, but Samsung has been sending staff to visit.


In China, the world’s largest cellphone market, operators have started to play a bigger role in selling phones, and that trend is working against Nokia.

“They prioritize domestic vendors over international companies,” said analyst Pete Cunningham from Canalys.

In January-March its sales there shrank 62 percent from a year ago. Its share of the market had dwindled to 24 percent last year from 39 percent two years earlier, according to research firm Strategy Analytics.

In Africa, too, its market share slipped to 51 percent last year from 62 percent two years before. It’s still ahead of rivals because of its superior distribution on the continent, says Neil Mawston at Strategy Analytics, but it has to act to arrest the decline.

“Nokia is drying up like a puddle in the sun and urgently needs new products to refill the puddle,” he said.

In the meantime, it is racking up losses, its shares have lost more than three quarters of their value in a year, and this week two agencies cut its credit rating to junk status.

Nokia says it is continuing to invest to attract customers in these markets.

“Our mobile phones portfolio continues to be strong, especially in key markets like India, Nigeria, Brazil and Mexico where the Asha products are receiving record high scores from consumers,” said Mary McDowell, EVP Mobile Phones.

She said the company would be announcing data plans for the new Asha 202 basic phone model with five operators in India on Monday.


Analysts also say Nokia can be slow to react on popular technology.

In emerging markets, for example, multi-SIM models have been a draw for people who want to take advantage of freebies doled out by competing carriers, but Nokia lacked such phones until mid-2011.

Another costly gap in its basic phones offering is a full touch-screen model. Around 105 million such phones were sold last year globally, according to Strategy Analytics.

“Nokia left the door wide open for Samsung and others by not delivering a full-touch feature phone. The Koreans figured it out three years ago, yet Nokia still does not have a product,” said Ben Wood, head of research at CCS Insight.

“In the meantime, prices of Android smartphones have dropped, and Nokia’s window of opportunity is almost closed.”

Nokia is due to unveil a full-touch 306 feature phone model in the coming months.


“Nokia’s main challenge this year is to arrest the sharp decline in its flagship smartphone portfolio and use it to rebuild a positive halo-effect for the overall Nokia brand,” said Mawston.

The company abandoned its own Symbian smartphone operating system last year in favor of the largely untried Windows Phone alternative after Stephen Elop joined as chief executive from Windows maker Microsoft. Symbian sales have nosedived before the Windows models got off the ground.

This month it started sales of the first Windows smartphones in China with an aggressive marketing campaign and huge ads at subway stations, in magazines and newspapers.

There are some positive noises coming from customers.

“I just bought a new Nokia Windows phone and wasn’t very used to its tile design, but the experience was quite good after half an hour. All the basic functions I need are there, and I’m beginning to think that Windows phones will make it,” Wang Xiao said on his Sina microblog.

“Having an operating system which is Windows-based doesn’t excite me,” said 22-year old student Akshay Johar in New Delhi, looking at one of Nokia’s new Lumia models, but added: “The phone has great features, it looks good, the touch screen is very responsive.”

He is considering buying one, he said.

About 27 million people need to make that decision this year, 55 million next year, and 94 million in 2014, according to analysts polled by Reuters.

That only 2 million did in the first quarter shows how steep is the mountain that Nokia must climb.

(Additional reporting by Lee Chyen Yee in Hong Kong; Editing by Will Waterman)


Mexican Invasion slowed

April 28, 2012

Mexican ‘invasion’ slowed to a trickle


Last Modified: Feb 21, 2012 08:24AM

Even as the Republican presidential candidates vie to show who’s toughest on illegal immigration, the United States is no longer attracting undocumented workers the way it once did.

Few are talking about this, but the flow of undocumented immigrants — mostly from Mexico — has slowed to a trickle.

Contrary to public perception that the southern border is being overrun, illegal crossings dropped more than 80 percent between 2000 and 2010. That explains why arrests at the border in 2011 were down to their lowest levels since 1972.

According to the Pew Hispanic Center, fewer than 100,000 illegal border-crossers and visa violators from Mexico settled in the U.S. in 2010, down from about 525,000 annually from 2000 to 2004.

The undocumented population — around 12 million — peaked in 2007, with about 58 percent coming from Mexico. It declined as jobs dwindled, and it has remained steady at around 11 million. An estimated 525,000 undocumented immigrants live in Illinois.

These figures confirm the work of experts such as Douglas S. Massey, co-director of the Mexican Migration Project at Princeton University. Massey’s research points to the lowest flow of illegal immigration from Mexico in 50 years.

Massey conducted an extensive survey showing that Mexicans’ desire to come to work in the U.S. has fallen to its lowest level since the 1950s. The economic downturn, improved border security and a record number of deportations have caused Mexicans to think twice about crossing the border. Improving conditions in Mexico also explain the diminished flow of Mexicans moving north.

The birth rate in Mexico has fallen to about 2 children per mother, compared to 6.8 in 1970. That means less competition for jobs and consequently a less pressing need to go north. Improvements in employment and education also are making the dangerous and expensive trip to the north less attractive, especially with the drug cartels controlling the border zone.

But Massey does not anticipate much of an impact on the U.S. economy in the short run.

“For two reasons,” he explained to me. “Labor demand is low, especially in the construction sector, which had been a big driver of Mexican immigration, and because the U.S. is issuing a record number of temporary work visas, which is covering much of the demand in agriculture and food processing.”

Last year, Massey said, more than 500,000 guest workers were from Mexico, the largest number in history.

With illegal immigration virtually stopped, now looks like a pretty good time for President Obama and Congress to legalize the residence status of the millions of undocumented people who live among us. Deport the murderers, rapists and gang-bangers and help the hard-working majority to integrate into their new home.

“I would recommend an amnesty for those who entered as children and an earned legalization program for those who entered as adults,” Massey said. “It is the only sensible thing to do.”

The presidential candidates and others really might want to stop talking about immigration as if there were an ongoing invasion.

Mexicans are staying home.

The end of the flood

April 27, 2012

Partisan Spin Denies Obama Credit for Immigration Success
Obama has used increased funding and enforcement to slow illegal immigration through our southern border to a trickle, but Mitt Romney and conservatives have responded with silence—or more attacks about a lack of border security.

The headline should be striking: U.S.A. Stops Illegal Immigration from Mexico in its tracks.

That’s an underlying insight in a study by the Pew Hispanic Center released days before the Supreme Court heard arguments over the controversial Arizona illegal immigration law.

It represents a rare success on a contentious culture-war topic, driven in large part by economic trends that have driven down demand for undocumented labor but also by dramatically increased border enforcement under President Obama. The bottom line: a four-decade flood of illegal immigration through our southern border has been slowed to a trickle.

If this happened under a Republican president, conservatives would be celebrating. But because it has happened under Obama the reaction has been awkward silence—from liberals as well. The facts don’t fit the established narrative.

All of which places this week’s Supreme Court hearing over the controversial (and often mischaracterized) Arizona illegal immigration bill in an ironic light.

The law has been a lose-lose for the GOP. Its passage has torpedoed Republican approvals ratings with Latino voters—and possibly turning Arizona into a 2012 swing state—while making no impact on the actual problem it sought to address, because it hasn’t been enacted. Simultaneously, the problem is showing signs of being solved—at least for now.

The numbers are staggering:

• 1.5 million deportations in the last 4 years, a record high.
• A 70 percent increase in the number of convicted criminals deported.
• Arrests at the border up 14 percent in the past two years.
• An 85 percent increase in border agents since 2004.
• 31percent more drugs and 63 percent more weapons seized at the border.
• 650 miles of border fence now completed.

It’s true that many of these efforts began under President Bush—but President Obama has increased funding and accelerated enforcement. The talk-radio crowd just doesn’t want to face those facts because it contradicts their stereotypes.

President Barack Obama speaks at the University of Iowa Field House, Wednesday, April 25, 2012, in Iowa City, Iowa., Charlie Neibergall / AP Photo

I was down at the Arizona border a few weeks ago and saw the impact for myself. I drove through three checkpoints in the Sonoran Desert in just a few hours and passed more border patrol units than I could count. Right now, I’d guess that we have more Federales at the southern border than at any time since Woodrow Wilson sent Black Jack Pershing to push back Pancho Villa.

In a different, more sane, political time, perhaps this would be celebrated as a strategic coup—President Obama pulling a Nixon-in-China on the issue of border security and illegal immigration. But there is no talk of triangulation; instead just a fact-defying rush to reinforce old narratives.

Here’s Mitt Romney six months ago: “Three years ago, Candidate Obama promised to address the problems of illegal immigration in America. He failed. The truth is, he didn’t even try.”

In a different, more sane, political time, perhaps this would be celebrated as a strategic coup—President Obama pulling a Nixon-in-China on the issue of border security and illegal immigration.

It is fair to point out that President Obama didn’t try to pass a comprehensive immigration bill. George W. Bush was the last president to attempt it, and Mitt Romney opposed it in a 2008 pander to the far right. The word amnesty would have been slapped on anything President Obama did on this front—hell, Reagan looks like a lefty on this issue now—and so Obama chose to increase enforcement and funding instead. This falls under the category of deeds, not words.

There is some political risk in the president’s decision to get tough on deportations—ironically, from the left, particularly among immigration activists and members of the Latino community who know deportees personally. But because Romney chose to tack to the right of even Rick Perry on illegal immigration—slamming the border-state governor for backing the DREAM Act—tacking back to the center would be difficult even for this proven political contortionist. And so Romney’s current 40-point Latino vote gap is likely to endure for the foreseeable future, unless it is ameliorated by a Rubio-esque VP nominee.

Border security is a perfect example of what should be seen as a bipartisan responsibility. We should be able to agree on increasing legal immigration to our nation while decreasing legal immigration. Here we have a rare example of data-driven good news—a long-standing problem showing signs of being solved. Again, the driving factor might be the supply and demand of economics—but aggressive enforcement is helping as well by literally raising the barriers to entry. It’s too bad we can’t recognize the progress because we are so preoccupied with the same old partisan spin in a political world where narratives matter more than facts.