Nokia announced there reorg that in my opinion this time – given the better understanding of the urgency – should mean a bit more. The appointment of Anssi Vanjoki to run the challenging part is a good thing – it means that creativity and risk-taking could potentially get more priority. I cannot understand why he is just simply not the CEO by now. Jorma Ollila must have dictated bringing him into this position as a condition for Olli-Pekka Kallasvuo to stay as the CEO. Mary McDowell has always been a mystery for me – but then again the low-end handset business is not really in trouble either. This lady has in my opinion never really shined in her previous post. Moreover, she held previously the post of heading up the Nokia ‘R&D Mafia’, teh biggest impediment to the growth of the company. And the Niklas Savander, he is groomed to become the next CEO which is good in the sense that it is not going to be Tero Ojanpera which would be the more incompetent of the two choices. But neither of them has the hunger to turn the company around, they have been onboard for too long and vested out of too many options to really push the limits.

This morning Motorola surprised the Wall Street with somewhat positive earnings story. Immediately the press reacts to it as if this dying manufacturer buoyed by their bet on Android would be so kind of a new success story… This is in stark contrast to what reaction Nokia gets these days. After all to me Nokia is the real turnaround story in teh upcoming 12 months – you will see. http://bit.ly/9D5see

Been happy with my new Boost Mobile plan: $60 per month PREPAID all-you-can-eat voice/data/SMS/web/BBemail (new BB $250). No more $300 AT&T phone bills. My next move will be to get the Sierra Overdrive 4G modem and be ready for the Sprint 4G launch in LA in 4Q10 – including being able to use my iPhone/iPad/Mac at 4G speeds through the router (cost $99 plus 60 per month). Is the new coming of Sprint imminent?

I read through the new Nokia N8 specs and I think Nokia should be given some credit, this is a new overall benchmark in smartphones, all aspects considered (except app ecosystem). It is amazing that an unwashed Russian blogger gets to play the role of Walt Mossberg… Is it our fascination to find a ‘James Bond story’ in tech journalism? http://bit.ly/d2ZOvq

$40 billion at end of 2009 shows acceleration over 2008. In 2008 Apple added $9.7B in cash while in 2009 it added $11.7B.

Apple still has no debt.

I consider it safe to assume that at least $10 billion will be added during 2010 for an end of year total of $50 billion.

To put that in perspective, there are only 76 companies (out of 2673 listed on Google finance) whose entire _market cap_ is greater than $50B. Nokia is not one of them.  Graph: AAPL cash accumulation

Here is a table of the iPhone business so far (click on the table for larger view):

1. ASP has been increasing. It peaks immediately post-launch. Since it reflects a mix of two SKUs it also shows more early adopters opting from the higher-end model.
2. Gross margin reflects shipping and returns so there will be some improvements through the product cycle. Apple’s cost controls seem to have improved with later generation products.

This new accounting will allow more insight into Apple’s profit capture vs. industry players.

When asked about the company’s recent acquisitions of Quattro and Lala after the recent earnings report, Apple’s chief financial officer Peter Openheimer answered, “In terms of Quattro and Lala we acquired Quattro because we wanted to offer a seamless way for developers to make more money on their apps, especially free apps.”

As we have said before: why bother with AdMob if Apple integrates ads into the SDK? Does AdMob offer better terms? Does AdMob offer more sponsors? It’s the developers (and Apple indirectly) who supply inventory.

Nokia regained top spot in operating profit.  I’ll leave net profit assumptions aside this time, but Apple is sure to have beat by having far lower R&D as percent of sales.

Nokia Smartphones had a good quarter due to new launches.  I attached share and ASP comparisons for smartphones in both companies.

Much of Nokia’s growth is in so-called numbered devices (not N or E series).  This shows continued growth for Eseries sales driven by the advent of the E52, E55 and E72 mass market availability. Nseries devices sales remain relatively flat and are likely to included around 100,000 N900 (Maemo devices). Numbered devices also showed impressive growth against continuing good sales of the 5800 and the advent of the 5530.

I think it’s a logical evolution of mobile computing. A hop along the trajectory. When the iPhone first rolled out as an embodiment of the new touch-based UI–a disruptive technology, I said it was far too good as a phone. It could not be a better phone because phones were as good as they could be. It was a pretty lousy computer so I reasoned all it could become was a better computer. The iPad is a better computer.

Will it be a big hit? I think it will grow nicely and be profitable. It will take several iterations but eventually it will absorb usage from low-end laptops and move computing to new contexts. It will have amazing applications in certain verticals like education, health care, travel and automotive use.

All these steps are like checkboxes in the disruptor’s playbook. In 5 years, this will be as big a business as the Mac and then Apple will have to think how they break out of the 5% share ghetto.

Will there be a response? Yes, but, like with the iPhone, not for a long time, and not symmetrically. The PC guys will dismiss this and the phone guys will see it as outside scope. Once they begin the effort in earnest, it will fall well short of the entrenched, incumbent, integrated(*), rapidly evolving juggernaut that will be Apple Mobile Computing.

(*) Note the emphasis from Apple on its own CPU in the device. Apple does not talk about chipsets in their devices, but they did this time. Not only are they signaling control, but it also shows that value-chain integration down to silicon is what is needed to go up the performance trajectory for good-enough mobile computing.

Observations:

0. feature rationing in effect. Apple is also clearly demarcating the product as fitting in a continuum of usage behaviors. If there will be cannibalization, it will be affecting Mac, not iPhone.
1. it’s a new line in the income statement. Accessories and other revenues will add cream on top.
2. Guessing a $600 ASP (in line with iphone)
3. For margin I’d go with high 30s, maybe half way between Mac and iPhone.
4. units: 3 million this year, 100% growth for 3 years. Could range higher but distribution deals will tell story. So far this looks more like a Mac. However, will Operators run with it? If so, then we’re looking at much higher numbers.
5. Is Apple going to get revenue share on the data plan? I would not be surprised if they do get a cut.
6. iWork on it is a wild card. Does not fit use cases but they might be testing waters.