Is Nokia on its deathbed?

Last night Nokia SA unveiled its new Lumia 900 smartphone running Windows Phone OS with much fanfare and an interesting twitter campaign. Smells of desperation to me

Last week we ran a story chronicling Blackberry’s evolutionary decline. Their drastic decrease in share price, market value, share and resulting retrenchments. Now it’s the turn of the other famous phone maker to say hello to its goodbye.

Our story begins with the Finnish phone maker’s reporting another quarterly loss, this time the worse ever at €929 million. Last week, it was reported that the company will sack 10000 more staff in a restructuring process to save costs and ultimately the company. The company will close research and development facilities in Ulm, Germany and Burnaby, Canada. Finland will lose it main manufacturing plant but some employees would remain in its home base.

The chronic disease affecting Nokia has been its struggle to translate it former feature phone dominance into smartphone clout. Nokia has continually struggled against formidable competitors such as Apple’s iPhone and phones carrying Google’s Android OS platform. The stubbornness of its executives and poor foresight to react to market changes and consumer needs.

I blame the executives mostly as they had the opportunity to change but did not. Stubbornly they stuck with their own Symbian Operating system with these massive consequences. Apparently the Nokia Board does as well, two members of its top leadership team will leave – Mary McDowell, the head of the struggling mobile phones unit and Niklas Savander, head of the markets sector.

 

Late last year saw the move to Window Phone OS as a change but despite favourable reviews has failed to have considerable market uptake. Nokia’s main power was always its market size and strength in the feature phone market. I’m sure it hoped that if it could keep that sizeable share those users would eventually migrate to smartphone with them. But competition in that space has been aggressive from Samsung and a host of Chinese brands like ZTE, that plan appears to be failing. Nokia has fallen from the number phone maker in the world to number two now but sliding fast.

Nokia still has clout; I think it is high time they strategically used it.

BRSlifestyle

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  1. Microsoft announces Window Phone 8 « brslifestyle - June 21, 2012

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