Is Nokia Finnished?

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Inconceivable? Not any more. For the past few years, the mobile industry has outpaced Nokia, leaving it looking obsolete and vulnerable. Paul Withers asked industry leaders if the Nokia giant could actually fall

It’s no secret that Nokia, regarded as the giant of handset manufacturing for a number of years, is a company in decline. In fact, this could be seen to have been the case for the past few years.

Many industry observers have indicated that Nokia never prepared properly for the phenomenal impact the first Apple iPhone had, when it was released in June 2007, and therefore was never in a position to recover from its slow start.

In addition to Apple, the likes of Samsung and BlackBerry have continued to dominate the market, while HTC has seen its brand grow in the past couple of years, to the point where it is now seen as a challenger to the elite.

Losing share
Even the likes of Motorola and Sony Ericsson, both of which have suffered from declining handset sales and revenues, are slowly regaining a foothold in the market. Both are innovating – Motorola with the Milestone and ATRIX, and Sony Ericsson with its own Xperia range of handsets.

Nokia attempted to turn back the tide by appointing former Microsoft man Stephen Elop to its top position last September, and by signing the deal with Microsoft in February. It terminated a long-standing relationship with its Symbian platform, instead opting to use the US IT giant’s Windows Phone operating system.

However, things are not getting any better for Nokia. Research released by analyst house Gartner last month showed Nokia’s global market-share slipped to 25.1 per cent in Q1 2011 – its lowest since 1997. Despite selling 107.6 million units

in the period, down from 110.1 million in the same quarter last year, its market share fell 5.5 per cent year-on-year.

To make matters worse Nokia’s rivals are gaining ground quickly. Apple’s share grew from 2.3 per cent to 3.9 per cent in the period. It must be remembered that Apple only has the iPhone on the market. HTC almost trebled its sales in the quarter to 9.3 million handsets, compared to the same quarter a year ago.

Questions
At the end of last month Nokia issued a huge profit warning in relation to its Q2 financial results, saying sales will be well short of the €6.6 billion (£5.85 billion) it had previously reported, and may not even make a profit in the quarter.

Many questions are unanswered: Did Nokia make the right decision in abandoning Symbian? Was it right to choose Microsoft’s Windows Phone operating system over Google’s Android platform?

Where will Nokia fit into the handset manufacturing market when it does come back with Microsoft? Can Nokia regain the market share lost to rivals? Is there a possibility the company could disappear altogether?

These are questions Mobile News put to eight industry identities from a range of market sectors. The answers revealed many differing opinions on where it went wrong for Nokia and what the future holds for the company.

Full article in Mobile News issue 491 (June 20, 2011).

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