Cutting Room: Nokia sending us mixed messages

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The manufacturer insists it is happy with its performance and that Lumia sales have exceeded anything it has achieved with other handsets previously, despite various reports suggesting otherwise 

When we met up with Nokia last month we wanted some straight answers on why the Finnish firm’s ambitions to get back on top are being stifled by the UK market. An honest question.

You only need look at Nokia’s disastrous results for Q1 2012, published last month, in which it posted a £1.1 billion loss.

Many have said sales of its new device have not reached expectations, such is the strength of the competition.

Even Nokia CEO Stephen Elop (pictured right) admitted that while the firm was exceeding expectations in markets including the United States, establishing momentum in certain markets, such as the UK, had been difficult. A fair and honest assessment.

But sitting with Nokia Western Europe chief Conor Pierce (pictured left), you’d be forgiven for thinking everything was rosy – he seemed to dismiss Elop’s comments completely.

We were told sales of Lumia handsets had been better than any other products the company has launched by a “wide margin”. It’s difficult to believe this.

While I have nothing against Nokia, and was rooting for it to recapture the dizzy heights it commanded for so long, this simply doesn’t seem likely.

Are Lumia sales really outselling previous hero devices such as the N95 – a handset virtually impossible to get hold of at one stage in the UK? Or even the 3310, which I still see knocking around.

Pierce said he was very happy and proud of what Nokia had delivered and the support it is getting from the market.

He also insisted the marketing campaign for its Lumia handsets, which has had a global investment of £80 million, was working very well. It’s that kind of comment that makes Elop’s comments all but redundant.

It’s easy to knock a firm when it’s down, but the vultures seem to be swarming over Nokia more than ever at the moment.

A report from investment research firm OTR Global said international carriers were losing confidence in Nokia’s ability to remain a competitor in the market and that its weak portfolio and worsening financial position could result in it going bust, being sold or facing bankruptcy by next year.

It said price cuts had been the only effective way of lifting poor sales of the Lumia 800, the handset meant to revive the manufacturer’s fortunes in the marketplace.

They were also unimpressed by its future portfolio.

Added to which, there was an extraordinary story last month relating to a lawsuit filed in a California district court against the firm by one of its own investors. According to various reports, Robert Chmielinski is suing the manufacturer for misleading investors that its new Windows Phone range, the Lumia 800 being the first, would turn its fortunes around.

This does not sound like a company in good health.

And the market is getting tougher. It’s becoming increasingly difficult to see where Nokia can catch a break. It’s not all about quality either – Nokia has that. The industry is becoming a lot like a popularity contest. Samsung is part of the in-crowd, and it’s getting stronger. Its marketing team has put it within an inch of Apple by creating over-the-top headlines to accompany its product launches, similar to those Apple has traded in.

The Samsung Galaxy S III had just gone on sale as Mobile News went to press, and the PR behind it was incredible – with each operator and specialist scrambling to send out releases about availability and how customers can pre-order the device.

By the time we go to print, the web will undoubtedly be full of ‘sold out’ stories and ‘x-million sold in first weekend’ headlines.

These are the kind of reactions Nokia used to get.

The iPhone 5 will be next, and the usual fist-clenching, “yeahs” and arranged rounds of applause will greet it.

Nokia doesn’t command that respect any more.

But it is by no means alone. The fragility of the market is evident with RIM, which now looks in serious trouble.

There have been reports it is axing 2,000 of its 16,500 workforce. One source claims lay-offs could even hit 6,000.

And it seems to have little on the horizon to turn things around. People we spoke to said RIM’s one time famous BlackBerry World conference in Orlando was a waste of time this year and could be its last. One attendee said he spent two of the three days at Disney World instead.

Both Nokia and RIM need to inject something more into the market and attempt to find ways out of their current predicaments.

Both will have to come up with something radical in the next six to 12 months before the gap becomes too large to close.

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