Home : Mobile : News

Nokia: A crisis unfolding

A Stephen Elop memo gives a strong indication Nokia is in trouble, but how serious is the crisis?

By Tom Brewster, 9 Feb 2011 at 16:01

ANALYSIS Nokia is a company in turmoil, if you believe reports splattered across the web today.

And it has become increasingly hard to deny the firm really is faltering, especially in light of a reported memo from Stepen Elop, Nokia’s recently appointed boss, outlining the state of the Finnish manufacturer.

Elop reportedly told Nokia staff that the company was atop a “burning platform,” as competitors like Google Android and the Apple iPhone eat away at its market share.

Figures today further confirmed what Elop said in the memo, showing the firm’s mobile market share had been eroded away even further.

So how serious is the crisis at Nokia, the once indomitable mobile giant?

A bad start to 2011

Although cracks at Nokia began appearing some time ago, this year has not started well for the firm, with various pieces of bad news hitting the company.

A report from Bernstein Research showed Nokia had spent more funds on research and development than both Apple and HTC. The data indicated the Finnish firm had been spending almost three times the average of its competitors, yet results indicated the investment had not helped turn the company decline around.

Company results posted at the end of January did not provide any succour. Profits fell yet again in the last quarter of 2010, as operating profit dropped by 26 per cent compared to the same period in 2009. The firm’s devices and services segment saw a 24 per cent fall, and shipments dropped three per cent year-on-year.

Not long after the results were posted, a Canalys report rubbed salt in the wound by showing the Symbian OS had been toppled by Google Android in the worldwide smartphone software rankings. Phonemakers sold 32.9 million Android-equipped phones globally in the fourth quarter, compared with Symbian's 31 million sales.

An IDC report from this week again highlighted Android’s rise and Nokia’s stuttering.

All of this led up to the leak of Elop’s memo, calling for the company to sink or swim. It revealed what everyone had suspected: Nokia was in trouble.

Email to a friend

Print this page

1 2

< Previous Mobile : News Next >

4 comments

You need to Login or Register to comment.

2 wrongs don't make a right

What a classic wrong move from Nokia. Inevitable, really, once they had appointed an ex-Microsoft man (if there is such a thing). Microsoft has never really 'got' mobiles and their user interface has always been even worse than Symbian, featuring endless scrolling lists. Obviously it would have been too hard to move to Android as that would have been a further recognition of failure. All very sad really as there are some great people at Nokia and their hardware is by far the best in the world.

By Beckett on Friday Feb 11

changing directions

Nokia developed Maemo but then stopped leaving current users with nothing further to look forward to. A migration to MeeGo and then a line up of new products might have made all the difference. The N800/N810 has advantages for whole class of users over the iPad but these have not been developed. I was going to upgrade from the N95 but there is nothing in the Nokia range worth moving to particularly if the current operating systems are to be dumped.

By Ip_gfge5146c4406 on Friday Feb 11

Microsoft takeover of Nokia

@Beckett -- spot on. It's an effective MS takeover of Nokia by the backdoor.

By 6tricky9 on Saturday Feb 12

Big Mistake: Nokia and MS combining efforts

Recently on the news, Nokia and MS announced joint efforts to produce phones using Windows Phone 7 - another big no-no.

Nokia should have just put in Android. Now they have decided to sink with Windows Phone 7.

By orionds on Saturday Feb 12