Nokia looks to be heading down the same slippery slope into oblivion as RIM and Palm, as the ailing Finnish Smartphone manufacturer moves ever-closer toward losing its independence. Should CEO Stephen Elop be unable to breathe life back into the once-unstoppable brand by the close of 2012, an outright sale could herald the only way forward.
This Thursday, Nokia announced that a further 10,000 jobs were to be shed on a global basis over the coming months, as second quarter loss predictions once again skyrocketed.
Share value in Nokia have plummeted by over 18%, hitting their lowest levels in over six years. Since the company came under the control of Elop in late 2010, a total of 40,000 jobs have been shed at the company made ongoing efforts to halt its rapid decline.
Analyst and investor concerns are growing by the day, which have not been helped by Elop’s recent remarks, admitting that it is at present impossible to known when and how Nokia will recover, as Samsung and Apple’s Smartphone market share appears impervious to all efforts.
It has since been suggested that Nokia is well and truly on borrowed time and that if a resolution or at least a workable action plan is not put in place by the end of the year, there will be little choice other than a sale of the company to a rival.
Microsoft has already been earmarked by most as a likely buyer
As Smartphones increasingly take over from PCs and laptops as the primary means of consumer entertainment and communication, a direct move into Smartphone manufacturing seems an eventual inevitability for Microsoft. What’s more, Nokia has invested considerable efforts in producing a range of flagship Windows Phone devices, making the possibility of an imminent partnership all the more plausible.
In short, Nokia desperately needs rescuing by a global superpower, while Microsoft needs all the help it can get to boost its rather depressing Windows Phone OS market share.
It had long been predicted that a new generation of Nokia Lumia Smartphones would prove to be the saving grace of the brands, with the Lumia 900 flying the flag for both. However, despite ticking all of the right boxes and going a considerable distance further, the ideal partnership has so far proved to be a recipe for failure.
In total, Nokia has so far managed to ship 3 million Lumia’s since November last year, which compared to Apple’s 72 million iPhones since October is truly unsettling.
Furthermore, Nokia was overtaken by Samsung early this year and lost its top-ranking as the biggest phone maker in the world. Since the beginning of 2011, Nokia is known to have ploughed through no less than E2.1 billion of its cash reserves – a rate of spending that would see the brand bankrupt before 2014.
The 10,000 additional job cuts have been announced as a means by which to curb this potentially fatal spending.
However, Elop remains confident that the company’s devices and indeed its future remain strong – it is simply a matter of getting them into the hearts and minds of an Apple and Android-obsessed world. Breaking recent habits in his opinion represents at least 90% of the task ahead, as Nokia’s flagship Windows Phone devices are more than capable of selling themselves.
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