Posted on 06/16/2012 7:52:04 AM PDT by SeekAndFind
The once-great Finnish cell-phone giant Nokia (NOK) is now undergoing one of the most spectacular implosions in the history of business.
Several years ago, Nokia was the undisputed heavyweight champion of the world when it came to making phones. Now, the company is frantically cutting costs and downsizing in a desperate bid to survive.
What happened?
The iPhone happened.
In the five years since Apple (AAPL) released its first iPhone, Nokia has lost a staggering 90% of its market value.
Worse, the company has gone from coining money to burning it. And the situation has gotten so bad that Nokia announced yesterday that it plans to fire another 10,000 employees.
Nokia's problem is that the cell-phone market has become a "platform" market, in which third-party developers build apps that run on top of cell phones. Platform markets tend to standardize around one or two winners. And the smartphone market is already standardizing around Apple's iPhone and Google's Android.
Nokia recognized this market shift last year. Its new CEO wrote a bold memo likening the company's predicament to being stuck on a "burning oil platform" in the middle of the ocean. He then radically changed Nokia's strategy and bet the company's future on Microsoft's forthcoming entry into the mobile platform market--a new version of Windows.
Unfortunately, Nokia's Microsoft phones have not been selling well. And, in the meantime, Apple and Google (GOOG) have only gotten stronger. So Nokia's situation has become even more dire.
Because Microsoft (MSFT) and Nokia are now in bed together, moreover, Nokia's problems have become Microsoft's problems. Microsoft is desperate to regain some of the ground it has lost to Apple and Google in smartphones. But its one major global partner, Nokia, is now drowning. So that puts Microsoft back at square one again.
(Excerpt) Read more at businessinsider.com ...
That's usually the point where the executive team stops thinking.
Research in Motion is making a similar mistake with the Blackberry - it needs to support Android apps ASAP, but management can't seem to get that.
Nokia screwed up about seven years ago in Germany. They had taken advantage in the late 1990s of a German tax credit...moved in, and had a factory there. As the tax credit maxed out...they quietly announced that they’d found a new location down on the Black Sea. Whole operation at the German plant was to shut down within a year. They even had construction going on while secretly holding back on the termination notice. Germans went ballistic after the announcement, and I suspect that they lost about half of their sales in Germany almost overnight. They had never gauged the negativity of the announcement and what it would bring.
I think Nokia and RIM should ask Oblame-o for a BAILOUT, and have him blame the GOP/Bush on their problems!!
I prefer not to play around with Beta versions of Microsoft Windows, so I have stayed away from Windows 8. I do other betas, but MS beta operating systems stung me too often in the early days.
But the word out seems to be that Windows 8 is a lousy platform for desktops or laptops, but designed primarily for iPad type operations.
If so, this cannot be good news for Microsoft. I like Windows 7, but it really looks as if Windows 8 will be another loser.
Given all the square Large Innovative Tiles in theIr upcoming OS, that's oddly apropos.
Shades of Motorola! Back in the analog days of cellphones, the batwing symbol dominated the market. But when digital technology arose, Motorola stayed with analog and lost most of the market.
I think more details of the analogy are unnecessary....
I hope Microsoft gets smart enough to throw Nokia under the bed. That's probably what this announcement Monday is about, at least indirectly.
Why would anyone buy the Nokia Windows phone. there are probably more apps available for HP’s now-defunct Palm Pre than there are for the MS platform. Microsoft waited far too long. It is like trying to enter the 2012 presidential race....today. Ridiculous.
As their financial results are proving, the “secure enterprise platform” business isn’t enough to keep RIM alive as an independent company. Either they open their OS to support Android apps (not difficult to do) or they sell themselves to some larger company like IBM.
As someone who still just wants to make a phone call, I miss my old analog bag phone. All the rest of this crap has done for me is make it harder to get through and digital signals don’t carry as far.
Nokia + Microsoft is akin to Kmart + Sears. The alliance is not going to work out for good.
Looking at the positive side (seems like kicking people while they're down is a common recreational sport in Obamaland, and even here in FR)
Microsoft probably is the only company with the financial resources to pull it off, resuscitating Nokia.
You must be really old, like me.
Not interested in being cool, hip, and popular with the senseless mob, being able to discuss "Apps' and all...
Funny thing, I have not seen much discussion about the frequency when losing your entire life's data when the (criminally attractive) device breaks, is lost or stolen.
And personally I think that's not Microsoft's brightest move. IMO they should have found a more healthy partner. By saying that MS should "throw Nokia under the bed" I meant they should stop expecting for a nearly-dead foreign company to save them from irrelevance.
My comment wasn't about "kicking people while they're down", it was about the advisability (for Microsoft) of spending billions more dollars trying to get Nokia to be a help rather than a hindrance, not to mention wasting more time that isn't there to waste. Microsoft is years behind the hand-held curve already, and it is way too late to wait for someone who's down to get up again.
Microsoft needs to be resuscitating itself, not foreign companies. I hope they're not too far gone -- it would be a damn shame for an important and valuable American company to blow their chance at the hand-held market.
My first phone was a Nokia 6110, circa 1998 or '99. Built like a brick s**thouse. Great reception, long battery life, comfortable in my hands and clear as a bell. And I believe you could even text with it (though nobody ever sent text messages back then).
Now I've got a Casio G-Shock flip phone. Bought it because it was rugged, waterproof and had a long battery life. At my job, I think I'm the only person left without a smartphone. At least I can leave home without my phone charger though.
It's a shame to see the once mighty Nokia take such a fall. I've often thought they should go back to doing what they did best; building simple, rugged phones with great reception and a long battery life. The reality is, there isn't much of a market for phones like this these days.
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