This morning, like you, I read about the Nokia cuts. Nokia appear, in my opinion, to be hitting the same issue that Microsoft and Windows Mobile tackled four or five years ago.
There was far too much washing about. Nokia were the undisputed king of the mobile ring and they, like Microsoft and Windows Mobile, rubbed their hands together as the money trucks backed into the car-park.
But, just look at the release Nokia put out today…
Competitive industry dynamics are negatively affecting the Smart Devices business unit to a somewhat greater extent than previously expected. Nokia expects (this) to continue … in the third quarter of 2012.
Translated, this basically sounds like Nokia are saying “Our competitors are doing way better than we are. We expected to throw the Lumia range out there and watch the money trucks, but it hasn’t happened”. Now, with another 10,000 staff pushed out, they’re telling investors to expect a downward line until at least October. Will less staff mean that those stronger competitors will go away? Can Nokia continue to moan that, “We’re not doing well because others are doing better and selling more. That’s not fair!”
During 2007 I sat and watched Microsoft dismiss the iPhone. I watched the iPhone gobble up market share like a hungy hippo. Nothing seemed to happen with Windows Mobile and, as Microsoft dragged their heels, it vanished from consumer and business pockets. This happened quickly. Fast forward to today and Blackberry are facing similar issues with Directors and Managers switching to iPads, iPhones or a “BYOD” (Bring Your Own Device) policy as spending takes a back seat in a economic downturn.
All this happened with immense speed. The mobile industry is changing faster than ever. Who’d have thought that Samsung would dominate the Android scene so quickly and HTC would be changing the number of handsets in their portfolio so rapidly?
Speed is key, and being able to adapt on an almost monthly basis is essential.
Getting a brand which is trusted is difficult. When your brand is on the rise a tiny issue can instantly send it tumbling. Samsung have achieved a strong brand and are known for producing quality products with great designs. Nokia, on the other hand, have seen their brand become less well known as their devices disappear from shelves and get replaced with other brands. Now even my nan knows about HTC phones and, for her next handset, she wants one of those instead of the Nokia featurephone she has now.
Those millions of people using Nokia featurephones are transitioning to cheap Android smartphones. Featurephones are dead and Nokia knows it – they’re knocking out cut-price Lumia devices (like the 610 and 710) in the hope of regaining those lost featurephone customers but, from what I can see, it’s too little, too late. An army of cheap Android phones are available from the likes of ZTE, HTC, Huawei, Alcatel, LG, Samsung, Sony Mobile and others. Can Nokia, with a couple of cheaper Lumia devices lacking the app catalogue of their Android competitors, grab those customers back?
Will Microsoft buy out Nokia when the “time is right”? It’s a question many in the media are too afraid to mention, but with the Nokia share price tumbling it could prove to be a fire sale bargain. Not only that, but the semingly cosy relationship with the two is implanting the belief that only Nokia make Windows Phone devices. It’s not true of course, but it’s what customers can mistakingly believe.
Will Nokia become a Zune? Or will Microsoft continue piling cash on the embers until – like the XBox – the numbers begin to climb?
Let us know what you think below or in our forums.