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Nokia
Nokia
News
Nokia
strikes back against 'smart' rivals - 6th September
2009
Faced
with increased competition from up-and-coming
rivals, Finnish telecom giant Nokia plans to launch
a slew of new products this year but analysts
say it faces a tough battle to hold on to its
position as the world's number one mobile phone
manufacturer.
To
fight back against Apple's iPhone and RIM's Blackberry,
Nokia announced plans to launch three new smartphones
with touch screens, a portable notebook PC, and
will tie up with Microsoft to use its popular
Office software on its handsets.
Industry
observers criticised the Finnish giant for its
aging product lineup and for not bringing smartphones
to market quickly enough to take on their up-and-coming
rivals.
Analysts
interviewed by AFP agreed that Nokia had not yet
found a product to challenge the iPhone as most
new Nokia devices use an outdated operating system
to drive their phones.
"It
is going to be 2011 before they have the right
software to make a really competitive product,"
Richard Windsor, a London-based technology analyst
for Nomura Securities, told AFP.
Its
latest smartphone, the N97, has achieved modest
sales so far compared to the iPhone.
Technology
consultancy Gartner estimates Nokia has sold just
500,000 of them worldwide since its launch in
June. Apple's new third-generation iPhone sold
one million units in its first weekend on sale.
Nokia
needs its new models to be a success -- smartphones,
handsets with high-speed internet access, are
the fastest growing segment in the mobile phone
market and their higher price tags mean they carry
higher profit margins than cheaper, more basic
models.
The
Finnish giant's share of this lucrative segment
has ebbed away in recent months. In the second
quarter of 2009, it sold 45 percent of all 40
million smartphones sold worldwide.
That
compares to 47.4 percent of 32 million handsets
at the same time last year, according to Gartner
data.
"The
right high-end product and an increased focus
on services and content are vital for Nokia if
it wants to both revamp its brand and please investors,"
wrote Gartner analyst Carolina Milanesi in a research
note to clients.
In
addition to its partnership with Microsoft, Nokia
will also use Linux software and work with social
networking site Facebook to develop new services.
"They
have realised that for certain things it makes
sense to partner," Ben Wood, research director
at CCS Insight, told AFP.
Apple
also beat Nokia in drawing in additional revenue
from the sale of online applications: ringtones,
videos, games and other Internet gadgets.
Its
App'Store went online in July 2008 while Nokia's
Ovi store launched in May this year.
"Nokia
cannot create one killer product to beat Apple
or Google. Nokia has to create an experience or
a solution that is so compelling that a consumer
says 'I like the whole proposition'," said
Wood.
Nokia's
chief executive Olli-Pekka Kallasvuo told reporters
on Wednesday that these add-on services were "critical
to our future" and that his company wanted
to make smartphones more affordable to a wider
range of people.
But
that will be a hard sell in the current economic
climate.
The
global financial crisis has weakened demand for
mobile phone sales after six years of uninterrupted
growth.
Nokia,
which has 1.1 billion customers worldwide, posted
a 66-percent drop in net profit in the second
quarter of 2009 and a nearly 25-percent decline
in revenues on a 12-month basis.
In
a bid to restore the company to profitability,
a cost-cutting programme was launched in January
aimed at reducing Nokia's workforce by some 4,000.
Profile
Nokia
Corporation is a Finnish multinational communications
corporation, focused on wired and wireless telecommunications,
with 112,262 employees in 120 countries, sales
in more than 150 countries and global annual revenue
of 51.058 billion euros as of 2007. It is the
world's largest manufacturer of mobile telephones:
its global device market share was about 40% in
Q4 of 2007. Nokia produces mobile phones for every
major market segment and protocol, including GSM,
CDMA, and W-CDMA (UMTS). Nokia's subsidiary Nokia
Siemens Networks produces telecommunications network
equipments, solutions and services.
Nokia's
corporate headquarters are located in Espoo, a
city neighbouring Finland's capital Helsinki.
It has sites for research and development, manufacturing
and sales in many continents throughout the world.
Nokia employed 21,453 people in R&D in 2006.
Nokia Research Center, founded in 1986, is Nokia's
industrial research unit of about 800 researchers,
engineers and scientists. It has sites in seven
countries: Finland, Denmark, Germany, China, Japan,
United Kingdom and United States. Production facilities
are located at Espoo, Oulu and Salo, Finland;
Manaus, Brazil; Beijing, Dongguan and Suzhou,
China; Fleet, England; Bochum (closing planned
for mid-2008),Germany; Komárom, Hungary;
Chennai, India; Reynosa, Mexico; Cluj-Napoca,
Romania and Masan, South Korea. Nokia's Design
Department remains in Salo, Finland.
Nokia
plays a very large role in the economy of Finland:
it is by far the largest Finnish company, accounting
for about a third of the market capitalization
of the Helsinki Stock Exchange (OMX Helsinki)
as of 2007; a unique situation for an industrialized
country.[9] It is an important employer in Finland
and several small companies have grown into large
ones as Nokia's subcontractors. Nokia increased
Finland's GDP by more than 1.5% in 1999 alone.
In 2004 Nokia's share of the Finland's GDP was
3.5% and accounted for almost a quarter of Finland's
exports in 2003. In 2006, Nokia generated revenue
that for the first time exceeded the state budget
of Finland.
Finns
have ranked Nokia many times as the best Finnish
brand and employer. Nokia is listed as the 5th
most valuable global brand in BusinessWeek's Best
Global Brands list of 2007 (1st non-US company),
the 20th most admirable company worldwide in Fortune's
World's Most Admired Companies list of 2007 (1st
in network communications, 4th non-US company),
and is the world's 119th largest company in Fortune
Global 500 list of 2007, up from 131 of the previous
year. (Credit:
Wikipedia).
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