Nokia: If Windows Phone Doesn’t Work Out, There’s Always the Rubber Boot Option
After Nokia’s horrendous second quarter earnings — with their sharp sequential declines in smartphone and mobile phone shipments, does the company still have a shot at regaining its competitive edge?
Perhaps, but not for much longer. Smartphone sales down by a third. Overall sales of core devices and services down by 23 percent. Precipitous market share losses like these suggest Nokia’s window of opportunity here — if one even exists — is closing.
Nokia is back.
Going forward, execution is critical. Nokia is racing to ship its first Windows phones in the fourth quarter in a bid to rebuild market share. But as Bernstein analyst Pierre Ferragu observes, pulling that off is not a guarantee of future success.
“In a fast changing market, Nokia is losing ground very rapidly,” Ferragu says. “The company lost significant market share again in the second quarter, 7pts in smartphones and 6pts in basic phones. The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast. … Android has been clearly identified by management as being the major driver behind the current negative trend of Nokia, especially in Europe. The operating system grabbed 36 percent market share last quarter vs. 11 percent a year ago and we are concerned that against such momentum, no third ecosystem will have a chance to emerge.”