Nokia’s Profits Drop To 13-Year Low
It was revealed yesterday that Nokia’s fall from grace over the decade has seen their share price fall to an all-time 13-year low.
Nokia were once the kings of simple mobile communication devices. We can all remember playing hours of snake, getting new covers for our 5110s and of course, the infamous 7110 banana phone from the Matrix. Nokia used to be the cool kid on the block.
But the Finnish handset maker has fallen on hard times. They failed to see the Smartphone revolution and have been left behind the Apples, Androids and HTCs of this world. Their only chance of survival? Their new deal with Microsoft.
The Finland-based company has been struggling against tough competition in the top-end smartphone market, especially against Apple’s iPhone, Research in Motion’s Blackberry and on the software front against Android, which has emerged as the top choice for phone makers that want to challenge the iPhone.
They seem to have lost their way over the last 10 years; we’ve had the iPhone, Android and new device makers like HTC who are all now eating up their profits, and Nokia’s recently gloomy share price is reflected in this.
The last roll of the dice is a deal with Microsoft that will see Nokia phones using the Window Mobile7 operating system exclusively.
A statement released by the company on Tuesday explained that “multiple factors are negatively impacting Nokia’s Devices & Services business to a greater extent than previously expected”, and said it was “no longer appropriate to provide annual targets for 2011”.
“Nokia now expects its ‘Devices & Services’ net sales to be substantially below its previously expected range of €6.1bn to €6.6bn for the second quarter 2011,” the statement continued. “This update is primarily due to lower than previously expected average selling prices and mobile device volumes.”
The company expects its operating margin for the quarter to be “around breakeven”, rather than the six to nine per cent previously forecasted.
“Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011,” he added.
What ever happens to Nokia we think that they have one last chance to build upon their remaining shred of goodwill. Let’s just hope that fickle consumers are willing to give them one last chance, as the communication world without Nokia just doesn’t seem right.
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