Tuesday, April 17, 2012

Nokia Crisis Deepens, Shares Plunge
Shares Tumble as Phone Maker Warns of Weaker-Than-Expected Sales, Margins; Software Glitch Adds to Woes


In our last posting, we discussed the hyper change mode of the digital communication world. This article focuses on the impact on one of its major players. Realize, however,  the real story is in the trail of companies who dominated or were major players in the market just a few years ago but are either gone, going, or struggling to find its footing—Motorola, Nokia, RIM, and Microsoft. The biggest challenge for these companies lies in the concept that innovation driven growth must be coupled with “creative destruction”. You must cannibalize what you have for something better or more adaptive to changing market dynamics before your competition does. This is a leadership issue.

Nokia Corp., long the biggest name in the cellphone business, is scrambling to stay relevant in the smartphone age. 
On Wednesday the company warned things will get worse before they get better, saying that competitors are rapidly eating into its sales in emerging markets such as China and India.
Nokia also said its newest phone in the U.S. had a software glitch that is preventing some users from connecting to the Internet, marring its attempt to fight into the world's most important smartphone market...
....In the U.S. and in other big markets for high-end smartphones, Nokia has struggled to gain traction despite a big bet on high-end devices powered by new software developed by Microsoft Corp. 
Nokia is also losing its dominance in developing countries like India and in the Middle East as consumers increasingly dump their basic Nokia phones for cheap smartphones running Google Inc.'s Android operating system...... 
.......On Wednesday, the company said its core handset unit was likely a money loser in the first three months of the year, with a negative 3% operating margin, as harsh competition in emerging markets weighed on sales... 
... Like BlackBerry maker Research In Motion Ltd., Nokia is trying to re-establish its relevance in a market dominated by Apple Inc.'s iPhone and Google-powered devices. Both Nokia and RIM are working on new devices they hope will make a splash, even as Apple and Android work on improvements of their own... 
....Akaash Saini, a 21-year-old college student in Seattle, said he's been looking forward to the Lumia since last year and even pre-ordered the phone from AT&T...He said he needs access to certain iPhone apps to communicate with colleagues at work 

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