Nokia has recently announced the release of its latest smartphone N8 hosting its improved Symbian 3 software. The phone will be available globally, including India, from September onward and is priced at 370 euros (Rs 21,019).
While this announcement was much awaited, many analysts have met it with an admonition that it maybe a little too late. Nokia itself seems to be aware of this fact and has made statements to that effect. On Wednesday it said that its second-quarter handset revenue and margins will be “at the lower end of or slightly below” its earlier forecast range of 9-12% and that sales in the devices and services division may fall below euro 6.7 billion in the second quarter.
But Nokia has also backed up these announcements with steps to improve its performance in this segment. It is set to introduce a second line of high-end devices running the MeeGo operating system developed with Intel at an unspecified date this year. It is also making management changes within the organization by promoting Anssi Vanjoki, a 20-year company veteran, to head a new smartphone division.
These announcements have lowered expectations from the company and given everyone the impression that the Symbian user experience won’t be fixed this year and MeeGo won’t arrive in time to make a difference to 2010 either. The drop in people’s opinions about Nokia was reflected in the fact that investors pushed Nokia’s stock prices down by 9% to euro 7.22 in Helsinki on Wednesday, the lowest level since March 9, 2009. The stock drop put the market value of Nokia at euro 27 billion ($33.3 billion), below the $34.4 billion of rival Research In Motion and Apple’s $240 billion.
Yet for the moment Nokia has managed to hold on to its smartphone market share of 41% in the first quarter by introducing cheaper models and trimmed prices. And even though Symbian’s (Nokia’s smartphone operating system market share) has fallen to 44.3% in the first quarter from 48.8% a year ago, there will be hope for the company.
Amidst all the dismay rising over Nokia, there are 2 noteworthy facts about Nokia that should not be ignored. The first is that Nokia still remains the preferred choice for lower-end and mid segment phones and is very popular in developing countries. The second is that Nokia has recently unveiled low-end smartphones phones costing as little as euro 135 this year. Coupled with the internal changes and new releases, Nokia still has a strong position. WATBlog recently covered the strong influence of Nokia in the Indian market.
As Helena Nordman-Knutson, a Stockholm-based analyst at Oehman aptly put it,”It doesn’t mean Nokia will never come back, but it does say they will not come back in 2010 or not before the fourth quarter.”
The smartphones’ sector is increasingly emerging as one of the most competitive sectors in the mobile space. Only time will pick out the winners. What is your opinion?
Yes Nokia is a strong player. But to keep the growth alive, i believe they should adopt to Android
Hi Aaksha
First of all, i think you got the image of the phone wrong. What you have here is the N900 and not the N8.
Secondly, i very much agree to your points here that Nokia has nothing exciting to offer in smartphone space for 2010. The outlook revision is also a signal that Nokia as a company also doesnot see too much promise in its smartphone line up. I am not to hopefull of Symbian 3 to cut major ice and the Intel partnership to me is not exciting enough (Intel itself is learning the ropes in the smartphone markets and is yet to establish the Moorestown as a cutting edge solution).
I have been studying Nokia for over some time now and what appears to me is that Nokia is increasingly getting marginalised as the choice of the developing economies/ Afro-Asian continents. In mature markets Nokia slowly getting wiped and whipped.
With the current suite of services like Information Tools, Money Transfer, Free Music, Maps and Navigation, Nokia looks to be better poised to ride the up-wave in the developing AFro-Asian economies. That is where Future of Nokia is!
Thanks
R