Plans to cut staff and close factories to reduce losses of Nokia as well as a great threat to the future of Microsoft.
The irony of history
Alliance Nokia - Microsoft is like the irony of history, because they had two fierce competitors in the mobile market. A decade later, in 2011, Nokia and Microsoft had to shake hands, to form a coalition in the war "a take a while" to compete in the smartphone market dominated by two "giants" Apple and Google .
Nokia agrees to use Windows Mobile OS Symbian smartphones main alternative, then pay to use Microsoft software. In return, Microsoft will support Nokia billions on developing and marketing products. But now, Microsoft faces the risk is Nokia - partners bring 2/3 sales of its mobile software - may not be strong enough to sustain the impact on the market.
The future of Nokia is very blind when rising from everywhere 5th, Nokia announced a loss in the last two months is much higher than expected. The company also can not predict when a new end state.
In an effort to cut costs as business losses, said Nokia will lay off 10,000 workers of moving parts. The plan is expected to complete by end of 2013, and the risk of things will not stop there.
Recently, Nokia's share price fell 16% to $ 2.35 on the New York trading floor - the lowest level since 1996 to present. Nokia's market value has fallen by more than three quarters since CEO Stephen Elop to run from 9/2010 and decided to bet the fate of the company's Windows Mobile operating system Microsoft. Nokia's market value is now $ 8.8 billion, down 92% compared to 2007 (when Apple introduced the iPhone), only slightly higher than the price Microsoft spent to buy Skype last year.
In a conference, Elop said that Nokia plans to solve the problem of market share by increasing sales and marketing push, more intense competition in the array are cheap Microsoft smartphone for "specific support" . Nokia will cut many areas to focus resources on a few major markets, including USA, China, and a certain market in Europe and Asia. He said: "Currently we are in the situation are required to create a breakthrough in sales."
In late 2011, according to research firm IDC, the first Nokia accounts for less than half the mobile phone market share at home to Finland. According I/2012 quarter results, Nokia also to take the throne maker of mobile phones leading the Samsung hands.
In addition, Nokia also faced many difficulties in cheap phone business in emerging markets - mainly profits of this company. For example, in Indonesia, Nokia's market share fell from 52% (early 2010) to 24% (early 2012), according to IDC. Nokia also slow rivals over the issue of dual SIM phones - very popular item in the developing countries for several years now.
Alliance Nokia - Microsoft is like the irony of history.
Microsoft has to find other options?
For Microsoft, the selection of Nokia as a partner for the production of the leading Windows Mobile device is also a big bet. In 2011, the iPhone and Android taking off and drowned while Windows, Microsoft hopes a partnership with Nokia may bring to their 3rd place firmly on the lucrative smartphone market. Now Nokia have problems, Microsoft has responded by increasing aid to the "gold partner".
However, if Nokia's situation is not improved, the software giant may have to start looking for other options.
Nokia a loss of no small damage to Microsoft. In I/2012 quarter, Apple accounted for 23% of global smartphone market, Android accounts for 59% and this number continues to increase, according to IDC. Meanwhile, the operating system of Microsoft Windows Mobile ranked sixth, accounting for only 2.2% of the smartphone market, down from 2.6% in early 2011. Nokia and Microsoft are setting targets 10% market share of the smartphone market, although they have no specific timeline for that goal.
Nokia said it shipped more than 2 million phones worldwide Lumia second quarter I/2012, compared with 35 million of the Apple iPhone. In Western Europe, Lumia's largest market, IDC estimated that Nokia sells 980,000 machines Lumia - compared to 15.5 million Android phones, 7 million and 2.5 million BlackBerry iPhone.
Last year, Nokia will be placed on the important challenge when Samsung recently released Samsung Galaxy S III - Android smartphone's leading blockbuster, Apple also is expected to be a new iPhone version later this year. Meanwhile, Nokia has not revealed details about an upcoming new product. Does Nokia have enough power to run the competition?
Until the situation is more positive signs, Nokia has still to develop risk depends on Microsoft.