Nokia on Thursday laid out a turnaround plan that includes a management shakeup and massive layoffs as it focuses on its flagship Lumia device. But is it too little, too late for the once-dominant mobile handset maker?
Nokia plans to cut as many as 10,000 positions globally by the end of 2013, including closing its manufacturing operations in Salo, Finland, and research and development operations in Ulm, Germany, and Burnaby, Canada.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," said Stephen Elop, Nokia president and CEO. "We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities."
Nokia's plan is to invest in products and experiences that make Lumia smartphones stand out and available to more consumers, improve the competitiveness and profitability of its feature phone business, and invest in location-based services as a competitive differentiator for Lumia.
The company recently announced Nokia City Lens, a navigation and visual search application. Additionally, the company plans to extend its mapping technology to multiple industries to strengthen the platform and generate new revenue. Of course, the mapping competition is fierce, with Google and Microsoft also vying for market share.
"We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia," he said. "However, we must reshape our operating model and ensure that we create a structure that can support our competitive ambitions."
Windows Phone Ties
Nokia plans to broaden the price range of Lumia and continuing to differentiate the Windows Phone with new materials and new technologies such as City Lens. As part of that strategy, Nokia is acquiring assets from Sweden-based Scalado, which has imaging technology used on more than 1 billion mobile devices.
In terms of mobile phones, Nokia will develop its Series 40 and Series 30 devices, and invest in key feature phone technologies like the Nokia Browser.
We caught up with Michael Disabato, managing vice president of network and telecom at Gartner , to get his take on the strategy shift. He told us one of Nokia's key issues is that it has hitched a ride with Windows Phone.
"People are [choosing] the operating system first and some cool piece of hardware later," Disabato said. "So if Windows Phone doesn't get out of the starting gate and begin selling, Nokia is not going to sell Nokia phones, and if they don't sell Nokia phones, they have a problem."
Path to Profitability
Nokia also sold ultra-luxury phone maker Vertu and made a number of changes to its senior leadership. With all these changes, Nokia CFO Timo Ihamuotila said he believes Nokia's Devices and Services unit "has a clear path to profitability."
But Disabato is keeping a close eye on how things unfold: "If the people Nokia puts at the top don't have the kind of vision that the company needs and realize that they can't just bank on the Lumia as their savior, then the company won't survive. They'll have a one-trick pony."
Posted: 2012-06-15 @ 7:58am PT
Elop has already ruined another company: Macromedia. And he is doing the same with Nokia.
To sell some Lumia phones, they have to reduce the margins so much that the financials suffer. And, anyway, all their USA sales in 2 months are what the iPhone 4 sold in the launch weekend.
How Elop could choose WP over MeeGo is beyond me.
Poor Nokia and poor Finland.