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Nokia’s Windows Gamble Faltering

18 months ago when Steve Elop took over as Nokia CEO he made 2 major mistakes. He hurriedly junked Nokia’s Symbian operating system that powered its smartphone,  months before it had a viable and credible alternative. At that time Nokia was still the world leader despite steadily losing market share to Android and Apple phones for 2 years.

Elop an ex Microsoft executive then put all Nokia’s eggs in the Microsoft basket trusting that the Windows 8 Operating System for smartphone that was still a year from development would create magic and help Nokia revive its sagging fortunes. We had then reported these twin mistakes with the article in ISEdb “Nokia Commits Hara Kiri Junks Symbian for Windows.”

Ever since Elop joined Nokia and junked the Symbian OS, the sales of Nokia smart phones which was admittedly not electric took a further downturn . Nokia which commanded 56% of the mobile market share  in 2008 before the entry of smart phones had already slipped to 44% by 2010 but was still way ahead of  Blackberry, Google and Apple . The Symbian OS considered mediocre was still providing some resistance to the early leaders of the smartphone era and Nokia still had a big lead though losing some ground to RIM with 18% , Android 16 % and Apple 13% market share.
When Elop took over he had promised a two-year transition and a longer term operating profit margin of at least 10 percent. Now after 20months at the helm Stephen Elop has brought out only the Lumia 920 that is not a patch on iPhone 5, Galaxy 4S or even the struggling but upgraded Blackberry. This has led to not only a sharper loss of market share and profits but also a dip in Nokia’s market cap as its stock price hit an all time low of nearly 2.00 Euros.

Nokia’s shipments of smart phones dropped from 24.2 million in the first Quarter of 2011to a lowly 11.9 million units in the first quarter of 2012 as per an IDC Tech survey while Samsung and Apple sold 42.2 million units and 35.1 units respectively.

Worse Nokia has lost over $3 Billion since Elop took over and cut tens of thousands of jobs and closed several factories around the world including in Finland. Now Elop has less than 6 months to prove that his strategy can work and he can revive Nokia and the sagging fortunes of Windows 8 operating system, that looks nearly impossible.

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