With increasing signs of desperation in Nokia’s stuggle against rivals Apple and Samsung, customers continue to flock to the popular Android & iOS smartphone operating systems. Nokia’s change to & and reliance on the new & little-used Windows Phone operating system may shape up as the strategic decision that breaks, rather than makes, the company.
Meanwhile, consumer momentum for the Android operating system — free for handset manufacturers to use — continues to grow, with latest figures showing it nearing 52% of the smartphone market. Apple remains second with 34%, maintaining a loyal fanbase & continuing a tradition of groundbreaking features with it’s voice-recognition assistant, Siri.
Once the world’s largest mobile-phone manufacturer, Nokia was noticably late to embrace the touchscreen & smartphones. This failure in strategy has seen it lose out to Apple and Android manufacturers such as Samsung, HTC and Motorola in the most profitable part of the market.
Analysts expect Samsung to sell 50 million smartphones in the second quarter, compared with Apple selling around 30 million iPhones and Nokia around 10 million smartphones, according to a Reuters poll on Monday.
Nokia’s net loss is also expected to approximate double, to $864 million (706 million euro), with the company’s burn rate increasing to over a billion of cash in just three months, the analysts predict. Such a burn rate is obviously unsustainable, and an indication — with sales remaining flat — of the company being in deep trouble.
The upcoming Microsoft release of Windows Phone 8, points to problems in Nokia’s strategy.
The new version will not be compatible with Nokia’s existing phones, effectively rendering these “flagship products” obsolete. The need to Nokia to successfully build, market — and most of all sell — a new series of flagship phones, coming off the effective failure of the current generation, places Nokia’s recovery strategy & entire business model at risk.
Further complicating the picture, are the facts that Nokia is the only manufacturer with a large commitment to Windows Phone — and the corollary, that Windows Phone thus is largely tied to Nokia. Without success from both sides, this relationship may well sink.
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