Nokia's Decline
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The Finnish mobile phone developer Nokia was once the glory of that small Scandanavian country and all of Europe, as a recent New York Times article writes.
Nokia is such a big presence in Finland that its equity accounts for 25% of the stock in the Helsinki exchange, it accounts for 1/3 of the R$D budget in the country, and until recently it accounted for 18% of corporate taxes paid. This year, it accounted for 9% of taxes and if projections are accurate next year it drop more. So dependent is the Finnish government on its corporate flagship that it may have to borrow to make up the lose in tax revenue.
This year it recorded its first quarterly loss in more than a decade at $1.3billion. The reason for its apparent decline?: iPhone. Apple's iPhone has been incredibly successful, and Nokia is late to the smart-phone game. It greatly trails Apple and R.I.M. (Blackberry) in this market niche which isn't really much of a niche since more and more people expect their phones to provide extensive services. Apple and R.I.M. have North American market share at 29.5% and 51%, respectively, in comparison to Nokia's 3.9% share. Given how lucrative the U.S. market is, Nokia's light penetration here is not to be dismissed even though Nokia commands 39.3% market share in the global smart phone market. And even here its share is declining, just last year it was 42.3%.
Nokia's troubles should not be exaggerated, however. It is still the mobile leader at 37% market share and in some regions it commands an even stronger dominance ("a whopping 62.3 percent of the market in the Middle East and Africa, as well as 48.5 percent in Eastern Europe and 41.8 percent in Asia."; Times.).
But the rapid raise of Apple and Nokia's trailing in what is emerging as the new cell phone market (everyone will soon expect Internet et al on their phones) is cause for alarm for the firm:
Nokia is innovating with a few new phones as an answer:
Nokia X6
Its looks nice, but I still prefer my iPhone.
