Despite flashy advertising and heavy promotion of their Lumia Windows phones, Nokia has failed to convince consumers that they are a serious smartphone player with the Company reporting falling sales resulting in their share price plummeting 15 percent overnight.The Company has warned that heavy competition will hit first-quarter earnings, especially in developing markets, and that it expected no improvement in the second quarter despite spending millions in the last quarter trying to convice consumers they are a serious smartphone player.
Now reality has caught up with the struggling Finish Company who is expected to announce losses for the first half of 2012 of around $165M.
The Wall Street Journal said “Nokia last warned of falling profits in May last year due to its weak and eroding position in the lucrative smartphone market. The company ditched its own smartphone software Symbian and joined forces with Microsoft to build a new family of high-end phones using Microsoft’s Windows operating system. The strategy overhaul aimed to recover ground Nokia has lost to rivals such as Apple with its popular iPhone and Samsung with their Android-based phones.”
Nokia recently launched its flagship Lumia 900 Windows-based smartphone with great fanfare but consumers are not buying into the device which Telstra Shop sales staff claim is not selling well. “Nokia is a yesterday brand consumers want either Apple or Samsung or at a stretch HTC” said a Sydney based Telstra Shop Manager.
Earlier this week Nokia had problems in the USA market when they were forced onto the back foot after a bug was discovered in their new Lumia phone, leaving some early customers in the US unable to connect to the Internet.
Roberta Cozza, an industry analyst at information technology research firm Gartner told the WSJ that Nokia’s warning is partly a result of the company being unable to match competition from handsets using Android software on emerging markets, such as those made by China’s Huawei.
“We’re seeing that many consumers on emerging markets are shifting towards low-end smartphones, rather than feature phones, and Nokia doesn’t have much to offer in this space,” Ms. Cozza said. “Nokia won’t have a full range Windows portfolio until late 2012, and I don’t expect to see a turnaround until 2013,” she said.