Nokia Management To Blame For Losses & Share Slump

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COMMENT: As Nokia slumps further into the mire and Samsung, HTC and Apple strip market share away from the Finish phone Company, one has to question the sheer stupidity of Nokia management, who on the surface appear to lack the marketing and sales skills need to turn the Company around.

I believe that past management as well as current management have to take the blame for the losses that shareholders are now withstanding, with many investors facing the real prospect that they will never recover their investments in the phone maker who most analysts claim face a bleak future.

Some analysts are speculating that Microsoft is simply sitting on the sidelines watching the value of Nokia so that they can step in and buy the Company when it is close to rock bottom. 

Despite Nokia’s Symbian operating software proving unpopular with consumers the arrogant managers of Nokia persisted in trying to sell it to former owners of Nokia phones who were fast deserting the European brand for offerings from Samsung, HTC and Apple.

Earlier this year Nokia management announced that it would launch phones based on Microsoft’s Windows in an effort to make a comeback, a strategy that many say is stillborn after Microsoft spend $400M in December ramping up their Window Phone 7 offering only to go backwards in marketshare.

The sheer stupidity of Nokia management and their clear lack of marketing and public relations skills were exposed recently when the Australian subsidiary launched their N8 Smartphone and recently when the Company chose to launch their new N9 phone.

After gabbing on for more than 20 minutes at the Australian launch of the N8 Smartphone which was all about the photo capability of the N8, with no mention from management presenting of the communication capabilities, applications other than photo management, messaging or access to social network sites a trade journalist interrupted to ask the most obvious question “what is your strategy to get sales?”

They then asked a question about the fast disappearing “Ovi store”.

I then followed this up with a question as whether Nokia had taken to delivering cameras with a phone capability as opposed to a competitive Smartphone.

The questioning got right up the noses of Nokia management.

Sometime later Nokia Public Relations manager Tracy Postill  contacted me to complain about my questions and the fact that I had interrupted their so called “product launch” with questions that were “not relevant”.

The trade journalist from Appliance Retailer, who had obviously picked up on the irrelevant gibberish being dished out to journalists went on to write “We were promised an “insight” into “Nokia’s aggressive renewal of its smartphone strategy” but all we know now is that the new N8 device has the best camera of any phone in the market – if it is actually a phone.
He went on to claim that Nokia Australia managing director Emile Baak (who has since been dumped by the Company), and product demonstrator Stephen Wright dedicated virtually all of the presentation to the handset’s imaging capabilities.

 

When Nokia management was asked by Appliance Retailer if the lack of discussion about strategy was because there was none, Wright prevaricated, saying that this event was to launch the N8, and not to discuss strategy. This is surprising, since the invitation clearly says that two key insights set to be discussed were “Nokia’s aggressive renewal of its smartphone strategy” and “the company’s long-term platform strategy”.

Some months later the new General Manager of Nokia Australia Chris Carr decided to not turn up at a local media launch for their N9 Smartphone which like their N8 offering is witnessing “poor sales”.

Instead he decided to go on a trade junket to Singapore where the N9 was being launched.

Local journalists were again told that the N9 launch was not about “strategy” or Nokia business, but the phone.

It appears that Carr and Postill have failed to realise that journalists go to product events looking for stories, and not to listen to some filibuster present a party political broadcast on behalf of Nokia.

Right now the Nokia story is all about their failures and how it happened to what was once a dominant phone Company. It’s also about how Nokia is going to dig them self out of the hole they find themselves in. A hole that was self-dug by arrogant management who failed to realise, that open standards great design and applications were a real threat to their future.

All they had to do was look at history, Wang, Prime, Data General and Digital all peddled proprietary offerings until Intel and Microsoft proved that this was not the way to go.

At the weekend Strategy Analytics revealed that Apple’s share of the smartphone market rose to 18.5% in the second quarter from 13.5% a year earlier, while Samsung’s smartphone market share jumped to 17.5% from 5.0%.

 

Nokia saw its share of the market slip to 15.2% from 38.1% a year earlier.

Nokia also reported a sharp net loss for its second quarter last and its debt rating was downgraded by two notches by Moody’s.

The data suggest the intensifying rivalry between Apple and Samsung could get an added push in the third quarter at the expense of Nokia.

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