Nokia Yesterday’s Mobile Company Say Analysts

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Nokia has little to show for their research and development budgets with the Company struggling to come up with a competitor to the Apple iPhone say analysts. Now investors and consumers are starting to desert the once mighty European phone Company.

Last year Nokia spent almost six times as much as Apple on R&D yet despite this they have failed to develop a device that appeals to consumers.

During the past two weeks the Company’s shares have tumbled 20% since it reported first-quarter earnings missed analysts’ estimates, wiping out $12 billion in market value. Recently Nokia came in 43rd in a brand-ranking study released  by Millward Brown Optimor, tumbling 30 places in a year. It lost 58 percent of its brand value, the biggest plunge in the top 100 brands, according to the study.

In Australia carriers are moving to replace Nokia phones with models from Apple, Samsung, and HTC, LG and Research in Motion, who make the Blackberry. When asked recently one senior Telstra said “Nokia is yesterday’s brand we are currently putting our efforts into Android based phones along with models from Samsung, RIM and HTC”.  

Last night Chief Executive Olli-Pekka Kallasvuo whose job is on the line tried to convince shareholders that a new smartphone set to be launched this  year that will “help close the gap” with Apple. Research in Motion’s BlackBerry and devices running Google Android software.

“Patience is running out and people are starting to worry about eroding brand value,” said Max Jul Pedersen, who helps manage $95 billion at Danske Capital in Copenhagen and is considering selling his Nokia shares. “Nokia has very little to show for their big research and development budget.”

Some analysts are now saying that “the game is over for Nokia” thers are calling for a major management overhaul. Others are saying that the current management should be given a chance to prove themselves.

If there were new management, depending on who it was, people could be impressed and it could be a positive catalyst,” said Leon Cappaert, who helps manage $700 million of Nokia investments at KBC Asset Management in Brussels.

He  sold all his Nokia shares last week.

 

 

 


 

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