HA HA HA Nokia in trouble

[Guest superkingdave]

http://business.timesonline.co.uk/article/...1069520,00.html

Sales fall as Nokia pays the price for ignoring fashion

First-quarter revenues fell even though the market for mobiles was growing strongly. Worse may be to come, says Paul Durman

IN HELSINKI last June, Nokia’s executives were asked why the company did not make any clamshell phones — the flip-open design popular with hundreds of thousands of customers.

Nokia’s response was dismissive, almost contemptuous. Eero Miettinen, group design director, said the Finnish mobile giant had nothing against clamshells but it wanted to offer some “added value”. Anssi Vanjoki, an executive vice-president, sneeringly added that to do that Nokia’s designers would have to come up with something more than “silver clamshell phones. I think we have to aim a little higher”.

Nokia has paid a high price for its lofty disregard for customers’ demands. Last week the company announced it had suffered a 2% fall in first-quarter sales, despite buoyant growth in the market. It had led investors to expect its sales would grow at up to 7%.

The company blamed a poor mix of phones, including a lack of clamshells. Ironically, one of the biggest winners from Nokia’s discomfort was Samsung, the South Korean company that did much to popularise those silver clamshells that Vanjoki dismissed. In Britain Nokia’s market share has tumbled from 60% to less than 40%.

Shares in Nokia fell heavily as investors expressed their dismay that the world’s biggest mobile-phone maker had missed its targets by such a wide margin.

The problem goes beyond a single bad quarter. Nokia has been battling to defend its 40% share of the global handset market at a time of technological change and with increasing competition from Asian manufacturers. Here was hard evidence of the difficulties the company will face in returning to the heady growth of the 1990s.

On top of weaker sales, Nokia suffered a decline in its industry-leading profit margins, from 24.7% to 21.5%, and another fall in average selling prices.

Richard Windsor, technology analyst at Nomura, estimates that Samsung has captured another 3% of the market — the same percentage that Nokia has lost. “Samsung is being more aggressive,” he said. “The impact has been acute.”

Windsor said he had always been nervous about next year, when Nokia will feel the impact of 3G, which will bring new competition from Japanese manufacturers. But he wondered if Nokia’s day of reckoning was already here.

Experts point out that the peculiarities of the first quarter accentuate Nokia’s problems. Its rivals struggled in the run-up to Christmas: the Finnish company was the only manufacturer big enough to meet the exceptionally strong demand. These pressures eased in the traditionally slower first quarter.

However, some believe the company has aggravated its difficulties with a series of idiosyncratic designs that are more eye-catching than practical. For example, its first 3G phone is the diamond-shaped 7600, with the keys on either side of the display.

The 3650 camera phone last year had its keys arranged in a circle. A Nokia director last year told The Sunday Times that he thought the phone’s design was a mistake. Its sales have been poor.

The group’s sympathisers say that, having established the concept of the fashion phone, it cannot simply copy clamshell or other popular designs. Its phones need to remain distinctive while appealing to all segments of the market.

Yet in an increasingly fragmented market, this may be too big a gap for one company to bridge.

[Guest Disco Stu]

They should go back to making toilet rolls & rubber boots !

:D)

Posted from my SmartPhone!

[Guest Ricard00]

It seems that Nokia are so deperate to be innovative that they have been failing to pay attention to the core use that their products are purchased and that is making phone calls.

Funny shaped keypads do not make a phone great.

[Guest Sasuke]

It seems that Nokia are so deperate to be innovative that they have been failing to pay attention to the core use that their products are purchased and that is making phone calls.

Funny shaped keypads do not make a phone great.

I agree with you on that one, most recent releases of Nokia handsets have funny shaped buttons. I dont see how they (Nokia) can regard this as fashion, I just find it highly annoying.

The fall in sales is anything but shocking, serves them right for designing such horrible handsets. :D

[Guest Matt Kirby]

The worst one recently has to be the 7600 - I saw someone in Shadwell (East London) today with one of these around his neck - like some bad-ass rude-bwoy medallion.

He thought "I'm cool"

I thought "You tosser!"

7600.jpg

[Guest superkingdave]

yeah i saw someone on the train using one, looked lik he was holding a conch to his ear of something, only marginally less embarrasing than an ngage