Nokia Is In A Crisis!

Two days ago, the company’s stock price plummeted more than 17% off news that their operating margin for the quarter sat at negative 3% . The stock fell to $4.16, a 15 year low. The company’s market capitalization is $16 billion, a stark contrast to Nokia’s market cap from five years ago–$90 billion.

According to news release  yesterday, the company’s decline is due to “Competitive industry dynamics”, which are negatively affecting net sales in the Mobile Phones and Smart Devices business units, particularly in India, the Middle East and Africa and China.

Hope for the crumbling giant comes from the Lumia 900, which is selling well in most carrier stores. On Amazon.com it even sits in the Top Rated category. Unfortunately Amazon makes up for little of Nokia’s marketplace; most of it’s phones are sold through mobile carrier outlets, and even after that, Amazon still sells behind companies like Best Buy and Radioshack for the company’s sales.

It’s easy to forget that Nokia accounts for 23% of cellphone sales worldwide , but as other developers are able to bring cheaper products to the worldwide marketplace, Nokia will no doubt suffer. We’re already seeing signs of this as other mobile phone makers have been expanding their presence worldwide while Nokia’s sales from around the world are slipping consistenly.

The immediate future looks grim for Nokia and there are little signs of a comeback in the longterm. Nokia is facing challenges never encountered before, as it has to find its way into the U.S. marketplace to survive while struggling to maintain its position worldwide. Nokia is making bold moves, but is it enough for recovery.

Trackbacks/Pingbacks

  1. Nokia Can’t Catch A Break: European Carriers Say New Lumia Is “Not Good Enough” | WholeLottaWonder! - April 17, 2012

    […] the U.S., Nokia only accounts for 1% of the smartphone market. As we reported last week, Nokia’s Lumia 900 was selling well with most mobile carriers. On Amazon.com, the phone was […]

  2. Mobile’s Supercompany: How Samsung Remains The World’s Most Dominant Smartphone Maker | WholeLottaWonder! - April 29, 2012

    […] company’s lead in the global cell phone market is partly due to Nokia’s recent demise. Nokia’s shipments declined 24% to 82.7 million units in the quarter, breaking a 14 year […]

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