In Nokia has posted a loss of 368 million ($523 million) in the second quarter. The companys smartphone sales are down by a third. Its overall sales are down by 25 percent. The loss for Nokia has come despite the company receiving a one-off payment of 430m from Apple to settle a long-running patent dispute. Net revenues fell overall by 7% to 9.3bn. Clearly Nokia is in trouble.
Nokia said it sold 16.7 million smartphones in the quarter, falling behind Apples sales of 20.3 million iPhones.
The company has now announced that it will accelerate cost-cutting efforts in order to be in a better position to face of rising competition, and weak demand in North America. Nokia plans to cut more than the 1 billion, or $1.43 billion, from its operating expenses by 2013. However, the company has not specified the specifics of the new plan. Despite the posting of loss, Nokias shares rose, as investors welcomed the austerity measures that the company has announced.
Nokia is planning to progressively replace Symbian with Microsofts Windows Phone software starting later this year. However, the announcement has only resulted in further decline in Symbian based Nokia handsets. This makes it imperative for Nokia to start coming up with those Windows based mobile phones as quickly as possible, because users do not seem to be interested in buying phones with an OS (Symbian), which is going to be discontinued.
It was in the 1990s that Nokia rose to the top position in the cell phone maker, after it overtook Motorola. Even though the company struggled in the U.S., it dominated almost everywhere else, primarily through mass sales of low- and mid-priced mobile phones. In India, it continues to be ranked as the top cell phone maker, even though its market share continues to see a steady decline.
Analysts believe that Nokia slipped from its number one position, because the company had too much faith in its own abilities and it failed to keep an eye how the new breed of handset makers were attempting to change the market dynamics with more feature rich handsets.
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