April 27, 2012 at 03:58 AM EDT
Nokia loses mobile top spot. What does it have left?
After 14 years as the world's biggest mobile phone maker, Nokia has lost the top spot to Korean rival Samsung. The question facing the Finnish company's bosses now is whether they can ever regain the momentum they've lost.
Fourteen years after it became the world’s most popular handset maker, Nokia has finally been eclipsed — pushed down into second place by Korean rival Samsung.
According to data from iSuppli, the Finnish shipped 83 million mobile phones around the world in the last three months — nine million fewer than Samsung, which managed to ship 92 million units.
But this change in leadership is not because Samsung is doing particularly well — although it’s making a ton of profit, in fact, worldwide shipments from the Korean company were down 13 percent in the last three months. The crown was passed along because Nokia is doing significantly worse than everybody else — dropping 27 percent from the last quarter of 2011.
As you can see from this iSuppli chart, every manufacturer took a hit in the last three months, thanks to the post-Christmas lull. But while Apple managed to mitigate much of that fall, dropping just 5 percent of sales from the end of 2011, the rest of the market took a much larger hit.
But things were particularly bad for Nokia in smartphones, where it recently said it had to act with “urgency”, where volumes dropped by 39 percent quarter-on-quarter. And that’s with a range of new handsets which, despite the lack of sales, are actually pretty good.
So what does this really mean?
The big question is whether any company that loses so much momentum can ever regain it — or even bolster its position to remain afloat. The shine has been coming off Nokia for a few years now, but the one thing it could rely on — its size and penetration — seems to be deserting it too.
In an interview with CNet UK earlier this week, former Nokia and Symbian executive Lee Williams was very critical of chief Stephen Elop, and pinpointed a part of his strategy that he feels is particularly weak.
“There’s no overarching vision for this company. That to me is akin to stepping completely out of the leadership role and running behind the bus now… Before Elop, Nokia would never give up that leadership position and role in the marketplace, would always talk about the future.”
“When I was at Nokia and we shipped a Symbian product and it was bad, in its worst incarnation we knew that if we just flipped the switch, we could move 2.5 to three million units — overnight, no matter how bad the product,” he tells me. “That was Nokia. That was Nokia’s brand, we knew we could count on that.
This has been characterized as a disinterest in creating good products, but what it really says is that Nokia used to have industry-beating penetration. It can’t say that any more, and with a relatively tiny number of smartphones sold and weakening power in emerging markets, it can’t coast.
While some critics of Elop — many of them former Nokia employees — suggest that he started the boat sinking without any lifeboats, that’s an assertion that is impossible to back up.
But what is clear is that the name Nokia meant something to people: a mixture of ubiquity, simplicity and reliability, depending on who you were and what you looked for. But these were all really a function of size: its products were everywhere, had to market themselves to everybody, and even if they weren’t more reliable than competitor prpducts, they were so common as to be easily replaced.
So if it’s not the biggest any more, then what does Nokia really stand for?
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