The Nokia situation

27 Jul 2010

Nokia's result last week confirmed all what we knew or suspected: profit is down, the CEO is on borrowed time and it still doesn’t have a competitive operating system.

Quarterly earnings dived 63% as average handset sale prices fell €3 to €61 and operating margin shrank nearly by a third to 2.9%.

Interviewed on CNBC, embattled CEO Olli-Pekka Kallasvuo declined to comment on his position other than to admit that the speculation was damaging.

The Wall Street Journalreported last week that Nokia was sounding out Silicon Valley executives as possible successors to Kallasvuo - the first time the 145-year-old company has looked outside for a leader.

Clearly it is looking for a solution to its biggest problem, which is the lack of a platform that appeals to developers and can compete with the iPhone and Android.

Kallasvuo said the Symbian 3 and its flagship phone the N8 - now available for pre-order in some markets - will “kickstart Nokia’s fightback.”

But the fact that coming fast behind Symbian 3 is Symbian 4 - due to ship in commercial devices in early 2011 - is telling enough.

That Nokia is also betting on the Linux-based MeeGo platform, a joint effort with Intel – another giant trying to hold its place in the new mobile universe – underlines its desperation.

MeeGo is supposedly for tablets, Symbian 4 for smartphones. Android manages to support both.

Nokia is trying to split differences that aren’t there. It clearly has the same confidence in its platforms as it has in its CEO.

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