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The Collapse

Gordon Kelly


What's Going Wrong At Nokia?

Nokia is the biggest mobile phone manufacturer in the world. It has 123,000 employees across 120 countries and an annual turnover of 41 billion euros, that's 20 per cent larger than Apple. In 2009 it made a billion euros in profit and one in every three handsets sold was a Nokia. Sound good? It isn't…

The Collapse

In 2008 Nokia had 40 per cent market share, and made 8bn euros in profit. Its fall from grace has been staggering and this week Anssi Vanjoki, Nokia's new head of mobile solutions, felt compelled to use his second day in the job to write an open letter entitled 'The fightback starts now'.

In it he declares: "I am committed, perhaps even obsessed, with getting Nokia back to being number one in high-end devices," but admits "Achieving this will require performance and efforts over and above the norm."

As Vanjoki hints, the company's failure has been from the top down. Nokia still shifts hundreds of millions of phones per year, but it isn't getting its premium devices right. A view backed up only this week by a pole from YouGov and attained by TechRadar that revealed the company can expect to haemorrhage customers for some time to come:

"Only a third (34 per cent) of respondents will consider getting a Nokia next time, a drop of 12 per cent since December 2009 and the number of those who expect to actually purchase a Nokia has also fallen," said the study. "Only 10 per cent of respondents expect their next handset purchase will be Nokia, compared to one fifth in December 2009. This is in contrast to 41 per cent of smartphone owners who expect to get an Apple handset next time."

Oh, and indeed, dear.

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