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Nokia can not cope with crisis

22 July 2011 10:46 (UTC +04:00)

Baku. Ali Ahmadov - APA-Economics. Ailing Nokia on Thursday surrendered its lead in the global smartphone market to rival Apple and shed more market share as it reported a steep net loss for the second quarter. Nokia’s outlook for its handset business to be profitable in the current quarter brought some relief to its battered share price but analysts doubted it would dispel fears about the future of the onetime cellphone leviathan.

Nokia, still the world’s largest phone maker by volume, has failed to come up with an attractive smartphone offering to compete with Apple’s iPhone, Research In Motion’s BlackBerry and a wide array of handsets using Google’s Android software.

Nokia said it sold 16.7 million smartphones in the quarter, falling behind Apple’s 20.3 million iPhones.

Its quarterly phone sales volume was down 20 percent from a year ago, missing analysts’ forecasts, at a time when the overall global market grew around 10 percent.

A Reuters calculation showed that Nokia’s overall market share fell to 23.7 percent from 29.1 percent in the previous quarter. Before rivals stole its lunch, Nokia enjoyed a near 40 percent market share.

The Finnish company created the smartphone market in 1996 with its first Communicator model but in recent years has failed to match the appeal of Apple and RIM’s models.

It is now pinning its turnaround hopes on a new suite of devices using Microsoft (MSFT.O) software, but these will only come to market later this year.

â€œThe path to recovery for Nokia is going to be a long one. Deterioration in Nokia’s smartphone performance shows that time is of the essence in rebuilding a coherent portfolio of Windows Phone 7 products in 2012," said CCS analyst Geoff Blaber.