Nokia will cut thousands of jobs related to phone manufacturing, as it shifts production from Europe to Asia by the end of 2012.
Nokia will
shift phone production from Europe to Asia by the end of 2012, a move that will
result in 4,000 job cuts.
The cuts will
occur at three factories in Finland, Mexico and Hungary. On its Website,
Nokia suggested it would provide financial support and assistance with local
re-employment.
There will be
no assembling of mobile phones at our plants in Europe after this, a Nokia
spokesperson told the Associated
Press Feb. 8. We plan to focus product assembly at our plants in Asia
where the majority of our suppliers are based, while our facilities in
[Finland, Hungary and Mexico] will focus on the software-heavy aspects of the
production process.
Early last
year, Nokia made the decision to abandon its homegrown operating systems,
including Symbian, in favor of Microsofts Windows Phone. According to Nokia
CEO Stephen Elop, that decision positioned his company to better combat Apples
iPhone and the growing family of Google Android devices. In return, Microsoft
is paying Nokia hundreds of millions of dollars per quarter in platform-support
payments.
However, that
firmly ties Nokias fortunes to that of the Windows Phone platformwhich has
suffered from anemic sales in the year-plus since its launch. If a new
generation of Windows Phone devices cant sway customers, then Microsoft will
face some very hard questions about its future in the mobile segment.
Data from
research firm Nielsen suggested that Microsoft owned 7.3 percent of the U.S.
smartphone market in the third quarter of 2011, down from 9 percent earlier in
the year; much of that decline was due to users abandoning the antiquated
Windows Mobile platform, something Microsoft executives say they anticipated.
Nokias new
smartphone strategy centers on Windows Phone devices targeted at both the
midrange and high ends of the market. The Lumia 800 and 900 both feature
premium hardware, paired with the latest Windows Phone software; meanwhile, the
more midmarket Lumia 710 likewise boasts some strong specs.
By the end of
2011, Nokia had managed to sell some 1 million smartphones running Windows
Phone. From this beachhead of more than 1 million Lumia devices, you will see
us push forward with the sales, marketing and successive product introductions
necessary to be successful, Elop wrote in a statement accompanying the
companys most recent earnings. We also plan to bring the Lumia series to
additional markets, including China and Latin America, in the first half of
2012.
Thats a solid
start for Nokia. But as its most recent factory move suggests, the company
still has a steep uphill battle in front of it.
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Nicholas Kolakowski on Twitter
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
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