NEWS ANALYSIS: Nokia reported that Lumia sales during the fourth quarter hit 4.4 million units, which is positive news for this struggling company. But Nokia isn’t out of the woods yet.
In the mobile world, there are some companies that succeed without much trouble, and others that once enjoyed success but now have trouble keeping pace. Companies such as Apple and Samsung fall into the first category because they are able to introduce mobile product hits every year.
Nokia was once a company like Apple and Samsung
. The mobile giant was able to launch a host of popular products consumers and enterprise users around the world would eagerly purchase them. Since the iPhone’s entrance into the mobile space, however, that has changed. Now Nokia, once the leader in the mobile market, has watched sales and revenue plummet.
In a recent preliminary financial release, Nokia said that it experienced a stronger-than-expected fourth quarter, driven mainly by a jump in mobile phone sales. The announcement jolted the company’s stock price and made some analysts question whether claims of Nokia’s impending demise came too soon.
Here’s the answer: they didn’t. Nokia is in deep trouble. And even though the company had a strong fourth quarter, its chances of future success seem slim.
Read on to find out why:
1. Apple sells that many smartphones in a week (or less)
Nokia announced that it sold 4.4 million Lumia handsets in the fourth quarter. And although that figure is nothing to scoff at, it’s about how many iPhones Apple sells in a week (if not less). Until Nokia can boost its smartphone sales to a level that at least halves Apple’s tally, it’s hard to see how the mobile company can succeed in the marketplace.
2. Samsung, too, is a sales juggernaut
Samsung’s success is another huge challenge for Nokia
. Aside from the fact that Samsung is selling the world’s most popular smartphones along with Apple, the company has become the top mobile vendor in the world, unseating Nokia, which held the top spot for more than a decade. If Nokia can’t regain the top spot, it might have trouble staying relevant in the mobile space.
3. Windows Phone isn’t taking off
Nokia has bet its future on Microsoft’s Windows Phone platform
. Yet that operating system has yet to take off, despite oft-repeated statement by Microsoft and Nokia saying that it will happen. Most analysts agree that Windows Phone will likely own just a few percentage points of the mobile space this year and that figure likely won’t jump to anything close to 10 percent in the next several years. That’s bad news for Nokia.
4. Emerging markets are breaking for Samsung, Apple
There was a time when Nokia, through its Asha line of handsets, owned emerging markets around the world. However, Apple is increasingly making some inroads into emerging markets. Furthermore, Samsung’s mobile handset success has come from its ability to steal significant market share from Nokia in several countries around the world. Emerging markets are starting to slip away from Nokia.