Nokia Struggling on Multiple Fronts

By Don Reisinger  |  Posted 2011-06-21

Nokia Is in Deep Trouble: 10 Reasons Why

In the mobile market, much of the focus is placed on Apple and Google, two companies that have proved over the last few years that with the right idea and powerful software, companies can enter a market with entrenched competitors and still reign supreme. Now, the iPhone and Android-based devices are capturing the attention (and cash) of consumers around the globe.

But amid all that success, there is one company that's struggling to maintain its once lofty market position. Nokia used to hold the top spot in the mobile market and was easily dominating the space. But over the last few years, the company has lost its way as more-capable alternatives continue to hammer its market position. Now, Nokia is turning to Windows Phone 7 and its upcoming N9 smartphone to help turn that tide. But no matter what the company does, it won't help.

Nokia is in deep trouble. Read on to find out why:

1. No one wants Symbian

For years, Symbian was the dominant operating system in the mobile market. But its market share has shrunk even though it's still hanging on in some parts of the world. Symbian can't compete any longer with Google's Android platform and Apple's iOS, which are the operating systems that have grabbed customers' attention. Symbian was a sound, reliable mobile phone operating system, but it was bypassed by more sophisticated competitors. Now Nokia finds itself in a difficult position with an aging operating system and no viable successor technology of its own.

2. Windows Phone 7 isn't catching on

Nokia earlier this year tried to change its luck by announcing that Windows Phone would become the "principal" operating system in its smartphones going forward. When those devices launch, however, they will need to overcome Windows Phone 7's lack of appeal in the mobile market. Microsoft's OS was too late to the game, and due to updating issues and design quirks, consumers haven't jumped at the chance to use Windows Phone 7. Chances are Nokia won't be able to change that situation.

3. Consumers have gone elsewhere

Nokia phones were once a consumer favorite, but no longer. Other devices, including the Apple iPhone and Samsung Galaxy S smartphone, among many others, have captured consumers' imagination. Consumers stuck around in support of Nokia for a while, but after they realized that the company wasn't reacting very adroitly, they left, and they might not come back.

4. Trust is gone

Following that, it's important to note that consumers around the world have lost trust in Nokia. There was a time when they could count on the company to deliver the latest and greatest platform on the market. But over the last several years, it has been slow to react, and when it did offer products, they failed to appeal to the new customer. Now, consumers don't know if they can trust Nokia's claims that it will change all that in the coming years. That alone will be a difficult issue for Nokia to overcome.

Nokia Struggling on Multiple Fronts


5. MeeGo is no solution

On June 21, Nokia released details on the latest smartphone in its flagship N-series, the N9. Unlike previous N-series smartphones, the N9 will run the Linux-based MeeGo operating system. Last year, Nokia was touting MeeGo as an ideal solution for its top products. But this year, it's clear that just isn't the case. MeeGo, while a fine operating system in its own right, is no iOS or Android. Some can make the argument that Windows Phone 7 is a better platform. Simply put, Nokia's decision to bet on MeeGo could prove to be a costly and time-consuming detour.

6. The enterprise doesn't care

Though the enterprise doesn't always get the attention it deserves, it's important to note that that market segment is vastly important to the success or failure of a mobile company. RIM, for example, is doing well today because of the enterprise. But the corporate world doesn't care about Nokia. By the looks of things, that won't change. That is not a good thing for the company's future.

7. The smartphone designs aren't cutting it

When one considers Nokia's latest smartphone design, the N9, they will quickly find that the company doesn't appear to know what it's doing with hardware. The N9 comes with a 3.9-inch display, putting it in no-man's-land between the iPhone 4's 3.5-inch display and the Motorola Droid X's 4.3-inch screen. Moreover, the device comes with odd color choices, including cyan and magenta, and doesn't feature the same polish as Apple's smartphone. Until Nokia delivers better hardware designs, it will be in for trouble.

8. There's no confidence at the top

If there is anything that an embattled company needs, it's a strong leader with a confidence in his or her firm's ability to succeed. Unfortunately for Nokia, it doesn't seem to have that. Earlier this year, Nokia CEO Stephen Elop said that Nokia is "standing on a burning platform." He went on to say that the company has "multiple points of scorching heat that are fueling a blazing fire around us." And so far, his solution has been to partner with Microsoft and hope for the best. That's not a good thing. And Nokia will suffer because of it.

9. The financials are a mess

Though Nokia has historically been a profitable company, its corporate issues are starting to impact its financial performance. In fact, last month, it announced that it wouldn't make a profit on phone sales in the quarter ended June 30, and its overall revenue figures will be "substantially below" its initial estimates. It went on to tell investors that it will no longer be "appropriate to provide annual targets for 2011." Simply put, Nokia is in major financial trouble and investors are losing confidence. If that's not a sign of a company that's in deep trouble, what is?

10. It can't see the changing times

If there is anything that Apple is good at, it's knowing what's coming next and capitalizing on that. It did that with touch screens, and it's doing it again with its upcoming iCloud service. Nokia, on the other hand, has been unable to see the changing times. After finally seeing the need for change-two years too late-it has been slow to react. As long as that's the case, there's simply no way that Nokia can turn the tide and right its ship.

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