Nokia's Fall Spurred by Rise of Android, iPhone

Blame the rise of Google's Android operating system worldwide and Apple's iPhone dominance in the U.S. for pinching Nokia, which is struggling to remain viable.

Just a few short years ago, Nokia's Symbian platform was the reigning smartphone king with 50 percent smartphone market share.

One week ago, the company reported for that fourth quarter that its smartphone market share was 31 percent, 4 percent less than the year-ago period. Nokia's profit for the three months ended Dec. 31 was $1.02 billion, down 21 percent from a year earlier.

As a result, Reuters reported that Nokia CEO Stephen Elop, who took over last September, will fire several executives and revamp the company's strategy at the company's Capital Markets Day investor meeting Feb. 11.

"Nokia faces some significant challenges in our competitiveness and our execution," Elop said in the company's earnings statement. "In short, the industry changed, and now it's time for Nokia to change faster."

So, what has happened to Nokia? The quick answers are Google's open-source Android operating system and Apple's iPhone, as Symbian's slide has coincided with the rise of those superior, high-end smartphone platforms.

Android surpassed the struggling Nokia last quarter in smartphone shipments, 33.3 million to 31 million, according to mobile market researcher Canalys.

It's hard to believe that this has happened less than two years after Android's market share was almost nil. Verizon Wireless launched its Droid line in November 2009 and the platform has caught fire.

As a singular device on a singular, proprietary platform, the iPhone's growth is even more impressive. The iPhone is pinching Nokia, particularly in the United States, where it sold 16.2 million units in the last quarter and is racing Android in market share.

Industry analyst Jack Gold said one of Nokia's issues is that its impact has remained largely centered in Europe, while RIM, Apple and Android have carved large swaths of U.S. market share.

Gold called for Nokia to jettison its total reliance on Symbian, noting that business users, the core of the smartphone market, are abandoning the Symbian OS for Android, iPhone and BlackBerry.