Could the bad news come any faster at Nokia? The company announced recently that due to tough competition in the mobile space, sales plummeted during the first quarter, resulting in the worst three-month results the company has every reported. During the quarter, Nokia lost $1.2 billion, and shareholders, shocked by the steep decline in earnings, sold off the company’s stock.
As one might expect, the tough quarter andNokia’s acknowledgement that something drastic needs to be done fast to address its many problems are causing most to believe that nothing can fix the once-dominant mobile firm. At this point, the naysayers argue that with Apple and Google Android devouring its market share, all Nokia can do is accept its fate as a dying mobile company.
But perhaps it’s not time for Nokia to wave the white flag just yet. Sure, it’s facing serious trouble and the chances of it turning things around are slim, but there’s still hope if the company can follow the right strategy.
Read on to find out some of the things Nokia should do to fix its ailing operation.
1. A quick sale to Microsoft
The first thingNokia should consider is selling itselfto Microsoft. The software giant is looking to exercise some control over a major vendor, and what better company to do it with than Nokia? What’s more, Nokia has several highly valuable patents Microsoft might like. At this point, it’s either sell off Nokia to Microsoft or face the very real possibility of closing the doors.
2. Changes at the top
Although Nokia brought on Stephen Elop with the hope that he would change the corporate culture and turn things around, he hasn’t been able to do that. ConsideringNokia is on the downward spiral, the company’s board should fire Elop and find a replacement with radical ideas. At this point, it might be the only thing that can save Nokia.
3. Focus on international markets
When will Nokia finally admit that it can’t win North America and Western Europe and focus its efforts on international, emerging markets? Those are the areas that most likely need Symbian devices and other lower-cost Nokia offerings. That could very well become part of an overall strategy that gives the company a chance to recover.
4. Remember pricing
Although Nokia’s Lumia line hasn’t been very successful, the company’s Lumia 900 has done relatively well bydelivering high-quality features and a $99 price tag. Maybe there’s something to that. At this point, price-to-value is a huge consideration among consumers and enterprise users. Without that right balance, Nokia won’t be successful. The Lumia 900 might just be the template Nokia should use for all future launches.
Nokia Needs to Leverage Patents, Software
5. Become a smaller, more agile company
When one looks at Nokia’s corporate structure, it’s hard not to get a headache. The company is huge, with over 134,000 employees worldwide and with so many moving parts that it would make anyone scratch their head. The time has come, unfortunately, for Nokia to dramatically reduce its workforce and become more agile. By doing so, it might be able to fend off losses and become more financially sound.
6. Become a budget provider
Going beyond the earlier point on pricing and value, perhaps Nokia should consider becoming a budget provider that only sells affordable devices to those who can’t afford an iPhone. That would play well into a focus on international markets and could help it slowly but surely increase market share.
7. Focus more on software
Let’s not forget thatNokia has a somewhat strong software-development arm that has delivered high-quality products in the past. It won’t be an immediate fix, but perhaps Nokia should invest more in software and try to find those areas where solid platforms could plug some holes in business model.
8. Leverage patents
If Nokia has anything going for it, it’s the company’s broad patent portfolio. From mobile technologies to design ideas, Nokia has a host of patents that several companies, including Apple, Microsoft and even RIM, would be interested in acquiring. Nokia should consider selling or licensing those patents sooner rather than later.
9. Remember industry standards away from phones
Although smartphones might be Nokia’s first focus, the company has opportunities to make a mark across the industry in other less-sexy areas. For one, the company is making the smart move by competing against Apple to produce the industry standard on the new Nano-SIM card. Nokia should try to find other areas across the mobile space that will allow it to become a key player in industry standards.
10. Assume radio silence (and financial silence)
Looking ahead,Nokia needs to stop talking. It needs to stop telling the world about its troubles and stay as quiet as it can, given its legal requirements regarding the financial reporting calendar. At the same time, it should consider taking the company private so it no longer needs to announce losses. All of this negativity makes customers question whether they should buy Nokia products or move on to something else. It also makes them wonder how long Nokia will be around. At this point, silence is a blessing for this company that has been endlessly pummeled by bad news.