Nokia: It may be time to turn out the lights

Nokia: It may be time to turn out the lights

Summary: The latest quarterly numbers are in for Nokia and they are grim indeed. Looking back it is easy to see how the company has come to the position it now holds, but the future is what matters to Nokia's survival.

JK Lumia 900

Once the darling of the mobile phone world, Finnish company Nokia is now as low as a company can get. ZDNet's Zack Whittaker has the latest picture of Nokia's financials by the numbers, and they are about as grim as they can be. Andrew Nusca sees nothing but lemons in Nokia's situation, and rightly so. The situation calls for drastic action if the company is to survive, so what can it do to stay afloat?

A company in such dire straits must take drastic action to stem the losses and keep operating. While the reduction in staff of 10,000 is a good start, it's not enough to stop the cash from flowing out faster than it is coming in.

The Wall Street Journal has a good look at the bad strategic decisions over the past decade that brought Nokia to the grim position it is in today. Unfortunately, rehashing those decisions doesn't help Nokia get out of the horrible position it occupies today. The look must be forward, and it's not very encouraging.

Nokia's situation is so bad it requires drastic action to have any shot at turning things around. When you break down the actions needed to have any chance at improving things, you realize how bad things really are.

  1. Reduce staff by significant numbers.
  2. Completely change smartphone platform to try and ramp up interest.
  3. Partner with an industry giant to get technology and insider help needed to jumpstart the new platform.
  4. Get said partner to pay hundreds of millions of dollars for the partnership.
  5. Design a totally new line of smartphones to capture market interest.
  6. Use new line and platform to regain lost smartphone market share.

This may seem like a drastic course of action because it is. To have any chance at turning the giant losses around, Nokia must throw out everything it has been doing wrong and start over. It must do this in record time, thus the need for the partnership and new smartphone platform adoption.

Those who have been following Nokia's slide into the abyss will recognize that Nokia has already done all of the must-do things on the list. That's the problem, and one that the company may no longer be able to recover from. It has already completely changed everything about its smartphone business, and it's just not working.

The alliance with Microsoft has brought hundreds of millions of dollars into Nokia's coffers yet it's not enough to stop the negative cash flow. The move to Windows Phone for the company's smartphone line has not generated significant sales as hoped.

Microsoft didn't help Nokia at all with the recent admission that none of Nokia's fancy new Lumia smartphones would be able to run Windows Phone 8 when it appears late this year. That admission in effect orphaned Nokia's entire smartphone line even though they are still up for sale. It's no wonder that at least a portion of those 4 million Lumias "shipped" last quarter are no doubt the ones being dumped by AT&T for just $50.

Nokia has already totally changed course in an attempt to get back on track, and it has failed. Not a little, it has been a total, complete failure according the latest financial information for the company. As much as we'd like to see Nokia turn things around and recover, it is a giant task and one that may not be possible.

Topics: Mobile OS, Microsoft, Nokia

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  • Turn out the lights?

    Man you guys don't give any company time to turn itself around, especially Nokia. I don't see any articles about HTC getting hammered and losing money? They have their work cut out for them, but there are some good signs going forward and I don't think they expected to come into the market and just sweep it with 50% market share. If you haven't noticed its a pretty entrenched market right now between Android and iOS and only an idiot would think that some new platform would come in and kick ass right away. Microsoft has alot of reputation to make up and I think they will over time, but many are very stubborn to trying their product and its a very very good product they have. Customers that do buy them love them and I think thats a better track to go down than sheer numbers and sub-par devices like many Android products out there.
    • Yes, turn out the lights, please.

      You are wrong. HTC does not lose money. They break even, at least for now. And let's not talk about Microsoft's reputation. It sucks.
      Nokia will die. Microsoft can prolong Nokia's life by pumping money in it, but not for long.
      coco montoya
      • Yeah its maybe your wish.....

        But the facts are that they will make it through if you knew how to look at financials and see that they have a good amount of cash in the bank and right now they are taking hits for restructuring which not one tech pundit is talking about. They just have no clue and same for you. The sales are growing so they will be alright man. Sorry that many think about Microsoft from years past, but they have done great things in the past few years and only getting better. You obviously hate Microsoft so getting any objective view out of you is a complete waste and no matter what they release you will hate it, even if they released the product you favor today! Thats just the way you roll and there isn't any changing your mind about that.
        • Yes I wish

          I don't hate Microsoft, I fear them. I don't want to have the computer history repeated on mobile devices. Microsoft killed all the other OSes when it had the chance. And it was not Windows' quality that killed the competition. I would like to see more OSes in the mobile world, just not Microsoft's. I would like to see open source OSes because they don't lock you down, they can't impose their monopoly on you. If any open source platform attempts to abuse you, there will always be a fork that gives your freedom back. Microsoft should not be given another chance. I would be relieved to see Microsoft die. The sooner the better.
          coco montoya
          • And.....

            Thank you for proving my point about your attitude toward Microsoft. You are paranoid if you fear them. If anyone that would be Apple these days. Heck they don't allow developers to put apps in their store that mimic their apps. I don't see that happening at Microsoft, but hey keep your 1999 thoughts!
          • Apple is not better

            Bringing Apple in this discussion will make Microsoft look better than Apple but that's a very low standard. Both companies are cancer. There is nothing wrong with not forgetting what happened in the past, that's how we avoid making the same mistakes again.
            coco montoya
          • There is an Open Source OS

            Ypu have heard of Android right? Also tin foil hats can be purchased for 99 cents at Walmart.
          • @coco montoya

            "I don't hate Microsoft, I fear them. I don't want to have the computer history repeated on mobile devices."

            And you will not. Even when Microsoft was... hmmmm more relevant.... in the mobile smartphone industry they did not have near the marketshare they enjoy in the PC market... nor does anyone at the moment. Android is top dog followed fairly closely by Apple.
          • Smart Phone Industry

            The thing with the smart phone industry is that it's constantly changing. What could be the dominant OS for a few years, could be nothing the next. Phones are constantly growing more powerful, and people often look to get new phones once they are let out of their contracts. Because of this, people will constantly be changing based off of their past experiences with their phones.

            And Nokia is far from dead. I'm pretty sure MS will not let them die. IMO, there is no better company to make a WP device than Nokia.
      • Nokia will die

        and you will write the obituary. Looking forward to that?
        • Sure......

          Thats great man!
    • There must be a lot of idiots around here then.

      "...only an idiot would think that some new platform would come in and kick ass right away."

      I agree yet I recall almost two years ago all the MS fanboys on here saying just wait 6-12 months and WP7 will dominate the market. Of course, then we heard the exact same thing a year later. Guessing we get to starting hearing it again soon.
  • Dump article

    Based on your article title "Nokia: It may be time to turn out the lights" , you deserved to be called a dump person or an idiot... Simple market knowledge will tell you that they are in the middle of an huge transition, its just 8 months since the first lumia phone came out and now the migration to WP8. Nokia's future is bright...
    • Dump yourself

      Nokia anounced its alliance with Microsoft one and a half years ago. Still burning cash like hell (is it because they stand on a burning platform?)
      coco montoya
      • You don't have a clue, do you???

        • owllnet, do you have a clue, or do you think you have a clue ????

          Please note that my question has more question marks than yours.
          coco montoya
        • Re: You don't have a clue, do you???

          Well, we certainly have more of a clue than Nokia. Though admittedly that's not saying much.

          Just one bit of hilarity from that WSJ article: "By [going with Microsoft] he was able to deliver a new line of phones to compete with the iPhone in less than a year, much quicker than if Nokia had stuck with its own software, [Elop] says".

          Which is a statement so clearly belied by the facts---remember, the MeeGo-based N9 was able to ship well before any of the Lumias--you really wonder how much of a grip Elop has on reality.
  • And if you knew what you were talking about......

    You would know that there is massive restructuring costs right now for Nokia and if you take that out, the loss isn't as bad as it seems by just looking at the straight numbers. The actual real loss taking out the restructuring is somewhere around $300 - $400 million so do your homework next time!
    • where did you get that number?

      Did you factor in the bribe from Microsoft?
      coco montoya
      • That is called market research...