Why is Nokia Killing Itself?

By Jyoti Patodia - September 13, 2012 | Tickers: GOOG, MSFT, NOK | 0 Comments

• Email
• Print

“Building A Relationship Takes Years But Destruction Takes Few Seconds.” It looks like Nokia Corp. (NYSE: NOK) needs to take a lesson from this famous saying and understand that how badly it is playing with its age long reputation.

How They are Managing to do so?

Nokia recently revealed its flagship Windows 8 smartphone Lumia 920 and Lumia 820 in partnership with Microsoft Corp. (NASDAQ: MSFT). This is probably the last battle tool it possess against the crowned head of smartphones – Apple Inc..

This new smartphone certainly has some exciting promises to keep up with. Lets analyze the features:

** OIS - An optical image stabilizer, often abbreviated OIS, IS, or OS, is a mechanism used in a still camera or video camera that stabilizes the recorded image by varying the optical path to the sensor. (Source: Wikipedia)

Apart from these features one of the biggest innovations in smartphones from Nokia is Wireless Charging. The wireless chargers come in all shapes, sizes and colors. They’re all Qi-compatible, which means users can choose any wireless charger. The three kinds of chargers available are: Wireless Charging Plate, Wireless Charging Pillow by Fatboy and Wireless Charging Stand.

So Far so Good..What is Wrong Then?

If you are an organization the size of Nokia, you should understand that each and every movement you make is being observed and analyzed intensely. These are the few things which will surely hurt its reputation very badly in the long run:

• They made a video and other promotional material while unrevealing this phone, which were said to be taken from its “PureView” Camera. But later on it was discovered that these videos were actually not taken from the “PureView” Camera. Which they accepted on Saturday and came up with an apology. How Shameful, Isn’t it?
• The secrecy around Windows 8. Either Windows 8 is not ready or Microsoft did not release it purposefully. Irrespective of it, Nokia’s launch was not so smooth because it could not demonstrate the look and feel in the show. A big no-no!
• The existing phones cannot be upgraded from windows 7 to windows 8. Neither the applications written will be supported by windows 7. Lack of backward compatibility is a big downside. The phone is due to be released in November. Basically, they have killed their own market till the launch of this phone. Who will like to buy an outdated system?

We do not expect such mistakes from an organization of the reputation of Nokia. In a market with fierce competitors like Apple and Samsung such mistakes can cost them enormously. These activities in the past have already resulted in a dip of market share from 50 percent down to 10 percent since the launch of iPhone in 2007.  

Take Away

The competition is getting stiffer day by day. Apple’s iPhone has by far exceeded expectations and performed with superior design and excellent graphics. This is the reason they are currently the market leaders in the smartphone section. Also with the launch of iPhone 5, Nokia Lumia should not expect a smooth journey ahead.

Google (NASDAQ: GOOG) slowly and steadily is building its own castle. They are also participating in the smartphone war with the launch of “Nexus.” Their Android software is already a hit with the Samsung users. Also, Motorola (One of its recent acquisition) has announced the launch of Razr HD and Razr Maxx HD. This means Google is planning to hit Apple with double blows.

One of the reasons why Nokia has not been able to create that market in smartphones is because the competitors operating software is far superior to Microsoft’s windows. The iOS and Android have proved to be much more compatible and user friendly as compared to Windows. In contrast, Microsoft is acting a bit smart; they are planning to compete with iOS and Android on two frontiers. Firstly, they are launching the Windows 8 war with the help of Nokia and secondly, they are also on course to launch the Smartphone war with its own tablet “Surface” due in few months with Windows RT. This is getting interesting as the the technology war is heating up between these companies.

Food For Thought

From an investment point of view the ship named Nokia is sinking….The Sailors (Management) are going bonkers…They are experimenting and cheating their own passengers (Customers) with false beliefs (The “PureView Camera” instance)…Are you sure you want to put your money into this Titanic?

• Email
• Print
• Feedback