Nokia’s Strategies to End its Dark Night
Rajesh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Big brands tying up with movies to promote it are among the age old techniques which doesn’t seem to get old. This time it is the Finnish phone maker Nokia (NYSE: NOK) that took support of this strategy to boost its sales. The company associated itself with the promotion of Christopher Nolan’s much talked about The Dark Knight Rises. Recently, the company partnered with T-Mobile to deliver special edition back covers for the Lumia 710 handset. Is this just another desperate move on Nokia’s part to get a grip on the situation? Maybe. But is that really the question anyone wants to ask? No. It does not matter if this seems to be a desperate attempt as long as it works.
Is this move a part of the strategy?
Absolutely. At the moment what Nokia is trying to do is push its current range of Lumia devices so that it can make the most out of the current situation. Consumers are holding back from purchasing new handsets in anticipation of the latest offerings from biggies like Apple (NASDAQ: AAPL), Samsung and Nokia. Nokia knows once Microsoft’s (NASDAQ: MSFT) Windows Phone 8 (WP8) is out, it will face a relatively easier time in selling its devices. And since the consumers already know the new platform will not work on the existing Lumia devices, no one is willing to make a purchase. With its The Dark Knight Rises promotion Nokia is attempting to clear its present stock of Lumia handsets. In the recently ended second quarter, the company reported to have sold 4 million Lumia handsets, thus managing an outstanding growth of above 100%.
Step by step progress
Lately, Nokia’s life has been anything but smooth. The company has been surrounded by trouble for quite some time now. But what is nice to see is that it still is making substantial effort to get back on its feet. The phone maker is taking small steps at a time to improve its situation. It is following a three level strategy that has to do with identifying critical investment areas such as R&D, revamping its leadership team and, last but not the least, conserving cash. An integral part of this strategy is the reduction of its global work force by 10,000 jobs by the end of 2013. Nokia also plans to become leaner and agile and thus has plans to do away with facilities that are not adding value to the company. It is trying to improve on its business model, identify the loopholes and solve them to bring the company back to a profit earning situation.
The company also recently announced that it completed the acquisition of technology, developers and IPs from Scalado, a Swedish mobile imaging company. It is also making big moves related to its flagship offering: WP8 powered Lumia handsets. Some time back the company had launched a smartphone with a 41 megapixel camera called the Pure View. Now the company wants to introduce this Pure View technology in the latest Lumia handsets.
Finally! Windows Phone 8!
Where is Nokia’s very own Dark Knight? Just above a month away it seems. Investors are seeing a ray of hope as talks about WP8 powered handsets from Nokia hits the streets. Now, the latest devices can be expected to be out for use on 5th September at the “World Event." Nokia Lumia 910 and Lumia 920 will probably the first two smartphones in the world powered by the WP8 platform.
Nokia is the preferred device partner of Microsoft and these two biggies have an exclusive arrangement between them. Though WP8 will officially be launched sometime in November, Nokia will get the platform earlier than other players such as Samsung and HTC, thus giving the company an edge over its rivals. Nokia will get to enjoy the first mover’s advantage as the company will be the sole manufacturer of WP8 powered phones for more than a month's time. With the biggest holiday season about a month away from Nokia’s release date, the company will extract the most from the arrangement.
Recently, Nokia reported a weak second quarter with a $0.09 loss per share, and to be honest the outlook for the next quarter is not at all bright. The company needs time before it can flag encouraging results. However, the point of relief is WP8 is almost here. If the company actually launches its new WP8 powered Lumia phones before others and thus gets a head start, the chances that it will bounce back are encouraging enough for investors to keep their hopes attached to the phone maker. The company is expected to do wonders with its Lumia-WP8 portfolio. Though it's not clear when this dark night will end for Nokia, let’s keep a close watch on this stock as the situation might just improve.
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