Nokia Reports Loss of $1 Billion for Second Quarter
Why did the once-giant company fall off the map?
Web2Carz Contributing Writer
Published: July 19th, 2012
hink back to your first cell phone. Or maybe your fourth or fifth, depending on how old you are. Think of how long that one lasted. Your solid-as-a-rock Nokia bar phone—you could drop it, throw it, kick it around, and practically run it over with a car, and it wouldn't break. Nowadays, if you don't have a specific type of case on your iPhone, one hit to the ground and the glass is irreparably shattered. So why did a company that was so successful a decade ago seemingly fall off the face of the earth? Why weren't they able to keep up? And where are they now?
In the late 1990s, Nokia had prototypes on hand for products awfully similar to the iPhone and iPad. But instead of pursuing those products, they shelved the idea, putting more effort into what was making them money—basic, durable phones. Unfortunately, the iPhone took over shortly thereafter and left Nokia in the dust. Though they've held on a long time, they fell from their ranking of world's largest mobile phone maker, losing out to Samsung. But honestly, the real reason they hung on so long was probably because, as mentioned before, nearly everyone had one; Nokia had a big head start when they were dominating the cell phone market.
Nokia had a 14-year run as the world's biggest seller of cell phones. What's next? Can they compete with what's out there now?
And though they've introduced the Lumia, their take on the smartphone, it's not helping them as much as they need it to. Nokia has sold four million Lumias, but their overall revenue is still flailing. This time last year, Nokia had sold 4.8 million more phones. For this year's second quarter, Nokia reported a $1 billion total loss—not great.
But they are still confident of a rebound, or at least they'd like us to think so; Nokia's CEO, Stephen Elop, said in a statement, "While [Q]2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competetiveness, improve our operating model and carefully manage our financial resources...We are executing with urgency on our restructuring program...We are taking the necessary steps to restructure the operations of the company."
Restructuring a company's plans, as well as pointing to 'careful management' of finances doesn't make us believe that they're doing as well as they want us to believe.
Nokia had a 14-year run of the world's biggest seller of cell phones. What's next? Can they compete with what's out there now?
We're going to be the pessimist and say probably not. These days, Apple is the benchmark for what's newest and (typically thought of as) best. For Nokia to surpass Apple or even Samsung (which currently holds the biggest-seller title), they'd have to pull a few tricks that involve more than just a sleek touchscreen or durable design. As for what, we're not really sure. And maybe they aren't either. But maybe they've got something up their sleeve and are just waiting for the right moment; they ruled the market once, there's always a chance that they'll do it again.
Still, we're skeptical.