It was once the most dynamic mobile provider in the world. Its transition from forest products and rubber boot maker to tech company was the stuff of legend. Its executives were lionized while business managers and policy experts beat a path to Eshoo, its headquarters outside Helsinki, to find out how the clever Finns did it.
Needless to say, that was then. The company just announced that sales and profit margins are below forecasts for the current quarter. It can no longer provide a full year forecast. Gulp.
Despite the much-heralded alliance with Microsoft, things are looking iffy for Nokia. US handset manufacturer Motorola is suffering the same fate. The lesson is that in this economy, resting on one's laurels is a death sentence. Instead of taking victory laps and dispensing wisdom, executives should inculcate a passion for paranoia: who's out there scheming and what are they going to do to knock me off my perch?
With the costs of innovation decreasing exponentially (see yesterday's post on Google Correlate) disruptive innovation is in the air we breath. JL
The BBC reports:
"Mobile phone giant Nokia has said it expects sales and profit margins for the current quarter to be well below its previous forecasts.
Lower selling prices and gross margins together with general market trends were behind the downgrade for its Devices and Services division, it said.
It added that it could no longer provide a full-year forecast
Last month, Nokia said it would cut 7,000 jobs worldwide as part of strategy to focus on smartphones.
'Transition period'
The company's latest announcement said sales would be "substantially" below the 6.1bn euros ($8.8bn; £5.3bn) to 6.6bn euros previously forecast for the second quarter of 2011.
Operating margin would also be "substantially" below the 6% to 9% range forecast. As a result, shares in the group fell by almost 12% in Frankfurt.
"Strategy transitions are difficult," said Nokia chief executive Stephen Elop. "We recognise the need to deliver great mobile products, and therefore we must accelerate the pace of our transition."
More details of Nokia's performance in the second quarter of the year will be published on 21 July.
Job cuts
As part of the Finnish firm's reorganisation, Nokia is moving from Symbian to Microsoft's smartphone technology. Mr Elop said the company had "increased confidence" that its new Window's-based smartphones would be launched in the final three months of this year.
The firm is looking to make up the ground it has lost to competitors such as Apple's iPhone and phones using Google's Android operating system. Of the 7,000 job cuts announced last month, 3,000 are being transferred to outsourcing and consultancy group Accenture, which will take over Nokia's Symbian software. Nokia hopes that the job cuts and restructuring will help produce savings of 1bn euros for the firm by 2013.
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