How wrong or delayed decision to adopt fast changing technology can prove fatal to a company can be best illustrated by the fate of once world-renowned and dominant leader of handsets maker – Nokia of Finland. Nokia has done himalayan blunder not to visualize the rise of smartphones and did not turn to Android OS for its devices when it was ready with smartphones. Nokia is struggling to keep up with Apple, Samsumg and Google. It is also losing market share in cheaper, more basic phones.
In a second profit warning in nine weeks, Nokia said on Thursday that its phone business would post a deeper-than-expected loss in the second quarter. To stop fast evaporation of its cash reserves because of dwindling sales, Nokia is planning to cut 10,000 jobs world-wide. Nokia also announced closures of its facilities in Ulm in Germany and Burnaby in Canada as part of its planned measures to re-scale the company by making additional reductions in devices and services.
Chief Executive Stephen Elop is still placing hopes of a turnaround on a new range of Lumia smartphones, which use largely new and untried Windows mobile operating system against well-entrenched Android OS used by Samsung and other vendors of smartphones. This is the main reason that Lumia sales have so far been slow, disappointing investors.
The changes at the global level will not have any significant impact on Nokia’s India operations, the company said. “Today’s planned changes will impact Nokia employees throughout operations globally. While we anticipate impact at other sites, we don’t see significant impact on India operations,” a Nokia spokesperson said.
Nokia also said it would sell luxury phone business Vertu to venture firm EQT and revamp its management team.