Nokia's just posted its third quarter financial report, and it's absolutely abysmal: An $834 million loss. But that's not all--there's still more bad news.
Nokia's recent moves into innovative devices certainly seem like a step in the right direction. The N900 smartphone/smartbook device is capturing much admiration from gadget bloggers, and its Booklet entry into the netbook world is wow-ing people with an unheard of 12-hour battery life. But behind the scenes at Nokia, there's plenty of other stuff that's been going wrong.
Today's financial figures reflect a 20% drop in sales performance over the same quarter last year (down 1% compared to the previous quarter), and a 58% drop in profits. Nokia's share of the global installed handset market is basically stalled at 38%, the same as in 2008. Nokia sold 8% fewer devices in all its global markets, with the biggest drop being in the U.S. and Canada, down 31% on the same period last year.
What's happened? For decades Nokia--featured on our magazine cover just a few months ago--has been the World's biggest cellphone maker. The majority of its business has been conducted outside the U.S., with most of its income from low-end dumbphones. Yet it's clear that the global economic gloom has taken a toll on the Finnish company, as that enormous loss demonstrates. And while Nokia's never been a big player in the American mobile game, the statistics show it absolutely cannot afford to see dropping sales here.
Another factor seems to be its reluctance to innovate quickly. Nokia was very slow on the uptake when touchscreen smartphones arrived, and its smartphone UI has been looking jaded in the years since the iPhone revolutionized the whole market. The fact that its share of the "converged mobile device" market dropped to 35% from 41% in the second quarter of 2009 is possibly the worst indicator for the future of the company from within these figures. Because with innovations like 12-megapixel cameraphones, app stores and augmented reality, smartphones are definitely the future for mobile communications.
What two things should Nokia be concentrating on to recover from this doomy financial report? Improving its U.S. footprint, and getting the smartphone thing exactly right (in other words, never have another "flagship" like the N97).