Struggling Nokia heralds 'new season'

2011-06-21 14:08
A Nokia staff member shows off the Nokia N9 phone on the sidelines of CommunicAsia 2011. (Wong Maye-E, AP)

A Nokia staff member shows off the Nokia N9 phone on the sidelines of CommunicAsia 2011. (Wong Maye-E, AP)

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Singapore - Troubled mobile phone giant Nokia on Tuesday declared that a "new season" had begun for the firm as it struggles to protect market share from rivals like Apple and Samsung.

Nokia chief executive Stephen Elop said at a regional telecoms fair in Singapore that the Finnish company was making good on promises to overhaul operations in what was once the industry's undisputed champion.

"Earlier this year Nokia outlined a new course to change our direction. Just four months and ten days later, on June 21st, today, a new season is beginning at Nokia as well," Elop said at the CommunicAsia industry expo.

"We have shifted our organisation, we have a clear strategy and we are focused on delivering results."

Nokia hired Elop, a former Microsoft executive, last September as its market share slumped in the face of competition from Apple's iPhone, Asian rivals led by Samsung and Canada's Research in Motion, maker of the Blackberry.

New model

In February, the company announced it was going to adopt Microsoft's Windows Phone 7 operating system for its future smartphones.

Elop said he had "increased confidence that we will launch our first device based on the Windows phone platform later this year, and we will ship our products in volume in 2012".

He also unveiled a new model, the N9, featuring an "all-screen" display devoid of the "home" button present on the iPhone and other high-end devices.

The N9 - which does not run on Windows Phone 7 software - has a function which allows users to link it to dedicated accessories such as a headset or speakers by simply touching the phone against them.

Elop said the N9 was the culmination of efforts by Nokia engineers to reinvent the firm's models.

"The real focus of the N9 was to uncover new ways to bring innovation into the marketplace," he said.

"Many of the innovations that you see today in the N9 will live on in a variety of ways at Nokia."

Decline

Nokia phones accounted for at least eight out of every 10 phones sold in Asia at one point, according to the CommunicAsia programme.

While Nokia remains the world's biggest phone maker, the firm has seen its global market share dwindle after Apple and other companies came up with sleeker mobile phones offering a wide range of applications from games to business software.

Nomura Equity Research has forecast that Nokia's share of the entire mobile phone market will decline from 25.1% in the first quarter this year to 19.9% in the fourth quarter.

In the smartphone sector, the decline is steeper, from 25.5% in the first quarter to 13.1% in the fourth quarter, according to Nomura.

Until competitive new products are launched, "it is hard to see how management can arrest this decline", the report said.

Tablet computers and smartphones are taking centre stage at the four-day CommunicAsia expo.

Industry behemoth Apple, whose iPad has a stranglehold on the tablet market similar to the iPhone's dominance in the mobile sector, was absent from CommunicAsia, preferring to continue staging its own marketing events in California.
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