There’s no other way to slice it. Nokia is in deep, deep trouble. Having a posted a whacking 40 per cent fall in profits last week, the mobile maker’s CEO, Olli-Pekka Kallasvuo, or OPK as he’s known throughout the industry, is staring down the barrel - and all of this as Nokia prepares for a hectic second half of 2010.
Nokia’s dismal results have been blamed squarely on its failure to compete in the smartphone segment. The company remains mobile number-one, surging in emerging markets, but its abject failure when it comes to seeing off the dual threats of Apple and Google’s smartphone success is really starting to pinch.
OPK is almost certainly on his way out. Rumour has it that an American exec is being lined up to bring in some outsider nous and push Nokia harder in an area it once led handsomely, but where it's now struggling to keep up with the pace of change.
The push has already begun with a lengthy teaser campaign around the Nokia N8, a phone which has been relatively well-received but is already suffering thanks to the fact that since its initial announcement, the iPhone 4 and Android 2.2 have both been released. It’s hoped that the new flagship smartie will do the business and help Nokia kick on. But any success here will only paper over some other major issues which need addressing.
First and foremost, OPK, or the new CEO, is going to have to address fragmentation. Symbian 3 has already been undermined by talk of Symbian 4 and the confirmation that MeeGo, the joint OS effort with Intel, will replace it in top-end handsets. How Nokia expects to shift the N8 when savvy consumers will know it’ll be obsolete within a matter of months remains a mystery.
It’s here where you have to ask whether changing the top brass will really work. It seems Nokia needs a complete change of strategy. It’s become entrenched in the fact it remains mobile number one, but can’t get its head round how to battle Apple and Google.
Android could also be about to suffer from fragmentation problems, leaving Apple’s singular iOS 4 out there on its own. There’s nothing wrong with offering different versions of an operating system, but the look and the feel need to be similar. Nokia is only confusing matters by making its move to MeeGo public now.
It has to be remembered that Nokia’s mobile devices grew by ten per cent in the last quarter. In countries such as India it’s tearing it up. But it’s in the headline-grabbing smartphone arena where it will win and lose.
Its reputation has suffered badly as sleeker, cleverer handsets flood the market. It will take more than a change of boss to give Nokia that much-needed edge. The company's whole culture needs to change to meet the challenges laid down by its newer rivals.