The struggling Nokia gave away its long held leadership of the global market for smartphones to its fierce rival Apple yesterday. The company also suffered much loss in its market shares as a large loss for its second quarter was reported by the company. The forecast from Nokia that its handset business will bring profits in the upcoming quarter came as much needed relief to the falling share price of the company; however, analysts don’t believe that it will be much help in dispelling fears about the future state of the once market leader.
However, despite all its pitfalls, Nokia still remains the largest phone maker in the world in terms of volume. One big reason for its demise is that it hasn’t succeeded in coming up with a new innovative device which can compete in the market with the likes of RIM’s BlackBerry, Apple’s iPhone and the uncountable number of handsets based on Google’s Android platform.
According to Nokia, the company has sold around 16 million handsets during this quarter, trailing to the 20 million iPhones which were sold by Apple in the same period. The quarterly sales volumes of Nokia’s phones went down by 20% from their value the last year, missing the forecasts of analysts by a long shot. The loss is especially hurtful as it comes at a time when the market all over the world has grown by 10%.
According to a media source, the overall market shares of Nokia fell to 23.7% from the previous quarter’s value at 29.1%. Before this staggering downwards spiral, Nokia made up nearly 40% of the global market share. The market for smartphones had initially been created by Nokia itself when the Finnish giant came up with its Communicator handset in 1996. However recent years have seen it fail miserably at attempts for matching the RIM and Apple models in their appeal.
The only turnaround hopes for the company now seem to be coming from a new series of devices which will be based on Microsoft’s Windows Phone OS. However these will not hit the market before the end of this year. According to Geoff Blaber, a CCS analyst, Nokia has a long path to travel for its recovery. He said that it is evident from the deterioration in the performance of its smartphones that the time has come for the cell phone manufacturer to develop a new portfolio of Windows Phone models.
