Nokia announced on Thursday that it sold about 700,000 handsets in North America in Q4 of 2012. This is much lower than the predictions of 1-1.2 million by most analysts, and definitely not enough for Nokia’s aimed comeback in the U.S. Its competitors, Apple Inc.’s iPhone and phones powered by Google Inc.’s Android, sold tens of millions of phones and together control about 95% of the market. One of Nokia’s weak points is that its communication fails to tell people how it is different from the two market leaders, or why consumers should switch to it.
The deficiency in communication is a key problem, as the Finnish tech company sees the U.S. as an important part of its global revival. While signing AT&T, the nation’s second-largest mobile carrier, was a good start, the company failed to turn it into concrete numbers. Louis Landeman, a credit analyst at Danske Bank A/S in Stockholm, was quoted saying that customers don’t have an attraction to the Nokia name. He urged the company to boost the 700,000 number significantly if it hopes to gain a worthy market share. In other bad news, Nokia’s fourth quarter reports showed a drop in sales for the seventh consecutive time, and the company scrapped dividends for the first time in 20 years to maintain liquidity.
The last time investors saw a glimmer of hope in the company was back in February 2011, when Chief Executive Stephen Elop announced that they would be replacing their own Symbian OS with Microsoft’s Windows Phone. This led to positive growth of share value, but today that value has been cut down 50%. The shares closed at $4.21 on Friday, which represents a 5.5 percent fall since Thursday. Mikko Ervasti, an Evli Bank analyst in Helsinki, ascribed this negative sentiment to the fact that the company’s U.S. ramp-up is not progressing as predicting.
On its part, Nokia is not yet ready to give up. Recently, the company announced a deal with Verizon Communications, the largest mobile carrier in the U.S., which will carry the Lumia series in 2013. They are also working hard to deal with supply constraints that largely brought down Lumia sales in 2012. Francisco Jeronimo of research firm IDC in London said that Nokia could improve its situation by increasing awareness of their unique apps, services and phones’ abilities.
