Tag Archives | Nokia

Nokia Cuts R&D, Production

Singing the macro-economic woes, Finnish telecommuncations giant Nokia has decided to cut production and to close one of its R&D sites. Ultimately, the company has failed to capitalize on the strength of the smartphone market.

Nokia is reducing production at its plant in Salo, Finland, and has begun to phase in furlough days that will affect 20 to 30% of the plant’s 2,500 employees, on a rotational basis. The company is also shuttering its facility in Jyvaskyla, Finland, costing 320 people their jobs.

Nokia told investors in January that it expects cell phone demand to fall 10 percent in 2009. However, it managed to increase its share of the worldwide mobile market in 2008 even while demand was weakened by lowered consumer confidence, according to a September 5 report by Nordic Business Report. It experienced a 69 percent drop in its 2008 fourth-quarter net profit.

In many markets, Nokia’s sales grew–it’s the U.S. market that has remained its albatross. RCR Wireless News reported in July that Nokia claimed 40% of the market in 2008, and its sales were particularly strong in the Asia-Pacific region, Latin America, and Middle East.

The company is relying upon high-end smartphones to help them cope with economic crisis, the Wall Street Journal reported in a December interview with Jonas Geust, vice president of Nokia Nseries unit. The smart phone market is growing, but Nokia is not a benefiting much. It is losing out to fierce competition from Apple and Research In Motion.

It seems counterintuitive for Nokia to cut its expenses when its most advanced devices are failing to sell. The 5800 XpressMusic, Nokia’s initial answer to the iPhone, lacked multitouch capabilities. That should have been an indication that it needed to invest more, not less. I don’t see how a move away from innovation is good for customers.

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Today’s Financial Results Mixed

Okay, so I can’t be 100 percent negative about this economy all the time. Besides Microsoft’s poor results and resulting job cuts which Harry covered this morning, other big name tech companies also reported results today.

googlelogoGoogle’s results were quite respectable: $4.22 billion in revenue and earnings of $5.10 per share. This beat Wall Street expectations, who were looking for $4.12 billion and $4.96 respectively. How many times these days do you hear about a company beating The Street lately? Not much.

It’s advertising business, essentially the core of Google’s revenues, actually increased ever so slightly which came as a surprise to many. In a weakening ad market, it was expected that the so called “cost per click” would decrease during the quarter.

Employees will be happy: Google is launching a program for “underwater” stock options — where the cost of the option is higher than the current stock price — for new options that will be priced at the share price at close on March 2.

amdlogoBut don’t get too excited. AMD rains on our parade with results that come in below what Wall Street was expecting. The chipmaker was already struggling, so this hits doubly hard.

The company lost $1.424 billion on revenues of $1.162 billion, which means that its losses outpaced revenues. However, lets be far to AMD: this included $996 million in one-time charges, including $684 in impairment charges related to its buy of ATI.

Still, taking all that out, the company lost about 68 cents a share, considerably worse than the Wall Street predictions of 54 cents. AMD doesn’t see a light at the end of the tunnel yet: it warns that Q1 could even be worse.

Nokia logoNokia joined the bad news bandwagon too, posting sales of 12.67 billion euros, down a staggering 20 percent year-over-year. Worse yet the company sees a 10 percent drop in handset sales in 2009 over the year previous.

That’s Nokia’s bread and butter, so essentially expect a full year of financial bad news out of the Finnish phone manufacturer. CEO Olli-Pekka Kallasvuo seems concerned, saying “in recent weeks, the macroeconomic environment has deteriorated rapidly,” and the company is taking steps to insulate itself.

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The T-Grid: Nokia’s 5800 XpressMusic vs. the iPhone

Give Steve Jobs this: When Apple frets publicly about other companies ripping off the iPhone, it has a point. The iPhone is quickly becoming what the Mac was more than twenty years ago, only more so: A device that sets the style, technological, and functional agenda for an entire industry. And now Nokia is leaping into the game with the 5800 XpressMusic, its first iPhone-like touchscreen phone.

The 5800 XpressMusic certainly looks like an iPhone, and it matches its features in many areas (though not all of them: It’s got a less sophisticated, single-touch screen, albeit one with more pixels). And it’s got some of the features which some people wish the iPhone had, including a fancier camera that has a flash and can record video, voice dialing, and even an FM radio.

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Motorola Expanding Android Team Sevenfold

Erick Schonfeld over at TechCrunch is reporting that Motorola is set to expand its team working on Android from 50 to 350, indicating the company may be about get really serious about devices operating on the platform.  Word of the expansion comes from a Android developer who apparently has been targeted by the company.

And it doesn’t end with Motorola. Erick’s source also says that Nokia and Verizon made an appearance last week at a conference that was intended for developers who had not seen the G1. While Motorola isn’t a big surprise — it already is a part of the Open Handset Alliance — neither Nokia nor Verizon are officially affiliated with the organization.

It’s not clear when Motorola plans to release its own Android powered devices, although such a ramp-up seems to indicate any announcement may not be too far off. But the fact that Nokia is also showing possible interest may mean the iPhone could face some serious competition very soon.

Then again, Nokia controls Symbian, which has a commanding lead of the market already. Some 65 percent of all smart phones run the OS, nearly six times that of the second place Windows Mobile (11.5 percent). All of this just could be some good old oppo research.

Having Nokia developers familiar with Android does not hurt, however. If the OS suddenly takes off, the company would not be caught off-guard and could release its own phone.

Add this to the news that pre-sale allotments of the G1 are apparently close to being sold out, and the folks at the Googleplex in Mountain View must be smiling ear-to-ear right now.

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No Place Like Chrome?

Today was Labor Day–and boy, did the blogosphere labor at talking about Chrome, Google’s new Web browser. Today’s the last day we can do it without having seen the thing; a beta goes up Tuesday.
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