Nokia Faces Staggering Q2 Loses, Remains Optimistic about the Future

by Matt Klassen on July 22, 2011

Nothing short of a debacle, Nokia strikes me as a sports team enduring an extended losing streak, with all of us listening to the repetitive prattle from the head coach about just how close the team is to turning a corner and how bright the future looks. In fact, should things not work out for current CEO Stephen Elop at Nokia, I’m sure there’s a motivational speaker position somewhere with his name on it.

To the point, Nokia came into this week facing significant negative forecasts for its Q2 sales report that was released yesterday; a report that read as expected, seeing the Finnish company post significant losses as it continues the arduous uphill journey back to respectability.

But through it all CEO Elop remains steadfast about the future of the company; a future that will see Nokia return to the top of the mobile market, and that will finally see the company break into the smartphone market with the help of Microsoft’s WP7 operating system. One has to wonder, though, if Elop really believes his own hype, or whether he’s simply trying to sugar coat Nokia’s inevitable demise.

Like RIM, perhaps it’s premature to be talking about the demise of Nokia, a mobile market mainstay for almost two decades now. That said, five years ago no one would have imagined that the once great Palm empire would now lying in ruins, its scraps scooped up by HP last year. But even if the writing is on the wall for Nokia, does this mean that there’s no hope for the ubiquitously global mobile brand?

While fully recognizing his company’s dire current financial situation, Elop did go on to note in the Q2 report that the company is still well situated to meet its strategic goals for this year. In fact, one might get the impression that such loses were expected from Nokia, simply an unfortunate necessity of the company’s rebuilding process.

You see, Nokia’s profits through most of this year are being generated through the company’s Symbian devices, an operating system that Nokia has since abandoned in favour of Microsoft’s Windows Phone 7 OS. With the company having to wait till Q1 of 2012 to really see any impact from the company’s new devices, its stuck trying to sell phones to a public who are fully informed about Symbian’s impending demise; not the best recipe for increasing revenues.

Although this does little to improve my future outlook for Nokia, it is enough to at least withhold any sort of final judgment.

That said, there’s no question that its hard to put a positive spin on more than half a billion dollar loses in one quarter, especially when compared to $323 million profit over the same period a year ago, but Elop is hoping that his optimism about the future can help stabilize the nerves of worried investors.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

{ 1 comment }

AABHINAV S MEHER July 23, 2011 at 10:32 am

i personally feel that nokia didn’t ask its customers what they need…. may be they had some ego problems that they did not bring out android phones! they were firm and confident about their SYMBIAN OS…. which obviously was beaten by the android…. now having understood this, it is now that they have tied up with microsoft to atleast bring out a windows phone! however, apple and google android OS have won the hearts and the trust of millions worldwide, thus over-powering the symbian… its tough for nokia….
one more basic problem why nokia has lost its name is because, due to the increase in multitude of their products, there are many flaws in them… their aim has been to reach out to maximum number of customers whereas the aim should be to deliver quality products!
thank you!!

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