Why Nokia incurs such loss

Stephen Elop — CEO of Nokia states that the company has developed a new strategy that began to be implemented last year and showed positive results, however, stiff competition in the cellular technology market soon changed plus by minus, forcing Nokia to post big losses. According to preliminary estimates, the situation in the second quarter of two thousand twelfth year will not improve. The

fifty-three per cent drop in the value of shares following the sale of the latest smartphone powered by Symbian at the moment is pushing the company to cut about twenty-seven thousand jobs, to reduce domestic costs and stay afloat.

Changes may also affect management. The main contender for the new board chairman is the founder of Finnish anti-virus company F-Secure, Risto Siilasmaa. He already holds a seat on the board. A

good prospect promises cooperation with Microsoft, which is involved in the development of smartphones based on Windows Phone. Also Nokia has to rely on its partners. Experts of the analytical department expect an increase in sales of smartphones almost double in two thousand thirteenth year. The main competitor using Windows Phone OS is Taiwanese company HTC, which according to preliminary forecasts will exceed Nokia sales and in two thousand thirteenth year.

The main reasons for the company’s losses, as mentioned above, are considered to be a great deal of competition in the dynamically developing mobile market. Failure awaited Nokia and after the release of the Lumia 900, which turned out to be poorly crafted and sold not at the planned price of $99, but a smaller one, in some cases given for a pittance with a two-year contract. Current board chairman Yorme Ollila may also serve as probable cause. If management changes at a critical time, according to experts, it could cause both the company’s take-off and its sharp fall.

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