All is not yet lost for Nokia

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There was no way to dress up Nokia’s fourth-quarter results report yesterday (27 January) – the figures were certainly not rosy.

Nokia’s accountants must have felt shooting pains in their fingers as they typed in each digit of the bleak financials: profit down 21% for the three months to December, full-year sales at a lower level than in 2008 – when we were at the peak of the financial crisis – and a shrinking market share.

Nokia’s CEO Stephen Elop who joined to turn the company around in September conceded his company faces “challenges” in the months ahead and that “now is the time for Nokia to change faster”.

On 11 February Elop will hold a strategy and financial briefing in London to update grim-faced investors on the turnaround strategy for flailing handset manufacturer.

And yesterday he hinted at what he might have to say to them: could “changing faster” signal a change of operating system (OS)?

Compared to the iPhone and Google’s Android OS, Nokia’s Symbian looks and feels aged. Reviews, both from tech experts and anecdotal users say it is slower, duller and less intuitive.

Nokia has the brand recognition (who hasn’t owned a Nokia phone in their lifetime?) and operator relationships to be able to own up to its mistakes and start again – but as Elop says, it will need to move quickly before it gets left behind once again.

Nokia has long been planning the introduction of its new “MeeGo” OS, a Linux-based open software platform made in partnership with Intel. But, in what is becoming something of a broken record for Nokia, the launch of a MeeGo handset has been delayed.

If Nokia is ever going to compete with the new kids on the block invading its territory, a more radical change than MeeGo is probably needed.

2011 could be the year Nokia adopts Android. One could summise a new direction explains the delay of two of its smartphones and any official launch of MeeGo.

Nokia has the brand recognition (who hasn’t owned a Nokia phone in their lifetime?)

Elop only needs to look at the exponential growth of HTC to see the potential of converting. Handsets can have all the bells, whistles, shiny screens and buttons that can speed dial the local takeaway they like, but without a hot OS, a phone just isn’t smart. It’s just something to call people with and why would we just want to do that?

By outsourcing its software, Nokia could focus all its attention on growth and regaining the market share it has been slowly losing by educating salespeople that the Finnish company has finally got its mojo back.

Let us not forget, at 31%, Nokia still has a resounding slice of the handset market share and although this has dropped from its 50% level just two years ago, it is still likely that just under one in every three handsets will carry the annoying ringtone synonymous with Trigger Happy TV.

Nokia is still a major player, but it can’t afford any more slip ups. Now is the time to hang up its clunky OS and dial into Android, before it gets left behind once again.

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