Nokia is one step away from the smartphone scrapheap

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At the start of the year I wrote that “all was not yet lost for Nokia”, but the Finnish mobile company’s latest financials and its lack of any innovative new launches, mean that six months on I am finding it extremely difficult to stand by that statement.

Among one of the only figures that wasn’t preceded with a minus in Nokia’s financials for the three months to 30 June was the average cost of a Nokia phone, which increased 2% year on year – hardly a positive result considering revenue dropped 7% year on year to £8.2bn.

LG Mobile marketing director Alex Windle said to me earlier this week that consumers don’t care about dour shipping forecasts or financials – even if they are truly shocking.

He’s exactly right, they don’t care, but without quality products, they won’t care for your brand either.

LG have countered their tumultuous 2010, when customers “drifted away from the brand for a year”, by launching the world’s first glasses-free 3D smartphone. It doesn’t answer a definitive consumer need, but it has differentiated it from the raft of other iPhone clones its rivals produce by the dozen.

Unlike LG, Nokia is doing little to attempt to recapture its migrating users. The company abdicated its smartphone market share leadership to iPhone this week, as consumers rebel against Nokia’s clunky Symbian operating system. There were also no flashy brand marketing campaigns – like Apple, which could sell billions of pints of sick if it pinned its logo to them – to tempt them to Nokia fanboydom.

But Nokia still has one scintilla of hope: the Windows Phone Mango update.

The Mango update promises 500 (FIVE HUNDRED) improvements to the Windows Phone 7 operating system. The standout features are multitasking, Internet Explorer 9, multi-email support and Bing’s version of Google Goggles.

All the above are wondrous services for a smartphone to contain – but where’s the smartphone?

Nokia has committed to delivering the first Windows Phone device in 2011. But Elop’s promise that the first Nokia/Windows Phone will be available by the end of this year isn’t going to cut it. Nokia needs a Windows Phone now.

The iPhone 5 is set to launch in September, so Nokia has less than two months to avoid a market deluged by Apple. It is not a simple process transferring an entire ecosystem over to another company, but its developer team needs to be working into the wee hours to ensure it beats Apple to the market. Unfortunately, mutterings from Nokia suggest that the device won’t be ready until the very end of the year.

I predict another Stephen Elop “burning platform” memo…

The Guardian proffered earlier this week that Yahoo! was fast becoming the Woolworths of the internet. I’d suggest that, unless something drastic happens in the next quarter, Nokia is destined to become the Woolworths of the phone industry.

Just like a Woolworths kitchen utensil, Nokias are now confined to the “messy drawers” of the nation, alongside yo-yos, Blu-tak and those extra bits that came with that Ikea bookshelf that have no holes to fit in to.

Once the darling of the mobile phone industry, Nokia articles are now consistently depressing reading. If it doesn’t pull a Windows Phone out of the bag quickly, all could well be lost for Nokia.

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