Nokia slides again

A picture taken on October 21, 2010, shows Finland's mobile phone maker Nokia's N8 smartphone at Nokia flagship store in Helsinki.

Tess Vigeland: Earlier today Nokia's stock price shot for the sky on rumors that the phonemaker was about to sell its smart phone division to Microsoft. The rumor quickly died and Nokia, which cut its revenue projections drastically yesterday, headed straight back to the basement.

It's just the latest step in a downward spiral. From the Marketplace Tech Desk, Steve Henn reports.

Steve Henn: Even before Nokia could deny it, many analysts were calling the idea of a possible buyout bogus.

Ben Wood: I think the Microsoft buyout rumor is preposterous.

Ben Wood is at CCS Insight. He says for the past two years at least, Nokia has been getting pummeled. Its stock price has lost more than half it's value.

Wood: This situation that Nokia finds itself in was almost inconceivable just a few years ago.

Charles Golvin is a mobile analyst at Forrester Research. He says Nokia's market share is being devoured by the competition.

Charles Golvin: It's clear that all of Nokia competitors are eyeing Nokia's customers and there may even be a little bit of drool hanging out of their mouth as they are eyeing them.

Apple redefined the smart phone in 2007. Then Google's Android quickly copied the vision. Nokia was flat-footed. Now, it's abandoning its own smart phone operating system called Symbian, and announced in February it would begin build phones running Microsoft's software instead.

Golvin: They made one major strategic misstep, which was they put up a graphic which showed a graph of the Symbian volumes tapering to nothing.

Symbian became a dead system walking. Now Nokia's got a phone no one wants to buy or build apps for. And it will be months before the first Windows phone hits the market.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.


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