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Nokia investors tell CEO their patience running thin

Reuters/ AFR | May 8, 2013
Nokia investors told chief executive Stephen Elop on Tuesday that they were running out of patience with his flagging attempts to catch up with market leaders Apple and Samsung in smartphones.

Some analysts have also been critical, saying Lumia sales were not strong enough to ensure the company's survival.

Nokia sold 5.6 million units of Lumia handsets in the first quarter. That was up from 4.4 million in the previous quarter, but its market share was still only about 5 per cent, with Apple and Samsung together controlling over half the market.

"He's managed to decrease costs but not to increase market share," said Magnus Rehle, senior partner in Greenwich Consulting, which advises telecoms companies.

"Maybe they could go back to Google and say we also want to go with Android. Even if it hurts. Microsoft, they've had their chances, and are not managing to take off," he said.

 

CHEAPER SMARTPHONES

In the absence of a Plan B, analysts said Nokia's best bet would be to focus on selling cheaper smartphones, or feature phones with some smartphone capabilities such as its higher-end Asha handsets, in emerging markets.

Sources also say it will soon begin selling new, higher-end Lumia phones through Verizon Wireless in addition to its current partnership with AT&T.

But few expect it to help Nokia gain significant share in the US smartphone market any time soon.

"Their best chance of success isn't going head to head with Apple. We think it will be in the mid-range," said Morningstar analyst Brian Colello in Chicago.

"That's $US300 rather than the $US600 models. That's where customers in emerging markets and first-time buyers will be looking."

Analysts were more hopeful about prospects for Nokia's Lumia 521, a low-end smartphone, due to go on sale at Walmart later this month at an unsubsidised price of under $US150.

"They've lost the battle in expensive smartphones to Apple and Samsung. And at the low end, they have very strong competition from the Chinese. But there's still a possibility to fight in emerging markets," Rehle said.

Elop said Nokia would announce new Asha models soon. He is due to attend a news conference in New Delhi on Thursday.

 

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