Guess Who May Be Going Out of Business

Nokia's Ship is Sinking

Image Source: Mobilesyrup.com

 

It’s Nokia. This was tough news for me to hear. I’ve been sort of rooting for these guys. In order to save a business circling the drain, Nokia has made some wild hail-Mary passes that didn’t make a lot of sense but took a lot of guts. And I sort of hoped they’d work out. But it looks like Nokia’s recent decisions won’t be able to save the company.

Nokia may not be doing well now, but once upon a time they were the biggest names in the cell phone industry. The internet is still rife with old Nokia phone memes, celebrating them as the best and most durable phones of their day. You could drop them, soak them, scratch them and still use them for a decade after you bought ’em.

Unfortunately, Nokia failed to transfer their cell phone success to the smart phone market. The iPhone and the more popular Android models quickly dominated, choked out the competition and made Nokia pretty irrelevant pretty quickly. Soon, Nokia’s profits were dropping faster than RIM’s and it looked like they’d be going the way of the dodo soon.

 

Nokia's Not Doing Well

Image Source: Zdnet.com

 

But Nokia didn’t take its losses lying down. In a move that will probably go down in history as pretty crazy, Nokia dropped their best-selling low-end phones and hitched their wagon to the Windows Phone OS: the dark horse and distant third of the OS dominators.

Then, for some reason, they bottomed-out the price of their flagship phones to offer mid to high-range specs for low-range pay-as-you-go prices. Keep in mind that at the same time, it’s two successful rivals were offering high-end luxury models for customers interested in the best that the two OS’ had to offer — and they were (and still are) both selling a lot of phones.

It was such an unprecedented hard left turn that it made headlines. Nokia made it’s name as the Crazy Eddie of phone sales willing to do anything for a buck. And that kind of moxie sort of made me want to buy a Nokia Windows phone…almost.

But I didn’t. Because they’re Windows Phones. And I like my OS’ like I like my politics: in a two-party system. And right now, Windows Phone is sort of the green party of OS’: it may have some great points, but I’m not comfortable wandering into fringe territory to try it out; even if it’s offered at a discount.

And apparently I’m not the only one who feels that way. Nokia just reported over $750 million in losses in the third quarter and a 19 percent decline in sales from last year. Those loses are almost solely due to a drop in Nokia phone sales.

 

The Nokia Lumia

Image Source: Fooyoh.com

 

This drop in sales was easy to predict, but I sort of hoped that it wouldn’t be true. I’ve always had a soft spot for the underdog. And I hoped that Nokia’s crazy business move meant that they knew something that I didn’t: that low prices would help Windows Phones rise from obscurity and dominate the market bringing Nokia with it.

But that’s not going to happen. At least not yet. Unfortunately, Nokia still has hope in its failing business plan. According to Stephen Elop, CEO of Nokia, the phone company hopes that the reasonably priced Lumia 820 and Lumia 920 will do what the 900 couldn’t: convince people to use Windows.

It’s sad really. Windows Phones may eventually become a viable competitor to Android or Apple. But I don’t see that happening any time soon. Windows Phone 8 is shiny and new, but it’s attached to an app store with only 100,000 apps on its shelves. And no one is really interested. Windows Phone sales continue to drop. And as they sink, they’re probably going to take Nokia with them.