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Nokia has watched its global market share dwindle in recent years, and another nail hovered over the mobile giant’s coffin on Thursday. Finland’s leading daily Helsingin Sanomat reported that Nokia’s head of technology has taken a leave of absence and is not coming back after disagreement over a new group strategy.
“Two independent sources for the Helsingin Sanomat say (Rich) Green will be gone until the end of the year and is unlikely to return to Nokia,” the newspaper said.
The Finnish company told AFP that Green “had taken leave to attend to a personal matter” but did not provide further details or a date for his return.
Nokia announced that Henry Tirri, who currently heads Nokia’s Research Center, would however take over as acting chief technology officer during Green’s absence.
Helsingin Sanomat’s unnamed sources said Green disagreed with a decision by Nokia to scrap plans for its MeeGo operating system, an open-source platform developed in co-operation with Intel which was eventually supposed to replace the Symbian platform in Nokia smartphones.
New chief executive Stephen Elop announced a radical restructuring of the company in February 2011, which included a decision to phase out both Symbian and MeeGo following its deal with Microsoft in which Windows Phone would take over as the core OS for Nokia smartphones, relegating MeeGo to a side engineering project.
The move also places Nokia in a vulnerable position, as they go back to the drawing board while Apple’s iPhones and Android smartphones continue to shine at the premium end of the market.
At the cheaper end, companies like ZTE of China and Micromax of India are nipping at Nokia’s heels, as are ‘no-brand manufacturers’ (small Chinese copycats) which have been wining sales in India and China Africa, Latin America and Russia.
The company is also more vulnerable to a take-over as they scramble to ally with Microsoft. Rumours have already circulated around advances from Samsung, Chinese groups and private equity firms, although Elop firmly denied these as “baseless” at the Open Mobile Summit in London today, saying the company is “not for sale”.
Elop’s gamble on the Microsoft platform was a dramatic move to stop a crippling loss of market share at the hands of Apple and phones running Google’s Android operating system. The switch is expected to take place at the end of this year or early 2012.
Although Nokia is still the world’s mobile phone leader, they were forced to slash their sales forecast for the second quarter of 2011, citing stiff competition and a rough market.
Nokia’s first-quarter share of the overall cell phone market fell to 29 percent from 33 percent a year ago and its share of the smartphone market dropped to 26 percent, compared with 41 percent the prior year, C-NET reports.
The mobile company’s stock has plunged by 44.2% over the year to date, and desperate attempts have been made to trim costs.
Nokia said in April that it would eliminate 12 percent of its global work force, or 7,000 jobs, to help save €1 billion by the end of 2012. The New York Times also reports that, in a leaked memo this year, Elop had compared the company’s predicament, trying to catch up with Apple and Google, to that of a “man standing on a burning oil rig at sea”.
If Nokia and Microsoft get their technology right however, this might be a good time to buy Nokia stock. It’s a risky gamble – based on past lukewarm offerings from both companies, one might think it’s a case of the blind leading the blind to slaughter. If they come up with something really unique, however, it could go a long way towards saving them both.