Leadership
Business & leadership lessons from Nokia.
August 5, 2016
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Here’s Why Nokia Shares Are Dropping…….

Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. Nokia has been a respectable company. They didn’t do anything wrong in their business, however, the world changed too fast. Their opponents were too powerful. They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival. The message of this story is, if you don’t change, you shall be removed from the competition. It’s not wrong if you don’t want to learn new things. However, if your thoughts and mindset cannot catch up with time, you will be eliminated.

During the press conference to announce Nokia’s smartphone division being acquired by Microsoft, Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. Upon saying that, all his management team, himself included, teared sadly.

Nokia was one of the world’s biggest and most successful mobile phone manufacturer in the world, in fact at one point slightly over half of the world’s mobile phones are Nokia phones!

Alas, nothing lasts forever – by 2010, the mobile phone giant started its downhill path, and within only a span of a few years, the company that once sold half the world’s mobile phones now barely sold any – with a market share of barely 3%.

What went wrong? Did someone up there made a terrible decision to cause such catastrophe?

The fact is – They didn’t do anything wrong in their business, however, the world changed too fast. Their opponents were too powerful. They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival.

The advantage you have yesterday, will be replaced by the trends of tomorrow. You don’t have to do anything wrong, as long as your competitors catch the wave and do it right, you can lose out and fail. To change and improve yourself is giving yourself a second chance. To be forced by others to change, is like being discarded.

Those who refuse to learn & improve, will definitely one day become redundant & not relevant to the industry. They will learn the lesson in a hard & expensive way.

This article is originally written by Ziyad Jawabra. Nokia officially sold its mobile phone business to Microsoft in 2013, it’s main company still exists today as a major telecommunications company, but not in mobile or smart phones.

following 3 great lessons :

1. The advantage you have yesterday, will be replaced by the trends of tomorrow. You don’t have to do anything wrong, as long as your competitors catch the wave and do it RIGHT, you can lose out and fail.

2. To change and improve yourself is giving yourself a second chance. To be forced by others to change, is like being discarded.

3.Those who refuse to learn & improve, will definitely one day become redundant & not relevant to the industry. They will learn the lesson in a hard & expensive way

Customers are holding off while it integrates its purchase of rival Alcatel-Lucent.
Nokia’s mobile network equipment sales fell more than expected in the first quarter and will continue to decline this year, the Finnish company said, as customers hold off new orders while it integrates its purchase of rival Alcatel-Lucent.

Nokia NOK -3.34% bought Franco-American Alcatel for 15.6 billion euros ($17.8 billion) earlier this year to help it more broadly compete with Sweden’s Ericsson ERIC 0.28% and China’s Huawei in both fixed-line and mobile network equipment.

The first unified results after the deal showed growth in Alcatel’s fixed-line equipment business softened the blow from the decline of Nokia’s mobile wireless business.

First-quarter network sales in total dropped 8% in from a year ago to 5.18 billion euros, missing analysts’ average forecast of 5.51 billion in a Reuters poll.

Sales fell 17% in North America, the company’s largest market. They were down 11% in the Middle East, 6% in Asia-Pacific and 5% in China, but up 6% in Latin America.

“Some of our customers could be holding back a bit while waiting for deliveries from our new combined roadmap,” Chief Financial Officer Timo Ihamuotila told reporters in a conference call, as the company shrinks two product portfolios into one.

“However, we have no reason to believe we have lost footprint with any of our major customers,” he said.
Nokia nudged up its cost-cutting target for the merger, seeking savings of “above” 900 million euros in the course of 2018, compared with “approximately” 900 million euros before.

The company started the cuts month, saying it would axe thousands of jobs worldwide, including 1,400 in Germany and 1,300 in Finland.

“The decline in (Nokia’s) wireless networks was surprisingly fierce … The market remains difficult, which seems to add pressure to step up their cost-savings program,” said Mikael Rautanen, analyst at Inderes Equity Research, who has an “increase” rating on the stock.

Nokia shares were down 3.1% at 8:20 GMT. The stock has fallen recently along with that of mobile networks market leader Ericsson, which last month posted its sixth consecutive quarter of declining sales.

For the full year, Nokia forecast falling network sales and an operating margin of more than 7%, compared with 6.5% in the first quarter and analysts’ average estimate of 9.4%. Analysts expect the margin to rise to 11.6% by 2018, once cost cuts from the merger have been completed.

Sales in Nokia’s small technologies unit, which includes its vast patent portfolio, fell 27% in the first quarter. Nokia did not provide an annual outlook for the unit, citing uncertainties in timing of some licensing deals.

Rautanen said the business was being hurt by weakening sales of smartphones. Nokia once ruled the global handset business but failed to compete in the smartphone era created with the advent of the Apple iPhone in 2007. It eventually sold its phone unit to Microsoft in 2014, while holding on to its patents.

(CREDIT : by Reuters MAY 10, 2016, )

About author

Dr Shailesh Thaker

Dr. Shailesh Thaker is a world-renowned management thinker and trainer on organizational behavior and development. He is the CLO of Knowledge Plus Inc., a highly reputed training firm based in Ahmedabad, India, helping organizations to achieve international benchmarks in management practices.

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