The 2012/04/19 at 05:40
Nokia and Research In Motion have made a spectacular descent to hell. While Samsung and Apple flitter from record to record, the Finnish constructor and its Canadian counterpart are inexorably going to the dogs. Their results have collapsed and entailed draconian internal restructuring and reorganisation measures. The two giants are suffering from the same defect: strategic errors regarding the emergence of the tactile smartphone market. In Toronto, Research In Motion shares have fallen by 75% in the space of one year. The manufacturer of the BlackBerry has not ceased to accumulate setbacks – to such an extent that investors are speculating about the group being handed over.
When fourth quarter results lower than expected were published, its CEO Thorsten Heins declared the launch of a strategic review that may well end up with the setting up of partnerships, the creation of co-enterprises or licence agreements. Caught in the crossfire between Android smartphones and Apple iPhones, the telecom supplier notched up a loss of 125 million dollars (96 million euros) in the fourth quarter (closing at the start of March), compared with profits of 934 million dollars (717 million euros) one year earlier. Its turnover fell by 25% to 4.2 billion dollars (3.2 million euros). The Canadian technological firm sold 11.1 million BlackBerries (-21% compared with the third quarter).
The announcement of the strategic review has also been accompanied by the departure of Jim Balsillie, the group’s former co-CEO and co-founder. Chief Technology Officer, David Yach, and Chief Operating Officer, Jim Rowan, have also resigned. Too late, according to JPMorgan who considers that the smartphone war has been lost and that Research In Motion is not on the winning side. The Canadian may well be joined by Nokia. The world’s number one name in telephones from Finland also committed a strategic error by not foreseeing competition from Apple and Google. As a result, the telecom giant issued, at the start of April, a severe profit warning that brought its stock market price down by 14.5% in a single session.
For the first time, mobile phone activity, the group’s main branch, is expected to lose money in the first quarter of 2012. And the situation looks like it will worsen. In an attempt to catch up, the Finnish giant joined up with Microsoft and its Windows Phone a little over one year ago. But the union is struggling to bear fruit: for all brands, Microsoft is said to have only sold 3.5 million Windows Phones since the system’s launch in October 2011. In comparison, Apple sold 37 million iPhones in the first tax quarter of 2012. Samsung reached 44 million smartphones over the same period. According to specialists, Nokia no longer has a choice. In order to avoid disaster, the group must launch an offensive in the cheap smartphone segment. But this is not the path that has been chosen by the firm, worry analysts. And yet the European telecom gem has no time to lose!