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Nokia shares are falling – by 49% in three years, but why?

Nokia were once the outright leaders in the mobile market but in the last few years we have been watching the company weaken, every month. In the last three years their shares have fallen by 49 percent and they have dropped 30 places across 12 months in a global brand ranking system.

Millward Brown Optimor have shown Nokia dropping to number 43 position in a global brand ranking system, from number 13 just over a year ago. Their shares have dropped in value by 49 percent and it doesn’t look to be changing anytime soon.

Matthew Lynn, a reporter for Bloomberg said “True, it still has more than one-third of global mobile-phone sales. But it’s stranded in the middle of the market. Korean manufacturers such as Samsung Electronics are leading the main consumer market. Apple’s iPhone and Research In Motion’s BlackBerry dominate the upscale smartphone industry. Recognizing the scale of its challenges, Nokia hired Stephen Elop, the Canadian head of Microsoft’s business unit, to turn the company around. Everyone will wish him well… But if the guy knows so much about phones, he’s kept it a secret. Microsoft has never made any progress in that industry.”

Nokia CEO Olli-Pekka Kallasvuo - forcing a smile

Lynn while damning of Nokia has a point, Nokia have been struggling to handle the ever changing market place and while they have many nice phones in their portfolio,. the more dramatic designed units such as the iPhone are gaining marketshare all the time. With Google Android making such an impressive initial impact in the market we can only assume that Nokia will need to reinvent their phone range and come up with radical new designs to stop the decline.

Lynn isn’t so sure, he says “The cruel truth is that for all its residual market share, Nokia looks like a has-been. The company misread the way the mobile-phone industry was merging with computing and social networking. And it’s probably too late to turn that around.”

KitGuru says: With a market worth billions every year, Nokia look to be failing on hard times. 2011 will be a very important year in this market. We still believe that Google Android powered phones will dominate.

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