That was followed by another profit warning, a carbon copy of one last summer
that revealed the depth of the Finnish company’s structural challenges. The
two setbacks are linked. No wonder the shares fell 14 per cent yesterday.
$100 credit
The Lumia 900 glitch may be simple bad luck. Every company’s technology lets
it down at some point. But Nokia is not the only company to be frustrated by
the setback. The smartphone is being launched with Microsoft and AT&T;
all three need it to succeed – and not just because, coming so late after
the iPhone and the Android, there are many industry observers who wonder why
they are even bothering.
The device costs $99, but Nokia has been forced to offer a $100 credit on
phone bills as compensation to anyone buying it before April 21, in effect
giving the product away.
Given the importance of the Lumia 900, the latest operating setback is
ominous. Last year Nokia said operating margins in its devices and services
division would be zero in 2012; now it says they will be minus 3 per cent
because of intense competition for its mobiles and smartphones in emerging
markets from Android-based rivals.
Nokia’s saviour
The Lumia range has been on the market since only November and sales of 2m in
the first quarter of 2012 look healthy enough. But the average selling price
was just €220, compared with an expected €300.
The Lumia 900 is chief executive Stephen Elop’s big idea for turning Nokia’s
fortunes round after it lost the smartphone revolution. If customers and
regulators become wary of the Apple/Google duopoly, it might work. But
Nokia’s next life is receding into the distance.
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