What’s happening With Nokia: Announces To Cut 10,000 Jobs And Sell Vertu Luxury Mobile Phone Division

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Since the launch of Apple’s iPhone in 2007, Nokia’s market share has continuously been declining—it has lost over 70 billion euro ($88.45 billion). Nokia’s total mobile handset shipments declined by 22.7 % in Q1 of fiscal 2012 compare to the same quarter a year back, and it has also lost its tribunal to Samsung. Now, Samsung is the world leading smartphone manufacturer, shipped  86.6 million mobile handsets in Q1 of the fiscal 2012, up 25.9% compare to the same quarter of the prior year. Yesterday, Nokia promulgated to cut its 10,000 global workforce and also decided to extrude its three top executives along with the closure of its privileges in Germany, Finland and Canada.

Indeed, incidents (happening around) are not in the favor of the Finnish mobile handset manufacturer. Apple and Google have intensified the global Smartphone competition. However, Nokia has saddled all of its afford, but the consequences are against of the expectations.

Recently, the company has instructed to its shareholders that they might have to face more loss in the Q2 of this year compare to the prior quarter. Last year, it declared to cut 7,500 jobs including a significant number in the U.S.. Later, in February of this year, it again announced to reduce 4,000 manufacturing job across Hungary, Mexico and Finland. At present, the company is seeking for how to save money, increase its efficiency, and accelerate cost reduction. The company has also decided to shift its headquarter from Finland to Asia.

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The company is currently working hard to re-stabilize its profits. It’s more concentrating on Lumia handsets and trying to focus on location based services.

Nokia president and CEO–Stephen Elop–said, “We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia.”

In Q1, 2012, Nokia succeeded to ship 2 million Windows Phone powered Lumia models across the world. The company is now trying to broaden the price range of Lumia model for making the device more competitive. At present, variant price range of Asha touch screen phones are available in the market.

On the other side, Nokia has also declared to sell its Vertu luxury mobile handset division to Private Equity Group for almost $250 million.  Recently, there are lots of rumors in the market revealed an acquisition from Samsung and Microsoft. However, Nokia has teamed up with a Swedish mobile imaging company, Scalado, in order to provide a better imaging experiences to users.

But, one thing seems weird here, if Vertu’s sales continues to increase then what the need of the company to sell the luxury mobile phone division? Indeed, at present, the company is not fit to accelerate  the business of its luxury phone division. It’s very tough for the company to sustain the business of Smartphone and Luxury phone together. For the growth of luxury category, it will have to sacrifice the division. The luxury mobile phone division came into existence in 1998 and its business has continuously been increasing year-over-year due to talented workforce and unique products and services.

At the time, there’s no any rivals of the luxury phone division. An advent of Smartphone has revolutionized the technology and the fanatics of luxury phone are now demanding craftsmanship along with the advanced technology.

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