The world's biggest cellphone maker Nokia warned of a grim start to 2011 after rivals ate even more of its market share, highlighting the scale of the turnaround task facing its new boss. Stephen Elop, who took over as chief executive last September, will unveil his plan to revamp Nokia's strategy in two weeks' time and said on Thursday he would aim to reopen markets such as the US
His comments helped Nokia shares reduce losses. They were down 2 percent at 7.645 euros by 1500 GMT, off an earlier low of 7.12. Nokia has been left in the dust by high-end competitors such as Apple and Google and is now also suffering a drop in sales of its stronghold of traditional phones as Chinese manufacturers muscle in to take advantage of the growing market.
Elop said the company faced significant challenges in its competitiveness and execution and flagged a change in its software strategy. "We must build, catalyse or join a competitive ecosystem," he told a telephone call with analysts, in comments that experts said suggested Nokia could introduce new smartphone models using Google's massively popular Android application.
Nokia, which has struggled to create a rival to Apple's iPhone phenomenon, is now watching smaller competitors like HTC Corp and Motorola hook up their smartphones to Google's Android software and lure customers around the globe. "The statement opens up the opportunity for Nokia to join other ecosystems depending on the markets. Does this mean Android in the US?" said Gartner analyst Carolina Milanesi.
"Based on Stephen Elop's comments Nokia is certainly evaluating this opportunity," said Canalys analyst Pete Cunningham. "They need to do something radical in the US" The phone market has recovered from a slump in 2009 when the global economic slowdown dampened demand for the latest gadgets, with demand for new smartphones like Apple's iPhone 4 and Samsung's Galaxy S surging.
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