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Nokia Is Hosed, and Time Is Running Out

IDC came out with its estimates of handset vendor sales for the first quarter of 2011. There's lots of talk about Apple (AAPL) passing RIM in market share. But even though Nokia (NOK) stayed at the top of the handset vendor heap, various numbers show just how much trouble the company is in. Given how slowly it's moving to Microsoft (MSFT) Windows Phone as a software platform, it may already be too late for Nokia to keep its predominance in the phone industry.

Here's what IDC has to say about the smartphone market (click to enlarge):

Nokia remains in first place. Its year-over-year growth in units is the smallest among all the companies mentioned. But what the table doesn't show is sequential quarter growth, and that sign is even worse, as you can see from the table below that I put together (click to enlarge):

Nokia is in a global smartphone sinkhole. Research in Motion (RIM) doesn't look so hot, either, though the result might be a bit deceiving, as IDC reported by quarters ending in December and March, but RIM's closest quarters close in November and February.

Still, this shows the huge change happening. A 14.5 percentage sequential quarterly drop in one of the fastest growing tech markets screams failure. But it's not the end of Nokia's problems. Aside from the global smartphone market numbers, IDC released some other data yesterday about mobile phone sales in Western Europe (click to enlarge):

If Nokia's sequential drop in smartphone sales is bad news for the company's future, the 10 percent year-over-year slide in Western Europe says that the company's grasp on the past is also slipping away. This region has always been a stronghold for the Finnish handset company. What makes the slip particularly dangerous is that the numbers include both smartphone and feature phone sales. Not only is Nokia rapidly losing a grip on the smartphone front, but it is now falling behind in handsets period in what might have been its best territory.

Nokia needs something to start moving in the right direction. But things are still taking too long. Given Nokia's market share degradation, it no longer has years, or even many quarters, to act. As recently as April, the companies said that they're on schedule to deliver in volume in 2012, "although the pressure is on for first delivery in 2011."

No kidding. It probably makes sense to deliver your first phones before they become your last.


Image: morgueFile user imelenchon, site standard license.
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