Dwindling market share raises concern.
Bernstein analyst Pierre Ferragu believes Nokia will have a hard time combating market share and revenue losses even after it has shipped its first, hotly awaited, Windows Phone 7 smartphone later this year.
Nokia reported a loss of 484 million euros in its last financial quarter, and subsequently lost its market share crown to Apple. And with Android’s gaining popularity, Ferragu reckons Nokia has a lot to worry about in the coming months.
“In a fast changing market, Nokia is losing ground very rapidly,” Ferragu says. “The company lost significant market share again in the second quarter, 7pts in smartphones and 6pts in basic phones. The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast. … Android has been clearly identified by management as being the major driver behind the current negative trend of Nokia, especially in Europe. The operating system grabbed 36 percent market share last quarter vs. 11 percent a year ago and we are concerned that against such momentum, no third ecosystem will have a chance to emerge.”