Nokia Begins CEO Search
Among the reasons cited for his trouble are the company's lack of a product to compete with Apple's (AAPL) iPhone, Research In Motion's (RIMM) BlackBerry, and Android-powered smartphones.
Nokia is the largest manufacturer of handsets in the world, with about 37% of the market worldwide. But its very modest smartphone market share has begun to hurt both margins and revenue. The company said in June that its forecast for second-quarter revenue for the mobile devices and services division would be below its previous range of $8.2 billion to $8.8 billion. Nokia blamed the change on lower-than-expected average unit prices.
The smartphone market is the high-margin part of the mobile phone industry. As a result of Nokia's failure to penetrate the most lucrative and fastest-growing portion of the sector, its shares are down 32% this year to a 12-year low. S&P recently cut its credit rating for the company, saying the decision reflects its expectation "that a material improvement in profitability over the near term could be hampered by intense competition for smartphones and traditional mobile phones, and also by Nokia's rather weak competitive position for high-end smart phones."