Nokia to post loss prior to its make or break launches

Nokia Lumia 820

Nokia Lumia 820

Speculations are rising in the market that Nokia will report yet another quarterly loss and diminishing cash reserves prior to Nokia’s upcoming smartphone launches next month. Nokia is struggling hard to regain grounds that it has lost to its arch rivals in the smartphone sector Samsung Electronics Co. and Apple Inc.

The Report:

According to the reports released on the 18th of October, the biggest and most popular maker of mobile phones is facing tough times and is soon to report yet another Nokia quarterly loss. Nokia has lagged behind to their arch rivals in spite of their partnership with Microsoft Corp., the software giant, and is unable to satisfy the expectations of consumers much like the Samsung Galaxy models and the iPhones from Apple Inc. Nokia cash reserves are staring at a fall and the Finnish group is relying heavily of Nokia’s upcoming smartphone launches like the Lumia 820 and 920. These latest smartphones are backed by the recent Windows 8 software from Microsoft Corp. and are due to hit the stores sometime around the month of November. According to some analysts, the diminishing Nokia cash reserves and future of the company might well be resting in the sales of these smartphones in the holiday shopping season.

The market status of Nokia:

According to Eric Beaudet of Natixis Securities, the competition for Nokia is fierce and it all depends on the sales of the upcoming Windows 8 phones for their chances of survival. Some analysts have stated Nokia quarterly loss in the third quarter was a weak one for the company and hope that the new Lumia phones will compensate for the heavy loss in sales of the of the older models of the company and stabilize the dwindling Nokia cash reserves. An average forecast from 35 analysts shows a hefty loss that amounts to about 11 euro cents for each share. This was consecutively the third straight Nokia quarterly loss.

Nokia point of view:

Many analysts are now focusing their attention on how the plan of Stephen Elop, chief executive officer at Nokia, to make partnership with some of the network operators goes. These plans will determine the sale of the upcoming Nokia Lumia phones in the midst tough competition from Samsung’s Galaxy SIII and the New iPhone 5 from Apple Inc. The details of Nokia’s upcoming smartphone launches and the aggressive sale and marketing tactics are bound to persuade analysts to give more time to the company. A big fall in Nokia cash reserves could mean that the company is running out of vital time as the cash position of the company is being speculated to drop from  €4.2 billion three months earlier to  €3.4 billion by the end of the third quarter. According to some analysts and investors, if the condition of the Nokia cash reserves worsens and the sales of the upcoming Nokia smartphones are unable to show signs of improvement, then the company might need to change not only its strategy but its chief executive as well.

Richard Meryn
Richard Meryn, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

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