This Is the End of Nokia as You've Known It

Did Stephen Elop know what he was signing up for when he left Microsoft (Nasdaq: MSFT  ) to take over as CEO of Nokia (NYSE: NOK  ) in September? I'm not so sure.

Four months into his reign, Elop and his team this week canceled plans to bring the X7 smartphone to AT&T's (NYSE: T  ) network here in the U.S., The Wall Street Journal reports. No official word has been given, but no one's denying it, either.

Perhaps that's because the story is believable. Seriously, is there anyone left who's surprised by Nokia's failures to penetrate the U.S. market? American users have been turning to domestically designed options for months now. Google's (Nasdaq: GOOG  ) Android OS has been the primary benefactor, while Research In Motion's (Nasdaq: RIMM  ) BlackBerry OS has fallen from leader to laggard. According to the Nielsen company, its share of U.S. customers purchasing a phone in the last six months has declined from 35% in June to 19.2% in November.

So Nokia isn't alone in its failure. And yet there's an increasing body of evidence that, like ancient Rome, the Finnish phenom's once-vaunted global empire is crumbling.

Over at Computerworld, reporter Richi Jennings cites data from a mobile analytics company comprised of ex-Nokia executives who found that only 6% of current U.S. Symbian (i.e., Nokia) users surveyed would purchase another Symbian device. Most were planning to switch to the iPhone. Android and Windows Phone 7 were also named as alternatives.

Excuse me? Just 6%? If that's even within spitting distance of accurate, everything that drives earnings at Nokia from here on is under threat. At the very least, carrier agreements could become less generous and drive down hardware margins. Less cash would flow through the business as a result, hurting investors' chances to realize market-beating returns.

Now it's your turn to weigh in. What do you think of Nokia canceling the X7 here in the U.S.? Is the business facing a global threat? Please vote in the poll below and then leave a comment to explain your thinking.

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Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 20, 2011, at 9:22 PM, powerphrase wrote:

    @InfoThatHelp What a Idiot you are, You sound like you know lot about technology, after reading your Comment about QNX all i want to say study more and learn more about QNX before you make any Judgement. You know Half learning is no Learning.You are nothing but a spammer goes blog to blog website to website to spread false and Base less comments about RIMM. I think you are the same guy AKA James,James Apple and 50 different AKA. Come with a real name so you have some Credibility

  • Report this Comment On January 20, 2011, at 9:37 PM, powerphrase wrote:

    @InfoThatHelp just for your information according to Yahoo financials and Forbes Magazine QNX was the

    best acquisition of 2010. If you deny it you are nothing but a Ignorent

  • Report this Comment On January 21, 2011, at 7:33 AM, stoli89 wrote:

    IMO, Nokia needs to leverage MEEGO in order to successfully re-enter the premium Smartphone space within the USA. The X7 accomplishes nothing the N8 cannot already deliver, with the exception of QUAD speakers and a 4 inch CBD AMOLED (having the same resolution as the N8's 3.5 inch display). Meego would allow the Nokia brand to reclaim a "perceived" position as a tech leader in this space. Of course, said move would require a carrier subsidy to succeed in the USA.

  • Report this Comment On January 21, 2011, at 11:22 AM, dlchase24 wrote:

    Nokia has catching up to do and at this point it is wiser for them to get it right than to just get a smartphone out there. A misstep would cost them dearly.

    Nokia's smartphone issues are primarily software at this point which really translates to implementing MeeGo. With the probability of the N9 on the horizon, pulling a weak X7 may prove to be wise.

  • Report this Comment On January 22, 2011, at 6:08 PM, ajaykc wrote:

    Is US phone market really important for any phone company which is looking for a growth? Isn't it overly saturated here? While media is pro-apple no matter how bad product they launch (remember Antena issue and alarm clock issue that was thrown under the rug because wall street is heavily invested and they would not let it go down unless it falls apart and bubble bursts), US-media never leaves a single chance to hammer down foreign based companies such as RIMM and Nokia. I think Nokia is underestimated at this point, they were not born yesterday and big ships take a while to make turns. So just wait and watch.

    Apple has peaked and cash out before pros sell and sit on sidelines. Apple can't sell it products in China and other emerging markets as easily as they can sell in US. The reason behind it is simple. In emerging markets most transactions are cash and that's a big difference. If apple wants to expand in those countries then they can't maintain their margins. In US, you can buy a phone, laptop, PC/Mac, or whatever even without having a single penny in your pocket and that's not the case in Asia. If you know that fact then you should know who will be the winner at the end of the day.

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