Analyst says Nokia isn’t going to recover, the company should be broken up
Credit Suisse, one of the largest financial services companies in the world, recently told investors that they’ve lost confidence in Nokia. They say the stock is likely going to hit 1.60 EUR ($2.07), and that Windows Phone 8 isn’t going to fix the Finnish handset maker’s problems. Their most bold suggestion, by far, is that Nokia should split itself up:
“Apple may be interested in Nokia’s IP (intellectual property). Ericsson, Huawai, ZTE may be interested in parts of Nokia Seimens Networks. No company would likely be interested in the entire company with its 114,000 employees.”
So what do we make of all this? Let’s look at the facts. Nokia sold 4 million Windows Phones during the second quarter of 2012. They’re going to announce how many Windows Phones they sold during Q3 in roughly three weeks. In July, Microsoft held an event where they showed off parts of Windows Phone 8, but more importantly they finally confirmed to the world that today’s Windows Phone aren’t going to get updated to the latest version of the OS.
In early September, Nokia held an event to show off two new Windows Phone 8 devices, but they forgot to mention how much they were going to cost and when they’re going to come out. Which brings to last week, when week Nokia finally issued some press releases that said we’re not going to see any of their Windows Phone 8 handsets until mid November. The high end device, the Lumia 920, will cost 650 EUR, which is what’s expected of a flagship phone. The Lumia 820 on the other hand, the “budget” model, is priced at 500 EUR, and that’s simply too much.
Microsoft gives Nokia $250 million every quarter to stay alive, but Nokia is burning through that at a rate that isn’t sustainable. If these new Lumia phones don’t break sales records, we honestly don’t know if the company can stick it out until the end of 2013.