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Nokia Needs Better Connectivity & Market Strategy To Survive

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Nokia Corporation (NYSE:NOK) has faced many different challenges in the past, but the company’s current situation is not ordinary. In fact, the majority of analysts believe the company is in deep financial trouble. Others suggested the possibility that Microsoft  Corporation (NASDAQ:MSFT) would soon acquire the Finnish company.

Nokia Needs Better Connectivity & Market Strategy To Survive

The former world leader in mobile phone sales is burning cash at a very fast rate, which is a big problem. According to analysts’ estimate, Nokia Corporation (NYSE:NOK)may run out of cash by 2013. The company’s cash on hand in May 2012 was $2.7 billion. Its cash stockpile was more than $11 billion five years ago. There is a great possibility the company will collapse, due to its fast rate of cash depletion, difficulty in generating quarterly profit, and continuous decline of stock value.

A report from FT.com cited that one of the top executives at Nokia is uncertain about the future of the company. The senior executive said, “I really don’t know what is going to happen. I guess there are going to be lots of chances for investors, as there will probably be lots more ups and downs to come.”

The report also noted a comment from Michael Weyrich, co-head of Alix Partners, a restructuring consultancy firm, regarding the efforts implemented by Nokia CEO Stephen Elop to turn around the company. Weyrich pointed out that Elop did everything in his capacity to improve the financial performance of the company. He said, “If you look at Nokia Corporation (NYSE:NOK) and see what they have done in the past year, you can’t fault them. They have done all the things you would expect them to: restructured the operations, taken costs out, simplified things in the business, and furiously launched new smartphones into the market.”

Elop was the former head of Microsoft Corporation (NASDAQ:MSFT)’s Business Division before joining Nokia Corporation (NYSE:NOK) as CEO in 2010. Nokia recruited Elop from the search engine giant, to help resolve its financial woes. He is hoping that Nokia’s partnership with the software giant in introducing its latest models of smartphones – the Lumia 920 and Lumia 820 – powered by the Windows Phone 8 operating system, will ignite the interests of consumers and investors.

Nokia has a better chance of survival  if it will be able to beat HTC’s flagship Windows Phones, the 8X and 8S, recently revealed by its competitor. Its tie-up with Microsoft will be a big help, if Windows Phone OS becomes the third largest operating system behind Apple (Nasdaq:AAPL) and Samsung (KSE:005930).

The only problem, HTC’s Windows Phone 8 has better connectivity than the Lumia 920. In order for Nokia to increase its odds in achieving its recovery, it’s phone connectivity needs to be the best.

Furthermore, Nokia Corporation (NYSE:NOK) also needs to intensify its advertising and marketing strategy to encourage consumers to buy its products. The company should emphasize and tout the special features of the Lumia 920 and Lumia 820 including its wireless charging technology, longer battery life, Windows’ free Skydive storage, its camera’s PureView technology, and other interesting features. Many consumers still remember Nokia’s record in creating user-friendly and high-quality mobile phones, particularly in other countries.

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Marie Cabural
Editor

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