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Like RIM, Nokia to cut jobs

Nokia, the Finnish smart phone manufacturer which once was the leader of smart phones in the world, announced today that it would cut jobs to make up for losses. This sounds a lot like the BlackBerry maker, Research in Motion (RIM), decision. Nokia had the highest market share a few years ago, which started falling steeply after the Apple iPhone and the Google Android happened. Even after this, the Finnish company tried a lot of get up and face the blow by shaking hands with the software giant, Microsoft. The company is now releasing mid range to high end Windows Phone smart phones, which are doing pretty well.

But still, Nokia is not able to balance the incoming profits and the outgoing funds. As soon as the company announced that it will go short of 10,000 jobs soon, the Canadian company, Research in Motion’s shares came down. “As with RIM, (Nokia’s transformation) may be too little too late,” said Baird analyst William Power.

Nokia’s secret for the largest market share it had was that it used to release a lot of mid range phones in the emerging markets which were affordable. But now, Android has taken up this task. We see major smart phone manufacturers such as Samsung and HTC releasing mid range smart phones in the developing markets. These smart phones are both feature rich and affordable, and also bring in the power of Android. The Star writes:

The announcement, which echoed RIM’s warning in May of a likely operating loss in the current quarter, sent Nokia shares plummeting by 16 per cent in U.S. trading to $2.35 (U.S.) for their biggest single day decline since June 2001. RIM fell 3.6 per cent to $10. 61 (Canadian) in Toronto.

Nokia has also stated that it would cut jobs which are based on its new operating system (because it’s not working out as expected), some organizational fat, and then shift the focus to location based services and software. The Finnish company thinks it can score some in this sector. Well, guess we will just have to wait and watch what happens. What do you think Nokia should do? Ditch Windows Phone and move to Android?

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