Fading OEM slashes costs and unveils growth strategy; pledges to 'differentiate Lumia phones with location-based services'.
Bad day for Nokia yesterday, which revealed it's still burning through cash and has yet to make any real progress in the smartphone space.
It has spent €2.1bn over the past five quarters, trying to make its Lumia range compete with iOS and Android. But it hasn't worked, and it has only sold 3m devices against Apple's 72m.
The failure to deliver has heightened speculation that Nokia make end up broken up or sold to Microsoft, which needs to ensure its WinPho OS has a presence in the market.
The company made a statement of its vision yesterday, with a plan for targeted investments in key growth areas, operational changes and a cost reduction plan.
Specifically it plans to broaden the price range of Lumia, and enhance the range with new materials, new technologies and location-based services.
The just-announced purchase of Scalado was the first example of this.
But it looks as though there will be more acquisitions to come, woth location specialists as the principle target.
Nokia also revealed it will extend its mapping technology to multiple industries to strengthen the platform and generate new revenue.
To fund all this, there will be a radical cost cutting exercise, resulting in the closure of its facilities in Ulm, Germany, Burnaby, Canada and its manufacturing facility in Salo, Finland.
Nokia is appraising its core assets and deciding what to keep. Luxury brand Vertu was sold earlier this week.
It all adds up to 10,000 jobs lost globally by the end of 2013.
As a result, Nokia hopes to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of 3bn euros by the end of 2013.
Some big hitters have also lost their jobs in the overhaul.
CMO Jerri DeVard, EVP of phones Mary McDowell and EVP of markets Niklas Savander have all gone, although they will keep advisory roles through the transition.
In come Juha Putkiranta as executive vice president of Operations; Timo Toikkanen as executive vice president of Mobile Phones; Chris Weber as executive vice president of Sales and Marketing; Tuula Rytila as senior vice president of Marketing and Chief Marketing Officer; and Susan Sheehan as senior vice president of Communications.
"We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia," said Stephen Elop, Nokia president and CEO.
"We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions."