Nokia shares fell by 18% today as (the Financial Times says) Embattled Nokia hit by profits warning. "Even my Nokia's standards, it was a stunner" said Lex. The forecast 6-9% operating margin in their Devices and Services divisions has evaporated. We’ve made our views known on Nokia (search the archives) and in our Thumbs down to Nokia/Microsoft partnership. We were actually quite positive for its effects on Microsoft but we saw it as pretty disastrous for Nokia. Indeed it was difficult to understand why anyone would buy a Nokia smartphone in the meanwhile. So why Nokia didn’t fully expect its market share to plummet is a bit beyond me.
The stakes in all this are huge. Up until now, there were two worlds – the PC/Laptop OS and the Smartphone OS. I think that in future the smartphone OS will prevail. Indeed it will be the one used on tablets (and laptops and desktops – there will continue to be a huge market for these too!) There really are now only two smartphone operating systems in contention – Apple and Android. Even RIM is now a distant also ran. Microsoft’s very existence depends on getting its mobile OS established. Nokia is its route to market. But, by the time we get a Microsoft powered Nokia smartphone, its marketshare might have slumped to 15%/also ran status too.