Nokia is shifting its device assembling plant to Asia from Europe

Nokia has today announced planned changes at its factories in Komarom, Hungary, Reynosa, Mexico and Salo, Finland. The measures follow a review of smartphone manufacturing operations that Nokia announced last September and aim to increase the company's competitiveness in the diverse global mobile device market.

These three factories are planned to focus on smartphone product customization, serving customers mainly in Europe and the Americas. Device assembly is expected to be transferred to Nokia factories in Asia, where the majority of component suppliers are based.

Nokia Corp. plans to stop assembling cell phones in Europe by year-end as it shifts production to Asia and will cut another 4,000 jobs, its latest attempts to cushion itself from stiff competition in the smartphone sector.

The Finnish company said Wednesday it will make the new job cuts at three plants in Finland, Mexico and Hungary this year as it reorganizes global manufacturing operations to compete better with the likes of Apple Inc.’s iPhone and handsets using Google Inc.’s Android operating software.

Nokia said it had increasingly shifted cell phone assembly from Europe to Asia, where the majority of component suppliers are based, to help it reach markets faster. The company said it would not close the three factories, however.

Nokia said the shift to Asia would enable it to introduce innovations into the market more quickly and “ultimately be more competitive.”

Once the bellwether of the industry, Nokia has lost its dominant position in the global mobile phone market, with Android phones and iPhones overtaking it in the growing smartphone segment. It’s also been squeezed in the low-end by Asian manufacturers making cheaper phones, such as ZTE.

Nokia has been the leading handset maker since 1998 but after reaching its global goal of 40 percent market share in 2008, the company has gradually lost overall market share. It plummeted to below 30 percent last year.

In an attempt to remedy the slide, Nokia launched its new Windows Phone 7 in October, eight months after CEO Stephen Elop announced a partnership with Microsoft Corp. That heralded a major strategy shift for the Espoo-based company as it adopted the Windows operating system in its new phones.

But analysts have said it could take a few quarters before Nokia’s success can be measured.

Last month, Nokia reported that smartphone sales plummeted 23 percent globally in the fourth quarter as net revenue fell 20 percent to €10 billion ($13.11 billion) compared to a year earlier.

Nokia share price closed up slightly at €3.88 ($5.09) on the Helsinki Stock Exchange.

Nokia, based in Espoo near the Finnish capital, employs 130,000 people — down from more than 132,000 a year ago.

(C) Washington Post / Reuters