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
