Published on : Aug 04, 2014
Finnish communications and multi-national company, Nokia Oyj has expressed that the best way to stand out in the smart phones industry is by simply quitting from the business of smart phones which entails stiff competition.
Business statistics depicted that the shares of Nokia have surged since September 2, 2013 after it sold its mobile business worth $7.2 billion to Microsoft Corporation. The stock prices surpassed the stock prices of competitors like BlackBerry Ltd., Apple Inc., Samsung Electronics Co. and HTC Corp.
The stock prices of Nokia were the highest in the year 2007 after which it fell by almost 95% because it exited from the business due to heavy losses. While HTC and Samsung Electronics reported declining sales, Nokia outperformed the predicted earnings because it focused more on network equipments.
According to business analysts, Nokia’s financial standing improved after it got rid of the handset business which was only running into losses. The handset business is not a very lucrative one if the company dealing in that does not have its own software system.
It is evident from Samsung’s declining market share as to how the prominent players in the smart phones industry are under great pressure due to extreme competition. Strategy Analytics reported that the shares of Samsung declined from 32.3% in 2013 to 25.2% in 2014. Furthermore, Korea Investment Holdings Co. has also predicted that in the fourth quarter, the operating margins in the handsets division will drop from 21.6% 12.7%.