Nokia has announced that its smartphone portfolio is to be cut by half in preparation for 2010. Major competitors within the industry such as Apple and RIM are increasingly dominating the market, causing the share held by Nokia to diminish.

Is this collection cull a step forward for Nokia? Or does it spell the beginning of the end for the telecoms giant?

In terms of handset sales, Nokia remains a leader of the pack, selling more devices annually than the all mighty Apple. Yet, when it comes to smartphones, Nokia finds its Achilles heel. The largest profit margins are generated by smartphones due to their high quality applications which attract a high selling price. Every manufacturer worth their salt is guaranteed success if their smartphone box is ticked.

Since the introduction of the iconic iPhone, the smartphone world has shifted dramatically. The simple, ingenious design offered welcome relief from the bulky and complicated N95, placing the iPhone in the same realm as the well respected BlackBerry, leaving Nokia somewhat behind.

The Nokia/Apple power struggle has long been a continuous battle. Recent reports have noted that Nokia’s flagship store in Regent Street is due to close. Its prime location is flawed; it is situated directly opposite the Apple store which is said to welcome a huge amount of visitors through its doors each day. Whilst this closure must be a sad moment for Nokia, it could also be a time of opportunity. With their history of success, they can only draw on their expertise and slowly work towards re-gaining their hold within the smartphone market.

In some respects, a more concentrated smartphone range could be good for Nokia. The ‘less is more’ approach will allow them to specialise within a few key models ensuring up-to-the-minute technology and state-of-the-art design. This focused collection could also attract customers who were previously left dazed and confused by the variety on offer.

In reflection, one can’t help but offer cautionary words of advice. Nokia has built its reputation around the simple fact that they provide a vast array of different handsets; in 2009 they released 20 smartphones. Once upon a time their large selection gave them the upper hand when compared to their adversaries but as Apple proved, one all encompassing smartphone can easily knock the socks off twenty not-so-simple models.

We now live in a world where everything has to be accessible, simple and fast in order to be a success. Nokia must tread carefully.

This entry was posted on Thursday, January 21st, 2010 at 7:00 am and is filed under Business Mobiles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.