Smartphone Wars intensifying as Nokia faces further margin pressure and Fujitsu-Toshiba merge mobile operations

Technology Wars has broken out between 5-10 Global Technology Giants as they fight it out on multiple fronts as the whole Industry sees rapid Consolidation.Smartphones is the Technology segment which is seeing the most intense fight between numerous players around the world.Apple and Google have shaken up the whole Mobile Industry with traditional heavyweights like Nokia and Research in Motion finding themselves trying to play catchup.Apple has been the winner so far with its single product – the iPhone winning over the hearts and minds of consumer.

Nokia’s second Profit Warning in last two months as Competition Intensifies

Nokia which has been losing marketshare,brand appeal and pricing power guided a further lowering of its margins in Q210 as it continues to face tough competition in the smartphone segment.Its new products like the N900 has failed to gain much traction compared to Google’s Android phones and Apple’s iPhone.This was Nokia’s second profit warning indicating the sharp loss in Nokia’s competitive position.The stock fell by a massive 10% on the news and are now at the same level when the Global Markets troughed in March 2009.Nokia continues to make piecemeal moves like restructuring the management and incrementally improving its N-series smartphones.It needs a drastic strategic change to turnaround its downward trajectory to irrelevance.

Nokia warns on key phone unit, shares drop 10 percent – Reuters

Nokia warned on Wednesday second-quarter sales and profits at its key phones unit would be weaker than expected as it struggles to compete against Apple’s iPhone.Apple said it has sold more than 600,000 iPhones after just a day of pre-orders, underlining Nokia’s ailing position in the smartphone market.The second profit warning in less than two months is further increasing pressure on Nokia’s Chief Executive Olli-Pekka Kallasvuo, who has been heavily criticised by shareholders.

Toshiba and Fujitsu to merge Mobile Operations

Japanese mobile producers like Toshiba,Fujitsu,Kyocera,Sharp,NEC have never been large global players despite their strong technology.They have a dominant local marketshare as is the case with other Japanese industries but their global presence has been next to nil.Now these companies are facing pressure in their home markets as well which is seeing rapid shrinkage in demand due to demographics and mobile saturation.NEC, Hitachi and Casio with small mobile divisions have already combined their operations and now Fujitsu and Toshiba are doing it as well.Note it is kind of a tradition for big Japanese conglomerates to merge the operations of their subsidiaries when faced with low growth prospects and losing competitiveness.Despite their strong technological strengths,it looks highly unlikely that the Japanese companies can increase their global marketshare from the current 3%.

Fujitsu, Toshiba to unveil mobile merger – Reuters

Japan‘s Fujitsu Ltd and Toshiba Corp have agreed to merge their mobile phone businesses as early as October, and they are expected to announce the deal on Thursday, the Nikkei business daily reported.The paper said Toshiba will spin off its handset operations, and Fujitsu is expected to hold a 70-80 percent stake in the spun-off unit. The move would create the No. 2 cellphone maker in a rapidly-shrinking Japanese market.Two sources said last week the two electronics makers were in talks to merge their cellphone businesses to share the heavy cost of developing phones in the technologically advanced market.