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Tickers in this Article: NOK, AAPL, GOOG, MMI, RIMM
Some would be surprised to learn that Nokia (NYSE:NOK) is still the world's largest mobile phone maker; however, with its wide line of phones which cater to every price point and feature along with its global reach it's not that big of a surprise. Another piece of news that should not come as a surprise is that Nokia is continuing to struggle as competition from competitors grows and the company can't keep up with the competition.

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Nokia's in Trouble
In late January Nokia announced its fourth-quarter earnings that, no doubt, were a disappointment to shareholders. The Finnish firm said that earnings had fallen 21% in the quarter when compared to 2009, coming in at $1.02 billion. Although overall revenues actually rose 6% to $17.2 billion, weak margins and an ever-shrinking market share led to the poor bottom-line numbers. Even sales in traditionally strong regions struggled, with sales in Asia and Europe falling 10% and 2%, respectively. China, however, remained the company's strongest growth region, with revenues increasing 35%.

Falling Market Share
Getting back to market share, Nokia has seen its foothold in both the smartphone and mobile phone markets continue to shrink in the past year or so. In the higher-margin smartphone market, which is driving sales numbers throughout the industry, Nokia saw its 40% market share in Q4 2009 fall to barely over 30% today. A huge decrease in just over a year. Even Nokia's historically strong mobile phone dominance has wavered, with many new entrants into the market undercutting prices in the lower-price-point mobile market.

The dominance of Apple's (Nasdaq:AAPL) iPhone in the smartphone market has been well documented and is probably the single biggest reason behind Nokia's struggles. The technological breakthroughs from the iPhone changed the game forever, and Nokia was nowhere near ready to compete on that basis. Additionally, RIMM's (Nasdaq:RIMM) Blackberry has always been a big player in corporate circles, and Google's (Nasdaq:GOOG) venture into the operating system world with its ever-popular Android system has been a hit, giving Motorola (NYSE:MMI) a bump in sales as a result.

Changes Ahead?
Nokia's new CEO, Stephen Elop, recently spoke about consumers' preferences in the smartphone market being based more so on operating systems and apps rather than the phones themselves. This is a direct shot at the company's Symbian platform, which many believe will be replaced with a third party provider. The two most obvious operating systems to replace Symbian are Android and Microsoft's (Nasdaq:MSFT) Windows Phone 7. Management has to comment on the rumors but one should expect to see a change sooner rather than later.

Bottom Line
Add to the Nokia story that there will be a management shake-up this week and the future of this iconic phone maker is most definitely at a cross-roads. It's hard to find much to be excited about for any future growth for Nokia, but we'll see what Elop and his new management team can do in 2011. (Find an investment that will give your portfolio a shot in the arm. Check out A Checklist For Successful Medical Technology Investment.)

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