Nokia Q3: Doing Well, Except in US

Earlier today Nokia announced Q3 earnings, which beat financial analysts' estimates. The company sold slightly more devices than the same time a year ago, a massive 110 million. It reported €10.3 billion in revenues ($14.4 billion).

However look at the chart below. In contrast to most regions the company sold a comparatively anemic 3.2 million devices in North America, which actually represents growth. But it also indicates weak demand for Nokia (the devices and the brand) in this important smartphone market. While Nokia has a trusted brand around the world, the brand is very weak here. 

Nokia Q3 sales by region:

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One could argue that Nokia is just "a phone away" from having a hit in North America.

One really compelling handset could reverse the company's fortunes in the US. However given its software development and product-vision challenges that breakthrough handset is probably not immediately in the pipeline. Nokia is at least a year -- and perhaps two years -- away from potentially being competitive again in the US. I've argued that Nokia's North American strategy should focus on low-cost smartphones rather than trying to compete at the high-end, which it cannot at the present moment.

The company also announced that it would cut 1,800 jobs this morning in order to start to streamline the bureaucracy that is endemic to the Nokia corporate culture

Nokia has today communicated to its employees the company's plans to accelerate its transformation and increase effectiveness. The plans include simplifying operations in product creation in Nokia's Symbian Smartphones organization, as well as Nokia's Services organization and certain corporate functions. The plans are expected to result in a reduction of up to 1800 employees globally.

Nokia can be hugely successful without North America, in Europe, Africa, Asia and China in particular. But it shouldn't walk away from the US and North America because there would be a ripple effect in other regions.

I've argued in the past that Nokia's true competitor isn't the iPhone, which won't sell at the levels that Nokia does -- ever. Rather it's Android, which can be made to compete on price with the cheapest Nokia phones in some cases. Android is the platform that Nokia really needs to worry about globally.