"Old" Cell Phone Giants and The Big Three

Shannon Geis writes: The Finnish cell phone giant, Nokia, announced it is cutting 600 jobs and closing its site in Turku, which will displace roughtly 220 jobs. It's only the latest indication of traditional cell phone companies having difficulty adapting to the concept of a cell phone as more than just that. They forgot about the internet, until it was too late.

As these giants were sleeping, new, upstart phones with an emphasis on internet connections, like the Apple iPhone, BlackBerry's Storm, and the new G1 running Google's Android, have capitalized on the growing need for people to be connected to email and the internet.

Older, more traditional cell phone manufacturers have been slow to catch up. Now, companies like Nokia and Motorola are scrambling to save their business and figure out how to compete with this new generation.

Just last month, Motorola made the decision to use Android as the operating system for it's mid-tier phones. Kevin Maney writes that Motorola executives have finally realized that focus needs to be put more on software and less on hardware size. But due to company mismanagement over the past several years this realization comes more than a little too late.

The company that invented the cell hasn't made a profit since 2006 and the Android announcement didn't stop 3,000 layoffs from happening last week. Motorola also isn't expecting to have its first Android phones out until next Christmas, which doesn't do much to help the company's financial situation right now.

The other "old" cell phone giant, Nokia, may be looking into the Android route as well. But so far there have been no announcements on changes to their operating system.

But Nokia seems to be at least a little bit ahead of Motorola in embracing the new generation. Nokia recently released its first touch screen phone called the 5800 XpressMusic. It is a phone that is obviously meant to compete with the iPhone, and it is also one of Nokia's first phones to "Come with Music."

Comes with Music is a new service providing unlimited music downloads for the first year of ownership. Nokia hopes to compete with iTunes, banking on the idea that if you "give them a little taste, then they'll pay for it."

Whether the technique will work remains to be seen. The company's Q3 earnings are down 28 percent from last year. These losses spurred the announcement of job cuts and the closure of the company site in Turku.

The Finnish company has also announced a new focus on creating mobile devices and services for emerging markets like India. It is offering seven new devices and services focusing on email, agriculture and education.
This is probably a smart move for the company considering what a hard time it is having keeping up with the new big three.

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