Nokia Corp. (NYSE: NOK) said last week it was transferring more smartphone device assembly to its Asian factories, a move that will cut 4,000 jobs at plants in Europe and Mexico.
The stated reason won't surprise anyone working in the electronics sector: Get to market faster by being closer to suppliers.
"Shifting device assembly to Asia is targeted at improving our time to market. By working more closely with our suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive," said Niklas Savander, Nokia executive vice president, markets, in a press release.
Nokia has had its share of troubles these last few quarters -- some of which stem back to its partnership with Microsoft and the increased competition from other companies such as Apple, Samsung, and other Android-based handset makers. Clearly, the Finnish company has to trim even more costs and keep its operational budget in line. (See: Nok-Win a No-Win Combination.)
The cutbacks, which will hit manufacturing facilities in Finland, Hungary, and Mexico, brings total planned job cuts to more than 30,000 since Stephen Elop took the CEO spot in September 2010, cites Reuters. And it comes on the tail of bad earnings news: Fourth-quarter smartphone sales fell 31 percent from a year ago, and the company had "a steep loss" for the quarter, according to the wire report.
Ironically, perhaps, the headcount cut also overlaps with rumors about the splash Nokia wants to make at the big telecom show, the Mobile World Congress, later this month. According to several reports, including one from Pocketnow, Nokia could be introducing six devices -- three smartphones (two Windows Phones and a Symbian) and three feature phones. One of them seems to be going after the high-end market, according to a Forbes post.
Leading up to last year's MWC, Elop laid out his plan for reviving Nokia and followed up with additional details in an Engadget video interview, with particular emphasis on how the company was going to build out its Microsoft relationship. The company didn't announce any new devices at the last year's conference, the annual main event for anyone who's anyone in the mobile space. (See: The Problem With Nokia.)
The plus side is that Nokia is still the undisputed king of the low-end handset range. Maybe, that's not such a bad thing -- capturing the high-volume, low-end niche. There are still millions of people in Africa, Asia, and Latin America that rely on these kinds of phones.
As we all know, though, the money -- and the margin -- is in the smartphone business. Nokia's chance to get any significant portion of that market looks bleaker every month. We'll see what Elop has to say at this year's MWC show, starting Feb. 27.