According to a report in The Wall Street Journal, Nokia is going to close two of their four sales offices in China. To be more specific, the offices in Chengdu and Shanghai will be shut down and people will get laid off. Nokia isn’t saying how many people will lose their jobs, or when the offices are closing, but they did say that their two remaining offices in Beijing and Guangzhou will increase in size. Oddly enough, The Wall Street Journal report goes on to say that these closures were announced less than one month after Olivier Puech, President of the Nokia’s Asia-Pacific operations, said that the Finnish handset maker would “invest heavily” in Asian product development. To paint you a picture of just how bad Nokia is doing in China, the company’s Q1 2012 financial results [PDF file] revealed that sales collapsed 70% compared to the same quarter a year ago. When you look at Q4 2011 versus Q1 2012, sales fell by a dramatic 40%. In terms of unit shipments, in Q1 2011 there were 23.9 million Nokia phones sold in China. One year later that number fell to 9.2 million.
Why is Nokia doing so bad in China? Simple, it’s the rise of the 1,000 Chinese yuan smartphone. That’s roughly $155. Nokia doesn’t have any Windows Phones that are that cheap. The Symbian phones that they sell in that price range are laughably ancient compared to what you can get if you went with Android. And as for feature phones … who the hell buys feature phones anymore?
So what’s Nokia going to do to fix their China problem? We were on the Q1 2012 financial results conference call and the company’s CEO, Stephen Elop, said that we’re going to see a Windows Phone hit the market that’s even cheaper than the Lumia 610. The problem is that no one really likes the 610 since apps take forever to load, the screen is woefully bad, and the design just screams cheap plastic.