Zacks_Analysts' Blog : Nokia to Quit Japan - Analyst Blog

The struggling mobile phone manufacturer Nokia Corp. (NOK) has decided to close its operations in Japan by August 2011. Nokia will shut down its high-end Vertu handset stores in Shibuya and Ginza districts of Tokyo by the end of 2011. Vertu is one of the premium tier mobile handset in Japan and its price is ranged from $7,450 to $248,354. Vertu handsets started struggling ever since smartphones of Apple Inc. (AAPL) and several Android-based smartphones entered the Japanese market.

Nokia’s phone service in Japan currently runs on network infrastructure, which was leased from NTT DoCoMo (DCM), the largest Japanese wireless carrier. This contract will come to an end by end August 2011. Nokia has decided not to renew this deal. The Tokyo office of Nokia will remain close till end 2011 to manage post closure activities.

Quitting Japan is a part of Nokia’s strategic decision to restructure its sagging mobile devices segment and regain its lost glory. Once the king of the global mobile phone market, Nokia is now seriously facing existence threat from iPhone and Google Inc. (GOOG) developed Android software based smartphones. While Apple clearly seals the fate of Nokia in the lucrative North American market, various low-cost Asian smartphone developers are gradually pushing out Nokia from the emerging markets.

In early 2011, Nokia has decided to adopt Microsoft Corp. (MSFT) developed Windows Phone 7as the operating system for all its future smartphones. The company will abandon its legacy Symbian software or the much-hyped MeeGo software as none of these operating systems are able to cope up with the next-generation consumer taste. At present, Nokia’s future prospect is contingent upon the success of its Windows Phone 7 software-based smartphones, the first of which is expected to be launched in the fourth quarter of 2011.