LONDON & BOSTON & TORONTO & NEW DELHI & BEIJING & TAIPEI & SEOUL--(BUSINESS WIRE)--Nokia is one of the pioneers of the mobile industry but it has been struggling in recent years. The company�s mobile access division still dwarfs its other business units and it has yet to fully reap the benefits of the 2016 acquisition of Alcatel-Lucent. Clearly, the process of transforming Nokia from a mobile-only infrastructure provider into a broader based end-to-end communications infrastructure player has taken longer than expected.
Nevertheless, Counterpoint Research believes that Nokia now looks broadly on track to execute a turnaround in the short term, although there are some risks. In particular, with Huawei banned from several markets, Nokia must demonstrate that it can increase its RAN market share over the next few months in the face of stronger competition from Samsung Networks and a gaggle of open RAN new entrants.
�Although the loss of the Verizon contract in the US was disappointing, the company has won several RAN contracts since then, including a major contract to replace Huawei at BT,� said Gareth Owen, Associate Research Director at Counterpoint Research. �Perhaps just as important, and a pointer to the future, is the fact that it has won several strategic non-RAN contracts from a number of high-profile players this year. I expect this to accelerate over the next year,� he added.
With a strategic review already underway, there will be changes at Nokia in 2021 as new CEO Pekka Lundmark implements his vision to reposition the company for the future. Counterpoint Research believes that Nokia needs to urgently increase R&D investment, especially in 5G, including sorting out any 5G product performance and quality issues. �Outside its main Networks division, the company should increase focus and investment in its Software and Enterprise divisions to benefit from two major trends � the migration to cloud-native software and the Industry 4.0 automation revolution. This should include acquisitions,� said Peter Richardson, Vice President of Research at Counterpoint Research. �In addition, Nokia should focus strongly on developing new 5G service-based businesses based on emerging technologies such as network slicing and edge computing in partnership with key CSP and enterprise partners,� he added.
However, funding this investment will not be easy. Nokia will need to dispose of some assets as well as consider other funding and strategic options.