Business, Hardware

Nokia May Fire 6,000 Workers, Competitors Want to Poach Talent

On February 11, Stephen Elop, Nokia CEO, said "We are not announcing how many and in what country. But there will be substantial reductions in employment in various locations around the world, and that too will affect Finland." Nearly two months to the day of his announcement, it is clear to the Finnish research and development labor force that decisions have been made.

Nokia "Disconnecting People" banner as seen in Germany after Nokia betrayed the agreement with the German gov't and moved production to a Balkan countryBloomberg News had a lengthy story based on comments from Antti Rinne of Pro, Finland’s biggest private-sector office-worker union, that as many as 6,000 Nokia R&D workers may be terminated.

Elop also announced in February that Nokia’s homegrown Symbian and Nokia/Intel MeeGo systems are going to be replaced by Microsoft’s Windows Phone 7 and other Microsoft Windows products. MeeGo was collaboration between Nokia and Intel to create a new open-source, Linux operating system aimed at netbooks, smartphones, and other connected devices. They announced their cozy relationship at IDF 2010 in Beijing with MeeGo 1.0. Intel appeared to be caught completely without prior warning, when Nokia’s Elop announced they were shutting down their work on MeeGo.

Nokia has been known for their large R&D budget for devices, which include products ranging from basic handsets to smartphones that can edit documents and show movies. They have been spending about three times what their peers spent on research and development.

Nokia R&D Spending in 2010 when compared to its competitors 
Charts showing how much did Nokia spent on R&D in 2010 when compared to its competitors

In 2010, Nokia spent $3.9-4.3 billion, which is more than twice Apple’s entire $1.78 billion R&D budget. You already know the market results of that vast spending.

Tuesday, Nokia also unveiled two new smartphones in an attempt to stem its drop in market share as the struggling handset giant transitions to using software from Microsoft. The new phones use an updated version of Nokia’s Symbian smartphone software.

Nokia E6 Introduction Video

The E6 business phone combines a QWERTY keyboard and a touchscreen. The device  comes with 8GB of internal memory and support for MicroSD cards up to 32GB. The  battery is a removable Nokia BP-4L 1500mAH – rated for up to a month on standby  and 7h30m talk-time over 3G – longer over GSM connections. It offers Pentaband  2G/3G network support for world travelers. Wi-Fi connectivity is through 802.11  b/g/n chipset. There’s also Bluetooth 3.0 with support for stereo headphones.  The E6 measures 115.5 x 59 x 10.5mm and weighs 133g. The 8 megapixel full focus  (EDOF) camera has a dual-LED flash, 2X digital zoom (3X in video mode) and  offers HD 720p video recording at 25fps.

Both the E6 and X7 new smartphones use the same processor speed of 680MHz which is in the same class as two to three year old smartphones. Many features are the same in both models. Apple claims their 5MP camera is better than any of the 8MP cameras because of the higher quality of parts they use. It will be interesting to test the iPhone camera against the new Nokias.

Nokia X7 Introduction Video

As you can see in video above, Nokia X7 will have the same 680MHz CPU and 256MB RAM as current Symbian 3 phone. It has a 4 inch capacitive AMOLED display, this device is purpose-built for entertainment and that includes the media you create yourself. This model brings the same camera specifications and features as the E6. The Nokia X7 comes with an 8GB memory card pre-installed, with up to 350MB built-in operating memory. It also supports MicroSD cards up to 32GB.

This device measures 119.7 x 62.8 x 11.9mm (thinner at the edges) and weighs 146g. It offers Pentaband 2G/3G network connectivity and 802.11 b/g/n Wi-Fi support. It offers a 3.5mm audio connector for headphones. 1200mAH battery is rated for up to 450 hours standby and 4.5 hours talktime on a 3G network ? longer over GSM.

Investors reacted to Tuesday’s rumored layoffs with another downgrade of Nokia, slipping 1.6 percent to $8.93 on
Tuesday. Just before the February announcements, their share value was nearly $12.00. Thursday, investment bank Morgan Stanley said they see a 10 percent risk to Nokia’s 2011 profit expectations owing to a lack of high-end product launches, a rise in component costs, and increased sales slowdown in feature phones. The investment bank cut its price target on Nokia to $8.66 from $9.23. Nokia’s 52 week high was well above that at $15.47.

The question where all those laid off people will go isn’t as complex as it seems. Intel publicly announced they want to take the cream of Nokia’s engineering talent by opening up an Intel R&D Lab in Finland and we heard similar stories from Sony Ericsson (by offering relocation to up to three dozen engineers to Sweden) and a few other "familiar suspects" such as Research In Motion/QNX, STMicroelectronics, Magnetti Marrelli, nVidia and others. Naturally, all of these numbers are pale in comparison to the overall number.

Only time will tell.