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February 9, 2012

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Nokia seeks boost with production move to Asia

NOKIA Corp said yesterday it will end the assembly of cellphones in Europe and Mexico by year-end as it shifts production to Asia, in its latest attempt to cushion its finances from stiff competition.

The Finnish company said it plans to complete 4,000 job cuts at three plants in Finland, Mexico and Hungary this year as it reorganizes its global manufacturing operations to compete better with the likes of Apple Inc's iPhone and handsets using Google Inc's Android operating software.

The job cuts come on top of nearly 10,000 layoffs announced last year.

Nokia said it had increasingly shifted cellphone assembly to Asia, where most component suppliers are based, to help it reach markets faster.

But the company said it would not close the three factories in Finland, Hungary and Mexico.

"There will be no assembling of mobile phones at our plants in Europe after this," Nokia spokesman James Etheridge said. "We plan to focus product assembly at our plants in Asia where the majority of our suppliers are based, while our facilities in Salo, Komarom and Reynosa will focus on the software-heavy aspects of the production process."

Nokia said the shift would enable it to introduce innovations more quickly and "ultimately be more competitive."

Nokia has lost its dominant position in the global cellphone market, with Android phones and iPhones overtaking it in the smartphone segment. It's also been squeezed in the low-end by Asian companies making cheaper phones, such as ZTE.

Nokia has been the leading handset maker since 1998 but after achieving 40 percent market share in 2008, its share fell below 30 percent last year.

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