Nokia to Asia

Nokia announced Wednesday that it planned to complete its shift its cell phone assembly to Asia by the end of 2012, and that the move would lead to the loss of 4,000 jobs in its plants in Europe and Mexico.

The company estimated that in its Komarom plant in Hungary alone 2,300 employees would be affected, to be followed by 700 in Reynosa, Mexico, and the remaining 1,000 in Salo, Finland.

The Finish firm said, however, that it would not close the factories altogether. "Our facilities in Salo, Komarom and Reynosa will focus on the software-heavy aspects of the production process," said Nokia spokesman James Etheridge.

Etheridge also said that the planned changes "are all about speed and responsiveness, and ultimately, our competitiveness."

Market pressures

Nokia - once the undisputed world leader in the high-end cell phone sector - is desperately trying to regain lost ground from global rivals.

Google's Android phones and Apple's iPhones have overtaken Nokia in the growing smartphone segment. In the low-end cell phone sector, Asian manufacturers increasingly challenge Nokia by making their phones more cheaply.

Etheridge said shifting production to Asia was targeted at "improving our time to market," since this was "where the majority of our suppliers are based."

In the fourth quarter of 2011, Nokia sold 19.6 million smartphones - 31 percent fewer than in the same quarter of 2010. That was far fewer than Apple, which sold 37 million units, and Samsung which reported sales of 36.5 million smartphones in that quarter.

Author: Uwe Hessler (AFP, AP, dpa)
Editor: Michael Lawton