Nokia Delays E7 Smartphone, Shares Slump

Nokia Corp.  (NYSE:NOK) new Chief Executive Steven Elop was hired in September to lead a turnaround of the struggling cellphone maker whose market value has eroded by $61 billion.  With today’s announced delay of the shipments of the E7 smartphone, the Canadian’s job got much harder.

The E7, which was supposed to be available in the fourth quarter, now won’t ship until early 2011 missing the critical holiday shopping season.  A Nokia spokesperson told the Wall Street Journal that the company wanted to the phone provided a “good user experience.”  He didn’t elaborate further but it’s safe to assume that whatever was wrong was pretty bad for Nokia to take such a drastic step.  Moreover, as the Journal notes, the E7 problem comes on the heels of a separate delay of the N8 smartphone.

Nokia had high hopes that the E7 would help it regain ground it has lost to Apple Inc.’s (NASDAQ:AAPL) iPhone and smartphones that use Google Inc.’s (NASDAQ:GOOG) Android operating system.   U.S.  shares of Nokia, which are down more than 20% this year, fell in early trading.  Analysts were annoyed even though the E7 was not going to have a material impact on the fourth quarter.

“This is a clear disappointment and again proves that certain things are just not right at Nokia,” said Sami Sarkamies, a Helsinki-based analyst at Nordea Bank, told Bloomberg News. “Recent communication has been that they would start shipping in December as promised.”

Elop, a former Microsoft Corp. (NASDAQ:MSFT) executive, seems to understand the daunting challenges facing  Nokia.

“My job is to take the organization through a period of disruption and ensure that we are meeting the needs of customers while delivering superior financial results,” Elop told the press after he was named to his position.

Easier said than done.

Jon Berr