Chart of the Day: Who Will Eat What Apple Killed

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Published on Wednesday, 20 June 2012 08:00

Written by Adam English, Associate Editor, Inside Investing Daily

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Hope is quickly fading that Nokia (NOK:NYSE) will be able to salvage itself in an intensely competitive smartphone market.

No one saw it coming 4 1/2 years ago. In 2007, Nokia accounted for 50% of the smartphone market. Now it is down to about 8%.

The company sold 38% fewer phones in Q1 2012 as compared to Q4 2011. Year-to-year, the loss swells to 52%.

To make matters worse, Nokia has lost 13% of its cash and assets from Q4 2011 to Q1 2012 with a 24% loss year-to-year.

The company is now very close to collapse. Moody's recently downgraded the company's debt to junk status as Nokia cut 10,000 workers and halted production at some locations.

The company is slashing $2 billion from its 2012 budget, but still expects operating costs to eclipse sales for the foreseeable future.

It appears that Nokia quickly lost any significant value in a field dominated by Apple and Android phones.

Speculation of an acquisition or merger has bounced around for the better part of a year. Unfortunately, no one wants to take a bite of the fruit Apple left behind.

So who might want to gobble up this one-time giant? Perhaps Microsoft would. Nokia's smartphones featuring the Windows operating system are just coming to the market.

It is unlikely, though, Microsoft is willing to swallow the entire troubled company. Instead, a move by Microsoft to pick up key parts if and when Nokia gets ripped apart makes far more sense.

That means waiting until bankruptcy and a fire sale. For now, it seems like all potential buyers are doing the same.