Nokia sales and profits dip in 2nd quarter
Nokia, the world's largest maker of mobile phones, reported Thursday that its second-quarter operating profit fell 71 percent to 427 million euros ($600 million) from 1.47 billion euros during the same quarter a year earlier.
The company also reported that sales fell about 25 percent to 9.9 billion euros in the second quarter. But sales were up 7 percent sequentially from the first quarter of 2008.
Nokia shipped 103.2 million units during the quarter, which was down about 15 percent compared with a year earlier. But shipments were up 11 percent sequentially compared with the first quarter of this year.
And the company reiterated its expectation that the entire mobile market would contract about 10 percent during 2009.
That said, CEO Olli-Pekka Kallasvuo said in a statement that the worst may be over.
"Competition remains intense, but demand in the overall mobile device market appears to be bottoming out," he said. "As before, we are continuing to tightly manage our operating expenses."
Nokia said that it increased its market share sequentially for global sales of mobile phones to an estimated 38 percent. And its smartphone market share grew sequentially to 41 percent.
Toward the end of the second quarter, Nokia brought its N97 smartphone to the U.S. market.
The company changed its forecast for the third quarter, and said it expects its third-quarter market share in mobile phones to remain flat sequentially. The company had expected to increase market share in the second half of the year, but now it expects market share to remain flat.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Not sure what impact the N97 would have had as the US market is irrelevant to Nokia and it wasn't released on contract in Europe and Asia until early July which is Q3.
N97 is very much criticised in the US for having resistive touch screen technology. My understanding is that this is necessary if you are going to be successful in Asia. In a few months we see how B97 goes in comparison with IPhone. My tip is Nokia wins big.
N97 is very much criticised in the US for having resistive touch screen technology. My understanding is that this is necessary if you are going to be successful in Asia. In a few months we see how B97 goes in comparison with IPhone. My tip is Nokia wins big.
Who's buying these Nokia piles and why? Is their market share outside the US *that* large?
And Niceeg... I haven't even heard much of anything about the N97. And I don't even know what "resistive" touch screen would be... what does the iphone have? The g1? Something different? And why would a resistive touch screen be shunned in the US and loved in Asia? It seems that the wants of some normal dude in the US wouldn't be that far off from someone in Asia when it came to touching their phone?
Who's buying them? Everyone outside the US where Nokia have little if any subsidised carrier presence.
For example, the 5800 comprehensively outsells the iPhone in every market it competes against it other than the US. As for the N97, I don't rate it myslef but it will sell about 10 milion over its lifecycle.
But back to my question, what about these Nokias is so attractive to the 'rest of the world' ? They seem like total piles to me.
Half those sales were in the US where, as mentioned, Nokia don't have a market. Also we're on the third generation of the iPhone so if you want some honest comparisons I suggest you split sales down between iPhone, iPhone 3G and iPhone 3GS.
The N97 is just one out of a range of smartphones Nokia sell - in Q2 they shifted 16.9 million of them again with no presence in the US market. Bluntly, outside the US the iPhone is just one of a number of smartphones and although it has its share it's not dominant by any means.
As for why people like Nokias, it's probably that you can do pretty much anything with them. Sure the UI is a bit clunky but they're versatile, solid and reliable.
Nokia sells 38% of all the mobile devices in the world and 41% of all the smart phones! Actually, Nokia is also the biggest camera seller in the world.. These are amazing numbers in such a tough market. Nokia sells only 3% of its phones to US.
It is partly due to American ignorance that Nokia is not well known in the US. A good example was that when Microsoft CEO Steve Ballmer talked about leading smart phone manufacturers he did not even mention Nokia as one! It would be almost the same thing as not to mention Microsoft when talking about leading companies making operating systems. On the other hand, I think Nokia should advertise more in US.
US market has not been very interesting for Nokia because USA has been 5-10 years behind rest of the western world in terms of cell phone culture. Americans were still using pagers when school kids were using Nokia smart phones in Europe and in Asia. Now, US has been catching up and most of the American thing they have now "invented" smart phones. Although for example iPhone is still lacking features which Nokia has had over 5 years.
Another fact is that there is no free cell phone market in US. It is dominated by a few big operators who more or less dictate what phones you can buy. Nokia is best in markets where people can openly see what are the true costs for a phone. In US, phones are hardly ever sold with their true price. Nokia does not to play the game with operator's rules, which leads to lower operating margins.
People buy Nokia phones because they typically offer the best combination of price, features and quality. The iPhone hype in US seems more or less ridiculous when looking it outside USA. It has nice UI, but is it all you need from a phone? And if that is important, maybe Nokia can make a few nice icons too with its 9 billion dollar cash?
Over the years I had an E62, E61i, E71, N800, N810 and now an N97. I have a BB Bold and an iPhone. I WANT to like the N97. The hardware is solid and the specs are great (except for the comparatively pokey processor). I can even live with the resistive screen.
Where it totally falls flat is the user experience and system software.
There are 4 different software based keyboards that I have seen on it, none of them particularly good. The dialer does not show you the alphanumeric equivalents on them, so if you are traveling and you try to dial 1800-CITI-ATM, you stand there, guessing.
The phone randomly restarts and loses connection. Freezes happen almost every third time I unlock the phone.
Sometimes you scroll by using the scrollbar on the side of the screen, sometimes you have to flick the page á la iPhone. Sometimes you single click to select an item, sometimes you have to double click.
The Ovi application store is an embarrassment both in selection and design.
Some UI elements harken back to S60 3rd edition, while some are me-too iPhone like.
On paper this phone should wipe the floor with the iPhone. But it is not even close.
The phone would be 100% improved by shoehorning Android into it. Heck, even WInMo 6.5 would be an improvement. I cannot believe that this phone was released in it's present state.
I will hold on to it, hoping a few firmware updates bring it up to the usability of the E71.
- by mvl_groups_user July 17, 2009 3:15 AM PDT
- My wife (moved to US from Asia) got an N97 - she will buy no phone other than Nokia. Nokia has developed a reputation over the years for solidly built phones, very very few Nokias physically break or wear out.
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(10 Comments)Nokia continues its very strange interface (to me, a Startac-raised Motorola lover) but that is something that Nokia users have gotten used to. While I can't figure out how to use the N97, my wife learned it easily and loves it.
The problem with the US market started because Nokia didn't license the quality Qualcomm CDMA chipsets (building their own unreliable ones), and lost hand-over-foot to Motorola when CDMA ruled the market in the early 2000's. (Verizon at the high end, Sprint at the low end). Rather than have the poor CMDA quality ruin its brand, it abandoned CDMA and much of the US market.
Now Nokia has a different issue. In much of the world, you buy a Nokia, and your choice of cellco is secondary. Nokia has been able to maintain its quality brand by refusing to cripple its phones. In the US, the cellco's rule the industry and the phones are an afterthought. The cellcos mandate crippling of phones as many of Nokia's features would cut into huge cellco revenue streams (eg: music, navigation). To this day Nokia has never crippled their Nseries line.
It's in interesting dilemma - the "dumb pipe" is not what US cellcos want to be. US cellcos want to monetize the value of the cellphone services, and so does Nokia. So in a way, Nokia directly competes with US cellco companies. Nokia has regained its US aspirations, for examlpe they crippled their 5800 and E71 to test the US waters. Both Nokia and the US cellcos are deep-pocketed, we'll see who ends up winning the US services war.