Feeds

Nokia: sales slump caused by inadequate product range

Keep up at the Front

  • alert
  • submit to reddit

High performance access to file storage

Nokia's reputation as the unchallenged master of the mobile phone industry took a blow this week when it said it had lost market share in Q1 to increasingly confident competitors. Nokia's statement is worrying for its investors, but suggests that the telecoms market as a whole is looking up.

While Nokia originally forecast that sales in the three months to March 31 would be three per cent to seven per cent up on last year's level, it said it now expects the figure to be two per cent lower at €6.6bn ($7.96bn). With a product range skewed towards the low end, chief executive Jorma Ollila said the company lacked attractive medium-priced products in Europe and the North American market.

"We have not been able to grow with the market in the United States and Europe, where our share has been very strong," Ollila said.

Nokia estimated that mobile phone sales by volume increased 25 per cent in the first quarter, while it had only been able to achieve a 19 per cent rise in handset sales. This led some analysts to speculate that it had lost up to four percentage points of global market share from the 35 per cent achieved in Q4.

While Nokia says this is only a blip that would be corrected with further model launches throughout the year, the setback could be significant as Nokia has so far proved invulnerable to the advance of consumer electronic companies into the market, which has hit other players such as Motorola.

The Finnish company's woes will also bring delight to Microsoft, for whom Nokia represents the biggest obstacle to its gaining the same dominance of mobile computing as it has on the desktop.

Nokia's shares dropped 18 per cent to $17.42 on the New York stock exchange though the company expects earnings per share to be €0.17 ($0.21), within its forecast range of €0.17 to €0.19 ($0.21 to $0.23).

The news cast a pall over mobile operators and chipmakers on the stock market, though the Nokia statement suggests the market is recovering confidence. Nokia Networks, which provides infrastructure, exceeded expectations for the second quarter running. It is expected to show 16 per cent growth over last year's level to €1.4bn ($1.69bn).

Source: Datamonitor/ComputerWire

Related stories

Nokia blip prompts class action suit
CDMA450 threatens universal GSM
Sony, Ericsson plan move to block Nokia majority at Symbian

High performance access to file storage

More from The Register

next story
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
Broadband Secretary of SHEEP sensationally quits Cabinet
Maria Miller finally resigns over expenses row
Skype pimps pro-level broadcast service
Playing Cat and Mouse with the media
Beat it, freetards! Dyn to shut down no-cost dynamic DNS next month
... but don't worry, charter members, you're still in 'for life'
Like Google, Comcast might roll its own mobile voice network
Says anything's possible if regulators approve merger with Time Warner
EE dismisses DATA-BURNING glitch with Orange Mail app
Bug quietly slurps PAYG credit - yet EE denies it exists
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.