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Nokia sees sales, shipments and profits slide

Looks for solutions pick-me-up

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The recession bit Nokia with a vengeance in the second quarter, with the company seeing most of its major metrics take a turn for the worst.

Nokia's profit before tax for the second quarter of 2009 fell by some 74 per cent, with the company only bringing in €380m compared to the €1.4bn it managed in the same period last year.

Shipments were down 15 per cent compared to 2008, though they still topped 103 million handsets. But the average price dropped to €62 as the company was forced to cut prices, not to mention selling as lot of cheaper handsets.

So, inevitably, net sales were down 24.6 per cent on last year to €9.9bn.

Overall Nokia reckons it managed to increase its market share, by a single percentage point to 38 per cent since the last quarter, but down from the 40 per cent it managed last year.

Things don't look much better for the rest of the year either - with the company predicting that volumes and market share will remain pretty static, which seems at odds with the company's prediction that the industry will continue to contract by a total of about 10 per cent during 2009.

In smartphones Nokia reckons it still has 41 per cent of the market, though emphasising how Nokia no longer views itself as a phone manufacturer CEO Olli-Pekka Kallasvuo said: "Consumers will increasingly expect devices and services designed as integrated solutions. To capture this opportunity we are accelerating our strategic transformation into a solutions company."

Nokia has wanted to be in services for along time, and is now betting that Ovi will provide its own door to a new revenue stream. But the company is going to have to make more money selling handsets if it's going to continue to fund its solutions-company aspirations. ®

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