Earnings Drop 20% For Nokia

[Mike Temporale]

<div class='os_post_top_link'><a href='http://quote.bloomberg.com/apps/news?pid=10000085&sid=adsS5EGvphUI&refer=europe' target='_blank'>http://quote.bloomberg.com/apps/news?pid=10000085&sid=adsS5EGvphUI&refer=europe</a><br /><br /></div><i>"Nokia, the world's largest mobile- phone maker, said profit may drop for a second straight quarter. Earnings fell 20 percent in the three months ended in September because the company cut prices to regain market share. Earnings per share may fall to between 16 euro cents (18 U.S. cents) and 18 cents in the fourth quarter from 25 cents a year earlier, Jorma Ollila, chief executive officer of Espoo, Finland-based Nokia, said in a conference call. Nokia's profitability is declining as the company fights to win back customers. Samsung Electronics Co., Motorola Inc. and Sony Ericsson Mobile Communications Ltd. took market share by incorporating cameras in handsets earlier than Nokia. Nokia's operating profit fell to 13.4 percent of sales in the quarter just ended, the lowest since the second quarter of 2003."</i><br /><br />According to this article, Nokia's market share dropped by 6% to 29.7%. Combined that with a 20% drop in earnings, and I would say you have a company that is in serious trouble. It's no wonder they are slashing prices, and racing to add new features to their devices, like cameras and clam-shell design.

[TANKERx]

I understand the statement "rushing for clamshell designs" (paraphrased), but rushing for cameras? I don't think so. Nokia pioneered camera phones (though I figured it wouldn't be long before some part of the Microsoft camp started taking the credit) and so I wouldn't have thought Nokia was 'rushing' for them.

As for market share - I would think that any company that has enjoyed such domination of a market that has a level playing field would have to lose some of it eventually, especially when there are more and more players entering. They should be glad that it is a level playing field, because we all know what happens when there isn't ;-)

Anyway, I am very suprised to see that their Enterprise Solutions net sales increased 52% ... it is worrying when a company sees growth in a market it isn't targetting and no growth in a market it is.

But there we go - you should be glad that the market is doing so well. The competition can only benefit the customers (I just hope Nokia don't panic and try to pull a Microsoft on the market because that just won't work here).

[Mike Temporale]

I pretty much agree with ya, except for:

I understand the statement "rushing for clamshell designs" (paraphrased), but rushing for cameras? I don't think so. Nokia pioneered camera phones (though I figured it wouldn't be long before some part of the Microsoft camp started taking the credit) and so I wouldn't have thought Nokia was 'rushing' for them.

I wasn't trying to take credit or say Microsoft did it first. We all know that Microsoft isn't leading the way here. Camera phones are just starting to make it into Windows Mobile devices.