Nokia's profit slumps by 40%
By Matti Huuhtanen |
July 23, 2010, Friday
|
Print Edition
Print Edition
NOKIA Corp said yesterday that second-quarter net profit fell 40 percent to 227 million euros (US$290 million) as the world's largest mobile phone maker lost market share and sales remained flat. However, sales of smartphones were better than analysts expected.
Profit was down from a net 380 million euros in the same period last year, the company said. Revenue grew a mere 1 percent in the period to 10 billion euros from 9.9 billion a year earlier.
Nokia's overall market share fell to 33 percent in the quarter, down from 35 percent a year earlier. But it said market share in the smartphone sector remained at 41 percent - unchanged from the previous year and the first quarter of 2010, despite strong competition from iPhone-maker Apple Inc, and Research in Motion Ltd, which makes BlackBerry handsets.
"Nokia managed to hold onto that market," said Neil Mawston, analyst at London-Based Strategy Analytics. "They actually sold 24 million smartphones, more than our forecasts, and that's what maybe is helping to support the shares a little bit."
Nokia shares were trading up more than 4 percent at 7.27 euros.
Nokia said it sold 111 million handsets in the quarter, up 8 percent on 2009. The company remains the leader in the global market, selling 432 million devices last year, more than its three closest rivals combined, but competition in the smartphone sector was seen as being too much for the former industry bellwether.
Now, Mawston says, those rivals may be feeling some pressure as well. "The challenges are no longer unique to Nokia - they're impacting other players in the market ... BlackBerry and Apple are also under a little bit of pressure," he said.
Profit was down from a net 380 million euros in the same period last year, the company said. Revenue grew a mere 1 percent in the period to 10 billion euros from 9.9 billion a year earlier.
Nokia's overall market share fell to 33 percent in the quarter, down from 35 percent a year earlier. But it said market share in the smartphone sector remained at 41 percent - unchanged from the previous year and the first quarter of 2010, despite strong competition from iPhone-maker Apple Inc, and Research in Motion Ltd, which makes BlackBerry handsets.
"Nokia managed to hold onto that market," said Neil Mawston, analyst at London-Based Strategy Analytics. "They actually sold 24 million smartphones, more than our forecasts, and that's what maybe is helping to support the shares a little bit."
Nokia shares were trading up more than 4 percent at 7.27 euros.
Nokia said it sold 111 million handsets in the quarter, up 8 percent on 2009. The company remains the leader in the global market, selling 432 million devices last year, more than its three closest rivals combined, but competition in the smartphone sector was seen as being too much for the former industry bellwether.
Now, Mawston says, those rivals may be feeling some pressure as well. "The challenges are no longer unique to Nokia - they're impacting other players in the market ... BlackBerry and Apple are also under a little bit of pressure," he said.
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